Global gaming business, jan 2014

Global Gaming Business Magazine

January 2014 • $10 Vol. 13 • No. 1

CUSTOMER LOYALTY PROGRAMS ICE PREVIEW NEW JERSEY GOES LIVE DOTTY’S MIKE EIDE

LIVING LEGENDS John Acres and GGB’s

25

Going It Alone How tribes plan to

conquer online gaming

People to Watch for 2014

Pinpointing

Progress Why geolocation is a crucial element of iGaming

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GGB p. 3 toc jan:_table & mast.qx 12/12/13 3:17 PM Page 3

CONTENTS

Vol. 13 • No. 1

january

Global Gaming Business Magazine

COLUMNS

COVER STORY Page 22

Acres of Innovation

John Acres, the inventor of player tracking, bonusing and advanced progressive systems, is back in the industry big-time, with Acres 4.0, a company dedicated to bringing casino gaming into the 21st century with products like the Kai customer service tool and much more, an effort he says will help casinos avoid the fate of horse racing and Blockbuster Video.

By Roger Gros

FEATURES A preview of next month’s ICE Totally Gaming 2014, Europe’s largest gaming trade event, which is likely to set new attendance records.

26 People to Watch Our list of “25 People to Watch” for 2014 highlights the casino industry professionals most likely to make an impact on the industry this year.

By Roger Gros, Frank Legato, Dave Bontempo, Victor DeLuca, Marjorie Preston and Patrick Roberts

The most important factor in sustaining business in today’s casino industry is building customer loyalty.

Here’s how some are achieving it.

By Rodric J. Hurdle-Bradford

16 Fantini’s Finance Brave New World Frank Fantini

64 Global Gaming Women A Philosophy of Leadership Tina Kilmer

4 The Agenda

52 Location, Location, Location The successful growth of internet gaming in the U.S. will mean a refinement of geolocation technology used to assure players are within legal state boundaries.

6 Dateline 12 Nutshell 66 Cutting Edge 68 New Game Review

By Marco Valerio

72 Frankly Speaking

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

Feature 58 Tribal iGaming Emerges Native American tribes in the U.S. are finally taking the first steps toward participation in the emerging iGaming market.

48 The Loyal Player

Geoff Freeman

DEPARTMENTS

Cover photo of John Acres by Donavon Lockett

18 Hot ICE

14 AGA Standing Unified

By Dave Palermo

76 Emerging Leaders With Acres Bonusing’s James Acres, Fifth Street Gaming’s Seth Schorr, and Firekeepers Casino’s Brian D. Decorah

78 Goods & Services 81 People 82 Casino Communications With Mike Eide, CFO/COO, Dotty’s

iGNA Outlook 62 Fencing Out Sue Schneider

64 iGames News Roundup

JANUARY 2014 www.ggbmagazine.com

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THE AGENDA

Conversion or Collapse?

Roger Gros, Publisher

t’s always nice when someone walks in your door and drops a pile of cash on your table, and then tells you there’s more where that came from. And you don’t have to do anything except let them play in your yard.

That’s what happened in a lot of cases in Atlantic City when online gaming companies made deals with the land-based casinos there. The valuable online gaming licenses that go along with the land-based casinos in Atlantic City were—and are—sought after by companies whose business it is to operate online gambling.

And land-based executives often have no clue— or desire—how to operate online gaming. So when the online gaming companies came calling with bags of cash and no requirement for participation, it was an easy decision.

But was it the right decision? People were shocked last month when a Caesars Entertainment disclosure statement warned that online gaming could harm land-based gaming. For those who were paying attention, however, this wasn’t a surprise. European casinos have experienced the downside of decreased business, so the Caesars warning was sensible.

Ironically, however, Caesars is the one U.S. company that is approaching online gaming in the most rational manner. Instead of partnering with a technology provider, Caesars has built its own technology and begun to operate its own online gaming properties.

Remember, in most cases, the online partner gets the bulk of the revenue from net betting. While the New Jersey Division of Gaming Enforcement won’t release details of the agreements between the casinos and their online partners, sources tell me that the casinos only get between 20 percent and 40 percent of the revenues. So while Caesars had to make a sizable investment in technology and personnel, the company will have access to all the revenue—and more importantly, all the players. This will also allow them to be more liberal in marketing their sites, already some of the most recognizable gambling brands on the planet.

But the big advantage to operating alone is the ability to completely blend the data from online players into Caesars’ Total Rewards program, the industry standard when it comes to customer loyalty. Caesars will be able to identify which online players could be converted to land-based players and determine what

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Global Gaming Business JANUARY 2014

promotions would cause them to act.

While Caesars has this powerful vehicle, any land-based casino with a real-money online gambling presence (or even a “play for free” page now offered by many of the slot manufacturers) can design programs that will encourage your online customers to visit your bricks-and-mortar casinos. It takes a little expertise and an understanding of who is playing online and what motivates them, but it can be done.

Yes, Caesars’ earnings warning about the impact of online gaming should be taken seriously, because there is a real danger of creating a disconnect between the online casino and the land-based cousins. We’ve spent billions on these gambling palaces, and without the proper planning or forethought, players could just as easily stay home and play, or even worse, dispose of their disposable income without even venturing out their front doors.

There isn’t much data here, however. In Europe, online gaming got started before the land-based casinos could react. By the time they did, it was too late and the strong online brands dominated. There was and is no linkage between the two.

In the U.S., it will be different. In Nevada and New Jersey, only the established casinos can be participants in online gaming. Even in Delaware, where the state lottery runs online gaming, the casinos are the portals into the system. So the U.S. has the advantage of possibly changing the dynamic between the online gamblers and the land-based casinos.

And the games will be different as well. While poker has been the dominant player during the “Wild West” days of illegal online gaming, both Delaware and New Jersey offer full-blown casino gambling online (Nevada only offers poker for now).

And like the land-based casinos, poker players don’t produce lots of revenue for the online casinos. But casino players, again like their land-based cousins, have a much higher lifetime value. In Europe, sports betting is king. But since it seems that kind of wager is far off in the U.S., I’d be willing to bet casino players will be the top earners.

So the U.S. is certainly the “brave new world” for online gaming—lots of challenges and opportunities. But even though some of us might prefer to do without it, that horse has already left the barn. Time to decide how you are going to approach legal iGaming.

Vol. 13 • No. 1 • January 2014 Roger Gros, Publisher | rgros@ggbmagazine.com Frank Legato, Editor | flegato@ggbmagazine.com Monica Cooley, Art Director | cooley7@sunflower.com David Coheen, North American Sales & Marketing Director dcoheen@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Director of Operations bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com Columnists Frank Fantini | Geoff Freeman Tina Kilmer | Sue Schneider Contributing Editors Kimberly Arnold | Dave Bontempo | Jennifer Day Victor DeLuca | Joe Dimino | Rodric J. Hurdle-Bradford Dave Palermo | Marjorie Preston | David Rittvo Patrick Roberts | Robert Rossiello | Marco Valerio

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

• Mark A. Birtha, Vice President and General Manager, Fiesta Henderson Casino Hotel

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

• Jeffrey Compton, Publisher, CDC E-Reports

• Geoff Freeman, President & CEO, American Gaming Association

• Michael Johnson, Industry Vice President, Global Gaming Expo, Reed Exhibitions

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Director, Maryland Lottery and Gaming Control Agency

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, General Manager, ACSC Product Group Eastern Region Vice President, Bally Systems

• Steven M. Rittvo, President, The Innovation Group

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

• Ernie Stevens, Jr., Chairman, National Indian Gaming Association

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 921 American Pacific Dr, Suite 304, Henderson, NV 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 2014 Global Gaming Business LLC. Las Vegas, Nev. 89118 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 921 American Pacific Dr, Suite 304, Henderson, NV 89014

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DATELINE USA january2014

Match Made in heaven?

Mohegan Sun pivots to Suffolk Downs Mohegan Tribal Gaming Authority CEO Mitchell Etess

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he newly minted casino partners Suffolk Downs and Mohegan Sun got good news from the Massachusetts Gaming Commission, even though the referendum that approved a casino at Suffolk Downs in Revere was turned down in East Boston.

The marriage brings together two spurned casino developers, one defeated in East Boston and the other rejected in Palmer. Because the referendum specifically stated that there would not be a casino in Revere, nor did it name the Mohegan Sun, legal experts said a revote would be necessary. But since a vote can’t be

taken until 60 days after a new plan is announced, some feared that time would expire on Suffolk Downs at the end of the year. But the commission granted Suffolk Downs a waiver from the rules, which would allow a new vote, probably in February.

Events followed quickly after the Mohegan Sun’s casino proposal for Palmer was defeated by the slimmest of majorities. Although Mohegan Sun quickly called for a recount due to irregularities with one voting machine, the Mohegan Tribe began talks with the owner of the racetrack, which was seeking an operator for its casino after East Boston voted down its casino proposal in the same election where Revere voters handily approved it.

The new operator became necessary when Caesars Entertainment withdrew from the process after a potentially negative report to the commission came to light.

During the interim following the Boston electoral defeat, Suffolk Downs talked to Hard Rock International, whose proposal for West Springfield was defeated two months ago, and Rush Street Gaming,

which proposed and then withdrew a plan for a slot parlor in Millbury.

Despite having been defeated in Palmer, Mohegan Sun is solidly backed financially by a partnership with Brigade Capital Management, which has assets of $12 billion. It also has the advantage of having passed the ethical and financial vetting process by the commission. Should Suffolk Downs be chosen, the racetrack would just be the landlord; the Mohegan Tribal Gaming Authority would own and operate the casino.

Some former casino supporters in Palmer are hot under the collar because they suspect that Mohegan Sun was already thinking about shifting to Revere even before the November 5 vote.

Mohegan Tribal Gaming Authority CEO Mitchell Etess denied that allegation and said in a statement, “The site off exit 8 in Palmer remains an excellent opportunity for commercial development, and we look forward to coordinating efforts with Palmer so that it is developed for maximum benefit to the community.”

Sunshine Vote?

According to the Panama City News Expanded gaming could Herald, 63 percent of come up for a vote likely Florida voters suplater next year port expanding gambling by adding a lorida Speaker of the House Florida House Speaker limited number of reWill Weatherford is working Will Weatherford sort casinos, but that on a constitutional amendment survey was commison statewide gaming expansion, sioned and funded by Las Vegas Sands Corp.

Union Gaming reports. The bill could allow voters to make the big decision in 2014; to pass, The poll said 35 percent of respondents are opposed to new gaming and 2 percent are unsure. the plan would require a 60 percent majority.

But there are also many arguments against Last year, the state commissioned Spectrum Gaming of New Jersey to develop a comprehen- new casinos, along with powerful opposition.

The Disney Company and the Florida Restausive study on the impact of gambling in the rant and Lodging Association are squarely state, from the lottery and parimutuels to casiagainst casinos, saying they would taint the nos, internet cafés and tribal compacts. The state’s family-friendly image. state legislature is expected to review the issues The current leadership of both the state in the 2014 legislative session.

House and Senate are “publicly” against a If voters go for expanded gaming, there is no shortage of developers waiting to bring more large-scale gaming expansion, Union Gaming wrote. And then there is the Seminole tribe, casinos to the Sunshine State. For several years whose multimillion-dollar revenue-sharing Genting, the Malaysian casino giant, has been pacts with the state would be affected by the acquiring real estate in Miami in hopes of introduction of new casinos. The Seminole building a destination resort there. Las Vegas Sands has also expressed interest in moving into money is a sure thing, and the state may ultimately be loath to let it go. southern Florida.

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Global Gaming Business JANUARY 2014

Shop ‘Til You Drop Vegas Grand Bazaar begins construction eveloper Larry Siegel, chairman of the Juno Property Group, says his planned Grand Bazaar Shops near Bally’s casino in Las Vegas was inspired by the “world’s great markets”—including, of course, the Grand Bazaar in Istanbul.

“We’re going to create almost 60,000 square feet of energy that will draw in the 22 million or so visitors who walk by that space annually,” Siegel told the Las Vegas Review-Journal.

The $50 million project, in the planning stages since 2010, began construction in December. It will cover about two acres and is expected to open in the fall of 2014.

“This will be a tremendous attraction to bring people into the property,” said Bally’s President David Hoenemeyer. “Since I arrived seven years ago, I’ve been perplexed on what to do with that space. We’re very excited about this attraction.”

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DATELINE ASIA january2014

And So It BegInS… Gaming bill introduced in Japan

Hiroyuki Hosoda, leader of the pro-casino group

W

hile there are still some doubts about whether gaming would pass the Japanese Diet, the first step was taken last month when a coalition of political parties submitted a bill. Hiroyuki Hosoda, the leader of the group, convinced the partner of the ruling Liberal Democratic Party, New Komeito, to approve the bill and get it into the legislative till.

Grant Govertson, head of Union Gaming Group’s Asian office, estimates that a Japanese gaming industry could produce gross gaming win in the neighborhood of $10 billion. Casinos are currently banned in Japan, even though pachinko gambling parlors are part of the Japanese culture. Betting on horse, boat and bicycle races are also permitted wagering in the country.

Adelson Returns to Vietnam Las Vegas Sands eyes investment now that locals can gamble as Vegas Sands Chairman Sheldon Adelson was in Hanoi recently to discuss a possible investment in a resort casino in Vietnam with government officials.

Vietnam Investment Review reported the billionaire met with Minister of Planning and Investment Bui Quang Vinh.

It’s Adelson’s second trip to the country in the last two years. After the first, he said LVS desired to invest in two resorts with casinos in Hanoi and Ho Chi Minh City with a combined projected cost of US$6 billion.

Vietnam Minister of The massive project he had in mind on the Planning and Investment latest visit—slated for a government-sponBui Quang Vinh sored special economic development zone near Halong Bay in the north of the country—would include a hotel, restaurants, convention and meeting space, shopping, spas, an entertainment arena, cinemas and other tourist and leisure amenities.

He proposed the government create favorable conditions for foreign investors to do business in Vietnam to attract more tourists to the country, including relaxing a longstanding ban on casino gambling by Vietnamese citizens.

The reform, if enacted, would be in line with an official desire to promote economic development through foreign tourism, a policy that has been expanded recently to include the area surrounding Halong Bay, a popular holiday destination on the northeast coast about 130 kilometers from Hanoi. The government wants to attract at least US$4 billion in related investment into a special economic zone there, Vinh said, and appears to have come around to the view that liberalizing its 90 million-strong domestic gambling market is necessary to the success of that effort.

The potential has intrigued other global operators besides Sands.

Genting has expressed interest, and in October, Vienna-based Casinos Austria International sent executives to visit the Halong Bay area.

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Keiichi Ishiisaid, the policy leader for New Komeito, says even though the party has approved the bill, it’s still uncertain if the bill will win the party’s support when the time comes to vote. He said the pros and cons of the bill will be considered. The ruling LDP, however, has a majority in the Diet’s lower house, and probably can sway enough opposition votes to get it passed in the upper house, even without the support of New Komeito.

Not So Fast

Crown on hold in Sri Lanka

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lans for Crown Resorts’ US$350 million resort casino in Sri Lanka are in limbo as social and political opposition to the industry’s expansion intensifies and legislative approval is not likely to be achieved soon.

The latest delay comes after opposition Sri Lanka Investment politicians charge that Crown is getting generous Minister Lakshman tax concessions not given to local entrepreneurs. Abeywardena The island nation’s influential Buddhist leaders, meanwhile, are protesting that casinos are inimical to the culture and could be detrimental to social welfare.

The government has been working to amend the terms of Crown’s deal, which could see modifications to a promised 10-year corporate tax holiday.

Macau: The Boom Booms On

M

acau’s 35 casinos generated US$3.8 billion in gaming revenue in November, besting analysts’ forecasts with a 21.3 percent increase over the same month in 2012.

As of December, the booming Chinese gambling enclave had hit $40.9 billion for the year, 18.6 percent above where it was at the same point in 2012, with one month still to go.

“The calendar comparison was favorable with one additional Saturday this year,” noted Grant Govertsen, principal of Union Gaming Research Macau.

“There were no notable weather issues this month or in the prior-year period.”

Some of the November increase was attributed to special events, including the championship fight between Manny Pacquiao and Brandon Rios in the 15,000-seat Cotai Arena at the Venetian Macao, and the city’s annual Grand Prix auto race. Both events brought in high-spending visitors.

SJM Holdings led the market with a 23 percent GGR share, followed closely

by Venetian parent Sands China at 22 percent, Galaxy Entertainment Group at 19 percent, Melco Crown Entertainment at 14 percent, and Wynn Macau and MGM China Holdings, tied for fifth with 11 percent each.

JANUARY 2014 www.ggbmagazine.com

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DATELINE TRIBAL january2014

Vineyard Showdown Massachusetts governor sues tribe over casino M

assachusetts Governor Deval Patrick has filed a lawsuit in state Superior Court to prevent the Aquinnah Wampanoag tribe of Gay Head from converting an unfinished community building on Martha’s Vineyard into a small Class II casino.

The state contends that a federal settlement of 400 acres that the tribe accepted in 1983 included language subjecting all developments of the tribal land to state and local law, including forbidding gambling there. That agreement was ratified by the state legislature in 1985 and by Congress in 1987 (The Massachusetts Indian Land Claim Settlement Act). The tribe contends that when Congress adopted the Indian Gaming Regulatory Act in 1988, that trumped such a consideration.

The tribe has requested that Patrick negotiate a gaming compact, but Patrick insists the Aquinnah may not build a casino.

The governor commented last month, “It’s not about a negotiation; it’s about whether they do or they do not have a legal right to gambling, and the courts have to sort that out. And you know, we’re

Deval Patrick

Supreme Showdown Bay Mills, Michigan seek higher authority going to do that respectfully, but there’s a process for it, and that’s the process we’re pursuing.”

The governor’s position is similar to that espoused by the Aquinnah Board of Selectmen and Town Counsel, which has also threatened legal action.

Chairman Cheryl Andrews-Maltais made the announcement that the tribe planned to install a casino shortly before she was defeated for re-election by Tobias Vanderhoop. She cited an opinion by Acting General Counsel Eric Shepard of the National Indian

The Sewailo Golf Club at the Pascua Yaqui Tribe’s Casino Del Sol Resort

Arizona Ace Casino Del Sol opens golf club he Pascua Yaqui Tribe opened the Sewailo Golf T Club at its Casino Del Sol Resort in Tucson, Arizona on December 12. Sewailo means “flower world” in the Pascua Yaqui language, and the golf course will live up to that definition with more than 30,000 native flowers, plants and cacti, including indigenous flowers and plants used in tribal ceremonies. The 200-acre course also features nearly 14 acres of lakes, streams and water features. It measures 7,400 yards from the championship tees with five different tee boxes at each hole.

Sewailo was designed by the renowned golf course architect Notah Begay III, a Native American 8

Gaming Commission that supported the tribe’s contention that it could locate a casino on the island.

Vanderhoop, who will take office in January, did not comment on whether he intended to pursue the casino, but did indicate last month that he would defend the tribe’s interests from the lawsuit and keep its options open.

Global Gaming Business JANUARY 2014

and a player on the PGA tour and Golf Channel commentator.

Other course amenities include an extensive driving range, practice areas for chipping and putting, Callaway Golf equipment rentals and instructional programs. Troon Golf will manage the course.

Casino Del Sol Resort opened a new resort tower in 2011 and has since earned the Forbes Travel Guide Four Star award for its resort, Hiapsi Spa and P.Y. Steakhouse; AAA Four Diamond status for the overall resort; and the Wine Spectator award for P.Y. Steakhouse. Casino Del Sol also offers six restaurants and bars, a state-of-the-art conference center, Hiapsi Spa, Oasis pool and bar, two casinos and the AVA outdoor amphitheater.

n what could become a test case on the limits of tribal sovereignty, the United States Supreme Court last month heard arguments from Michigan officials who say a tiny offreservation Indian casino in the community of Vanderbilt is illegal. State lawmakers want to permanently shut down the Bay Mills casino, a slot parlor with 84 machines about 90 miles from the tribe’s reservation, on the grounds that it opened without permission from the federal government.

State governments in the U.S. are usually barred from suing sovereign tribes unless the tribe waives its sovereign immunity or Congress nullifies it. But Michigan Solicitor General John Bursch says blanket immunity that extends to businesses run off tribal lands “would bar our ability to enforce any ruling.”

“The big picture thing is the state wants to stop illegal gaming,” Bursch told Michigan Radio. “The Bay Mills tribe has set up a new casino in Vanderbilt, off of its reservation, and under federal law we don’t think this qualifies as Indian lands.”

Though the Supreme Court already said the land is not to be considered “Indian lands” for gaming, 65 tribes across the country have asked the high court to reject the state’s argument. On the other side, 17 states have filed briefs supporting Michigan’s position.

“If France came over and they opened an illegal casino in Lansing, Michigan, there’s no question that we could go to court to stop that,” Bursch said. “So it’s going to result in treating tribal businesses the same way that we would treat businesses by another state or a foreign country.”

The high court’s decision is expected later this year.

I

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DATELINE EUROPE january2014

Casino Loutraki is one of the casinos that has fallen behind.

U.K. GamblinG on the Rise New report shows revenues up 7 percent

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aming revenues in Britain grew by 7 percent in the last year, according to a new report by the U.K. Gambling Commission.

The market was worth £6.18 billion as of the end of March 2013, driven by growth in the land-based sector, which contributed 51 percent of total revenues.

Only the small-stakes amusement market declined, down 10 percent to £339.5 million.

The bombshell in the report was the 7 percent jump in high-stakes electronic table games in betting shops, whose revenues have boomed to become the mainstay of bookmakers’ profits nationwide despite being limited to four per outlet.

The devices, known as fixed-odds betting terminals or FOBTs, are considered by opponents to be a leading source of problem gambling and the cause of a proliferation of neighborhood betting shops that has local governments up in arms.

The debate is likely to heat up as a result of the report’s findings that FOBT revenues now exceed £2.4 billion on a 50 percent increase in wagers over the last four years to £46 billion.

The controversy has reached all the way to the House of Commons, where MPs were set to vote last month on some kind of cap on stakes and payouts, which so far the Conservative government of Prime Minister David Cameron has resisted.

Six Nations Run Afoul of E.U. Belgium, Cyprus, the Czech Republic, Lithuania, Poland and Romania served

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he European Commission has launched formal infringement proceedings against Belgium, Cyprus, the Czech Republic, Lithuania, Poland and Romania for protectionist legislation deemed in violation of European Union guarantees of free trade in goods and services.

Each of the governments has been sent a formal letter of notice of the commission’s intent to investigate their gambling legislation for unjustifiable restrictions designed to keep out competition from operators in other Member States.

Member States are able to set their own policies in terms of online gambling and may restrict or limit cross-border supply, but only to safeguard public interest, protect consumers and prevent fraud and other crimes.

The proceedings mark the first time in more than five years that the commission has launched infringement proceedings related to gambling, and will include investigations into licensing procedures, the conditions governing the provision of gambling services, transparency, coherence of national policy and equal treatment of service providers.

States usually are given two months to respond. The commission then submits either a “reasoned opinion” reflecting its assessment of the responses or votes to pursue litigation in the European Court of Justice.

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Global Gaming Business JANUARY 2014

PAY UP

Greece warns casinos to settle debts reece’s Gaming Commission has ordered the casinos of Loutraki, Rio, Corfu, Xanthi and Syros to submit memorandums to the government on their expired debts.

The five have run up debts to the state totaling €40 million over the last couple of years, the regulator says. Some of the properties have made arrangements for repayment but they have failed to follow up, which the commission says gives them an unfair advantage over their competitors—in Parnitha, Thessaloniki, Porto Karras and Rhodes—that have adhered to their obligations.

Observers say the casinos that do not comply could have their operating licenses revoked.

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Taking It Slow German gaming reforms on hold

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he opening to commercial competition of Germany’s lucrative online betting markets continues to move at a glacial pace, with 43 operators still waiting for word on their applications.

Germany passed a new federal interstate gambling treaty last summer, creating 20 sports betting licenses. Last March, some 18 applicants were invited to interview with regulatory authorities. At the time it was assumed this was the short list. Now it appears none of the applications was completely satisfactory in meeting all the criteria. Meanwhile, the total of 43 applicants will be sent specific details by this month as to how their bids need to be updated and improved. They will then have three months to complete the changes. All of this could take until April, at which point, the process of evaluating the applications will begin again.

“It could easily be 2015 before any operators go live under their new licenses in Germany, and even before the point at which the licenses are issued the legal cases will begin,” said Lorien Pilling, director of U.K.-based Global Betting and Gaming Consultants.

As GBGC sees it, the legal challenges could take several forms: • The initial deadlines to submit applications back in August 2012 were very short (three weeks), which discouraged some companies from applying. But with no licenses issued more than a year later, some companies may feel they were treated unfairly with false deadlines.

• Some applicants for a federal license have been invited for interview, others have not. Does that mean the interviewed applicants are at an advantage over those not called even though none were deemed to have met all the criteria?

• Are the 20 license holders in Schleswig-Holstein, the only state that has admitted private competition, in an advantageous position when it comes to winning a federal license? What is the status of the licenses for those operators not ultimately selected for a federal license?

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DATELINE GLOBAL january2014 Trump Ocean Club International Hotel and Tower

Sydney SucceSS

James Packer gets OK for controversial casino

c

rown Resorts has been approved by the New South Wales Parliament to proceed with development of a A$1.3 billion high-rollers-only casino and hotel on Sydney’s Darling Harbour.

The legislation, backed by Premier Barry O’Farrell’s governing Liberal Party coalition, passed through the upper house November 18 with the support of the opposition Labor Party and only the NSW Green Party and the Christian Democrats voting against it.

The state’s Independent Liquor and Gaming Authority still needs to sign off on Crown’s suitability to operate the proposed six-star resort, which also will require planning approval.

The resort is slated to open in 2019, when rival Echo Entertainment’s exclusive state license at its Star casino in Sydney expires, according to the legislation, which also codifies provisions in the agreement that restrict the casino to VIPs on a members-only basis and prohibit slot machines.

The resort is forecast to create around 1,300 jobs during construction, another 1,200 jobs when operational, and boost economic activity in New South Wales by $442 million a year by 2025. Crown’s agreement with the O’Farrell government includes a guarantee that the casino will deliver at least $1 billion in license fees and gambling taxes to the treasury over the first 15 years of “full operation.”

Crown Chairman James Packer released a statement saying he was “humbled” by the government’s endorsement. He said the development would “help attract Asian high-net-worth travelers to Sydney, in particular from China.”

SUNNY DAY IN PANAMA South African company OK’d for casino

S

un International has been approved by the government of Panama to operate a casino at the new Trump Ocean Club International Hotel and Tower in Panama City.

The approval allows Sun to purchase three floors of the 70-story mixed-use complex for US$45.5 million, including space on the ground floor for a 5,800-square-meter casino and a number of apartments on the 65th floor and a penthouse on the 66th.

Ocean Club Casino, as it’s called, is slated to open in September at a cost of $60 million.

The casino is the South African-based operator’s second in Latin America. It also has part ownership of one of Chile’s largest casinos and is planning to open a casino in Cartagena in Colombia‚ pending licensing and negotiation of a long-term lease on the site. The project will include a 284-room InterContinental hotel‚ convention center‚ retail shopping‚ apartments and offices.

Bermuda Decision Island nation prepares to vote on casinos bill authorizing a referendum on bringing casino gaming to Bermuda was expected last month to be approved by Parliament.

The Referendum Act 2013, as it’s titled, will require a public vote on legalization within 90 days of passage, meaning the referendum will likely be held sometime in the first quarter of 2014.

The government supports the bill, which will result, in Tourism Minis- Tourism Minister Shawn Crockwell ter Shawn Crockwell’s words, in a “regulated and dynamic gaming industry” for the popular tourist destination off the coast of the Southeastern United States.

If the referendum is approved, a Gaming Commission will be set up to handle oversight and regulation.

“The Cabinet Gaming Committee is in the process of finalizing the government’s vision for a new gaming industry,” said Crockwell, who pointed to successful markets in Aruba, the Bahamas, the Dominican Republic and Puerto Rico as models for the economic benefits the island will enjoy.

“Our research shows that if done correctly, the introduction of casino-style gaming in Bermuda can generate much-needed revenue for the government and provide jobs and even careers for our people.”

Not everyone is enthused, however, particularly with the proposed working of the ballot question: Do you favor the introduction of regulated casino gaming for the purposes of creating new jobs for Bermudians and encouraging hotel development?

Senator Diallo Rabain complained, “What happened to just laying the facts out, asking a nonweighted question and allowing people to decide? As a disclaimer, I am not saying the gambling will not encourage hotel development and by extension new jobs; however, fair is fair and right is right.”

A

One At a Time

Canada’s Gosal supports single-game bets

A

Canadian bill that would amend gaming laws to permit single-game betting stalled in the Senate for two years is back on the front burner with Minister of Sport Bal Gosal giving his support to the measure. The bill, originally launched in September 2011 as a private-members bill by MP Joe Comartin, already has received overwhelming support in the House of Commons.

Gosal said Canadians spend millions of dollars at online casinos and sportsbetting websites outside of Canada. He said Canadians could be spending that money at home with better odds and more wagering Canada Minister of options.

Sport Bal Gosal Gosal also said the single-game betting bill should be thoroughly vetted before it goes back to the legislature.

JANUARY 2014 www.ggbmagazine.com

11

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NUTSHELL

“They Northeast Ohio’s third and newest casino, dubbed the Hard Rock Rocksino Northfield Park, opened its doors on December 18. “We’re excited to get up and running and provide an entertainment destination for Northeast Ohio,” declared the casino’s president, Jon Lucas. Besides offering harness racing, the $265 million racino will have 2,300 video lottery terminals. The “rocksino” will join Cleveland’s Horseshoe Casino and North Randall’s Thistledown Racino. A fourth, Hollywood Gaming at Mahoning Valley Race Course, is being built. Bouygues subsidiary Dragages Macau has won a US$474 million contract to build a luxury hotel and casino at Melco Crown Entertainment’s City of Dreams resort in Cotai. Plans call for a 39-story building with about 780 rooms and 151,000 square meters of floor space to be developed over the next three years. The Davenport, Iowa City Council recently voted 10-0 to approve an agreement between the city and developer Dan Kehl’s Scott County Casino LLC. The development agreement represents the final step toward a completed sale option agreement for Kehl to purchase Isle of Capri’s Rhythm City for $51 million and build a $110 million land-based casino and hotel. The next steps will include a presentation to the Iowa Racing and Gaming Commission in January and the operating agreement between Scott County Casino and the Riverboat Development Authority, the nonprofit that holds the gambling boat’s operating license. After the vote, Scott County concluded a sale of the Davenport casino. U.K. gaming giant Gala Coral has sold the last of its casinos in the country to Double Diamond Gaming. No price was disclosed for the transaction, which covered four operating casinos in Aberdeen, Bristol, Cardiff and Teesside and a dormant license in Dundee, all of which were excluded by competition authorities from the May sale of Gala Casinos to competitor Rank Group. Cantor Gaming announced that it has partnered with Global Entertainment Investment & Management Co., Ltd. and the Tianjin Welfare Lottery club to provide the technology, systems and infrastructure driving the lottery offering at Cantor Club, a new high-frequency lottery club, spanning more than 80,000 square feet, which opened last month in Tianjin. Cantor Club, which is the world’s largest high-frequency lottery club, offers its members lottery games as well as a selection of private dining rooms, mahjong parlors and lounges, within a contemporary and luxurious setting.

Two unions representing 21,000

workers in Las Vegas agreed to ratify new five-year contracts last month. The deals end hard-fought negotiations for workers and management at 10 Strip properties operated by MGM Resorts International. The Culinary Local 226 and Bartenders Local 165 made the deal with MGM Resorts for union workers at MGM properties. Jobs covered under the contract include food and beverage workers, guest room attendants, bell department, porters and others. The two casinos in Rhode Island are canceling former predictions of falling revenue in the face of new competition from Massachusetts, due to expected delays in the licensing and ramp-up of Massachusetts casinos, according to a report in the Providence Journal. Rhode Island’s Twin River and Newport Grand racinos expect to generate $330.1 million this year and $334.7 million next year. The expected fall is now pushed back to 2015. University of Massachusetts gaming expert Clyde Barrow told the newspaper the Massachusetts rollout is the slowest anywhere in the U.S. Some state governments in Malaysia are enlisting “religious officers” to monitor casinos to ensure that Muslims are not gambling. The state government in Malacca has announced it will station the officers outside the Magnum, Sports Toto and Da Ma Cai betting shops to ensure that Muslims don’t place any wagers. Chief Minister Datuk Seri Idris Haron said the religious officers are a last-ditch effort to keep Muslims from violating their faith’s prohibition of gambling. The “Sirens of TI,” a free outdoor show at Treasure Island in Las Vegas, will close after a 10-year run. The pirate-themed show had been closed since late October, but was expected to reopen in late December. Grammy-winning Latin entertainer Jon Secada is said to be talking to Steve Wynn about doing a mini-residency at the Encore Theater in Wynn Las Vegas. Country superstar Garth Brooks just ended his run at the theater, and Secada could be on the marquee early next year. The Delaware Gaming and Lottery Study Commission, created by the state legislature to examine ways to ease the taxation and competition burdens causing the state’s three casinos to struggle, met last month to review existing research on the feasibility of adding new gaming venues in the state. Representatives of the state’s horse-racing interests were slated to make presentations at the meeting as well. The panel will return recommendations to the state legislature by January 31.

CALENDAR February 4-6: ICE 2014, ExCeL Center, London. Produced by Clarion Gaming. For more information, visit icetotallygaming.com.

March 19-20: Caribbean Gaming Show 2014, San Juan de Puerto Rico Convention Center. Produced by the CGS Group. For more information, visit caribbeangamingshow.com.

February 6-9: London Affiliates Conference, Millennium Gloucester Hotel, London Kensington. Produced by iGB Affliates and Conversion Pros. For more information, visit igbaffiliate.com/events/londonaffiliateconference.

March 19-21: iGaming North America 2014, Planet Hollywood Resort & Casino, Las Vegas. Produced by the Innovation Group, BolaVerde Media, Lewis and Roca LLP and eGamingBrokerage.com. For more information, visit igamingnorthamerica.com.

February 24-26: World Game Protection Conference, M Resort, Las Vegas. Produced by World Game Protection, Inc. For more information, visit worldgameprotection.com.

April 23-24: Andean Gaming and Entertainment Trade Show, Corferias International Business and Exhibition Center, Bogata, Columbia. Produced by FADJA. For more information, visit fadja.com.

12

Global Gaming Business JANUARY 2014

Said It”

“Assiduously, relentlessly, they are looking for public officials who are gambling with the people’s money. It is a death penalty. And the victim, the family, pays for the bullet.”

—Steve Wynn, chairman, Wynn Resorts, on what he describes as zero tolerance for corruption in Macau

“The Lady Luck stood empty and sad for so long. To have a hotel come back revitalized, almost entirely rebuilt and to make such a mark here is simply incredible.”

—Carolyn Goodman, mayor of Las Vegas, at the ribbon-cutting for the new Downtown Grand, formerly the Lady Luck casino

“If you want to compete on the Strip, you need to offer a high-end product. We haven’t put these rooms on the market yet; they are for our high rollers with credit lines of $150,000 or more.”

—Alex Yemenidjian, CEO, Tropicana Las Vegas, on new high-roller suites

“They’re going to go over the top to make sure that this whole process is honest. It’s going to be very transparent.”

—Senator John J. Bonacic, chairman, New York Racing, Gaming and Wagering Committee, on the licensing process for four new casinos in the state

“I come from the tech world where I’m used to going from idea to launch in 24 hours.”

—Tony Hsieh, Zappos CEO and Downtown Las Vegas entrepreneur, on the frustrating wait for new developments to be completed

“If Steve had put in a better proposal than us and they had chosen Wynn, then congratulations to Steve. It would have been a better result than this.”

—Gary Loveman, chairman, Caesars Entertainment, who would prefer to have lost a Massachusetts casino license to rival Steve Wynn than to be booted out for a minor accusation

“Stephen Crosby is perhaps the scariest gaming regulator in America in the scariest state to open a casino. And that’s exactly where he wants us to be.”

—Shirley Leung, writing for the Boston Globe about Massachusetts Gaming Commission Chairman Stephen Crosby

Macquarie: Your blueprint for success in Gaming.

macquarie.us Advisory | Debt | Equities | Principal Investing David Berman Global Head of Gaming, Lodging & Leisure +1 310 557 4343 david.berman@macquarie.com

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These examples may not be representative of every client’s experience. Past performance is not a guarantee of future performance or success. Macquarie Capital (USA) Inc. (Macquarie Capital) is a registered broker-dealer and member of FINRA and SIPC. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. This document does not constitute and should not be interpreted as either an investment recommendation or advice, including legal, tax or accounting advice. Macquarie Capital is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). Obligations of Macquarie Capital do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Capital.

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Global Gaming Business JANUARY 2014

ach new year presents new opportunities and challenges, but as we flip our calendars to 2014, there’s a consistent trend in our industry that’s bound to be an even hotter topic than in the past: internet gaming. Three states adopted online gaming regulations in the past year, and as many as a dozen more could have ballot initiatives to do the same this year.

Meanwhile, debate over the issue—both within and outside the gaming industry—continues.

With so much at stake, we can expect divergent opinions. And although it’s easy for some to focus on the areas where our industry differs, I would like to highlight those areas where consensus exists in the gaming industry: • We are, and always have been, on the side of regulation—in all forms of gaming. Online gambling is relatively new, but is no less in need of proper regulation than the other forms of gambling our industry provides. Just as the internet isn’t going anywhere, internet gambling is here to stay. By spending nearly $3 billion on unregulated offshore sites in 2012, U.S. consumers have proven they won’t wait for regulators to act. Prohibition hasn’t worked to stem the desire for online gambling opportunities, and it clearly won’t work in the future. This means regulation is the answer.

• We agree that shutting down unlicensed and unregulated actors is safer for our customers and better for our country. With a uniform set of minimum standards for online gambling across the country, which we’ve consistently called on Washington to provide, consumers will no longer be forced into a black market. Through regulation, we can protect those consumers—as we always strive to do—while also giving law enforcement the resources they need to shut down illegal op-

erators. Without such action, illegal operators will continue to thrive as they have done for the past many years.

Further, closing the black market brings with it the potential to tap into new revenue streams and reach new customers that will help increase our bottom lines and add to the nearly $9 billion a year in tax revenue the industry already provides to states.

• Ensuring the integrity of our games is one of the foundations of our industry. It’s essential to the consistency and trust that our industry has worked hard to build over the years. Regulation has long proven effective for our industry at brick-andmortar casinos, and it is equally as critical in the online space. And with geolocation, age verification, responsible gaming and player tracking technologies available, we can protect the games and players like never before. But this protection can only come with strong regulation.

• We have always evolved to meet the new needs and interests of our customers—in every era, at every turn.

This mentality has kept our industry on innovation’s leading edge. Other industries have stood at similar crossroads before—often in the online marketplace and often with stark results.

Now that we stand at our own crossroads, a particular analogy comes to mind. We have the ability to ask ourselves: Do we want to be Blockbuster or Netflix? Do we want to get ahead of the wave or left in its wake?

Fortunately, we have a choice. Strong regulation instead of prohibition is the only way to effectively protect our customers, push lawbreakers out of the market and keep the games safe and fair. We must learn from the lessons of the past—within our industry and others. The opportunity for innovation is here again, and we shouldn’t let it pass us by.

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FANTINI’S FINANCE by FRANK FANTINI

Brave New World How will New Jersey change the iGaming market?

S

o internet gaming is off and running in New Jersey.

And, despite what can be called expected start-up glitches, the new industry seems to be doing well.

As of this writing just a week into New Jersey’s new world, more than 50,000 players had signed up, several of the larger websites had been averaging 200 cash poker players at a time and growing, and about 5,000 new players were being added every day.

New Jersey already had more poker play than Delaware, which began several weeks earlier, and Nevada, which has been live since April.

New Jersey’s numbers are no surprise given that it has more than three times Nevada’s population and 10 times Delaware’s. Poker requires big numbers to succeed because there always has to be a game of the skill and denomination and type that appeals to enough players to put successful tables together.

Indeed, it’s likely that Nevada and Delaware

For example, as of this writing, only 17 players were in poker games in Delaware compared to 139 at World Series of Poker New Jersey and 282 at Borgata.

Still, growing pains and glitches aside, New Jersey appears headed for success readily enough that other states may soon follow.

Indeed, just one week after New Jersey launched, the Pennsylvania Senate voted overwhelmingly to study legalizing online gaming. The motivation? Fear that gambling revenue is flattening, and could start to diminish because of the new online competition next door.

It’s worth noting that attention to date is focused on poker because player figures are available.

There is no estimate yet of online casino play, and population size isn’t nearly as important because each slot game is played by a population of one, no matter how big a state. Slot play also is more profitable.

An illustration of just how small Delaware is came in its first full month—2,800 signed up, but

‘‘

Just one week after New Jersey launched, the Pennsylvania Senate voted overwhelmingly to study legalizing online gaming. The motivation? Fear that gambling revenue is flattening, and could start to diminish because of the new online competition next door. might never succeed at poker unless they can pool players with other states, something that a New Jersey or California might not be eager to do for competitive reasons. Why, for example, would New Jersey want to help neighboring Delaware casinos compete against those in Atlantic City? Likewise, why would California want to help Nevada at a cost to itself?

New Jersey could benefit from an expanded pool of poker players, but might choose to be selective with whom it allies.

The New Jersey casinos also have brand names and deep databases from which to draw players as advantages over Delaware.

16

Global Gaming Business JANUARY 2014

’’

only $3.8 million was bet, of which just a fraction is revenue.

However, it is just the start and should grow from here.

So, with all of that said, it’s time to try to get a handle on the size of the iGaming market and who the winners and losers might be.

Along those lines, Morgan Stanley analyst Thomas Allen issued an interesting research note.

Internet gaming in the U.S. will be a $670 million business next year, growing to $7 billion in 2017 when 17 states are likely to legalize, Allen says.

Estimates of the size of the market for just

New Jersey have ranged from $300 million to $1.8 bllion.

The biggest winners are likely to be Boyd as an operator and 888 Holdings among European online companies, Allen thinks.

Internet gaming might not be profitable initially, Allen said quoting bwin.party entertainment (BPTY), which expects to lose $5 million to $10 million next year in New Jersey and $5 million in 2015. However, margins will grow over time, Allen said.

He notes that online margins usually run 20 percent to 30 percent and that even in high-tax jurisdictions such as Australia, they run 25 percent.

Allen expects BYD to generate $75 million in EBITDA from online gaming in 2017, which translates into $5 of share value to BYD discounted back. Allen noted that BYD already is getting 50 percent share in New Jersey through its Borgata brand.

Borgata’s online partner is BPTY, but 888 is the best positioned among European companies given its alliances with World Series of Poker and its All American Poker Network that serves Caesars and Wynn, Allen said.

Allen’s assumptions are based on the average American player spending $50 a year, which compares to $75 in the U.K. and $100 in Sweden.

The U.S. is limited by the lack of sports betting, but Americans overall spend more on gambling, $385 each compared to $350 in the U.K. and $375 in Sweden, he notes.

There are 15 online sites in New Jersey right now, but iGaming tends to consolidate, Allen observes.

The top four operators control 30 percent of the British market, 79 percent of Australia, 80 percent of Spain, and 70 percent of Italian poker, Allen cited as examples.

And, while attention is focused on New Jersey, state lotteries are slowly starting to go online.

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.gaminginvestments.com.

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The ICE Sensation The 2014 edition of ICE Totally Gaming is expected to set new records.

T

he organizers of ICE Totally Gaming, Europe’s largest gaming conference and exhibition, predict that the 2014 edition of the show will set new records for attendance, which has grown for the past four years in a row.

This year’s show, which carries the theme “ICE Sensational,” takes place February 3-6. (The conference program runs Monday through Wednesday and the trade show floor is open Tuesday through Thursday.)

This is the second year at the Excel London Exhibition and Convention Centre, but the organizers have made the layout more attendee-friendly this year. Whereas last year the massive 400,000 square feet of exhibit space was laid out in a straight line that extended several hundred yards with a corridor to one side, this year, both sides of the hall will be utilized with a corridor down the middle— all the largest suppliers will have stands near entrances off the center corridor.

As usual, hundreds of exhibitors will use ICE Totally Gaming to launch products for TRADE SHOW HOURS the European market, with the largest stand again promised by Tuesday, February 4 the Novomatic Group of Com10 a.m. – 6 p.m. panies, which set a record for Wednesday, February 5 trade exhibits last year with a 10 a.m. – 6 p.m. stand spanning some 30,000 Thursday, February 6 square feet.

10 a.m. – 4 p.m.

ICE 2014 will feature products from the entire gaming ICE CONFERENCES world, including betting, bingo, casino, lottery, online, street and Monday, February 3 social gaming, in what is the 10 a.m. – 6 p.m. world’s largest gaming exhibit Tuesday, February 4 space, comprising some 55,000 8 a.m. – 6 p.m. square meters—or more than Wednesday, February 5 592,000 square feet, easily top8 a.m. – 5:30 p.m. ping the size of last year’s exhibit floor.

VENUE “ICE is the only business-tobusiness event to bring together ExCeL London both the online and offline gamOne Western Gateway ing worlds under one roof and Royal Victoria Dock the only exhibition to provide a London truly global perspective on gamE16 1XL ing trends, with 65 percent of

ICE TOTALLY GAMING 2014

18

Global Gaming Business JANUARY 2014

Tracy Cohen, Director of Europe, AGEM

exhibitors drawn from outside the U.K., said the organizers in a recent statement. “Alongside gaming’s mega-brands, ICE will also feature a total of 74 companies making their first appearance. It’s credentials like this which prompted Jens Halle, managing director of Austrian Gaming Industries, to describe ICE as the ‘world’s biggest and best event for the international gaming industry.’”

To register for the exhibit floor, visit icetotallygaming.com.

The “ICE Sensational”

theme is expected to draw attendance that will top the record set last year, according to Kate Chambers, portfolio director responsible for both ICE Totally Gaming and ICE Conferences.

“The 2013 campaign succeeded in helping to attract a total of 22,247 unique attendees, a 4.3 percent increase on 2012, 8.6 percent up on 2011 and a massive 17.8 percent uplift on 2010,” Chambers says. “The number of visitor days— the average amount of time visitors spent at the event—increased from 1.51 days (2012) to 1.81 (2013), taking the total number of visitor days spent at February’s event to 40,267.

“The commitment we are making to our stakeholders is to invest in the ICE brand with a far-reaching and truly ‘sensational’ multimedia campaign which connects with the 100-plus nationalities who we welcome to London each year.”

Tracy Cohen, director of Europe for the Association of Gaming Equipment Manufacturers, describes the expo as “an ideal platform to spread the word about what AGEM does and important to the future growth of the association.”

AGEM is one of 23 industry organizations which will be at ICE—a leader board of influence which also includes the International Association of Gaming Advisors, the American Gaming Association, Association of British Bookmakers, Business In Sport And Leisure, European Association for the Study of Gambling, eCogra, European Casino Association, Gaming Standards Associa-

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tion, GamCare, Gaming Regulators European Forum, International Masters of Gaming Law, Interactive Gaming Council, National Casino Forum, International Association of Gaming Regulators, Gambling Portal Web Masters Association, National Gaming Academy, Remote Gambling Association, the Responsible Gambling Trust, European Gaming and Betting Association, European Sports Security Association, World Lottery Association and the Gambling Commission.

“As well as being gaming’s international commercial center, it is increasingly clear that ICE has also become the hub or focal point for many of the world’s most important associations, regulators and non-commercial organizations,” Chambers says.

“For a long time, it’s been widely accepted that the products launched at ICE have and will shape the commercial future of gaming.

“In tandem with this, the policies and decisions made by the trade bodies and non-commercial organizations at ICE will also help direct the future of the international business and determine how it adapts to the huge changes in the markets and responds to the challenges ahead.”

ICE Conferences The ICE Conferences program, taking place alongside the ICE Totally Gaming trade show, features what the organizers say is the “most compelling lineup of speakers and seminars to date.”

The three-day program comprises eight individual conferences and more than 40 hours of targeted sessions and networking. Speakers include executives of gaming firms including Paddy Power, Bwin, SkyBet and BetVictor, and 150 of gaming’s most distinguished leaders as speakers.

“ICE is a compelling proposition precisely because it is both a commercial and an information exchange event,” says Chambers. “The exhibition and the conference program complement each other, and there’s a significant crossover between the two.

“If you look at the conference titles, which, in addition to the International Casino Conference, include World Regulatory Briefing, CRM Loyalty & Retention, Mobile Gaming, Cybercrime Security & Regulatory Compliance In Gaming, and Monetizing Social Gaming—as well as two brand new conference streams, Game Design & Development and Next Generation Lotteries—all of the topics are right at the center of the gambling debate.”

20

Global Gaming Business JANUARY 2014

“As well as being gaming’s international commercial center, it is increasingly clear that ICE has also become the hub or focal point for many of the world’s most important associations, regulators and non-commercial organizations.”

—Kate Chambers, Portfolio Director, ICE Totally Gaming

ICE Conferences Synopsis Monday, February 3

Wednesday, February 5

The 6th International Casino Conference The flagship casino industry event, organized in partnership with the European Casino Association, brings together casino executives from across the world. Speakers include Damià Calvet, director, Ministry of Economy and Knowledge, Government of Catalonia; Harrie Temmink, DG MARKT, European Commission; Luca Frigerio, CEO, Casino de la Vallée; and Roger Seshadri, Senior VP & CIO, Melco Crown.

Cybercrime, Security & Regulatory Compliance in Gaming As technology develops and consumers demand more flexibility on platforms and payments, the risk of fraud increases. This conference will offer the opportunity to hear experts discuss crucial compliance issues including international regulations, amendments to the 4th AML Directive and KYC, as well as innovations in mobile, online and social gaming.

Tuesday, February 4 World Regulatory Briefing This conference is dedicated to finding the right balance between regulation and commercial enterprise. Featured are the world’s leading regulators, operators and gaming professionals for a day of educational discussion in an attempt to manage the complexities of multi-jurisdictional licenses for online gaming across Europe, the United States and Latin America.

CRM, Loyalty & Retention As users switch from online to mobile and tablet and competition heats up in terms of customer acquisition, how can you create a sustainable and engaged user base without engaging in a ‘race to the bottom’ as bonus culture grows? The conference features speakers from Paddy Power, Bwin, SkyBet, BetVictor and many more.

Mobile Gaming Attendees will explore how to deliver a compelling, seamless and engaging customer experience, capturing customers for deeper and longer sessions across smart-phone, tablet and smart TV screens. Over 30 senior executives from the leading operators will discuss content discovery, affiliate tracking, notifications, social, distribution and payments.

Monetizing Social Gaming Whether you view social gaming as a tool to acquire and convert customers, a stand-alone business unit or a place-filler for cash gaming, there’s no denying it’s a critical and fast-growing sector for the gambling industry. The conference will investigate the business models which will take social games forward.

Game Design & Development Attendees will learn how to build a new breed of exciting games for existing players and new customers; and learn from games studios, operators and platforms about game development tools to create engaging, cross-channel experiences that appeal to audiences with restricted time and short attention spans.

Next-Generation Lotteries In a society in which technology is ubiquitous, the gaming industry is evolving and consumers are demanding access to everything across a variety of platforms. The lottery industry must innovate in order to remain relevant and competitive. This conference features case studies of success and panel discussions on the key issues.

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K Breaking New Ground John Acres is back with a new toolbox for casino operators | BY ROGER GROS

T

o call John Acres a visionary is almost like damning with faint praise. For the man who invented player tracking, advanced progressive jackpot systems and bonusing, visionary might not be strong enough.

And those inventions also weren’t enough for Acres himself, who has founded and sold several innovative gaming suppliers, EDT, Mikohn and Acres Gaming. He launched Acres 4.0 in 2007 “to reinvent casino gaming because bureaucracy, regulation and the ease of past success have so tainted our industry’s ability to adapt that we no longer attract hearts, minds and wallets of younger consumers who are essential to continued growth,” he says.

Acres cites declining gambling revenues in traditional jurisdictions as proof.

“Consider bookstores and horse racing,” he continues. “They were both once highly profitable with wide customer appeal. Today, both are obsolete. If gambling doesn’t adapt to changing consumer desires, we’ll be obsolete, too.”

Acres believes that the customer experience is key.

“Customers want fast service and personal recognition, in addition to affordable, entertaining chances to win,” he says. “Younger players were brought up with video games, home computers and the internet. They expect far greater interactivity than we provide.”

While Acres 4.0 has designed mobile gaming technology currently in use by charitable organizations at bars and restaurants in Minnesota, as well as in various Indian casinos across the U.S., Acres says he’s focusing on improving the customer experience in casino resorts.

“Today’s regulations and traditions are so entrenched that it will take a long while to convert traditional gambling experiences into games with greater interactivity and socialization as our younger generations desire,” he says. “And we still have a number of players that, although aging, still like traditional gambling games. So we decided to first focus on improving the immediacy, mobility, instruction and information with which customer services are delivered.”

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“We thought it important that Kai be viewed not as a technology but as a person, because we wanted to remind ourselves that customers— and employees—are people.”

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Kaizen = good change “Through this automated, more efficient and personalized service process, Kai cuts response times by 20 percent or more alone, while also saving thousands of dollars in labor costs. But Kai’s real benefit is improving the player’s experience.”

—John Acres

Meet Kai With the need for better customer service following the leaps in technology, Acres says he focused on how to use this technology to go hand-in-hand with improved customer service.

“Several years ago we noticed the incredible proliferation of mobile devices,” he explains. “Something like 1.3 billion smart phones will be sold in 2013. We also realized just how inefficient traditional two-way radios are in allowing casino employees to communicate. So we started building an automated dispatch system that could eliminate those old two-way radios with mobile devices. We originally called the product ‘Satisfaction Express’ because it was intended to improve player satisfaction.”

As they developed the technology, though, Acres realized they could create an entire management system that could simultaneously embody standard rules of conduct and empower employees to deliver more rapid, more personalized service.

“The further we went down this development path, the more we realized it was about personality and emotional gratification, not about technology,” Acres adds. “So in early 2013 we decided to embrace the emotional, personal nature of customer service and renamed our product Kai.” The name was taken from a Japanese term, Kaizen, which means “good change” and describes a manufacturing management technique that transformed Japan’s devastated postwar society into one of the world’s great economies.

“While Kai had similarities to Kaizen, we thought it important that Kai be viewed not as a technology but as a person, because we wanted to remind ourselves that customers—and employees—are people,” Acres explains. “We believed that giving an employee clear direction, instruction and information could empower them to provide great service.

“For example, suppose Tim Smith is playing on machine B741 and encounters a bill jam. Kai instantly senses that jam and searches through his database of all employees on duty for the best-qualified, available person to assign that task to. In this case, that employee’s name is Jason Jones.

“Now Jason, like all employees who work with Kai, wears a wireless earpiece that’s connected to his wrist-mounted mobile device that runs Kai’s software. When Kai calls, Jason hears a beep and looks down at his screen to learn there is a bill jam on machine B741 and the player is Mr. Tim Smith, a goldlevel player.

“Jason immediately heads over to the location and says, ‘Hello Mr. Smith. I

see you have a bill jam. Let me fix that and you’ll be back to playing in no time.’ Kai handles all the paperwork for Jason and lets him escalate the call if additional help is required.

“Through this automated, more efficient and personalized service process, Kai cuts response times by 20 percent or more alone, while also saving thousands of dollars in labor costs. But Kai’s real benefit is improving the player’s experience.”

But the slot floor isn’t the only place Kai has applications. He’s already grown to provide drink service support for beverage servers and will soon extend support to security, hotel, surveillance, housekeeping and any other place where two-way radios are now used.

Acres says Kai will also grow to interact directly with players, allowing them to text for drinks, restaurant reservations and even to retrieve a car from valet.

“We initially worried that employees would resent taking work assignments from an automated personality, but we’ve found exactly the opposite to be true,” says Acres. “Workers are glad to be relieved of listening to radio traffic all day, and they like getting concise work assignments that allow them to truly please players.”

Fixing The Hole Acres says he is genuinely concerned about the fall-off in revenue on the casino floor. While money might also be spent in the non-gaming areas of the casino resort, he says without a solid foundation of gaming revenue, we’ll never see the number of massive casino resort projects that were characteristic of the 1990s and 2000s. He suggests a paradigm change.

“There have always been three shares that have been important to any business. There’s money share, there’s market share, and there’s mind share. And the tradition, whether it be a casino, or a supplier, or any other business, has been to start small, build money share, find a place where you can be profitable, take those profits and reinvest them, build up more customers until you have a market share, and ultimately, that market share results in a mind share where people recognize you.”

Today, those shares are inverted, says Acres.

“About 20 years ago, that got flipped upside down, by the internet,” he explains. “It became mind share first, then market share, then money share at the end. Look at Google, for example. They opened up with just a box on a browser screen. You could type in anything you want, and find JANUARY 2014 www.ggbmagazine.com

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“If I was running a casino, I would really seriously think about changing my games on the casino floor so that they are available to play for free, so that people can sit down and experience those games without risk.”

—John Acres

websites that related to your interests. They charged nothing to use Google, even though it was an incredibly valuable service. And for the first couple of years, they didn’t even run ads. They wanted to create a mind share of how to find information. And indeed, they did it so well, that Google is now a verb.

“At great cost, they created a mind share and built from it a very loyal following: a market share, even though no money was collected. When they had sufficient market share, they went to money share by running ads.

And that money is incredible. Look at Google in the past year—the amount that their stock price has risen has increased their market cap value.

And just that increase in value of Google within the last year exceeds the total value of all of the publicly traded gaming companies on Earth combined.”

Casinos, says Acres, are going to have to adopt that “mind share” model if they want to attract that next generation.

“If I was running a casino, I would really seriously think about changing my games on the casino floor so that they are available to play for free, so that people can sit down and experience those games without risk,” he says. “I can sit down and play this brand new game, and exercise it without investing any money. After a while a message appears saying, ‘You can actually win these jackpots. Press here to wager with real money.’ You’ve got to get that mind share first. You’ve got to get that person to engage. All of the other recreations consumers engage in are doing this, and we should too.”

People do the math, says Acres, consciously or unconsciously, so appealing to them with some play-for-free games might keep them in the house.

“You’re challenging them to put up a lot of money,” he says. “If I put a $20 bill in the machine and it’s gone in three minutes, I realize that this is going to cost me $400 an hour. I make $60,000 a year, so I can’t afford this. I’m out of here. But if we gave them that chance to play for free, they would understand that the game goes in cycles, with periods of wins and periods of losses. If we don’t change that mindset, we’re dead.”

Open Opportunities Acres says he’s pessimistic about future opportunities in gaming, but that’s only because most markets are flat or depressed.

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Global Gaming Business JANUARY 2014

“The only place there are opportunities is where there’s a growing market,” he explains. “With 11,000 fewer slot machines on the Strip than there were five years ago, our market is, at best, stable, and at worst, shrinking.

Now it becomes all about cost savings.

“But when I started, all the opportunity was there. That was a tremendously exciting thing. They would say, ‘Hey kid, what can you do? Give this a shot.’ And if it worked, then you got another shot. Well, there’s nobody giving shots right now.

“If I’m a new college, or even high school graduate, I’d rather go and create an experience on Facebook where I can be in business tomorrow. I wouldn’t go to that old fuddy-duddy casino industry, and work through the regulations and the traditions, and all of the obstacles that they put in my way. It’s not even a choice. I’ll go to the internet, where my friends are, and where there’s true opportunity. If we don’t provide opportunity to bright young minds, we won’t have any innovation in our industry.”

Part of the problem, says Acres, is the ponderous regulations that strangle gaming industry innovation. He believes there needs to be a partnership between operators, manufacturers and regulators to ease these burdens.

“We’ve got to be open to new ideas,” he says. “Regulators and management have to be open to trying new concepts, even though immediate success, or any success, is not guaranteed. Our industry came of age in an era of pent-up demand to gamble. Open a new casino and, bam, the money hit.

The Mirage paid for itself in a year. Those days are gone. We’re in the real world now, where you earn your profits one dollar at a time, just like every other business. And I don’t know that we’ve adjusted to that reality yet.”

Because it’s so difficult and complicated to obtain a gaming license in most regions, Acres says innovation gets stifled.

“To a great extent, operators who win a license believe that they are entitled to customer business. ‘We’ve got the license here; you owe us your gambling business.’ The part that we forget is, the consumer doesn’t owe anybody anything. They can take their money and spend it anywhere they want. And more and more, they want to spend it doing things besides gambling.

“Our problem in this industry is not available technology. Our problem is attitude. Are we going to reach out and recruit new players, or are we going to die serving the players that are aging out? That’s our choice.”

Technology that inspires For nearly 60 years, JCM Global has been creating leading and award-winning transaction technologies that have evolved entire industries and inspired businesses to be better, smarter and faster. Now, there is a new generation of technology from JCM to inspire you, including even more advanced bill validation, advanced printing capabilities, real-time controls for the entire operation, and digital displays unlike anything you’ve seen before. A world of inspiring technologies, all from one company.

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LIVING The 2014 Class of GGB’s

T

25 PEOPLE TO WATCH

he rapidly changing gaming industry is in dire need of bright, innovative people who are willing to take a chance to stay a step ahead. With changes in operations, the birth of new segments of the industry, and emphasis on technology and growth, the next generation of gaming industry leaders are going to be crucial to the continued success of any business enterprise.

For the 13th consecutive year, Global Gaming Business magazine is recognizing the people who are making a difference in the gaming industry. Nominated by our stellar Editorial Advisory Board, the people profiled in these pages have been recognized as leaders in their fields, performing their jobs with an eye toward the future, while recognizing where they have already been.

The 2014 “25 People to Watch” is a diverse group of individuals from every corner of the globe and every segment of the industry. To understand where the business is going, simply pay attention to what these people are going to do in 2014 and beyond, and you’ll have a good grasp of what will be important in the future.

Russian Relations Anna Romanova • Vice President, Eastern European Marketing, Aria, Las Vegas

M

uch has been said about the importance of Asian guests to the U.S. casino industry. Now a growing number of Las Vegas casinos also are cultivating wealthy Eastern European patrons.

The demographic has grown in importance since mid-2009, when Russia’s then-Prime Minister Vladimir Putin shut down the country’s multibillion-dollar gaming industry, closed 15 legal casinos in Moscow alone, put some 400,000 people out of work overnight and established four far-flung casino zones in remote areas of the country.

The purge hasn’t dampened Russians’ appetite for gaming. They just have to travel farther to indulge it. And Anna Romanova, vice president of Eastern European marketing for Aria, wants them to do so in Las Vegas.

“It’s never been an easy market, not a slam-dunk like China and Asia,” says Romanova, who has worked in a similar capacity for Caesars Palace, Bellagio and MGM Mirage. “Taking money out of the country has never been easy. It’s not an easy flight, at 14 hours. But in the last 15 years, this population has developed disposable income and quite a taste for the finer things in life. We’re doing our best to overcome the obstacles, make Las Vegas a welcom26

ing place for gamblers, and satisfy their tastes.”

Romanova deals exclusively with wealthy clients, many oil-rich, from Russia, Bulgaria, Ukraine, Armenia and the five “stans” of Central Asia—Kazakstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

Azerbaijan, which like Russia banned legal gaming in the late 1990s, “has become a hotbed of customer development for me in the last few years,” she says.

But it’s not always easy to entice customers to Sin City, and it requires plenty of leg work. “In a lot of countries we do not advertise,” says Romanova, “so visiting people in person is my only way to get the brand name out there, get introduced to new potential clients—it’s good old Marketing 101.

“We host customer appreciation parties and sell Vegas as the entertainment capital of the world, with amazing concerts, fights—everything and anything, including Grand Canyon tours. There are lots of opportunities for people to gamble in Europe, but Vegas stands alone, and when they come here once, they get hooked. So, I make three or four international trips a year, visiting customers on their turf. I find it productive and fun.”

Born and raised in Moscow, Romanova moved to the United States when she was 20 and first

Global Gaming Business JANUARY 2014

worked as a translator for Cirque du Soleil.

Her hospitality career began during a brief stint as secretary for Ed Fishman’s Players Club International. Romanova describes Fishman as a mentor, her “fearless leader,” and one of the first in the industry to recognize the then-untapped potential of the Russian market. “He knew it wasn’t all about Asia,” she says.

Her clients expect the best of everything—luxury accommodations, Michelin-starred restaurants and high-end retail, all of which make Aria a logical destination. “As in any up-and-coming market, there are the ultra-rich who can afford to gamble. They have discerning tastes.” Despite the lingering impact of the recession, Aria has hosted a steady flow of Eastern European tourists, but the future is unpredictable. “Politics and economies in Eastern Europe change so fast people at the very top of the ladder fall, or businesses shut down. Things there change faster than in the Western world. You really need to be ahead of the game, know your market, know what they are looking for and be able to offer it.”

Even so, Romanova says, the need for more people in her profession “is definitely on the rise.”

“Right now I am kind of a one-man show, and also there are not a lot of Russian-speaking hosts out there on the Strip,” she says. “We are looking for a few good men in the field.”

The job requirements?

“A sense of humor, perseverance, and the ability to multi-task are a must. It’s important to make quick decisions and keep your cool under pressure and stress.”

The rewards could be substantial.

—Marjorie Preston

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LEGENDS New Frontiers Derik Mooberry • Senior Vice President of Games, Table Game Products and Interactive Research and Development, Bally Technologies

I

f his official title is a mouthful, it’s because his range of responsibilities has just grown significantly.

Derik Mooberry has been an executive of Bally Technologies for 12 years, and that means he has taken part in the supplier’s transformation from a struggling slot manufacturer into a diverse supplier of technology and innovation in just about every facet of the delivery of games to casinos.

Beginning in systems sales, Mooberry was part of the boom that solidified Bally’s position as the top systems company in the business. His responsibilities gradually evolved to oversight of all game and system development and, with the completion last month of the acquisition of SHFL entertainment, of proprietary table games—all of it on both brick-and-mortar and online channels from casinos to PCs to mobile phones

and tablets.

“I’ve really had the pleasure of watching Bally grow over 12 years, and I’ve been able to grow along with it,” says Mooberry.

That growth is really just beginning. As senior VP in charge of both slot and table games as well as the new move into interactive products, Mooberry will continue his role of guiding products from the idea phase to implementation by customers.

“I have end-to-end responsibility for design, building and placement of our games in various marketplaces,” he explains. “That includes hardware engineering, software engineering, regulatory compliance, product management—everything in terms of getting the products ready for sale.”

The addition of development staff from SHFL entertainment—including game design whiz Roger Snow, among others—adds to a game design studio system that has been growing for years, with more than 30 game development studios located around the world.

“Building games for us is truly global, as are the marketplaces we sell our games in,” Mooberry says.

“Those studios will likely continue to expand.

We’re always looking for new game development talent. As a growing company, it seems we’re always in a recruitment mode, which is a fantastic position to be in.”

Bally’s mix of talent includes more than simply seasoned gaming industry veterans. “Some of our most creative people who work in our various game development teams came to Bally with basically no understanding of the gaming environment,” Mooberry says. “They may have had background in graphics or animation and may even have come from the video game industry, or other areas outside of that. We’ve had employees form Disney and other major companies join Bally and become fantastic game developers.”

As Bally moves forward, that talent is in charge of pushing the technological envelope more than ever. Part of Mooberry’s job is to identify market needs for specific Bally products and to, in the end, make them happen. In the iGaming space, that has meant not only the development of Bally’s iGam-

ing platform, but the effective transfer of Bally content to online channels. “If you look at the early games we’ve been deploying in the realmoney wagering space and intend to deploy in the mobile space, they are existing Bally games that have been some of our most successful titles in the traditional brick-and mortar environment,” he says.

“We look to capitalize on that brand recognition, and on the efforts we’ve expended in building those games for the land-based environment, and take them into other channels.”

For the coming year, those efforts will apply not only to the traditional Bally slot games, but to SHFL table-game entries like Let It Ride, Caribbean Stud and 3 Card Poker.

On the brick-and-mortar side, Mooberry will continue to work closely with Bryan Kelly and his “Innovation Lab,” which searches the larger world of technology for new play mechanics and other features that can be applied to Bally slots. “Bryan’s team thinks of innovative ideas that can be industry-changing, which are 24 months out and further,” he says. “We then carefully determine which of the many ideas to commercialize.”

Many of those ideas—the iDeck, the Pro Curve cabinet—have already become part of the Bally product lineup.

For 2014, Mooberry predicts the biggest news will be the rollout of the Pro Wave cabinet, which employs a 40-inch concave screen that can handle content from any other Bally setup, including the popular V32 portrait-style cabinet. Mooberry calls the new cabinet a hybrid between an upright and a slant-top, because it offers the real estate for game features of a large upright in a format that can be easily viewed from a seated position.

It’s just one more innovation that Mooberry has brought from concept to market. And it certainly won’t be the last. For Mooberry, that’s a byproduct of what he calls the best supplier team in the business. “It’s the people that make Bally great,” he says, “and it’s been a great run for me.”

It’s a run that shows no signs of slowing.

—Frank Legato

JANUARY 2014 www.ggbmagazine.com

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LivingLegends 25PEOPLE TO WATCH 2014 Vetting VIPs

Placing a Face

Kelvin Tan • Executive Vice

Anna Sainsbury • CEO, GeoComply

President, Chief of International Marketing, Melco Crown Entertainment

L

S

uccess in gaming is all about relationships, and in China, home to the most consistently lavish gamblers in the world, this is true more than anywhere else. It’s a culture defined by relationships—business, personal, familial—and gambling mirrors it in the bonds between junket and player, casino and player and casino and junket.

No one grasps this better than Kelvin Tan, the marketing guru who has been instrumental in putting Melco Crown Entertainment on the map in Macau as a destination for some of the most lucrative VIP and high-limit cash players in the largest casino market in the world.

Affable, experienced, smoothly accomplished, the 47-year-old Tan learned the secrets of the Asian high-roller mentality from one of the masters, Jack Lam, chairman of Jimei Group and a pioneer of the junket industry throughout East and Southeast Asia.

Tan was formally educated in the States—he holds an advanced degree in finance from Indiana University in Pennsylvania and has studied at the Executive Development Program of the University of Nevada, Reno—but his real school was Lam’s Fontana Leisure and Resort, the company behind one of the Philippines’ most popular holiday getaways, Fontana Leisure Parks about 70 miles north of Manila at the site of a sprawling former U.S. military base. Fontana is home to one of the country’s largest privately operated casinos, and by his early 30s Tan was running the place as chief operating officer, one of the youngest in the business. He went on to found a consulting firm offering strategic planning, feasibility studies, valuations and junket development programs for casinos across Asia.

A few years later he was making his name in Macau with the Sands China empire as a vice president of business development at its Venetian Macao operating division, where he led the team charged with expanding the company’s “premium mass” trade, the prized high-limit cash players who have emerged as one of the drivers of the Macau revenue boom. Significantly, he also was part of the bid team that helped parent Las Vegas Sands secure its Singapore casino license.

It was from the Venetian, in 2009, that he made the move of his career in crossing the Cotai Strip to Melco Crown on the eve of the opening of the young company’s flagship City of Dreams. The resort was an immediate success thanks to the crucial junket partnerships he solidified in the early going.

As an executive vice president and head of international marketing for City of Dreams and Altira Macau, Tan directs the VIP Services division, manages an extensive overseas branch network and keeps it together with the more than 50 junkets that call the two resorts home. He is regarded as highly as ever as one of preeminent relationship-builders in the elite world of VIP baccarat, the source of two-thirds of the $40 billion Macau market.

It’s a tribute to his skill and energy that Melco Crown today enjoys an outsized 14 percent share of the city’s gaming revenues, good for fourth place in the market and ahead of both MGM and Wynn Macau in an intensely competitive field.

—Victor DeLuca 28

Global Gaming Business JANUARY 2014

egal online gaming in the United States is in its infancy, and individuals who understand what is needed for it to grow and prosper will also grow and prosper. That’s what happened for Anna Sainsbury.

She got her first taste of the technology needed to operate and regulate online gaming when she served as commercial director for testing lab TST, which is now the internet gaming testing division for Gaming Laboratories International. She left TST to enter the consulting world. It was then, while working with the DC Lottery on what would have been the first internet gaming system in the United States, that she realized how crucial geolocation was about to become in any jurisdiction limited by boundaries and borders.

“The federal regulations we were following required quite stringent geolocation technologies that didn’t exist in the market at that time,” she says. “That’s where the idea of GeoComply was born.”

Two years later, with an office in Las Vegas, Sainsbury and her partners decided that New Jersey was the future of the company.

“We’ve been lucky enough to obtain 90 percent of the geolocation market in the state’s recently launched online gaming market,” she says.

There’s a reason for GeoComply’s dominance in New Jersey: superior technology.

“When we first started looking for a complete geolocation solution,” she explains, “it wasn’t just one data source that we needed. A whole group of data sources was necessary in order to approve players no matter what device they were using. We also needed to satisfy the reasonably designed requirement issued by the Department of Justice.”

Sainsbury says the company collected every kind of geolocation indicator, collecting as many different database partners as they could get.

“We wanted to be sure that no matter what the scenario, we would have databases to compare,” she says. “We also established a complicated rules engine to ensure that nobody could spoof the data that was locating them, while providing as much flexibility to our gaming partners as possible.”

The challenges of geolocation in New Jersey are quite unique, says Sainsbury, so much so that the technologies in use in Nevada weren’t going to be enough for the Garden State.

“There are over 1 million (out of 9 million) that live within one mile of the border,” she says. “So we definitely had to rely on more accurate data sources—GPS data, as well as Wi-Fi data. We worked with the regulators to add some extra layers of spoofing protection. We took some existing technology that we had and implemented special detection mechanisms.”

Because of the unique challenges of New Jersey, Sainsbury says the state will become a focal point for the industry.

“New Jersey’s ability to go from no iGaming standards at all to some of the best standards in the industry in six months has been unprecedented,” she says. “This will be motivational to some other states that have been considering online gaming but holding off until there is more certainty. It shows it can be done and can be done with success.”

—Patrick Roberts

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LivingLegends 25PEOPLE TO WATCH 2014 Full Service David Rittvo • Director of Food and Beverage, The Innovation Group

H

e was born and raised in the Big Easy, but David Rittvo’s voice carries no trace of his native Delta.

Perhaps it’s his lineage—Rittvo’s parents are New Yorkers—or the fact that he’s lived and worked around the world, from New Orleans to Aspen, from London to Singapore. As a director of food and beverage for The Innovation Group, a specialty adviser for the gaming and hospitality industries, Rittvo is always on the move, helping clients streamline operations, optimize menus, enhance marketing and remain competitive in a notoriously cutthroat industry.

Rittvo’s apprenticeship began early. At 13, after interviewing the head chef at Emeril Lagasse’s Nola as part of a school project, he was invited to spend a day in the kitchen.

“I showed up at 7 a.m., washed 17 pounds of spinach and peeled 20 pounds of shrimp, and thought it was the best,” Rittvo says. “I caught the restaurant bug right there.” While studying hospitality management, development and finance, he worked as a line cook, waiter and bar back.

The experience served him well. “Growing up in the back of the house doing 12-hour shifts teaches you a pretty serious work ethic, and to couple the operational side with the analytical side gives you a lot

of credibility,” he says. “When I walk into a casino, I’m not just the guy who sits behind a desk and looks at numbers.”

During his career, Rittvo has worked with the superstars of the industry including Lagasse, Robert Earl, Jean Georges Vongerichten and famed mixologist Salvatore Calabrese. He also served for a time as manager of the elite Boulevard restaurant in San Francisco (“a $16 million-a-year machine”). But Rittvo is equally comfortable helping fast-casual chains like Papa John’s Pizza integrate into the casino environment.

In a struggling economy, he says, it’s more important than ever to offer value and service along with a great menu, particularly as casinos get more revenue from non-gaming attractions.

“Las Vegas just hit above 50 percent in nongaming revenue including retail, food and beverage and entertainment. For smaller regional casinos and at some of the Native American casinos across the country, gaming is still the majority breadwinner, so it doesn’t have as much impact on the bottom line,” Rittvo says. “But no matter where you are, it’s still important to differentiate yourself. Coming out of the recession, guests have really traded down, going to mid-level restaurants instead of the steakhouse.

Though spending is starting to return, people are a lot more conscious of the price-value relationship.”

In some cases, restaurateurs can painlessly boost

Built to Last Richard Emery • President, Co-Owner, Thalden Boyd Emery

T

he architectural firm of Thalden Boyd Emery is often referred to as “Thalden Boyd.” The website URL is simply “Thalden.com.” Yet for many casino clients, the last name on the marquee is the most important. As president, co-owner and design director of the St. Louisbased firm—one of the largest practices of its kind in the U.S.—Rich Emery leads design and production for every project in the portfolio.

In a career that spans more than 30 years, Emery has seen the gaming industry go through cycles of boom, bust and recovery. Today, with skyrocketing competition, maturing markets and contracting revenues, he says more operators are foregoing the bigger-is-better mentality for judicious investment.

“The industry, the economy and the lending climate are demanding that we build a better widget—something faster, more efficient and less expensive,” Emery says. In many competitive markets, he adds, casinos designed by Thalden Boyd Emery “have outperformed the competition because we bring them on with the right balance of amenities and at the right price for the market.”

That approach is embodied in a property that opened last month in the greater Cincinnati area, the $175 million Miami Valley Gaming racino, developed by Churchill Downs and Delaware North. “We were tasked with doing the same size casino that the competitors were doing, but bringing it to market faster and building it for much less,” says Emery. The 186,000-square-foot contemporary facility went from groundbreaking to grand opening in about a year.

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Global Gaming Business JANUARY 2014

price points by adding a little showmanship, “a higher level of experience.” It can be as simple as dressing up the drinks, replacing shots and mixers with craft cocktails that include fresh-squeezed juices and garnishes like salsa agave nectar.

“The product basically costs the same,” explains Rittvo, “but I can charge a couple bucks more.” Microbrew and artisanal beers —“a step above Budweiser”—remain strong and have higher profit margins. Customers like to patronize local enterprise, so farm-to-table and locavore menu items still make sense; done well and marketed correctly, they also can make money.

So, what’s most important in today’s casino restaurant: the menu, the price or the service?

“I’d say service leads the pack very slightly, so make sure it’s spot-on,” Rittvo says. “In the gaming environment, you’re inviting people for a whole entertainment experience.”

—Marjorie Preston

In some cases, designers act as historians, anthropologists and cultural interpreters. Case in point: the $300 million Buffalo Thunder tribal gaming hall near Santa Fe, which opened in 2008. “It was like crafting a work of art,” says Emery. “The site, the building, the interiors, every element represented the beauty of New Mexico.” At the request of the Pueblo of Pojoaque, the architects blended contemporary construction methods with ancient tribal techniques, incorporating massive viga logs and “monoliths of stone” into the design. Tucked into the foothills of the Sangre de Cristo Mountains, the casino with the adobe façade looks right at home in the desert landscape.

With iGaming now a reality and more patrons playing on handheld devices, the casino industry faces more years of tumult and adjustment, says Emery. “We’re seeing it now; everyone is trying to capture that new frontier in gaming. When people are no longer tied to big machines, casinos will take on a whole new appearance and the architecture will have to adapt. But my prediction is people will still come to the casino because of the attractions, the excitement and the fun.”

The days of “build it and they will come” are over, he adds. “We have to focus the money where it has the most effectiveness, and build reasonably priced facilities that also have impact and dazzle the customer.”

Emery’s gift for design was less acquired than inherent. In kindergarten, as his classmates scrawled stick figures, he created intricate 3-D structural renderings. “I told my mom I couldn’t believe the other kids drew things flat. From very early on I knew I wanted to be an architect.”

He doesn’t mind if people sometimes forget his name. “I tend to be in the war room with our amazing design team and not out in the world,” he says. “I don’t have to get the credit. I just love what I do.”

—Marjorie Preston

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LivingLegends 25PEOPLE TO WATCH 2014 The Good Fight

Moving Money

Steffani Cochran • Chief Legal Counsel, Pojoaque Pueblo of New Mexico

Tim Richards • General Manager and Senior Vice President of Interactive Solutions, Global Cash Access

I

n 1862, President Abraham Lincoln bestowed a ceremonial “cane of authority” on the Pueblo of Pojoaque of northern New Mexico in acknowledgement of its sovereign status.

But self-rule has not always meant self-sufficiency for the tribe. As recently as the 1980s, following centuries of displacement, disease and poverty, unemployment in the community peaked at 80 percent. With deprivation came illiteracy and addiction.

Today, all that has changed. The Pojoaque hosts two gaming halls—Cities of Gold, which opened as the state’s first Class III casino in 1995; and the $300 million Buffalo Thunder, which debuted in 2008. The Pojoaque now dominates the gaming scene in the Santa Fe-Espanola area, drawing 50 percent of all slot business; net win for the second quarter of 2013 exceeded $15 million.

Prosperity has brought stunning advantages, and also revived an old fight.

Though the Pojoaque now contributes $4.5 million in annual revenue sharing to the state, along with millions in salaries and payroll taxes, New Mexico wants more.

As in the past, the tribe is prepared to fight.

“The states are saying, ‘Hmm, our tax revenues are smaller and our debts have increased, so we need more of your money,’” says the tribe’s chief legal counsel Steffani Cochran, now working on compact negotiations with Pueblo Governor George Rivera. “That, sadly, is the long history of behavior from state and federal governments. We’ve been successful putting money back into our economy, so you’d like to have more. But why are we responsible for your budget holes?”

The two sides have faced off before. In 2001, then-state Attorney General Patricia Madrid sued all gaming tribes in New Mexico for failing to ante up 16 percent of net slot revenues, saying it was a violation of a 1997 compact that promised to limit gaming competition. Most tribes paid up. The Pojoaque held out until 2005, when it finally settled the case. At the bargaining table now, the state again wants increased gaming revenues in exchange for exclusivity. Cochran promises the tribe will reject the offer, especially in light of competition that now includes racinos, a state lottery and ubiquitous nonprofit gaming.

“Pojoaque has said very publicly and very clearly it will not seek exclusivity from the state of New Mexico, so they cannot justify revenue sharing,” she says.

“We are competing now. And if someone thinks they can do better than we can, Governor Rivera says, ‘Bring it on.’”

On the plus side, gaming has been beneficial both for the tribe and the community at large. The Pojoaque now offers $1 million in annual scholarships to its children from kindergarten to the doctoral level. Almost 100 percent of the children now graduate from high school. With the reversal of fortune, the Indians have become local benefactors. The Pojoaque police supplement the state troopers. A tribal fire station is leased to the county for $1 a year. And the tribe has built a library and a community health center that serve more non-Indians than Indians.

Cochran is a Chickasaw who served on the National Indian Gaming Commission from 2010 to January 2013, where she “tried to bring the agency back to its roots in IGRA and make sure we get behind those policies, supporting self-sufficiency and economic development for the tribes.” She is committed to advancing the mission of the Pojoaque and all Indian tribes.

And the ongoing faceoff with New Mexico?

“Buffalo Thunder opened when the market was at its worst,” says Cochran.

“The Pueblo stuck it out, got people off unemployment rolls, gave back even when the economy was tanking. We will survive.”

—Marjorie Preston 32

Global Gaming Business JANUARY 2014

M

ost people look to place themselves in a growth industry.

For Tim Richards, the philosophy worked in reverse. It has found him.

The general manager and senior vice president of interactive solutions for Global Cash Access positions his company for the burgeoning online gaming market. GCA already is a powerhouse, holding 70 percent of the cash-handling, land-based casino market, he says.

GCA distributes approximately $20 billion in cash to gaming patrons each year via more than 95 million transactions. The Las Vegas-based company has over 8,000 patron touch points around the globe.

Online gaming, at maturity, is anticipated to equal 10 percent-15 percent of land-based play, according to industry estimates. That’s a substantial new revenue source for those who can corner it. As casinos recruit online players to their land-based properties, they need to offer patrons a seamless transition across different systems and vendors.

Richards anticipates a growing acceptance of iGaming in 2014 and a possible boom in 2015. New Jersey, Delaware and Nevada figure to be the major iGaming players in 2014. The online market will become a major focus for him. Richards also expects the growth of i-lottery in 2014. GCA operates i-lottery payments for Scientific Games in Minnesota and North Carolina.

“This will begin to set the stage going forward,” he says. “The industry can say, ‘Hey, now this is all being done legitimately.’ Operators can see how states have done well with this and put their regulations in place. We are starting to enter the comfort years, in which states begin to see this as a feasible business and banks become comfortable with it from the standpoint of processing transactions.”

The fear of customer fraud and tepid support from the U.S. government has kept iGaming on the back burner for the last few years. Yet as casinos begin dealing more with known customers, they figure to give them more instant cash access.

Richards, who grew up in Tucson and lives in Las Vegas, has entered his third decade of gaming. He has been influential with new products at every location. At Interblock, for example, he helped now-CEO Tom O’Brien roll out the successful G4 series of multi-player electronic games. Richards assisted IGT’s foray into table games and helped Progressive Gaming in its RFID gaming product.

He is a prominent player in GCA’s Everi suite of products, which provides comprehensive payment processing, along with detailed reporting, player and transaction analytics.

Everi Payments is a payment wall built specifically for online gaming. It consolidates numerous payment options into one integrated experience. The Everi Digital Wallet enables customers to load, store and withdraw funds 24 hours a day. The one-view account profile enables players to keep information up to date. The Everi Productivity Suite provides online gaming operators with tools for player acquisition, retention and revenue growth.

—Dave Bontempo

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LivingLegends 25PEOPLE TO WATCH 2014 Ready for Battle Kevin Brown • Chairman, Mohegan Tribe

K

evin Brown can mix military terms like “duty, honor and country” with expressions like finding the “target environment.”

But don’t expect to hear “at ease.” That’s not the colonel’s style.

Welcome to the blended worlds of tribal government gaming and the military, a nice leadership scenario for the Mohegan Sun casinos.

Brown, the colorful new chairman of the Mohegan Tribe, preceded his gaming career with a 25-year stint in the United States Army. Besides attaining the colonel rank, he earned three Bronze Stars and two combat infantry badges. Brown also served 40 months in the Middle East. He knows that gaming pressures pale next to enemy fire, yet the industries have similarities.

In his case, that meant handling multimillion-dollar budgets and the concerns of more than 4,000 people while in the Army. And like many corporate CEOs, Brown believes employees should be treated like family.

Other comparisons between gaming and the military feature strategy.

“The answer to how an Army guy ends up in the gaming industry is not something that would show on a World War II movie on a Sunday afternoon,” he indicates. “In a general sense, leading large and complex organizations makes you quickly wrap your mind around ambiguous situations. That’s been especially true for the United States Army, because we have been in conflict for more than 10 years. The level of complexity is violent and uncertain.

“In gaming, the ‘combat’ means there are assets you have to protect and there are opportunities to expand.

“In the specific sense, what’s interesting to me are the parallels between the two industries regarding internal controls. Instead of targeting the enemy, you are targeting your customer population. In the military, as in gaming, you are also marketing to a certain degree. You ask how something you wish to do affects three different groups: the internal audience (military personnel), the external ones (Iraqis, in this example) and the U.S. population (whose opinions affect military budgets and operations). Do they understand what you are doing?”

In gaming, the internal audience might be tribal members and casino executives. The external sector could be the patrons and administrative bodies.

One of those groups, the Massachusetts Gaming Commission, affects a major target for Brown. Mohegan Sun wants to construct a billion-dollar casino and hotel at Suffolk Downs in Boston. Suffolk Downs partnered with Caesars Entertainment for the initial casino proposal, but Caesars backed out of the plan before it went to voters in November at the request of its partners, due to an upcoming unfavorable report by the commission.

Boston gaming earned a split decision with the voters. East Boston residents denied gaming, but Revere voters passed it. Mohegan subsequently unveiled a plan to build on the Revere side of the racetrack’s property.

At issue is whether another voter referendum is needed for the Suffolk-Mohegan partnership. Massachusetts law mandates that the applicant must reach a working agreement with the host site and the surrounding area before it can operate. Brown was ready to accept either being vaulted into the final round of consideration for a license, expected to be announced in the first half of 2014, or to “move to the next target.”

Regardless of that verdict, Brown makes a triumphant homecoming. The Kentucky native conducts business in the same town in which he spent highschool years. Brown went on to West Point, where he gained a degree in aerospace engineering. He has also served as an analyst at the Pentagon.

He’s more than ready for this particular fight.

—Dave Bontempo

Great in Graton Joe Hasson • General Manager, Graton Resort Casino

Y

ou might recognize Joe Hasson on the street. After all, he is a TV star. Hasson was general manager of Green Valley Ranch in Las Vegas in 2004 when American Casino was filmed at the property as one of the first reality programs. GVR had only been open a few months, and Hasson was the focal point of the show.

He says he still gets those stares and comments from people about appearing on television, even so long ago.

“They say ‘Don’t I know you from somewhere?’” he laughs.

“And when I tell them, they immediately remember specific episodes.”

Unlike today, when reality shows are virtually scripted, Hasson says it wasn’t that way with American Casino.

“One episode, they wanted to see how I ended my day,” he explains. “So they came to my office and filmed me helping my daughter over the phone with her algebra homework. I got hundreds of emails about that show.”

Reality is running a new casino, and Hasson has been involved for the past year in getting the Graton Resort Casino ready to open for the managing partner, Station Casinos. Owned by the Federated Indians of Graton Rancheria, the casino is one of the first off-reservation casinos in California. Located in Sonoma County, it is the closest casino to the Bay Area, and when it opened in early November, thousands of visitors jammed area roadways for nearly a week.

But it’s not just the gaming that Hasson says will attract customers to the property.

34

Global Gaming Business JANUARY 2014

“We have a fabulous array of restaurants with celebrity chefs like Martin Yan, and local restaurants like the Daily Grill and Tony’s of North Beach. We have a great selection of quick bites and our guests will enjoy familiar foods.”

Hasson says the involvement of tribal leaders, particularly the chairman, Greg Sarris, has been inspirational.

“They’ve been at this a long time,” he says. “When I arrived about a year ago, we were able to help them get over the final hurdles, and the results have been nothing short of spectacular.”

While original plans for Graton were scaled back, Hasson says he hopes that Sarris and tribal leaders decide to expand the project.

“It would be my honor to help them bring a hotel to this project because that would complete the vision the tribe had when they began all those years ago,” says Hasson.

Hasson says the choice of Station Casinos to build and operate Graton wasn’t a mistake.

“The Las Vegas model of serving the locals market fits nicely in Indian Country as well,” he says. “It has happened at Thunder Valley, at Gun Lake and now at Graton. Station Casinos is nicely aligned, well positioned and fabulously experienced in taking great care of local guests, and marketing today to create the kind of loyalty that any business owner would envy.”

—Roger Gros

Congratulations to Rymax’s

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Loyalty Marketing Executive appointed to the

25 People to Watch in 2014

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www.rymaxinc.com/ggb • 1.866.889.4813 Copyright © 2013 Rymax Marketing Services, Inc. All rights reserved.

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LivingLegends 25PEOPLE TO WATCH 2014 Keys to the Kingdom Donald Colvin • Executive Vice President and Chief Financial Officer, Caesars Entertainment

T

he “frugal Scot” may be just a notion, but surely Caesars Entertainment Chairman and CEO Gary Loveman was hoping there was a grain of truth in the saying when he appointed Donald Colvin to be the company’s chief financial officer late in 2012. After all, for a company with more than $20 billion in debt, it’s important to watch every penny.

Rather than be apprehensive of the company’s financial shape when he was first offered the position, Colvin says it appealed to him.

“I’ve had very good experiences in the past working for companies that had a lot of debt,” he explains. “My previous employer had a mountain of debt, no cash flow and not much revenue, with a terrible share price.

So, I did an analysis before I took that job and found that underlying that debt was a strong business. I did the same thing before taking this job. When I joined this company a year ago, the stock was around $4. Now it’s around $20, so my analysis wasn’t too faulty.”

Colvin reminds investors that Caesars’ debt was simply a result of bad timing economically.

“When the company was taken private, the financing was put in place pre-recession,” he says. “So there is a certain excess of debt on our balance sheet that we have to work with. But that doesn’t need to be fixed by a liquidation or a painful bankruptcy. It can be fixed by an adult-to-adult conversation. Eventually we will find our way forward. Yes, we have excessive debt, but the business is strong and the prospects are good.”

Recently, a company called Caesars Acquisitions (CAC) was spun off from the main company. Colvin says the company will be the vehicle for any future expansion for Caesars Entertainment.

“CAC is a vehicle for us to use for some exciting future expansion opportunities,” he says. “The first opportunity will be Horseshoe Baltimore, which is now under development, but there are other opportunities that we are currently considering. This allows us to consider these opportunities outside of the main company because we still have that debt issue hanging over us here.”

Colvin says the company has also refinanced some of the debt that pushed back maturity of these bonds, which totaled $4.65 billion, in an SEP arrangement.

“So basically we have three legs to the company now,” he says. “CZR, which includes Caesars Palace and most of the properties; we have the growth opportunities within CAC; and you have these remaining properties that are in an SEP.” Colvin says CAC allows Caesars to remain active in examining expansion opportunities because it is not subject to the debt that seemed to sideline Caesars’ ef36

Global Gaming Business JANUARY 2014

forts in South Korea and Massachusetts.

“The situation in South Korea had little to do with our debt level,” he explains. “We are still active there and we are making progress with a major developer.

“In Massachusetts, we left there for many complicated reasons unrelated to our debt level. I can tell you there are many projects we are actively examining and we have the means to execute those projects.”

Included under the CAC umbrella is Caesars Interactive, which is directing the company’s online gaming play. Colvin says recent legalization in New Jersey gives Caesars a chance to prove the power of its brands.

“The populous state of New Jersey will show the quality of our products,” he says. “And we have a bricks-and-mortar presence there that will help, as well. And our experience as one of the two companies approved to operate in Nevada will also help. We have great brands and a great team, so we should be successful. How big that market is, however, is the wild card.”

One of the biggest assets of Caesars Entertainment is the data it has captured through its Total Rewards program. Colvin says the financial value of that asset is substantial.

“We’re developing excellent analytics in the gaming part of our business, and our efforts are designed to make it a much more comprehensive analytics tool,” he says. “We’ve also made great strides with the non-gaming hospitality guest.”

Colvin affirms that Caesars remains interested in Asia, citing South Korea and Vietnam as attractive locales, but he says Japan is a “very attractive opportunity.”

“What we have to understand, however, is unlike the trains, the speed of any gaming legislation moves at a very Japanese pace,” he says.

—Roger Gros

Partners in Profits Nicky Senyard • Founder & CEO, Income Access

A

ffiliate marketing in Europe has been one of the most successful methods of growing online gaming in that region, accounting for anywhere from 25 percent to 35 percent of new player acquisitions. Affiliates compile lists of potential players and refer them to online casinos in exchange for fees of various kinds.

Nicky Senyard is the queen of affiliates.

Her company, Income Access, helps compile the information that affiliates rely upon to collect their payments from online casinos and to confirm that players are indeed active. But the affiliate system will be much different in the United States because of the stricter regulations and fewer methods to acquire qualified players.

“Affiliates are an important piece of the iGaming world for three reasons,” she explains.

“First, it gives the operator free exposure on a site with good traffic. Secondly, it gives them a third-party endorsement because the affiliates are independent. And finally, the affiliates usually have very specific niches and expertise that the operators do not have. So, when you combine those three things, and add the fact that affiliates are only paid upon successful registration, it becomes a very interesting business model.”

Affiliates are more than just a marketing device for the operators, says Senyard; they are partners.

“The affiliate doesn’t get paid unless he delivers a qualified player, so it is to the affiliates’ benefit to bring the best players to the operators.”

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25PEOPLE TO WATCH 2014 LivingLegends Survive And Thrive Affiliates have been compared to player agents or junket operators in the land-based casino environment.

“Just like junket operators, affiliates in Europe often get a piece of NGR (net gaming revenue), called revenue share,” she explains.

“Affiliates can be paid in numerous ways. NGR is the predominant one, but there are other ways as well, usually CPA (cost per acquisition), which is a fee paid when a player signs up with an online operator.”

Unlike Europe, where affiliates are rarely required to be licensed, the three states that have legalized online gaming do have licensing requirements of some sort.

“Regulators are doing something very wise,” says Senyard. “They want to understand how players are acquired so they require either registration or actual licenses. To do any sort of revenue share, a license will be required.”

Those regulations are going to make the affiliate world in the U.S. somewhat different from Europe, according to Senyard.

“I see affiliates in the U.S. playing a very important role,” she says. “The extent of that role is going to change over time. The regulatory requirements are going to thin out that market and increase the cost for the operator, which I think is an unintended consequence.

“For that reason, the regulations might, might, change. What regulators are trying to do is valid and appropriate, but I think that when they find how this is going to spin out, it might evolve.”

Income Access plays a vital role between the operators and the affiliates.

“Income Access has a tracking protocol that actually manages affiliate programs,” she says.

“We can learn what creative has drawn a player in, how much they have deposited and how much they have played on a daily basis, all related to an affiliate account. Regulators are just becoming aware of technology like ours, so that over time this may be a reason why specific regulations may come down in their intensity a little bit, because it offers complete transparency.”

Senyard understands online gaming and the relationship with affiliates, because she entered the industry in 1999.

“We realized there was a need to manage affiliates, so we developed the technology,” she says. “In Europe, we are currently managing more than 200 brands, and we expect to be as successful in the U.S.” —Patrick Roberts

Rob Goldstein • President, Global Gaming Operations, Las Vegas Sands

F

or Rob Goldstein, the decision to join Las Vegas Sands, the company operated by Sheldon Adelson, was one he never regrets.

“Are there ups and downs?” he asks. “Sure, anytime you have a wide-eyed entrepreneur and visionary guy like Sheldon that’s going to happen. But I could not have asked for a better situation and results. When you think about the impact we’ve had in Las Vegas, Macau and Singapore, I’m very grateful. It’s far beyond anything I could ever hope for. I’ve had to adapt and be on my toes at all times, but overall, it’s been terrific.”

Doubts always surrounded the seemingly outrageous plans laid out by Adelson, from the focus on meetings and conventions in Las Vegas, to the visualization of Macau’s Cotai, to the construction of an iconic building in Singapore, but he rarely fails to produce results.

“Every place he’s gone, there have been naysayers,” says Goldstein. “And every place he’s gone, he’s nailed it.”

For Goldstein, Adelson’s big contribution to gaming has been the growth of non-gaming amenities, particularly in Asia.

“When you look at Sheldon in the aggregate,” he explains, “Macau might be the single-most fascinating decision because it not only helped LVS; it also helped our competitors. There was tremendous scorn and ridicule when he announced what he planned to do, but if he hadn’t pushed forward with this, you wouldn’t have what we see in Macau today. He authored the idea of Cotai with these non-gaming-centric buildings, with retail, spas, meetings and conventions, superstar sports and entertainment and all the other amenities. That couldn’t have happened in the old Macau.

“So you have to look at him in a different light and consider the impact he’s had on people’s lives in Vegas and in Asia.”

The explosive growth of the revenue in Macau will continue to increase, says Goldstein.

“I think Macau will be the world’s first $100 billion gaming market,” he says. “I like to say all gaming is local, and the glory of Macau is that its local market is called China. The junket business drove it in the early days, but increasingly it’s becoming the mass market that is growing quickly.

“I don’t see any end to it, because if the highspeed rail and all the infrastructure improvements to get more people to visit Macau than the government

is making happen, I don’t see how it doesn’t continue to boom.”

Even with at least five new integrated resorts currently under construction in Cotai, Goldstein barely sees a blip on the market share.

“Everyone has figured it out,” he says.

“You have to take your hat off to Melco Crown and Galaxy. They have become the drivers on Cotai. When Steve Wynn opened the Encore in Macau, that was the first time that people realized the size of the premium mass market, as it’s called.

“I don’t think the market will grow that quickly when all the resorts open, but it won’t take long because on a parallel track you’ve got the airport, the rail system, bridge from Hong Kong and border crossings expanding.”

Goldstein isn’t so enthusiastic about Las Vegas, although he calls it home.

“I’ve been living in Vegas for 18 years with my family,” he says. “We love it, but I’m worried about the future. The core customer of Las Vegas is middle America that was impacted significantly by the financial downturn of five years ago. That was the more affluent, high-end customer. It’s going to take a while for that customer to come back to Las Vegas and spend the money they used to spend on the gaming side. And let’s be candid. The last $25 billion or $30 billion spent here didn’t return much to the investors. It’s been a rough five years.

“The biggest thing Vegas has going for it is its uniqueness. We’re the entertainment capital, after all. But it’s going to be a slow recovery to where we were five years ago. Room rates have not spiked like they have in the rest of the country. As they return, EBITDA is going to return. Non-gaming is going to be the catalyst in the future.”

Adelson is mounting a campaign against the spread of legalized online gaming in the U.S. While Goldstein says his boss has some moral opposition to the industry, he believes there’s a sound business reason to oppose it as well.

“What worries me about it is twofold,” he says.

“First, the cost of entry is incredibly small, which means anyone can get into it. That shows me it is of limited value. Secondly, once you’re in it, it’s all about marketing dollars. The reinvestment becomes larger and larger. The customers have no loyalty.

There’s no bricks and sticks that attract them.

“We thought that brands had real value online.

But the more I look at it, the more I question that.

Once a customer gets online, he looks for the best deal, so the deal becomes the driver. If that’s the case, the margins erode quickly. That’s the biggest fear for me, from a business perspective.”

—Roger Gros

JANUARY 2014 www.ggbmagazine.com

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LivingLegends 25PEOPLE TO WATCH 2014 Asian Influencer Grant Govertsen • Managing Partner and Lead Analyst, Union Gaming Research Macau

G

rant Govertsen is not only one of the most respected financial analysts covering the gaming industry today; he’s earned that respect on two continents, which makes him unique among his peers and really something of a pioneer, like his parent company, Las Vegas-based Union Gaming Group, which he co-founded.

As head of Union Gaming Research Macau, Govertsen’s focus since arriving in the booming Chinese casino enclave early in 2011 has been squarely on the city’s leading Hong Kong-listed operators, and investors have reaped the benefits of the groundbreaking research he’s been able to undertake as a result. He’s shed enormous light on a market that was growing at astonishing rates when he arrived but was opaque to many, especially in the West. He did this mainly by stepping out front in identifying the importance the mass market was beginning to play in that growth story.

He’s drilled down into issues impacting transportation, immigration, retail sales, consumer financial services and exchange rates—not the kinds of things investors were accustomed to taking into account—with regular reports that comprise a body of original thinking composed in clear, simple language that have done more than any sophisticated spreadsheet in making Macau comprehensible.

In uncovering its essence as a big-picture play on the emerging might of the Chinese, and greater Asian, middle class, he’s been instrumental in reshaping how

we think about the market as a destination.

His background has been varied and constructed almost ideally for the role.

He was six years on Wall Street providing supporting research coverage for Deutsche Bank’s gaming platform and serving as lead analyst for the bank’s Lifestyle Brands & Leisure Products sector. He began his career with Coopers & Lybrand in the firm’s Financial Advisory Services group and worked at several boutique consulting firms prior to joining Deutsche Bank, providing feasibility and market studies related to gaming and real estate.

It was at Deutsche Bank that his enthusiasm for the industry flowered in the company of fellow sell-siders Bill Lerner and Rich Moriarty. When the bank’s interest in casinos waned during the financial crisis they bolted, setting up shop in Las Vegas to devote their considerable knowledge and credibility and their combined energies to gaming exclusively.

Union Gaming Group today is the umbrella for an array of companies specializing in global equity and credit research, investment banking, trading and gaming-related market and economic analysis.

UGRM is its Asian eyes and ears, and hasn’t hesitated under Govertsen’s leadership to explore beyond the six big listed Macau names, raising awareness of diamonds in the rough like Cambodia’s NagaCorp and defying the skeptics by initiating coverage of Hong Kong-listed Louis XIII Holdings, a fledgling company for which the group has helped secure critical financing to develop a luxury boutique resort on the Cotai Strip.

“Raising capital in Asia versus the U.S. makes some sense because it shows you’re dedicated to the region,” he says. “Optically, that’s important if you’re Beijing or, by extension, the Macau government. It’s showing that you really want to be rooted in the region, that it’s not foreigners necessarily becoming rich via stock appreciation. It’s also Chinese people, Chinese investors, Chinese funds. So that’s good.”

—Victor DeLuca

Sage of Oklahoma Joe Olujic • Chief Operating Officer, Osage Casinos

W

hat will the gaming community watch Joe Olujic do in 2014?

Take a deep breath, for starters.

The chief operating officer of Osage Casinos opened not one, but two Oklahoma properties, two weeks apart in December. It was a coming-of-age project, giving the seven-casino family its first two hotels in a fiercely competitive market. Olujic, who celebrated four years at the helm on December 1, knows the investment will grow the tribe’s market share and identify it as a more high-profile player.

That’s why he could laugh about the labor pains as the opening dawned.

“I tell people, ‘Remember we wanted to do this,’” he jokes, mirroring executives who have compared them with child birth, “and that this was our idea.”

The unveiling completed a year-long push that brought the Osage casinos into a new era. Its properties operate within an hour and a half of each other in gaming’s most saturated state. There are approximately 110 casinos in Oklahoma, prompting a constant temptation to upgrade. Properties need to enhance their product, but do so sensibly.

“We were looking at the Tulsa market recently,” Olujic says, “and for every gaming position, there are only 9.3 adults. For the entire state, the number is only 45 adults for every slot machine. To get some perspective on that, in California the number of adults per gaming position is well over 1,000.

“It is very competitive here. Our focus truly is service. We combine a good quality gaming experience with a certain time-on-device expectation. We are setting up facilities in which they 38

Global Gaming Business JANUARY 2014

are going to be entertained. Although you can’t be everything to everybody, we want to be the gamer’s place to game.

“We feel that we have raised the bar very high for a competitor who would want to come into this market.”

The Osage property in Skiatook will include 33 rooms, and the facility in Ponca City features 48. They both have suites. Both establishments will feature the upgraded symbols of pools, hot tubs, lobby bar, sports bars, fitness and banquet facilities. Besides driving foot traffic, the hotels can be used as a magnet for communities to generate business, he says. Hotels can give them everything from a place to run a convention to a spot to house players in a baseball tournament.

Olujic believes the Osage interests will benefit from this investment in 2014.

Look for them to consider further renovations in the next couple of years.

Gaming and tribal ties have long run in Olujic’s family. His brother Michael is the general manager at the Wildhorse Pass in Phoenix.

Olujic is a member of the Oneida Tribe of Indians from Wisconsin. He has been in gaming for 13 years, and previously served as assistant general manager of finance for the Oneida casinos in Wisconsin.

“There were seven casinos there, too,” he laughs.

Perhaps Olujic can author a new gaming phrase: “Seven In.” “Someday, I’ll run just one place,” he says.

That just might not be enough.

—Dave Bontempo

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LivingLegends 25PEOPLE TO WATCH 2014 Singapore Song

Real Reels

Elena Arabadjieva • Director, Investor Relations, Genting Singapore

Marcus Yoder • Executive Director, Sales & Business Development for the Americas, IGT Interactive

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hen the government of Singapore approved two casinos in the city, it was a shock to the developed world. After all, when you can’t discard chewing gum on the streets of this city, how will gaming prosper?

Very well, thank you.

Elena Arabadjieva has firsthand knowledge of how gaming works in the nation of Singapore. She joined the team from Genting gathered to plan Resorts World Sentosa (RWS) well before it opened, so her knowledge of the process is intensive.

“Joining RWS in 2008 was a dream job for me in terms of scope, scale and excitement,” she explains. “Being part of the pre-opening pioneer team of what was then going to be Singapore’s first integrated resort, and what is now a global tourism icon, was a oncein-a-lifetime opportunity to be part of something big, groundbreaking and new. This was also a great chance for me to work with a team of professionals that were among the best in their respective fields. At the same time, because we were building a resort so unique and never-been-done-before, this was also a chance for us to get out of our comfort zone and push new boundaries.”

Genting bhd was based in Malaysia, but decided to spin off several entities. Genting Singapore is just one; others include Genting divisions in Hong Kong, the U.K. and the United States.

“Genting Singapore is an independent entity listed on the Singapore stock exchange,” Arabadjieva explains. “It has a market cap of SG$18 billion (US$14.4 billion) and is among Singapore’s 10 largest listed companies. Genting Singapore is a subsidiary of the Genting Group, and we are proud to be part of one of the biggest gaming and leisure conglomerates with a global footprint.”

The Singapore government views the integrated resorts as tourist attractions, and they must include a large amount of non-gaming amenities. RWS includes a Universal theme park and one of the largest aquariums on the Pacific Rim. Arabadjieva says that is an important element of the property.

“We are an integrated resort, where gaming and non-gaming are integrated seamlessly to provide a whole range of entertainment for our guests,” she says. “Non-gaming revenue is growing, and our attractions—Universal Studios Singapore and Marine Life Park—are doing very well.”

Arabadjieva acknowledges that Asia is the center for growth in the gaming industry, and opportunities are endless.

“Asia is the most exciting place to be today, period,” she says. “I am born and educated in Bulgaria, but I did my MBA at INSEAD in Singapore and France and have spent the better part of my career in Asia. Coming from Eastern Europe, a region that has undergone a lot of political and economic change in the past 20 years, I appreciate even more the global importance and the excitement of Asia, where everyone aims high and moves fast.

“In this context, it is even more exciting to be in an industry that is set to grow even more in the future. I believe that the key to remain relevant is to keep on learning and never shy away from challenges.

Also, to expect the unexpected and to embrace opportunities, even if they are unusual and out of your comfort zone.”

While Genting is one of the largest gaming companies in the world, there is an air of mystery about it since it was founded by Tan Sri Lim Goh Tong and still is largely owned by that family, with Lim’s son Tan Sri Lim Kok Thay in charge today. Arabadjieva believes that allows the company to be very proactive.

“I have been fortunate enough to be able to explore different areas of our business,” she says. “I joined RWS in 2008 in a marketing capacity and subsequently headed the MICE team during the pre-opening and early opening days. I am currently part of the corporate team of Genting Singapore and look after the investor relations part of our business. Having been in operations, a subsequent move to a corporate role has been very exciting for me, as this has given me the opportunity to see the company business from many different angles. At the same time, seeing the resort come to life from the ground up adds depth to my current role, and I look forward growing with the company in the future.”

—Patrick Roberts 40

Global Gaming Business JANUARY 2014

S

lot machine manufacturers have invested millions in research and development of new games.

When the companies could convert those games into expensive slot machines, the business model for that kind of investment made sense.

But when online gaming started operating, the money spent to develop new games has been questioned, because online casinos aren’t interested in the expensive cabinets, just the games themselves.

That’s where Marcus Yoder comes in.

As executive director of sales and business development of the Americas for IGT Interactive, Yoder is responsible for marketing games that often got their start inside the impressive cabinets designed by the parent company, IGT. But what Yoder has discovered is that the games themselves are often what the player enjoys. The cabinets are just the package.

Yoder believes that the popularity of the games within the casinos will translate to them being popular online.

“These are the exact same games as you see in the casinos,” he says. “They play the same way, they behave the same way and they pay out the same way.

Now an online operator can choose a different pay table if desired, but so can a casino operator.”

To cement that relationship, IGT is going to do rollouts of new games both in the land-based casino and the online casino.

“For example, we’ll launch our ‘Ghostbusters’ game in New Jersey within the next month, and we’ll do that both online and in Atlantic City,” he explains. “It will be a complete marketing campaign.”

Yoder is based in IGT Interactive’s San Francisco headquarters, where the company employs teams of game developers to design games primarily for the online gamblers, but also for the machines that go into real-life casinos.

“But all of our game studios report to the same manager, Darrell Rodriguez,” he says. “This way, we’re all on one team and all working together. So we can all work towards games that work on the internet, land-based casinos or both.”

Yoder says the entire company is now more integrated. His sales function, says Yoder, now reports to Eric Tom, the corporate senior vice president of sales.

“All functions of the company are more integrated these days,” he says. “Engineering, product assurance and other departments are all integrated, so other than the physical separation, we’re one company.”

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25PEOPLE TO WATCH 2014 LivingLegends Pioneering iGaming Rory Shanahan • Head of Marketing, Williams Interactive

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Online operators often request certain game titles that have been popular in land-based casinos.

“In the Interactive Division, sometimes we don’t know all the titles,” he laughs. “But if someone asks for a game in the IGT library, we’ll get it ready and put it in the pipeline.”

IGT launched 19 titles in New Jersey in late November, with another 20 to soon follow. They offer the games to the online operators, and then take a share of the revenues whenever people play their games. Of the original 19 games, four were popular IGT video poker titles that have been proven successes over the years on the company’s Game King platform.

“They’re just single-hand games to start,” says Yoder, “but Triple Play and the additional multiple-hand games are coming too.”

Like Apple’s iTunes, IGT has opened up its pipeline to independent developers, and has developed a relationship with Action Gaming, the world’s leading developer of multi-hand video poker titles.

The conversion of a land-based title into an internet game is rather simple, says Yoder. The math models and options are all the same.

“Sometimes the art or design has to be altered slightly, so we just load the game into one of our slot machines in the San Francisco office and the artists will play the game to become familiar with it,” he says. “That allows them to translate that game to a similar type experience online.”

Yoder sees a new dynamic emerging with online gaming for slot companies.

“We’re going to have a hybrid market in the U.S.,” he says. “Some games will become popular online and move to land-based casinos, and then there will be cases where it’s the complete opposite. It’s a very exciting time to be in this business.”

—Patrick Roberts

hen slot manufacturer WMS Gaming looked at forming a separate entity to take advantage of the emergence of internet gaming, Rory Shanahan immediately took note.

“I’ve always had an interest in getting into the interactive side of the industry,” says Shanahan, who was senior manager of marketing communications at WMS when the company was forming what would become Williams Interactive early in 2012.

Shanahan had worked on the World Series of Poker for Harrah’s Entertainment in the mid-2000s. “I saw the explosive growth coming from online gaming back then, and how it could positively impact the land-based casinos,” he says. When Bob Hays, one of the founding executives for Williams Interactive, moved from WMS into his role of vice president and managing director, U.S. & emerging markets for Williams Interactive, one of his main tasks for 2013 was to build a marketing organization. Shanahan, who had risen rapidly through the marketing ranks in his five years at WMS, came to mind immediately to head marketing for the new WMS subsidiary.

“He said, ‘Come and join me on this adventure in taking over the world of online gaming,’” Shanahan recalls. “I was sold immediately.”

Williams Interactive’s mission is “an extension of what WMS has done for decades in land-based casinos,” Shanahan says. “The mission is to take advantage of emerging digital distribution channels, while really staying true to what makes WMS such a success— dedication to delivering a really compelling gaming experience.”

That means not only expanding distribution of top WMS land-based titles to existing for-wager internet casinos, but using the unique aspects of WMS slot games to expand the iGaming world into the U.S. This effort can be supported through social and freeplay sites developed for existing land-based casinos, which empower casinos by building engaged online player communities of their own that they could leverage if iGaming becomes legal in their jurisdictions.

For live real-money sites in Europe and elsewhere, including emerging markets like New Jersey, Williams Interactive has developed its Remote Game Server, which already delivers a library of favorite WMS games like The Wizard of Oz, Super Jackpot Party and KISS: Shout It Out Loud! to over a dozen leading iGaming operators in Europe.

Meanwhile, the other B2B business Williams Interactive has refined is the development of free-play sites for U.S. casinos. The Play4Fun Network creates a white-label free-play social casino platform for landbased operators where iGaming is not currently legal.

It is currently live on the website of the Snoqualmie Casino in Washington, and on the sites of Affinity Gaming’s A-Play Club, in operation for players at 12 casinos across four states.

“We’re leveraging our success in social and mobile gaming to empower land-based casinos that don’t have online wagering capabilities,” says Shanahan, “to really begin building an online, engaged player community they can use to the benefit of their physical, offline operation.”

It’s all part of what has been a remarkably quick ramp-up for Williams Interactive in its first 18 months of existence, which was accelerated by acquisitions of leading iGaming operator and supplier Jadestone Group, as well as social, casual and mobile gaming company Phantom EFX. The new company, which became a subsidiary of the global lottery and gaming company Scientific Games following the October 2013 acquisition of WMS by Scientific Games, is ready to move iGaming into the future.

Shanahan says one immediate benefit of the Scientific Games merger was the addition of its Barcrest game themes, including some of the most popular titles in the U.K., to the Williams Interactive content library.

For 2014, Shanahan says one big opportunity for growth of iGaming is the introduction of content that features more of the attractions found in land-based casinos. “In the real-money wagering space online, there is an opportunity to introduce much more sophisticated and compelling gaming experiences,” he says.

Shanahan—who has been one of the industry’s most energetic promoters of iGaming—says it all boils down to giving players the opportunity to access the same games they find in casinos, no matter where they are, and in the internet and mobile formats that are expected from younger gamers, who comprise the market of the future.

Says Shanahan, “We want to make our great library of authentic Vegas-style games available to current and new players, wherever and however they prefer to play.”

—Frank Legato

JANUARY 2014 www.ggbmagazine.com

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LivingLegends 25PEOPLE TO WATCH 2014 Control Convergence David Berman • Senior Managing Director of the Gaming, Lodging and Leisure Group, Macquarie Capital

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Not the Retiring Kind James McHugh • Member, Massachusetts Gaming Commission

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im McHugh thought retirement should be, well, exciting.

That’s why the esteemed Massachusetts Appeals Court judge joined the state’s gaming commission nearly two years ago. McHugh had capped his 26-year judicial tenure by gaining the coveted William H. Rehnquist Award for Judicial Excellence in 2011. The Rehnquist Award is presented annually to a state court judge who exemplifies the highest level of judicial excellence, integrity, fairness and professional ethics. Chief Justice of the United States John G. Roberts Jr. presented the award to McHugh at the U.S. Supreme Court in Washington, D.C. What a way to go out.

Yet when retirement dawned, McHugh sought a different experience. He became part of a commission that will award up to three gaming licenses in the state. Once doors open, that will bring billions into the state’s coffers. The actions of his five-member body will be prominently watched by the gaming industry in 2014.

McHugh understands the tightrope he walks. Complaints have come from frustrated gaming industry applicants, who contend the licensing process is too stringent. Massachusetts, in their view, has been painfully slow to award a gaming license. McHugh does not dismiss industry concerns about the commission process, and his tone is congenial.

“There are two unique provisions of the statute that don’t exist any place else in the country,” he says. “One requires an agreement of local officials and the applicant as to the benefits the applicant will give the city or the town. There is a significant amount of interplay there between the two parties. The second unique provision involves surrounding communities. The applicant must reach an agreement within the surrounding community regarding the mitigation of adverse factors (like noise, traffic, etc.). The question becomes, ‘What is a surrounding community?’ I don’t believe that is entirely clear.”

A “surrounding community” that doesn’t get on board with a casino plan may end up filing a lawsuit against it. That’s a situation the commission would like to avoid.

One recent event highlighted the sticky situation. When Caesars wanted a license, voters of East Boston rejected gaming, but constituents of neighboring Revere approved it. Caesars pulled out, but Mohegan Sun and Suffolk Downs later announced plans to build a sprawling facility on the Revere-only side of the racetrack. Did the old vote cover the new deal? Questions, questions, questions.

If the commission approves the Mohegan-Suffolk arrangement, the awarding of the first license would come down to Wynn or Mohegan, sometime in the first half of 2014.

Gaming interests can’t move quickly enough, but McHugh says the enthusiasm must be mixed with protocol.

“We are in one of the most intense, thoughtful, watchful media markets in the nation,” McHugh asserts. “We have got to get this right. Yes, sometimes we are walking a tightrope. It is clear that the legislature wanted us to go fast enough to be relevant, but slow enough to make sure we have got it right. We firmly believe we are on the right track.”

—Dave Bontempo 42

Global Gaming Business JANUARY 2014

t’s fitting for David Berman to be a merger and acquisition kingpin.

He himself was a targeted play.

The senior managing director and global head of gaming, lodging and leisure for Macquarie was recruited in 2011. He came in the deal in which the Sydney, Australia-based company acquired Regal Capital Advisors, the Los Angeles-based boutique investment bank focusing on the gaming, lodging and leisure industries founded by Berman. Macquarie Group is a leading provider of banking, financial advisory, investment and funds management services.

Regal provided a broad range of advisory services, including mergers and acquisitions, capital raising, debt and equity placements, and debt restructuring.

He has, to put it mildly, made a regal transformation. Under Berman’s tutelage, Macquarie has helped orchestrate some of the largest merger and acquisition deals in the industry over the past couple of years.

Berman’s group delivered a $1.49 billion sale of WMS Industries to Scientific Games and a $1.45 billion sale of Peninsula Gaming to Boyd Gaming. SHFL entertainment was scooped up by Bally Technologies for $1.33 billion in late November, and MTR Gaming has announced a $1 billion merger with Eldorado Resorts.

Stocks on both sides of the aisle performed well. WMS was sold at a 57 percent premium to its 90-day average pre-announcement price and SHFL entertainment was sold at a 40 percent premium to such average.

When you look at WMS, that’s a great price for their shareholders and it becomes a great business for Scientific Games.

“The market likes this convergence play,” Berman says, “with the acquirers’ stocks outperforming their publicly traded competitors. It’s win-win. That’s the fascinating part of this business. You find the value and creativity to make negotiations work. Every transaction is unique.

We’re solely focused on creating value for our clients’ stakeholders, whether a transaction is $50 million or $2 billion.”

Berman accommodates both buyers and sellers. In addition, his group assists companies raising debt and equity. His banking knowledge and gaming contacts continue to bear fruit in an era in which casinos can prosper either by refinancing or acquiring another company.

Macquarie is happy to have Berman aboard. The Washington state native, now based in Los Angeles, brought nearly two decades of gaming, lodging and leisure industry experience to the new company.

Prior to founding Regal, he was managing director and head of the gaming, lodging and leisure investment banking group at Credit Suisse, and held similar roles at CIBC World Markets and Oppenheimer & Co. He had executed more than 75 advisory mandates with a combined transaction value over $65 billion and more than 175 debt and equity capital-raising transactions totaling over $100 billion for clients in the gaming, lodging and leisure sectors.

He’s on a hot streak now, known by some of his clients as “The Bermanator.”

—Dave Bontempo

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LivingLegends 25PEOPLE TO WATCH 2014 Marketing for the Future Paul Gordon • Vice President of Sales, Rymax Marketing Services

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s vice president of sales for Rymax Marketing Services, Paul Gordon helps clients in a number of different industries effectively market their businesses.

But his favorite clients are in the casino business.

“I run several different divisions, but the gaming division is my favorite,” Gordon says. “It’s fun because it’s a marketing exercise of everything from behavioral studies to short-term gratification to what’s going to make people do things on a longer-term basis.”

On the surface, the traditional marketing aims of the casino business were relatively simple: People like freebies, so lay them on in response to loyal play. But since he first came to Rymax five years ago, the game has changed quite a bit.

And it will continue to change, Gordon says, simply because the audience for casinos is changing rapidly. As the ranks of the baby-boomers continue to thin, millennials and “Generation Z” are taking over.

That, he says, very much changes the baseline strategies needed in marketing to achieve player loyalty.

“The days of saying ‘Come in on Tuesday and get a muffin tin’ are long gone,” Gordon says.

Rymax made its name in the casino marketing business by landing deals with all of the highest of the high-end retailers for products that can be offered as incentives.

“We’re all about name-brand products that go into our programs,” says Gordon. “We’re the guys that are delivering Michael Kors. We are delivering Samsung. We are delivering Myer cookware, including Rachael Ray. We’re doing all those things that are desirable in retail, and that can be conferred on comp dollars. That’s a different strategy than giving away something that’s going to keep your beer can cold, and has the property’s name on it.”

However, he says, having the right products is only the beginning. Gordon has built up Rymax’s casino division by rolling up his sleeves with casino executives at every level—examining the demographics drawn by a property at various times of the day, week or year; examining the promotions tied in with entertainment events; studying the demographics drawn by each promotional or entertainment event—and then tailoring promotions with high-end gifts that are likely to be appreciated by each particular demographic.

“The reason we’ve penetrated so deeply across the board is that we said there’s more to player loyalty than simply ‘sign up for a card and get stuff,’” Gordon says. “What are the emotional drivers key to that group? What’s an audience motivator? Why are

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Global Gaming Business JANUARY 2014

they going to go to a property?”

Gordon tailors promotions for clients according to what’s going on in the property—and who is going to be there.

“If the demographic is a younger, cooler, hip audience, then the giveaway should be Beats by Dr. Dre, the headphones. If a fashion icon is performing, then give away a fashion product with high brand equity. We take a look at the entertainment calendar, and the seasonality in terms of what population is coming through the most, and try to have multiple promotions running in a segmentation and concentration strategy between boomers, millennials and Gen Z.” In his years at Rymax, Gordon has overseen the development of marketing strategies for just about every situation in the casino business—startups, revivals of struggling properties, targeting several markets in successful properties. For the future, though, he says one factor in all these programs is essential: Promotions must be communicated in a way the target market will hear them.

Communication, he says, must be online, and mobile.

“Technology now is critical, because as older boomers exit, the expectation of what they’re going to receive through loyalty is dramatically different,” he says.

“The next group we (as marketers) want to talk to is Generation Z, age 25 and up. Their entire life has been experienced on the internet.

They’re used to communicating in 140 characters or less, and they demand instant gratification, and they’re tremendously swayed by celebrities and by brand ambassadors.”

While making sure the internet is used to its fullest, he says, marketers have to be ready to work a lot harder than they did in the old keychain-andmuffin-tin days.

“Whatever worked in the past needs to be revisited, and a lot more homework needs to go into what is the right promotion, to drive volume and create a distinct identity for the property,” he says.

“We’re doing that. It’s a very strategic exercise, and that’s why we’ve had such great success in the casino segment.”

—Frank Legato

Navigating a Powerhouse Victor Duarte • Senior Vice President, Gaming and Content, GTECH

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ast year, Victor Duarte’s job got a bit more interesting, as did his company. Duarte was president and CEO of Canadian VLT giant Spielo in 2010 when he was called upon to help oversee the merger and combination of Spielo with sister company Atronic, as CEO of the then-newly formed Spielo International. At the same time, he also incorporated the two subsidiaries’ technology with that of their sister company, Lottomatica, the Italian lottery operator.

Ultimately, Duarte would help to oversee the combination of those companies’ gaming machine technologies under one corporate umbrella and brand: GTECH. Traditionally a giant in worldwide lottery technology and services, GTECH is now one of the gaming industry’s most diverse suppliers, with products ranging from casino slots to VLTs to interactive games and lottery systems serving multiple continents.

“GTECH is our new brand,” says Duarte.

“We felt that GTECH was the strongest global brand we had in our portfolio, and we’re obviously going to invest in and enhance that brand going forward. However, that doesn’t diminish Spielo, which has done a great job of enhancing its market presence over the last several years. I believe Spielo as a product brand is still very important to our casino and gaming-focused customers.”

If there was any doubt that Duarte, now senior vice president of gaming and content for GTECH, was up to the task of capitalizing on all the technological assets of the newly merged company, it was put to rest with the recent Global Gaming Expo, at which GTECH unveiled the consensus hit of the show, the remarkable Sphinx 3D slot machine.

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25PEOPLE TO WATCH 2014 LivingLegends That was just the latest of several dynamic new slot products Duarte has ushered into the market, and which are now part of the GTECH library. The company has achieved its most recent casino successes with recurring-revenue games like “Plants vs.

Zombies” and others under a license with internet social game giant PopCap, and continued rejuvenations of its franchise “Deal Or No Deal” licensed brand.

With a greater focus on R&D, Duarte says that product library will expand even further. “In both our recurring-revenue and core-games segments, we are investing more,” he says. “We want to grow the business in the next several years. We expect to increase the number of games we produce each year, and expect to bring those forward on a global basis.”

Meanwhile, Duarte has helped GTECH achieve its most aggressive growth to date across a number of global gaming business segments, largely driven by the company’s successes in Italy, Canada, and the worldwide casino gaming market.

Under Duarte, GTECH was first-to-market in the highly competitive new Italian VLT market.

“Being first is important, but being sustainable is even more so,” says Duarte. “Over the last several years, our content has continued to perform very well in that market, and that’s created demand. The success of Spielo’s product has created demand from the other concessionaires in the market.”

Today, the company supplies 10 different Italian VLT concessionaires, and latest available data shows GTECH’s VLT supplier revenue market share at more than 50 percent.

Duarte has also overseen GTECH’s most successful Canadian VLT and systems replacement cycle to date, despite a flood of new competitors to this market.

In 2014, Duarte says the company will work to build the reputation of the GTECH brand in all of its business segments. “We’ve announced the brand, but that’s only the first step,” he says. “The way to implement the brand and build perceived value is by doing what we do day-in and day-out—by delivering compelling products, top-performing content and the highest level of customer service.”

Duarte’s division is responsible for all gaming content coming from GTECH across land-based and interactive channels. He says the company’s main focus this year will be to spread its content further across North American casinos, as well as new potential VLT markets in Europe and elsewhere— and in channels other than brick-and-mortar casinos like internet and mobile gaming.

By any measurement, the new GTECH is off to a great start.

—Frank Legato

Food For Thought Seth Makowsky • Founder, Makowsky Restaurant Group

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&B revenues slumping? Let Seth Makowsky prime the gaming pump.

The New York native, who now lives in Los Angeles, continues to shine as the founder and force behind the Makowsky Restaurant Group. It has specialized in restructuring, advancing and creating restaurant companies over the past 15 years.

Gaming increasingly uses his expertise to enhance business, especially now that 95 percent of patrons live within a two-hour drive of casinos.

Amenities become prominent vehicles of property separation, and restaurants rank high in the amenity “food chain.” Indeed, food-and-beverage excellence has become more important than ever to retain and recruit customers. That’s why gaming companies tap Makowsky. He helps companies upgrade their restaurant profile.

“We love the opportunity to transform underperforming spaces into landmark restaurants,” he says. “Our formula is to benchmark the very best and develop gold mines within non-traditional environments like airports, casinos, theme parks, etc.

All are aimed at creating a win-win-win environment that improves profitability, increases market share and keeps guests coming back.

“We listen to F&B and truly seek to understand their needs,” Makowsky says. “We want to be their best business ally that creates sustainable value. Our goal is to form a win-win alliance aimed at driving optimal performance and outstanding guest experience.”

Win-win involves the execution of a shared vision. Let employees buy into the process and unveil the company’s new approach to customers.

“You want to delight guests in a way that creates loyalty 100 percent of the time,” Makowsky indicates. “Our approach to achieving extraordinary results is to first learn what makes the system work, evaluate the pathway towards optimal performance, and engage employees. Next, we benchmark the very best and clearly identify value

adding needed. And we sustain performance through a culture of systematic improvement, strict standardization, and empowering employees and management. Our involvement sets the stage for executives and managers to shine.”

What does all this have to do with a meal?

Everything. Dining can be used to comp a loyal customer or boost the experience of a patron who lost heavily. It is a service tool for casino hosts and a sales tool for the property. Players should view restaurants as a sure bet, especially— in the casino’s view—if it is the last experience one will have prior to leaving.

Makowsky started his career with the CocaCola Company and then joined Food Systems Unlimited as vice president of administration, operations, construction and leasing. He also attended Goizueta Business School at Emory University.

Robert Earl, the Planet Hollywood kingpin, became a major force in his career.

“He’s been a mentor since I started my career in the restaurant business,” Makowsky says.

“Robert appointed me president and CEO of Earl of Sandwich at the time when the Aladdin transformed into the new Planet Hollywood Resort & Casino. With a dedicated and passionate team we ramped up growth by focusing on nontraditional growth in airports, theme parks, casinos, malls and service plazas. We developed a culture of continuous improvement, removing bottlenecks and consistently exceeding performance targets.

“The result was several of the highest-grossing quick-service restaurants in the world. That includes the Earl of Sandwich at Planet Hollywood Resort & Casino, Atlantic City, Downtown Disney Marketplace in Orlando, and Anaheim, Disney Village in Paris, and top airports and travel plazas around the world.”

—Dave Bontempo

JANUARY 2014 www.ggbmagazine.com

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LivingLegends 25PEOPLE TO WATCH 2014

Spanish Twist Heliodoro Giner • Secretary General, Spanish Casino Association

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n Europe, it’s sometimes good to be “Switzerland.”

That’s what happened when Heliodoro Giner was appointed as secretary general of the Spanish Casino Association.

“The SCA was looking for an independent professional to serve the needs of the industry,” he explains. “Independence and neutrality were major issues. That’s why they were searching for somebody with no experience in the gambling industry.”

As an attorney, however, Giner had a good grasp of the intricacies of Spanish law and how it applies in the gaming business.

In addition, the emergence of online gaming only complicated a situation that was already murky at the start.

Giner cites the flagging economy as a concern of the industry in his country, but says as a whole, the European industry has major challenges.

“It is clear that, at least in Europe, there is a social and technological crisis as well,” he says.

“People are changing the way they behave and the way the spend their leisure time and money.

Gambling in general, and casinos in particular, have a difficult mission to try to be part of the future. The big problem that we face as an industry is that it is very complicated to adapt to all these changes with the level of regulation and taxation that we have to face.”

Giner says saturation across all gaming spaces impacts the casino industry.

“There are hundreds of bingo halls, thousands of gambling halls, and around 220,000 AWP (amusements with prizes) in bars all around the country,” he says. “And when you add online gambling, sports betting terminals, more aggressive lotteries... It’s a serious challenge to our business.

“We are trying to mitigate all these threads and work toward the future looking for alternatives and new business models. Clearly, regulation and taxation are on the top of the list of the changes that we need, but regulators and lawmakers do not always understand the business and its evolution.”

One positive piece of news in Spain is the possible entry of integrated resorts. Las Vegas Sands has proposed an integrated resort in Madrid, and Melco Crown is involved with something similar in Barcelona.

“This will be very good news for the Spanish and European casino industry,” he says. “Both LVS and Melco will force a number of major changes in casino and gambling regulation in order to bring their investments to Spain. It’s clear for me that achieving all these changes without the projects that you refer will cost much more time and energy, if it ever happens.”

The arrival of online gaming in Spain has also been a challenge for the casino industry.

“Most of the casino companies understand that part of the future of casino gambling is related to technology,” Giner explains. “Internet, mobile and tablets are new means of distribution for casino games. The merging of land-based and online gambling products will be an interesting development in the future. But I don’t see many land-based companies competing with the big online operators. It’s a much different business.”

Giner is also an officer in the European Casino Association, pointing out that the fate of casinos in Spain is inexorably linked to the industry on the entire continent. He says that the red tape that constantly engulfs casino projects in Europe is very difficult.

“The problem is that projects in Europe take such a long time that many people fail to realize of the importance of influencing European institutions for the good of casinos,” he says.

But some success has been noted.

“We had in the future important challenges like anti-money laundering directives, and in other fields, and will have much more progress in the future, I am sure,” says Giner.

Always the Switzerland.

—Patrick Roberts

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Light at the End of the Tunnel Scott Kreeger • President & COO, Revel Casino Hotel

T

he opening of Revel in Atlantic City in April 2012 was hailed as a turning point in the history of the city by New Jersey Governor Chris Christie, whose intervention with lenders kept the project moving a year earlier.

Unfortunately, the only turn was more downward as Revel failed to meet initial projections. Before long, the project’s founder Kevin DeSanctis exited, replaced by former Mohegan Sun President Jeff Hartmann.

Along with the Fine Point Group, Hartmann instituted a “Gamblers Wanted” promotion that reversed the previous course of non-emphasis of the property’s casino.

When Hartmann left in September, former Station Casinos executive Scott Kreeger was elevated to president to go along with his previous COO title. Kreeger brings with him much experience in the locals market and a marketing expertise that will come in handy in the super-heated competition in Atlantic City.

“When we came in, we tried to make the place much more aligned with what you find in a traditional casino environment,” says Kreeger. “We put more casino customers in the hotel rooms. We dialed back a little bit on the leisure travelers and the cash business, so we put gamblers in our rooms.”

To emphasize the gaming aspect of the property, Revel was given the traditional “casino hotel” tag that

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25PEOPLE TO WATCH 2014 LivingLegends

was absent upon opening.

Food and beverage was always an emphasis and Kreeger is a big believer in the attraction of this amenity.

“In my opinion, we have the greatest selection of restaurants I’ve ever seen in any property,” he says.

Still, the price point was off-putting to some potential customers. “We really missed in the casual, quick-serve area, and we had customers clamoring for quick and less expensive foods,” he says. “So I focused in on that right away.”

The result was Relish, a casual café that offered those kinds of foods.

“We focused on simple, local style and fun foods,” he says. “We’ve got a $4.99 burger, a $9.99 steak and shrimp special. It immediately took off.

When you find those areas of compressed demands like value food items, it immediately tracks.”

So much so that Relish was moved to a new and larger location.

Revel has to appeal to everyone to be a success, according to Kreeger, and create a multi-channel property.

“I’m willing to take the 21-year-old customer and the elderly customers and every demographic and income spectrum in between,” he says. “A well-run and a well-branded property should be able to do that. You just have to be smart about the channels through which you communicate. They are all different: the slot customers, the club patron, the concert attendee, the leisure resort customer… You have to know how to reach each of those groups.”

Kreeger is also committed to appeal to the local customer as well as the destination visitor.

“You can make offers to locals that make sense,” he says. “But you can also have things for visitors that make it very appealing. As a new person to Atlantic City, we’ve been feeling our way through this. We’re doing penetration studies on a per-capita basis through the various distances. Our early traditional marketing like gift giving has been very successful, so it leads me to believe that there is an opportunity to do effective local marketing.”

Kreeger says the advantages Revel has are undeniable.

“It’s a great property,” he says. “It’s fresh and clean

and right on the beach. So the branding and advertising needs to reflect that. That’s who we are.”

Kreeger credits DeSanctis for developing a very strong corporate culture at Revel, but says that the developments since opening have raised some concerns among employees.

“We just completed an employee survey that came back surprisingly positive,” he says. “But they are concerned about two things: the financial shape of the property and the strategy going forward. It’s my job to develop that strategy and to communicate it to everyone here, which is what we’re doing right now.”

Some things, says Kreeger, are out of his control.

“We want to see the city marketed as a brand,” he says. “I’m working with presidents of other properties and community organizations to accomplish that. But we need more effort in the meetings and conventions area, airlift, general branding and things of that nature. If we all work together, we can make that happen.”

—Roger Gros

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BUILDING LOYA LTY

From small to large, foreign or domestic, there is a customer loyalty and incentive program for every casino. by Rodric J. Hurdle-Bradford

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he rapid expansion of the casino gaming industry in both domestic and foreign markets has increased competitiveness to levels never seen before, from slot machines and table to even live entertainment. But the one area that remains a top priority for all casinos, no matter their name, size or location, is customer retention through loyalty programs.

“Most casinos allow their customers to generate rewards from their spending throughout the casino, including gaming, dining, retail and entertainment,” says Tom Doyle, vice president of systems integration for Bally Technologies. “This forms the foundation for the casino to continue to market to the player as they leave the building.”

Depending on the player’s status and casino resources, a customer loyalty or incentive program can represent various experiences. Traditional experiences include compensating top players with hotel rooms when the casino is under maximum occupancy, or concert and sporting event tickets if it has not yet sold out. More modern experiences are often tied to new players, using social media and other electronic communications to get them to the casino on slow nights, or with nongaming promotions to reinforce the casino as a complete entertainment destination.

“It has been well-established that different loyalty programs are needed for local casinos versus national casinos,” says Paul Gordon, vice president of sales for Rymax Marketing Services, Inc., which brokers deals with leading brands like Samsung, Michael Kors and Rachael Ray cookware as rewards prizes. “We see trends in technology impacting the loyalty space in a very positive way.”

The newest technology trends can be implemented several different ways, from social media to reward redemption to promotional displays on the casino property.

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“To remain competitive, casinos need to find synergies and use technology to communicate the synergies,” says Alex Calderone, senior vice president of casino finance and business development for The Fine Point Group. “Successful loyalty programs will intersect both flexibility and transferability for the best player experience. As the industry consolidates so will loyalty programs, so pooled resources of properties will resort in enhanced promotions and bigger opportunities for casinos in the future.”

A Matter of Marketing The biggest change for casino marketing departments is that the increased competition means they have to implement more proactive strategies to develop customer relationships. However, adjusting to this new environment still leaves areas that need to be addressed.

“The casino marketing department is defined as getting players to play in the casino and maintaining existing players,” says Ted Gottlieb, president of Gaming International, Inc., producer of the Win Cards player-education system implemented in over 200 casinos, riverboats and cruise ships worldwide.

“Casinos do not have a department specifically for new player development or ways to incentivize new players to play games that they do not know. Cultivating beginners and low-level gamblers is grossly overlooked by the industry. Casinos need to look at things differently.”

Along with paying more attention to a new generation of beginner and low-level gamblers, casinos also have to address the rising trend of non-gaming revenue and implement that into their player rewards systems.

“I think a lot of customers now realize the importance of a good loyalty

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“

The days of using the same complimentary offer at the same steakhouse over and over again are finished. This new generation of casino customers gets tired of that fast. Transferability to external opportunities like retail, restaurant and even airlines are key in today’s marketplace.

—Alex Calderone Senior VP of Casino Finance and Business

“

Development, The Fine Point Group

program that is built within a cohesive framework,” says Calderone. “The landscape has become a lot more competitive, so the entire marketing playbook has changed. Gone are the days of building a new tower to attract guests. Now you have to use the tools of the future, data analytics and player behavioral science.”

With non-gaming revenue hovering around 60 percent at many casinos, marketing now includes interactive experiences like the “You Guess” application implemented by Micro Gaming Technologies. Instead of building contests around gaming, it draws upon allowing casino visitors to guess on general topics like the weather, number of chips in a bowl, etc.

“Ultimately, the base emotion for a player or non-gaming guest is the same; they want to win in something,” says Travis Carrico, vice president of sales and marketing for Micro Gaming Technologies. “The promotional kiosk is now better suited for this trend by allowing for self-compensation, checking rewards points, purchasing more drawing entries, or gift items, or even receiving free slot play. We see even more unique promotional ideas and smaller properties guided by local markets and regular visitors.”

Micro Gaming Technologies helps guests capture the winning feeling with its software by allowing casino marketing departments to establish promotions that begin as soon as they leave the facility.

“We are giving casinos tools to control player motion right now,” says Carrico.

“Combine that with the on-site touch-screen kiosk and we are eliminating the old methods of paper drawing slips and drawing barrels. It is important to create efficiencies in drawing promotions.”

Reeling in the Rewards The terms “player rewards” and “incentive program” are perhaps two of the most ambiguous terms in the entire gaming industry. In the past, the term strictly meant benefits provided at the casino property, whether it be gaming, lodging, entertainment or dining. Now, to match the non-gaming interest of at least half of all casino guests, the definition of “rewards” or “incentive” has quickly expanded.

“We took a position early on to deliver high-quality brand equity with our products,” says Gordon. “We are dealing with a smarter consumer who knows the value of their play and how they are being treated as a player.”

Gordon and Rymax Marketing Services have seen tremendous growth in domestic markets, and have been able to categorize their clients into three areas of operations to identify the proper incentive program.

“New properties have to develop their players from scratch, while older casinos have to fend off new regional competitors,” says Gordon, “while well-established and popular casinos have to maintain their clientele by distributing the proper amount of external and internal rewards. The strategies are a lot different than before.”

Part of the more sophisticated reward strategy is treating each player visit as its own experience. This allows for more accurate compensation while the players receive the feeling that the casino truly understands their needs.

“If you have a bad day, we can detect that and may give you free play if you lost quickly,” says Doyle. “This is a very appealing incentive to the customer.”

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For more interactive experiences, Bally Technologies also offers rewards promotions where the player can participate in the ski ball arcade game, or even seasonal games like a pumpkin patch promotion. They have also introduced the Beverage Order Service System (BOSS) that allows players to order a special drink during an event, like a Mint Julep on Kentucky Derby day or their favorite drink without having to talk to a cocktail server or bartender.

“The industry is catching up to technology,” says Doyle. “Clients expect to use everyday technology at the casino now. This is why you see the increased use of Facebook, email, text messages and mobile applications.”

The Five-Point Plan For The Fine Point Group, developing architecture for successful loyalty programs tailored to specific needs of the casino has been an effective value proposition against its competitors. Despite the wide variety of the clientele, both foreign and domestic, they have identified five major components for successful rewards and incentive program implementation.

“It all begins with customer control,” says Calderone. “The customer has to have a good sense of when and where the rewards will be redeemed.”

Simplicity is also a foundation to building a successful program, as a casino’s ability to clearly articulate how points are earned and redeemed is often overlooked. This has become increasingly important as casinos have consolidated and often have multiple assets across different states.

Aspiration is the third point used in the firm’s design of a loyalty program architecture.

“A casino needs to give customers a reason to play,” says Calderone. “Customers need to be inspired to consolidate all of their play at one property. The single-tiered property reward structure is definitely outdated.”

With the rise in multiple-property casino brands, transferability has also risen in importance.

“You have many Native American tribes that own multiple properties that range in size from small to large,” says Calderone. “The ones that are not using the combined program are not operating at full efficiency.”

This helps prevent what Calderone calls “comp fatigue” when customers get burned out from receiving the same complimentary offers and amenities at the same casino property.

“The days of using the same complimentary offer at the same steakhouse over and over again are finished,” he says. “This new generation of casino customers gets tired of that fast. Transferability to external opportunities like retail, restaurant and even airlines are key in today’s marketplace.”

The final requirement in the Fine Point rewards program architecture is flexibility within systems. A successful loyalty architecture is created for different investment standards depending on the economic environment of each region or metropolitan area.

“Of course, you need to have a different reinvestment level in Detroit than you would on the Las Vegas Strip,” says Calderone. “All five factors have to be in place for the long-term success of the program.”

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Focusing on the Future With the transition from baby boomers to generation X and generation Y populating the casino, the industry is recognizing their different needs to establish long-term relationships.

One product that has been able to make the transition is Win Cards made by Gaming International, Inc. Established in 1987 and featured at Mandalay Bay Hotel and Casino since 2008, Win Cards help new players learn how to play casino games without intimidation.

Win Cards are handy, plastic cards with a dial designed to quickly and easily show beginners the basics of how to play the live casino games of blackjack, craps, roulette and baccarat.

“Most people who come to casinos do not know how to play craps, and are very intimidated by the live action,” says Gottlieb. “In this day and age, ‘I do not know how to play’ is not an excuse. With an entirely new generation of players coming to casinos, it is important that casinos do not get relaxed and miss out on revenue by not educating them on how to play. Marketing is a full-time pursuit, which is more than getting a guest there—it is getting them to play, too.”

This player development with younger demographics is extremely critical because of the sheer volume of casino properties across the United States today.

“The focused priority on high-end whales at casinos will never stop, and that

is understood,” says Gottlieb. “But if you start young players off early, then you can develop them and have them as players for life.”

Part of that engagement for younger guests is the implementation of interactive and online gaming, as well as the use of iPads and similar devices. Free play and reward offers that incorporate this trend are a lot more likely to be redeemed by young players.

“In the future, it will be important for players to take their gaming experience to the slot machine and the promotional kiosk,” says Carrico, who is currently beta-testing these strategies at a Minnesota casino. “There is a need for both, and it has to come from the marketing departments to cultivate the gaming experience.”

Along with cultivating the gaming experience, the marketing department at all casinos will have to continue their efforts to transform the entire casino landscape for all guests with rewards and incentive programs, not just for those who come to gamble.

“In the next 10 to 15 years, the casino will be more of a cultural destination in this country, similar to what malls have become,” says Gordon. “The ability for casinos to create revenue, auxiliary businesses, jobs and overall economic development is all powered by the ability to build customer loyalty and incentive programs. That will never change.”

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Finding The Way How geolocation actually works

BY MARCO VALERIO

T

here are many complicated technical issues that confront online gaming in the United States. Recently, we explored how the complex nature of payment processing for online gaming in the United States was going to make it difficult for American bettors to deposit money on new, regulated online gaming sites.

Another challenge facing U.S. iGaming is making sure that players can be legally allowed to gamble online depending on their geographic location within a legitimate U.S. iGaming jurisdiction.

Depositing money and being able to gamble with it online are not necessarily mutually inclusive.

It is totally possible—and legal—for players anywhere in the world to create and fund an account on some U.S. intrastate online gaming sites, such as Ultimate Poker in Nevada.

But being allowed to use that money for actual online play is something that requires the user to be physically located within the boundaries of a U.S. state where online wagering is expressly permitted. You could be physically located in California and you could create and fund an account on Ultimate Poker’s Nevada client. But until you are actually in Nevada, you won’t be allowed to play on that site.

To determine where in the world a player is physically located, online gaming operators will employ a series of technological tools specifically designed to verify the player’s geographic location. This process is known as geolocation, or more accurately, geoverification, and it is certainly not something the online gaming industry invented.

When you utilize the GPS on your phone to find directions, you are being geolocated. But due to the restrictive nature of internet gaming in the United States, geolocation works somewhat differently than in other everyday circumstances.

BETTER SAFE THAN SUBPOENAED Before moving ahead to explore what makes iGaming geolocation work, it’s important to understand the crucial role it plays in the developing U.S. online gambling environment.

The Department of Justice’s 2011 “Wire Act letter” was hailed by many as a “gift” to the U.S. online gaming industry, but it was a gift with conditions. The DOJ made it clear that, with the exception of sports betting, online gaming was OK in the U.S., provided that it was kept strictly within the boundaries of a state where it was specifically legal.

In other words, if a state cannot keep its online game within its border, it is arguably violating U.S. federal law.

While the consequences of this are better left unimagined, it helps to explain why most of the actors involved in the U.S. iGaming industry have reacted somewhat passively to reports that a sizable percentage (around 40 percent by some reports) of indisputably New Jersey-based players have failed to be correctly geoverified since the state opened its iGaming door on November 26.

No one is happy to turn away perfectly able online gamblers in New Jersey, but for the time being, it is largely better to err on the side of caution and risk disgruntling a few users than relaxing all geolocation barriers and allowing New Yorkers to check-raise the people in Camden.

In addition, any visible interstate transgressions of proper geoverification would be viewed as irresistible fodder for those who oppose online gaming in any form, be it intra or interstate.

To determine where in the world a player is physically located, online gaming operators will employ a series of technological tools specifically designed to verify the player’s geographic location. This process is known as geolocation, or more accurately, geoverification, and it is certainly not something the online gaming industry invented.

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A user located physically within New Jersey but hanging out near the border of Pennsylvania or New York could easily be able to pick up on a Wi-Fi signal located across the state line.

ZONING IN The technology exists to perfectly geolocate anyone in the nation who possesses the appropriate technical means, and indeed thousands of New Jersey-based residents have been able to get verified just fine.

In multiple geoverification “fails,” the problem is typically the involuntary fault of the user through something he is not doing correctly on his own end. This becomes more clear once we look at how the geoverification process is actually carried out.

Companies exist that specialize in carrying out the iGaming geoverification process—these include GeoComply and Locaid—and they have to submit themselves to regulatory suitability licensing much like an iGaming operator or supplier does.

GeoComply, which occupies considerable market share in the iGaming space, is the official geoverification partner for most of the online gambling operators who went live in New Jersey.

While downloading the real-money client of any iGaming site partnered with GeoComply, users will be asked to install a GeoComply plugin. Installation of this plug-in is mandatory for real-money play, as it essentially allows the GeoComply solution to “fetch” the data it needs from the user’s computer to verify its physical location.

The user obviously needs to be online. As soon as a user is connected to the internet—independently of GeoComply or anything having to do with online gaming—he is immediately tagged with an IP (internet protocol) address, a numerical method to define the user’s connection, based, in part, on regionality.

Having established that IP addresses by themselves are not always a surefire way to ascertain the

)

player’s physical location (although they still matter), geoverification software will make use of additional means to snoop into the user’s data. Here we have Wi-Fi connectivity.

A user in New Jersey does not need to be connected to Wi-Fi to play online (they could be using a hard-wired connection), but they do need to be in a position where Wi-Fi networks are available. Fortunately, most modern computing devices come equipped with an ability to detect local Wi-Fi networks. For those that don’t, a user can make use of a portable Wi-Fi USB device. This is obviously an extra step and an additional expense for the user, but it would be mandatory in this instance.

The usefulness of Wi-Fi is in its detection of nearby local access points. If all of your Wi-Fi access points turn up to be based in a state where it is legal to gamble online, then we are all good. Unfortunately, this is where we encounter many of our issues having to do with online gamblers being too close to the state’s border.

A user located physically within New Jersey but hanging out near the border of Pennsylvania or New York could easily be able to pick up on a Wi-Fi signal located across the state line.

This is a much more common problem in New Jersey, a state surrounded by bustling communities, than in the largely deserted landscape of Nevada (although border geolocation has been a challenge there as well). The current border geolocation issue is the focus of great attention by operators looking for an easy remedy, but until that’s found, gamblers are advised to kindly take a few steps back in the other direction.

New Jersey is more complicated than Nevada had been for geolocation because of the JANUARY 2014 www.ggbmagazine.com

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As easy as it has become to circumvent IP addresses, it is also relatively easy for guarded operators to spot when this is happening and to take action.

dense population along the borders. Anna Sainsbury, the president of GeoComply, says that more than 1 million residents of New Jersey live within a mile of the state’s borders.

“But that dense population works in our favor, as well,” she explains.

“The amount of Wi-Fi data and Wi-Fi access points we have in these areas has given us the ability to get right over the borderlines. We’re getting accuracy levels of about 50 meters, so we can get very close to the border.”

It would seem that having a sufficiently local IP address would be enough to assess geographic location and quell any concerns. The problem is that IP addresses have become easy to fake and circumvent. Entire systems have been created to basically allow any user from around the planet to connect to a network located in another part of the planet and claim its IP address as its own, a process called spoofing. It’s not a difficult or expensive thing to do.

Some of these systems—they are sometimes referred to as Virtual Private Networks (VPNs)—were created with the pretty transparent purpose of fooling IP trackers. Websites such as HideMyAss.com are cited frequently as an example. Especially after Black Friday, a lot of U.S.-based online poker players took advantage of the VPN method to connect to remote servers around the world and continue to play on offshore poker sites in a country where it was largely made illegal.

The other side of the story is that, as easy as it has become to circumvent IP addresses, it is also relatively easy for guarded operators to spot when this is happening and to take action, which is exactly what companies like PokerStars have been doing. Here again we have an example of how the geoverification process is of paramount legal importance.

“We have algorithms that obtain different data and then we look to make sure that the device isn’t deploying any spoofing software that would allow you to mask your location,” says Sainbury.

Some systems that invariably involve a game of IPs are not meant to be used for any treachery at all. TeamViewer and GoToMyPC.com are examples. But because they involve similar means of making it unclear where the user is physically located, geoverification technology will recognize their presence and shut down the computing device’s ability to be geoverified. Users who call support complaining about geoverification are routinely asked if they’ve got any of these programs running in the background, and will be told to shut them down if the answer is yes.

ALTERNATIVE METHODS Having done all it can to extract verifiable information from the user’s com54

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)

puting device, and desirous to continue to fulfill that whole let’s-not-violate-federal-law requirement, modern iGaming operators have begun resorting to an alternative geoverification method which would have not been practical, if at all possible, 10 years ago. This involves ascertaining the user’s location through the object that is arguably closer and more important to him than any computing device: his smart phone.

Modern smart phones come into play in iGaming in two ways. The first is to determine where the smart phone is physically located (it is generally assumed that its proprietor will be somewhere nearby, in a position to operate it). Users creating iGaming accounts will invariably be asked to enter their cell phone numbers as a means to fulfill the cell phone triangulation requirement.

Once in possession of the user’s cell phone number, the operator will “ping” the user’s cell phone. The phone is then prompted to send a signal to the nearest three cell-phone towers. An imaginary triangle consisting of these three points is then formed to encompass the user’s general location—or that of his cell phone, anyway.

If the three triangular points are all found to be within the eligible state, this requirement is usually partly fulfilled. Sometimes the user will be texted some kind of PIN code and asked to enter that code into the online gaming system, as additional means of identity verification.

This method has been used in both Nevada and Delaware, but New Jersey has chosen not to permit this form of geolocation.

“It comes down to the federal requirement which calls for reasonably designed geolocation technology,” says Sainbury. “If you look at the European situation, which heavily relied on IP geolocation, it’s pretty fair to say you could easily mask your location with any kind of proxy program. We look to getting a minimum of two different data sources and cross-reference those data sources with anti-spoofing technology. We work with regulators in each state to ensure that meets the requirements of the individual states, as well as the federal requirements.

“Unfortunately, these anti-spoofing programs can increase the false negatives and impact players who are legitimately within the state borders wanting to play.”

But Sainsbury points out that it’s early in the existence of online gaming in the U.S., so she would prefer to err on the side of caution.

“However, our data indicates that we’ve brought down the false negatives to around 10 percent,” she says. “In Nevada, their rate of false negatives is 35 percent. So we’re confident that we’re going to continue to improve.”

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Sovereign Solution Tribes taking tentative steps to internet gambling

By Dave Palermo

A

fter more than three years of intense and occasionally volatile debate, American Indian tribes are beginning to embrace internet gambling, taking slow, tentative steps on a path to cyberspace lined with economic, legal and regulatory uncertainties.

California tribes are proposing legislation to enable Indian governments, card clubs and, perhaps, racetracks to offer online poker in an effort to capture gamblers among the state’s 38 million people, by far the country’s most lucrative online market.

Meanwhile, remote tribes in the upper Midwest and Great Plains are looking to offer bingo and other Class II games the Indian Gaming Regulatory Act (IGRA) allow tribes to operate without the need for tribal-state regulatory agreements.

Lacking player liquidity prevalent in populous states such as California, New York and Florida, tribes in the West and Midwest are pondering alliances and interstate compacts in an effort to compete with larger commercial gambling companies in Nevada and elsewhere.

Other tribal leaders are looking to federal internet legislation as a means of creating a more uniform regulatory structure among the various states.

The concern online wagering will erode revenues at 425 Indian casinos in 28 states has largely dissipated, in part because of competitive pressure from states moving to legalize cyberspace gambling.

About 40 of 247 Indian tribes with casinos operate free-play websites with the anticipation of eventually accepting realmoney wagers.

That final step may come soon.

“Tribes are finally, at long last, looking for solutions and not just asking questions,” says Joe Valandra, a tribal consultant and chief executive with Great Luck LLC. “There’s no way to stand in front of this juggernaut much longer. It doesn’t make any sense if you’re a government.”

“The issue of online gambling is now unavoidable,” consultant Ehren Richardson says. “Tribes have to look at it and get serious about it.”

Indigenous governments are taking parallel tracks to online gambling. California, with nearly a third of the 366 federally recognized tribes in the lower 48 states, is pursing online poker outside of IGRA, a scheme that will subject tribes to state Lac du Flambeau Band of Lake Superior Chippewa Indians Chairman Tom Maulson wants his tribe to lead the way to internet gambling.

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taxation and regulation.

Restricting online wagering to poker would maintain the constitutional exclusivity of California tribes to offer Class III, casino-style gambling. The statewide industry would operate outside tribal-state regulatory agreements, or compacts required under IGRA for Class III gambling.

“This is not Indian gaming,” says Jacob Coin, executive director of public affairs for the San Manuel Band of Serrano Mission Indians, a leader of one of two tribal coalitions drafting bills for consideration when the legislature convenes later this month.

Elsewhere, largely Midwest groups such as the Tribal Internet Gaming Alliance (TIGA) and Intertribal Online Gaming Association (ITOGA) seek to offer online bingo and other Class II, non-casino style games allowed under IGRA with regulatory oversight by the National Indian Gaming Commission (NIGC).

But progress has been slow.

Online Approaches Outside California TIGA, which plans to launch a network of tribal reservations and states on a real-money gambling website, has only one signatory to its “treaty,” the Lac du Flambeau Band of Lake Superior Chippewa Indians in Wisconsin.

“We want to be at the forefront of online gaming, and this is another step to advance that,” tribal Chairman Tom Maulson told Indian Country Today Media Network.

ITOGA and Bingo Nation, a fledging effort to link tribes in 29 states, have encountered similar problems generating tribal interest.

Desert Rose Bingo, an ambitious plan by Great Luck and the Alturas Band of Indians in California to launch a real-money Class II website, is struggling to meet a January deadline. The partnership hopes to use a “proxy” method of play to accept wagers from off the reservation.

“I wish it had moved faster than it has,” Valandra said last month on the eve of signing agreements with a bank and credit card processor to handle Desert Rose wagers.

“That’s part of being a pioneer… We’re breaking new ground.”

TIGA attorney Jeffrey Nelson says his group has a mailing list of 40 tribes in 17 states interested in the alliance. Many are in rural areas of Wisconsin, Michigan and Minnesota.

“The potential is there to level the playing field for tribes that aren’t in the greatest locations for land-based casinos,” Nelson says.

TIGA is taking a relatively safe legal approach in that it will not attempt to take wagers from off tribal lands with the exception of states joining the network.

“I don’t see anybody else doing this,” Nelson says. “As far as offering wagers for people in Indian country on a system that is conservative in its legal approach, we’re the only game in town.”

The group could be handicapped by the fact founder Kevin D. Maulson, the chairman’s son, was cited in 2008 for securities fraud in connection with the failed AmeriCash Inc., a supplier of ATMs to tribal casinos.

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California Dreamin’ Golden State tribes split on online gambling wo American Indian groups are philosophically divided on draft internet poker legislation in California, and their differences may be a barrier to getting a bill out of the 2014 legislative session.

Political insiders believe consensus among politically powerful tribes on bill language is crucial to the success of intrastate internet legislation.

But consensus will require settling differences between coalitions led by the Pechanga Band of Luiseño Indians in Temecula and San Manuel Band Senator Lou Correa has of Serrano Mission Indians of San Bernardino. authored a bill that treats The Pechanga group—which includes among its tribal online poker like a seven members the Agua Caliente Indians of Palm commercial enterprise.

Springs and Yocha Dehe Wintun Nation near Sacramento—seeks legislation that carves out a significant regulatory role for tribes and adheres to state public policy of limited gambling.

Pechanga opposes licensing racetracks and advanced deposit wagering firms and seeks to limit investment by outside companies such as bwin.party entertainment, partners with the United Auburn Indian Community, operators of Thunder Valley Casino near Sacramento, and Caesars Entertainment, management partner for the Rincon Band of Senator Rod Wright Luiseño Indians, owners of Harrah’s Rincon near favors licensing San Diego. racetracks and “As we consider authorizing internet poker, we ADWs for online poker, have to do so in a manner that honors the commit- along with tribes. ment we made to California voters 15 years ago, that gaming in the state would be limited,” Pechanga Chairman Mark Macarro says of the Proposition 1A ballot initiative.

State law restricts expansion of California card rooms, Macarro says, and a constitutional amendment gives tribes the exclusive right to operate casino-style gambling.

“Those are sensible limitations and they’re there for a purpose,” Macarro says. “They’re grounded in long-held policy that has served tribes and the state well for over three decades.”

The San Manuel coalition—which includes Rincon and United Auburn—views online poker as a commercial venture outside the Indian Gaming Regulatory Act, taxed and regulated by the state.

San Manuel is less concerned with licensing and investment restrictions, other than prohibiting participation by companies believed to have accepted online wagers after 2006 passage of the Unlawful internet Gaming Enforcement Act (UIGEA).

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“We want an open model under which anybody can do business without artificial restrictions,” said Alison Harvey, United Auburn’s director of government affairs.

The San Manuel group has drafted SB678 sponsored by Senator Lou Correa of Santa Ana. Senator Roderick Wright of Inglewood is sponsoring SB51, which extends licensing to racetracks and ADWs and requires applicants to form LLCs, a stipulation opposed by the Pechanga group.

Wright is chairman of the Government Organization Committee (GOC), through which internet legislation must pass.

The Pechanga group is seeking a sponsor for what could be a third bill.

“Chairman Wright made it clear at that meeting he’s willing to modify his bill,” says GOC Director Arthur Terzakis.

But the senator is holding fast to the licensing of racetracks and ADWs and the need for tribes to form LLCs. The Attorney General’s Office believes LLCs are necessary in the event a tribal business needs to file for bankruptcy.

Lawmakers believe the impetus to consensus may come as more tribes enter into partnerships with platform and software providers.

Macarro suspects many tribes in the San Manuel group are being pressured by business partners, noting in particular Caesars Entertainment’s $23 billion debt.

“We think Caesars expanding gaming in California is a strategic imperative for the company,” he says.

Michael Lombardi, gambling commissioner for the Augustine Band of Cahuilla Indians, believes tribes can reach agreement on bill language.

“Many of the differences are not fundamental or insurmountable,” he says. “They can be bridged.

“The fact of the matter is if we don’t work together there will be no bill.”

Whether the path to online gambling involves poker as a commercial venture or Class II bingo under IGRA, Macarro says the debate in California is a lesson for tribes throughout the country.

“Tribes need to evaluate things with regard to what is best for their tribe and what is best for Indian country,” he says. “A proposal should not sell out principles important to tribes.

“It can’t just be about the deal. Certain things shouldn’t be negotiated.

“As I have said consistently, we only have one chance to get this right. We intend to work methodically through the issues to ensure long-term tribal rights are protected.”

—Dave Palermo

JANUARY 2014 www.ggbmagazine.com

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NIGC May Not Be Ready Joe Valandra’s Great Luck plans to conduct Class II bingo online for the Alturas Band of Indians in California.

Marc Macarro, chairman of the Pechanga Band of Luiseño Indians, warns that Congress may act to shut down tribal iGaming.

“He is one of our TIGA organizers,” Nelson says of Maulson. “He has always said that he will not seek to serve as a member of TIGA leadership—that is, he will not be a member of the TIGA Treaty Council.”

Desert Rose is using a web browser-enabled virtual private network (VPN) website to wade into the untested legal and regulatory realm of off-reservation wagers.

“This is a watershed moment in terms of technology transforming the gaming experience in this country,” Valandra said in a Desert Rose press release.

Many believe tribes lack the legal authority under IGRA and federal law to accept off-reservation, interactive wagers.

But Desert Rose contends it can offer electronic bingo to off-reservation gamblers in adherence with both IGRA and the Unlawful Internet Gambling Enforcement Act (UIGEA).

With internet servers on the Alturas Rancheria and by utilizing “proxy” play, Desert Rose attorneys promote the legal argument that wagering and financial transactions occur on Indian lands.

“We know proxy play is permitted under IGRA’s own pronouncements,” says Desert Rose attorney Kevin Quigley. “The ingredients are there for iGaming

by Indian Country if it is done technologically right and legally correctly.”

But tribes, particularly those unwilling to risk lucrative brick-and-mortar operations to potential legal action, are cautious about getting involved.

“I believe the framework of iGaming in Indian Country will be driven by smaller players,” Quigley says. “The larger brick-and-mortar Indian casinos obviously have more at stake.”

Mark Macarro, chairman of the Pechanga Band of Luiseño Indians in California, says pressing the legal envelope may prompt Congress to amend IGRA. “Something speculative, like the TIGA proposal appears to be, may strike a fear into legislators that would cause them to open up IGRA,” he says.

None of the proposals for online wagering is generating much support.

“I haven’t come across one tribe that has found one of those existing models attractive,” Richardson says, “whether it’s Bingo Nation, Great Luck, TIGA, whatever.”

Along with legal issues involved with off-reservation wagers, internet gambling is not being embraced by banks and credit card companies leery of federal prohibitions.

Visa and MasterCard have been rejecting many transactions from Ultimate Poker and Caesars Entertainment’s WSOP.com.

“I predict the debit card, credit card problem will be slowly solved over time as the banks get more comfortable with this industry,” Richardson says. “Right now it’s a new industry and banks are still very much concerned about UIGEA.” “Great Luck is a solution. This other group (TIGA) is another, more complicated approach, in my view. There may be others,” Valandra says. “The industry is going to evolve. One of these approaches, whether it’s Great Luck or TIGA or some hybrid of the two or three ideas that are out there, will eventually take shape.”

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Most tribal lawyers, regulators and speculators contend NIGC is not yet prepared to provide oversight of the fledging online industry.

“In my view they don’t have people on staff with experience in cutting-edge technology,” Valandra says.

Tribal leaders were frustrated at former NIGC Chairwoman Tracie Stevens’ refusal to speak out on the issue, particularly when Indian Country sought a major role for the agency in the event Congress passed online legislation.

Acting NIGC Chairman Jonodev Chaudhuri and Commissioner Dan Little did not respond to requests for comment.

“They have the systems in place to be able to get there, in time,” says Nelson, who plans to submit TIGA-amended tribal ordinances to the NIGC for approval.

“It’s not that difficult to hire people who come with the knowledge and resources to regulate this area, especially when you consider tribal governments are the primary regulators.”

Unlike TIGA, Desert Rose and Alturas will not submit an amended ordinance to NIGC for approval.

“Under IGRA and approved regulations, the tribe has the right to conduct Class II gaming,” Valandra says. “The tribal gaming ordinance as approved by the NIGC is adequate.

“The tribe has promulgated regulations pursuant to the approved ordinance to better define the play of Class II gaming in general and specifically how Class II play on the internet and the virtual private network (VPN) is regulated.

“That’s the view the tribe is taking and that’s the view we’ll open with. We’ll see how the NIGC reacts to that.”

Valandra and others believe NIGC needs to revisit its legal opinions on what constitutes Indian lands in the operation of online wagering.

The agency in 2010 declined to take enforcement against the Bay Mills Indian Community when it opened a casino on fee land in upstate Michigan without federal or state approvals, a case argued last month before the U.S. Supreme Court.

The decision was criticized by tribal leaders who fear the court will erode tribal sovereign immunity.

“They (NIGC) want to keep the definition of Indian land—Indian jurisdiction is what it boils down to—very narrow,” Valandra says.

“I don’t think they can stick to that. In a technological world they’re going to have to look at jurisdictions and what it means to technology and Indian sovereignty in a broader sense.”

California Leading The Way Poker in the Golden State appears to be the most promising and immediate pathway for tribes looking to online gambling.

After three years of failed legislation to permit intrastate wagering, tribes and lawmakers are cautiously optimistic a bill will make it out of the Capitol this year.

“I feel good about the prospects for 2014,” Macarro says.

“I think it’s a great opportunity in terms of timing and getting stakeholders together and developing a reasonable policy.

“If we are unable to harness all of those things, it will have been an opportunity squandered.”

But 2014 is an election year. And there remains a philosophical divide between tribal coalitions promoting legislation. (See page 59.) Without tribal consensus, most political observers believe a poker bill will not make it out of the legislature.

“In the short term, it’s real problematic, I think,” Richard Schuetz, a member of the California Gambling Control Commission, told OnlinePoker.com. “One, we’re in an election year. That changes politicians’ behaviors. Two, it’s been a contentious debate.”

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iGaming North America

Fencing Out Why geolocation is becoming an issue in U.S. iGaming launches

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By Sue Schneider

or many years, geolocation was not an issue in the iGaming industry, as regulation by jurisdictions was immature and player pools were global. But, beginning with the “ring-fencing” that European countries began, the idea of identifying where the player was began to grow.

Once Canadian provincial lottery corporations initiated iGaming services, identifying the location of the player was clearly an issue for North America.

In Canada, most provinces appear to be using thirdparty vendors to gather information on IP address, including the user’s country, province or state, city, and postal/ZIP code.

Now that three states in the U.S. have successfully launched, the standards for geolocation services increasingly continues to be part of the mix. Regulators want to know that the device the player is gambling on is within state boundaries at the time of play.

It appears that the biggest challenge has been the calibration of the geolocation services near the state borders. Not wanting to take any chances, operators have often had the vendors set their services one mile in from the borders.

There were some complaints related to this when Nevada launched. Some reports said that as many as 35 percent of those attempting to register were blocked. The issue of “false negatives” remains a critical one for operators, particularly as they try to build liquidity for poker products.

But given the relatively sparse population of the state, especially along the borders, it really wasn’t much of an issue. It’s estimated that less than 1.5 percent of Nevadans live within one mile of the bor-

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der, which was the standard there. It does, however, include some cities like Laughlin, thus excluding some players.

But now, with a populous state like New Jersey, with tens of thousands of folks along the borders, it’s a bit more problematic. The population across the Delaware River from Delaware and Pennsylvania as well as those across the Hudson River from New York is sizable enough to be of concern if too many are excluded.

The electronic fencing has created a bit of a “dead zone” or no-play zone.

“Unfortunately for some people, there may not be sufficient verification that they are in New Jersey—even if they are— and they’ll be denied,” David Rebuck, director of the state Division of Gaming Enforcement, told the AP. “It’s an unavoidable consequence.”

While New Jersey regulators were pleased that over 50,000 accounts were established in the first week after the launch, there were also a myriad of accounts of players not being able to register because the geolocation said they weren’t in the state.

Anecdotally, some players who lived within a few miles of the Atlantic City casinos were upset that they were told they were outside the state.

News reports stated that in the first night of iGaming in New Jersey alone, the geolocation services blocked players attempting to register from at least 23 other states. However, some estimated that 12 percent of those within the state who wanted to register were blocked due to geolocation issues. In many cases, through working with customer support, players were able to finally establish their accounts. For operators, the fines associated with accepting a player outside state borders outweighs the number of players who can’t sign on. They’re

One of the more serious concerns is that the geolocation is checked on occasion during the play and some have indicated that their play has been interrupted mid-game.

Those actions cause even more problems for the player as they seek to resume the game.

Global Gaming Business JANUARY 2014

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erring on the side of caution.

“No one can afford to risk that,” Tobin Prior, CEO of Ultimate Gaming, which is the Trump Taj Mahal Casino resort’s online partner, told the AP. “We would err on the side of caution.”

A quick look at the technology behind geolocation is useful. In Nevada, cell phone triangulation was used. This was particularly problematic in the Nevada launch since Verizon customers were not included in spite of the fact that Verizon allegedly has about a 40 percent penetration rate in Las Vegas.

Another technology is a USB key, which plugs in to the computer, some even with fingerprint technology. This includes personal information on a player as well as latitude and longitude of the device. This may translate to a “Wi-Fi positioning system” in use by some operators.

Given that veteran players were unused to this level of verification in the past, whether this will be a deterrent is an unknown at this point.

One of the more serious concerns is that the geolocation is checked on occasion during the play, and some have indicated that their play has been interrupted mid-game. Those actions cause even more problems for the player as they seek to resume the game.

Geolocation wasn’t the only glitch that emerged during the launch in New Jersey. Probably the more critical one is the credit card declines that players experienced when trying to fund their accounts. If the iGaming lifeblood of deposits is cut off, the entire operation comes to a screeching halt.

Until the banks and the card associations get a comfort level with iGaming in spite of its growing legitimacy, the alternative payment methods will likely be the primary mechanism for moving the money in and out of player accounts.

Sue Schneider is an iGaming industry veteran, having been involved sine 1995. She is a partner in iGaming North America, the leading independent conference on this segment of the gaming industry (igamingnorthamerica.com). She can be reached at sue@egamingbrokerage.com.

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net Gambling will get an official rollout in January with personal visits from Adelson to congressional offices.

The new president of the American Gaming Association, Geoff Freeman, is walking a tightrope. He wants to expand the influence and membership of the AGA while retaining the influence—and the revenue—of the organization’s powerful members, LVS included. hile hardly glitch-free, New JerAdelson Ramps NEW JERSEY In a statement, Freeman explained the AGA’s sey’s venture into online gamONLINE CASINOS Up Online position. bling is off to a strong start with (as of launch date “Time and again, government Gaming War about 51,000 players signing up of November 26) efforts to prohibit use of everyday with the 13 websites now in action after t’s only been about products have failed,” he said. “In one week of play.

CAESARS/BALLY’S five years since Las 2012, Americans spent nearly $3 Officials are confident that geoloca- WSOP.com Vegas Sands joined the billion gambling with rogue offtion programs—which are still blocking us.888.com American Gaming Asshore operators. The internet cansome players in the state—are doing a us.888poker.com sociation, but that relanot be forced back into the good job blocking players from outside us.888casino.com tionship seems to be in bottle—nor can market demand.

New Jersey, and even outside the U.S., Harrahscasino.com conflict as LVS ChairWe support pragmatism and strong from gambling.

Caesarscasino.com man Sheldon Adelson regulation of online gaming that “The good news is that people are Las Vegas Sands Chairman has launched a protects consumers, prevents underBORGATA and CEO Sheldon Adelson not getting on the site from outside the scorched-earth camage play, ensures the integrity of the NJ.PartyPoker.com state, and that’s the most important paign against online gaming, which a games and empowers law enforcement.

Borgatacasino.com part,” Steve Callender, general manager majority of the AGA board supports.

“New government efforts to prohibit online Borgatapoker.com of Tropicana Casino Resort, told the In an extensive article in the gaming will unintentionally strengthen black-market Bergen Record. “Unfortunately, some Washington Post, LVS executives exTROPICANA providers, create more risk for American consumers, people in the state are having trouble plained Adelson’s motives. tropicanacasino.com including children, and drive U.S. jobs and potential getting in. It’s a brand-new technology “In my 15 years of working with virgincasino.com revenues overseas. We appreciate divergent viewand very detailed, and we still have to him, I don’t think I have ever seen points and welcome a healthy discussion on this TRUMP TAJ MAHAL work some things out. But people have him this passionate about any issue,” complex issue.” ucasino.com been very patient.” said LVS VP of Government Affairs Initial reports also say that the popAndy Abboud.

Singapore Plans ularity so far has not been based only on TRUMP PLAZA When Global Gaming Business betfaircasino.com Web Crackdown poker, and games such as online slots are was the first source to directly quote also getting a lot of play. Still, poker is a Adelson about his opposition to onhe government of Singadriving force. Nj.PartyPoker.com reported more line gaming early in 2012, it was an open secret in pore plans to impose strict than 1,800 players for its first “Next Poker Millionthe gaming business. LVS had no plans and no aspilimits on online gambling with aire” tournament held last month. rations to enter the online gaming industry. measures that are likely to inTechnical glitches remain a problem, however, In an article in Forbes magazine in November, clude website blocking, shutting Singapore as some players are also having trouble with idenAdelson explained why he’s launching this camdown payment services and pro- Minister for Home tity verification and sites repeatedly bouncing them paign.

Affairs S Iswaran hibiting advertising. out of the system. Still, DGE officials say none of “My moral standard compels me to speak out The government will seek these problems has resulted in an official consumer on this issue because I am the largest company by public feedback on the new regime, after which the complaint filed with the division. far in the industry and I am willing to speak out,” regulations will be published sometime after January.

Players are also continuing to have trouble with he said. “I don’t see any compelling reason for the Estimates say online gaming in the country was some banks and credit-card issuers, which will not government to allow people to gamble on the interat about $300 million a year. Reports say that about allow online gaming transfers. Visa cardholders net and nobody has ever explained except for the 245 largely unregulated sites operate in the country. have had the most problems, with about one in five two companies whose special interest is going to be At a recent symposium on casino regulation, being accepted. MasterCard users have seen a better served if there is gaming on the internet, Caesars Minister for Home Affairs S Iswaran emphasized the success rate of about 80 percent. and MGM.” need to “maintain law and order and to minimize Major banks such as Bank of America and Even though he named the companies most inthe potential harm, especially to the young and vulother systems such as PayPal have been refusing the volved in the online gaming push, Adelson denied nerable,” as the reason for the proposed restrictions. transactions. The state’s Department of Banking that he is attacking them.

“As an extension of our current laws, the governand Insurance, however, has been reaching out to “I have 25 competitors just on the Las Vegas ment intends to restrict remote gambling by making banks and federal regulators to help smooth the Strip. Have I ever trashed the Las Vegas Strip?” he it illegal unless there are specific exemptions,” he transactions, said David L. Rebuck, head of the asked. “This is not a competitive issue.” said. “We will introduce new laws to give our enDGE. For the moment, direct wire transfers and So Adelson has established a full-bore campaign forcement agencies the powers to act against facilitain-person deposits at casinos are the best bet for in Congress to get a law passed that would ban ontors, intermediaries and providers of remote players. line gaming in the U.S. The Coalition to Stop Inter- gambling services.”

New Jersey Sees 50,000 Sign Up for Online Gambling

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Global Gaming Business JANUARY 2014

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CUTTING EDGE

by Frank Legato

Scalable System Product: System2go Manufacturer: GTECH

he newly merged gaming supplier GTECH offers two different player tracking systems. One of its fastest growing system products, carrying the Spielo brand, is “System2go,” a packaged solution for single and multi-site slot venues.

Employing technology developed over decades of casino system experience of the former Spielo International, System2go is simple to operate, requiring less training than traditional slot systems, and doesn’t require a big IT infrastructure investment.

The System2go package includes accounting, remote reporting and a flexible mystery and progressive jackpot system, with optional add-ons for cashless ticket-in, ticket-out (TITO), magnetic card payment and player tracking. It is a scalable, centralized solution for casinos of various sizes, designed as a simplified system to address operational requirements of each venue in a cost-efficient manner.

The system is completely customizable to the needs of each operator, and can be accessed easily via mobile devices.

The System2go Platinum CC edition includes ticket-in, ticket-out and player tracking in addition to accounting, reporting and jackpots.

A recent installation at Cambodia’s NagaWorld Casino linked a single jackpot to 300 slot machines. “We were looking for a system from a reputable vendor to connect floor-wide mystery jackpots at an affordable price,” said Petrica Cozman, assistant vice president NagaWorld parent company Entertainment Gaming Asia, Inc. “GTECH’s System2go product perfectly fits all of those requirements. We have been extremely pleased with the product performance and support, and we certainly look forward to the opportunity to expand our business with GTECH in the future.”

For more information, visit GTECH.com.

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Checking the Checks Product: Check Prove Manufacturer: NEWave

EWave, a leading supplier of compliance software for a variety of casino-business functions, has seen rapidly growing sales for its “Check Prove” product, currently the most widely used payroll check-cashing software in southern Nevada.

Check Prove significantly increases the speed, accuracy and security of the entire payroll check-cashing process. The software automatically compares checks against business rules, check-cashing history, visual check and customer ID comparisons to known good images. Check Prove has been field-verified to dramatically decrease payroll check fraud.

Check Prove is an optional module of NEWave’s popular myRevenue Manager software suite, a collection of sophisticated software modules that

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automates myriad processes in the revenue stream across the entire casino operation, from cage to kiosks and everywhere in between.

For more information, visit mynewave.com.

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NEW GAME REVIEW

by Frank Legato

Dangerous Beauty 2 International Game Technology

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GT’s latest core video slot, a 40-line game using the MLD technology (for multi-layer display) to create authentic 3D graphics, reprises one of the slot-maker’s most popular titles, Dangerous Beauty, along with the original’s beautiful artwork depicting a mythical sword-wielding beauty.

Reel symbols include sword-wielding women, diamonds, tigers, panthers and poker symbols in a four-by-five configuration.

The base game features random Super Stacks—stacked symbols covering entire reels—and Stacked Wilds, which can fill up to an entire reel with wild symbols.

The game features a two-level progressive jackpot—in the pictured example (they are configurable), the jackpots are a “Mini” resetting at $2,500 and a “Maxi” top jackpot resetting at $12,500. When three scattered diamonds appear in the base game, the Mini progressive is awarded. If three sparkling diamonds appear during the free-spin bonus, the top Maxi progressive is awarded.

Dangerous Beauty 2 allows for the Easy Bet option, and is compatible with a variety of IGT cabinets.

Deal Or No Deal: In It To Win It GTECH

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his is the latest in GTECH’s franchise collection of slot games based on the U.S. version of the popular game show Deal Or No Deal, featuring host Howie Mandell. Like other “Deal” games, the central bonus replicates the central contestant round of the game show—a collection of briefcases is displayed; a list of cash prizes is shown which go into anonymous briefcases; the player selects a briefcase. Then, the player selects briefcases to open, revealing the prizes, and tries to gauge the chances among the prize amounts that are left. The “Banker” makes an offer based on the average of what’s left in the hidden briefcases. The player selects “Deal” to accept the offer or “No Deal” to decline and open more briefcases.

The process repeats itself until the player accepts a deal or there is only one briefcase left. The offers get smaller or larger according to the value of the remaining prizes.

However, this newest version of the theme, called “Deal Or No Deal: In It To Win It,” is distinctly different than its predecessors. It has a complete package of diverse bonus events to go with the Briefcase bonus, and it adds a wealth of new wrinkles to that basic theme.

The presentation is still in a community-style game on a giant LCD facing 68

Global Gaming Business JANUARY 2014

Manufacturer: International Game Technology Platform: AVP Format: Five-reel, 40-line video slot Denomination: .01 Max Bet: 400 Top Award: Progressive; or 1,000 credits times line bet Hit Frequency: 13% Theoretical Hold: 2%—12.5%

the individual machines. The player chooses between two base games, titled “Howie” for the host and “The Ladies” for Mandell’s beautiful assistants on the show. Graphics and reel symbols change according to the choice.

The players qualify as “contestants” in the bonus with a small number of spins—the screen follows how many spins are left to qualify.

Each base game has its own collection of special features and bonuses, including various random wild symbol additions, a community wheel bonus for which players qualify by increased wagers; and picking or free-spin bonuses in which the players who wager the most win the most.

Additionally, during each base game, the player can earn “Bonus Enhancers” for the main Briefcase Bonus. When that hits, players can use the Enhancers earned—such as a sneak peek at the contents of a briefcase or playing the entire bonus with two cases as your own.

This element changes the nature of the bonus, prompting some to stay in longer and press the “No Deal” button more times.

Manufacturer: GTECH Platform: ProdiGi Vu Format: Five-reel, 30-line video slot Denomination: .01 Max Bet: 250, 500 Top Award: 4,000 credits times multiplier Hit Frequency: 31.59% Theoretical Hold: 3.92%—12.06%

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NEW GAME REVIEW

Jackpot Empire Bally Technologies

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his game merges the popular “Quick Hit” progressive jackpot feature with a complete lineup of random-wild-symbol and free-spin bonus events, all wrapped up in an Art Deco theme that looks very 1920s, with a logo and title that play on the name of that popular TV series based on 1920s Atlantic City (without mentioning any names).

The base game is a five-reel, 30-line video slot in the Alpha 2 series, with a maximum per-spin bet of 1,000 credits. The game is designed for low denominations, although it is available in all denominations.

As with other games in Bally’s Quick Hit franchise, the player wins one of five levels of progressive jackpot simply by lining up the appropriate number of scattered Quick Hit symbols in the reel window—from five symbols triggering a jackpot resetting at $25 to nine symbols triggering the top prize, resetting at $5,000.

There also is a special bonus feature that can more readily trigger a progressive. When three “Quick Hit Gold” symbols land on the middle reel, all reels with those symbols or regular Quick Hit symbols lock in place, and all other reels re-spin—to land on either blanks or Quick Hit

symbols, with no other symbols.

The game’s other feature selects one of four free-spin events, each with its own special wild feature. When the free-spin event is triggered with bonus symbols on the middle reels, the screen displays a grid of 16 tiles. The player selects tiles until they match three symbols representing one of the four free-spin Scenarios: “Locking Wild Free Games” awards 10 free games, with wild symbols locking into position and remaining until the end of the feature. “Wild Sweep Free Games” awards six free games with “Wild Sweeping” reels—two wild reels, moving from left to right across the screen. “Random Wild Reels” awards five free games with one, two or three reels randomly awarded as wild reels. “Rising X Free Games” awards 10 free games with an initial 1X multiplier. With each “Rising X” symbol landing on the reels, the multiplier rises, up to a total of 10X. Manufacturer: Bally Technologies Platform: Alpha 2 Format: Five-reel, 30-line video slot Denomination: .01—500.00 Max Bet: 1,000 Top Award: 4,000 times max bet Hit Frequency: 47.36% Theoretical Hold: 4.14%—14.53%

Ultra Stack Feature Aruze Gaming

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his new game in Aruze’s G-Series group of core video slots includes a base game featuring the slot-maker’s popular “Ultra Stack” feature, which randomly stacks groups of symbols—including wilds—for big wins. But this game includes that feature in a novel type of free-spin round.

It’s novel because the game can randomly award up to a total of 200 free spins. When three “Feature” symbols trigger the Ultra Stack Free Games event, the number of games starts out as calculated by the triggering symbols. Each Feature symbol contains a number from one to 10, with the total translating into the number of free spins.

Then, a random number of pandas can jump onto the reels, each increasing the number of free games. If 50 pandas jump onto the game screen, the number of free games rises to 200.

The game gives the player the option of taking a straight credit award, rather than sitting through 200 spins.

The feature happens with very high frequency—according to the manufacturer, one in every 10 spins triggers a free-spin event.

Combined with the 50-line configuration, this results in a lot of time-on-device for the player in what Aruze officials say should be one of the company’s most popular titles in the coming year.

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Manufacturer: Aruze Gaming Platform: G-Series Format: Five-reel, 50-line video slot Denomination: .01 Max Bet: 250, 500, 750, 1,000 Top Award: 1,000 times line bet Hit Frequency: Approximately 50% Theoretical Hold: 2.07%—12.94%

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FRANKLY SPEAKING

by Frank Legato

Year of the Rat

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RINAL DO

How do you handicap a rat? Do they look at rat-breeding? And if so, do the rat-breeders get a cut of the revenues?

How about track conditions?

Do they add mud to the little tracks to make things interesting? (“This rat’s a mudder!”) Is there a Daily Rat Racing Form?

Do the rats just have numbers, or do they give them cute names like they do with horses?

“Give me $10 on ‘Out Of The Lab’ to win, and $15 each on ‘Cheese Worshipper,’ ‘Garbage King’ and ‘Mickey Rat’ to place.”

Maybe they should look into rat races and cock fights in Kentucky, where 2014 will see yet another legislative battle to legalize casinos at the racetracks. The rat races likely stand a better chance of passing than casinos.

Finally, 2014 will see some major new casinos opening around the world, some even outside of Russia. Horseshoe Baltimore will open in Maryland, the SLS will open on the bones of the Sahara in Las Vegas, and the $4 billion Baha Mar resort will open on Cable Beach in Nassau, the Bahamas.

The new Bahamas mega-resort should be opening toward the end of the year. If I’m called upon to cover that event, I shall respond to the call to duty, suck it up, and go sip rum beverages on a Caribbean beach somewhere around December.

Hey, I’m a pro, and sometimes, you have to sacrifice for the job.

In the end, Year No. 30 of my gaming-writer career is shaping up to be a pretty cool one. Now, if you’ll excuse me, I’ve got to leave for Moscow.

I’ve got a rat that’s a sure thing in the fifth race at Korona.

V IC TOR

H

appy New Year! It’s 2014, and that can only mean one thing: This August, I will celebrate 30 years of writing about the casino industry. And I’m getting really old.

OK, two things.

Actually, the new year brings much news other than my 30-year-old gaming industry career: If it’s 2014, it must mean that Sheldon Adelson, who probably has skin tags that are 30 years old, is still against online gambling. I’m anxious to see how Mr. Adelson’s all-out effort to ban internet gaming goes. Believe me, I understand his misgivings about online gambling, but I don’t really think prohibition is the answer. It didn’t really work that well with alcohol.

In any event, I’m sure Mr. Adelson’s full-throttle funding effort for anti-iGaming lobbyists will be just as successful as his effort to make Newt Gingrich president was.

Onward and upward: If it’s 2014, it must mean that Lawrence Ho is ready to open his new casino in Russia, in the Primorye casino zone. It will be the first casino in one of Russia’s new gaming zones, which are in areas inhabited mainly by ice. They were created after President Vladimir “Family Values” Putin banned casinos from Moscow, St. Petersburg and other major Russian cities back in 2007, telling them to get out of town by sundown, 2009.

I’m hoping I get invited to the Primorye opening, and that I can get there without being eaten by Siberian wolves.

Meanwhile, things are getting comical back in Moscow, where there were several huge casinos before 2009. Some former big casinos have converted into bookmaking operations, which are still legal. One of Moscow’s largest former casinos, the Korona, now accepts bets on cock fights and rat races.

Don’t worry. They’re humane cock fights. They attach colored balloons to each bird, and once a bird’s balloons are popped, the fight’s over.

Just because they don’t fight to the death doesn’t mean the roosters aren’t tough, though. One chicken blinded by swelling during a recent fight could be heard pleading with his manager, “Cut me, Mick!” (Of course, it sounded more like, “Cluck-cluck-cluck.”)

I’m more interested in the rat races. According to the Moscow News, every five minutes at Korona, 10 rats are released from boxes to run around an obstacle-strewn course. At first, some of them ran for the doors, ultimately to provide additional ambiance to the wagering lounges outside.

The newspaper story says that no longer happens. As a journalist, I want to know why. Do they have little mechanical female rats for males to chase around the course, like they do with rabbits and greyhounds? Are there little pieces of cheese suspended in front of them as they run?

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GLOBAL GAMING WOMEN

A Philosophy of Leadership … with apologies to philosophers everywhere

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By Tina Kilmer, Vice President of Product Compliance, Bally Technologies

everal years ago in college (seems like just a few years), I had the chance to read a book of philosophical quotations. Often witty and usually poignant, they seem to become increasingly relevant as the years progress. Coincidentally, many seem to pair nicely with the act of successful leadership. I want to share just a few (excusing any references solely in the masculine) that speak to me: “Each player must accept the cards life deals him. But once they are in hand, he alone must decide how to play the cards in order to win the game.” (Voltaire) Simply put, successful teams consist of people with a purpose. They are not merely a serendipitous assemblage of random souls, but rather a sometimes-eclectic collection of specific individuals chosen and assembled based upon their unique talents, skills sets, experiences, and perspectives. As a collaborative group, they work purposefully toward successful outcomes. On my team, when someone presents an idea, others expand on it so the idea grows organically into something even greater. Ideally, team members can feed off of one another’s ideas, making the whole much greater than the sum of its parts.

“Judge a man by his questions rather than by his answers.” (Voltaire) Successful leaders encourage their team members to ask questions so the team can get to a deeper level of understanding about a topic or problem. They also encourage a positive attitude, a “lemonade from lemons” outlook. When team members aren’t afraid to ask questions—albeit in a positive and respectful manner—the entire team is stronger because open communication leads to better outcomes.

“Think for yourself and allow others the privilege to do so also.” (Voltaire) Attempting to gather a conglomeration of individuals into a cohesive and effective unit is no easy task. The team builder must be tenacious and always, always listening and learning, empowering individuals to be their best, inspiring and being inspired. By listening, the team will

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become listeners too. Have the team’s members listen to each other and share. Someone may well have a viewpoint that has not yet occurred to anyone else.

“A person who never made a mistake never tried anything new.” (Albert Einstein) Thinking “outside the box” or even outside of your comfort zone can be a difficult thing to do, especially in a group dynamic. Team leaders should encourage team members to break away from the “group-think” mentality and take the occasional risk. Ask that they trust their instincts and follow their intuition and then share with the group.

“Ginger Rogers did everything Fred Astaire did, but she did it backwards and in high heels!”

(Faith Whittlesey) OK, so this one isn’t exactly Voltaire. But I include it here as it illustrates a very important point. Goals are achieved by the execution of steps purposefully aligned toward that end.

When each member understands their role, keeps the “rhythm,” and puts forth the individual effort necessary to meet the group’s task at hand, they will collectively realize their common goal.

“Strive not to be a success, but rather to be of value.” (Albert Einstein) A “lone wolf” attitude can be a destructive force, personally and professionally. It is also often counterproductive to the group’s ability to achieve the desired goal. Selflessly focusing on being of value to your team will ultimately also make all of you valuable to the organization as a whole.

“Love truth, and pardon error.” (Voltaire) Seldom does a single individual bring a project to successful fruition. In fact, it is usually the pairings of many talented team members. Within an assembled team, I would personally always rather see an “error of commission rather than an error of omission.” Believe in yourself and in your decisions and bring them to the team table. When mistakes are made, don’t dwell on them. Rather, acknowl-

edge them, learn from them, and move on. Likewise, acknowledge the contributions and accomplishments that led to the group’s success.

“Women are like tea bags—we don’t know how strong we are until we are in hot water.” (Eleanor Roosevelt) An assemblage of diverse team members can help you to realize your own strengths. They can also help you to grow as a leader. In the big picture, this allows you the growth to evince grace under pressure.

Finally, on his deathbed, a priest asked the non-religious Voltaire to renounce Satan. Voltaire replied, “Now, now my good man, this is no time for making enemies.”

Is there ever a good time for making enemies?

In your career you will encounter difficult people and subject matter. There will be times when you will disagree. Even when you are shown to be right, it makes no sense winning a battle but losing the war. These occasions allow you the opportunity both for humility and to be gracious in how you allow others to “save face,” thereby hopefully turning a potentially adversarial relationship into a productive partnership.

I hope you find these quotes as useful and inspirational as I have. While I’m on the important topic of leadership, I want to acknowledge the exceptional contributions of Judy Patterson, past senior vice president and executive director of the American Gaming Association. During her more than 18 years of dedicated service to the AGA, she was instrumental in the creation of the Global Gaming Expo, and was a driving force in the establishment and success of Global Gaming Women and the National Center for Responsible Gaming. I want to thank Judy for her tireless efforts, having had a monumental impact both on my outlook and on the industry as a whole. She continues to be an inspiration to countless leaders, and the following quote applies most fittingly to her: “The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails.” (John Maxwell)

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EMERGING LEADERS Bonus Baby James Acres President, Acres Bonusing ou might not think it considering his well-known industry name, but one of the toughest career decisions for James Acres, president of Acres Bonusing, was whether or not he should enter into gaming. The son of industry pioneer and innovator John Acres, James revealed that he debated if his father’s prominent leadership role was actually a reason he should test out his own interests in other business segments.

“Obviously, my father had a huge impact in gaming and built a strong brand around our family name,” Acres explains. “Ultimately, after a lot of soul searching, I realized that one of the hallmarks of a successful business person is the ability to recognize how to maximize and leverage your assets…and being an Acres is a powerful asset.”

Once the decision was made to help innovate the next generation of gaming, Acres jumped in with both feet, determined to live up to his father’s legacy but also make his own mark. Unquestionably committed to both customer service and R&D, he believes his second-best career decision to date was to focus exclusively on big ideas and transformational products that had the potential to keep the industry relevant and vibrant in the years to come.

“Being in such a conservative industry, it’s very difficult to build a business around truly new concepts,” Acres says. “Interests in such aspects as mobile gaming and Kai—an Acres innovation that is helping rationalize workflow across entire enterprises—are two of the big ideas that I am helping to champion. Our advancements in these areas have taken years of refinement and evangelizing to bring to market.”

The Kai solution, already embraced by gaming facilities throughout the country, has the potential to be one of Acres’ signature achievements. “Kai is an industry game changer that is gaining exceptional traction among operators,” Acres explains.

He describes Kai as an automated customer service, information sharing and tracking tool that improves efficiency, staff morale and customer satisfaction, all while reducing labor costs on casino floors by up to 20 percent.

“The hand-held system detects needs or problems, and instantly sends notice to the most qualified person on the floor to address it,” he says. “What I’m looking forward to more than anything over the next 12 to 18 months is transitioning Kai from its exploratory and launch phase to make it a transformative product scaled across the entire industry.”

As if his lifelong industry exposure and overtly likeable personality weren’t enough to help establish relationships with clients from coast to coast, anyone who has met Acres can tell you that his undeterred commitment to customer service and client management—for both Acres and the casinos themselves—is one of his most remarkable qualities.

“My clients know my focus isn’t on moving inventory for a quarter,” he says.

“I approach every relationship as a collaborative one, always asking how we can make the opportunity mutually beneficial and focused on building a more profitable future for all of us.”

Even at the age of 35, Acres has a discernible appreciation for the value of passing the torch to other emerging leaders in his industry.

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“The very nature of our product offerings means that I get to spend a lot of time with junior casino staff out on the floor,” Acres says. “I always go out of my way to help new and advancing individuals understand broader aspects of casino operations, and how they can use their customer service skills to advance their own positions.”

—Kimberly Arnold and Joe Dimino, The Innovation Group

Grand Entrance Seth Schorr CEO, Fifth Street Gaming eth Schorr is the CEO of one of the most promising gaming companies in Las Vegas, Fifth Street Gaming (FSG). Schorr has been working in the gaming industry almost all his life. After leaving for a brief stint in 2004, he returned in 2006 to cement his status as an emerging industry leader.

Schorr’s experience in the hotel and casino business started at a young age. From 1991 to 1999 he worked in various departments at the Golden Nugget Laughlin, Treasure Island Hotel & Casino and Mirage Hotel & Casino. From human resources to casino marketing, the 37-year-old Schorr was exposed to all aspects of the casino business, and has always referenced this experience throughout his career.

After graduating from the University of Pennsylvania 14 years ago, having majored in Chinese studies, Schorr worked at Bellagio Resort and Casino as an executive in the casino marketing department. In 2000, Schorr left Bellagio to work for Wynn Resorts, where he served as director of interactive gaming and worked to develop an online gaming strategy under the Wynn brand.

In 2002, Schorr shifted gears and was entrusted to develop the Wynn Collection of Fine Art, a $500 million collection of impressionist pieces. The following year, he relocated to Macau as the company’s director of international marketing. After successfully developing the program at Wynn Macau, Schorr decided to take a break from the gaming industry and start his own business in New York.

“Moving to New York and starting an asset recovery business was a challenging and exciting experience,” Schorr recalls. “It fueled my entrepreneurial spirit and laid the groundwork for my current role.”

After two very successful years running the business, Schorr missed the hospitality industry, and missed providing positive, impactful experiences for people. He was able to sell the business and move back to Vegas in a journey that would eventually end with his current position as CEO of Fifth Street Gaming. That path also included stops at then-Speedway Casino and now the Lucky Club. Successes at these stops were parlayed into his newest project, the recently opened Downtown Grand Casino in Downtown Las Vegas.

Schorr credits his success to great mentors including Steve Wynn and his father Marc Schorr.

“Wynn and my father are gaming luminaries that have provided great les-

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sons, and undoubtedly helped mold me and led to my current position,” Schorr explains. “I enjoy my current position, particularly the flexibility that allows me to contribute to everything from high-level strategic planning to the intricate details of picking light bulbs and carpeting for the property. Both of my mentors taught me that while you can think big, it is still imperative to pay attention to the operations and the guest experience.”

For future leaders, Schorr says that finding great mentors and using them is a key to success. While Downtown Grand is only in its early days of operations, it is performing fantastically and Schorr is looking forward to the immense growth potential of the property.

—David Rittvo, The Innovation Group

Security Blanket Brian D. Decorah Senior Vice President/Assistant General Manager, FireKeepers Casino Hotel iven Brian Decorah’s success in each of his management roles in casino operations, one may be surprised to learn that one of his favorite jobs was his first: security officer. According to Decorah, he enjoyed learning gaming behavior while working the graveyard shift at the Ho-Chunk Casino in Nekoosa, Wisconsin, back in 1995. The job also provided him with his first opportunity to observe multiple levels of casino operations. This experience would instill the passion that led to Decorah’s current position as the senior vice president and assistant general manager at FireKeepers

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Casino Hotel.

Having joined the FireKeepers team in January 2013, Decorah credits the success of FireKeepers to the leadership within the tribe and casino.

“In addition to the strong leadership of the Tribal Council, the mentoring opportunity with FireKeepers CEO, R. Bruce McKee, is one of the reasons I took my current position,” he recalls.

McKee has over 30 years of gaming experience, including 10 years at Trump Hotels and Casino Resorts, Inc. Specifically, Decorah appreciates the high level of expectations that are set for everyone at FireKeepers. A commitment to structured mentorship throughout the company helps the staff meet these standards, and has inspired Decorah to also mentor five managers throughout the casino.

“Although it can be difficult, everyone carves time from their busy schedules to discuss and teach all aspects of the gaming industry, from internal operations to industry trends,” Decorah explains.

It is this broad knowledge of the casino industry that makes Decorah a leader in the gaming industry. He has had various roles in a number of casinos and gaming corporations, from the Ho-Chunk Casinos in Wisconsin to Seneca Gaming Corporation in New York, and then to Cliff Castle Casino in Arizona, before being unanimously selected by the Mohican Tribal Council to serve as general manager at North Star Mohican Casino Resort. During his tenure at North Star, the casino received numerous accolades, including being named “Best Casino of Wisconsin” in 2012. Promoting into rewarding positions with different gaming entities has allowed Decorah to see that there are “many ‘right ways’ to get the job done.” It is no doubt that the many roles Decorah has engaged throughout his career will serve him well as the casino industry continues to grow and evolve.

—Jennifer Day, The Innovation Group

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GOODS&SERVICES

Bally Technologies President and CEO Ramesh Srinivasan

BALLY-SHFL: DONE DEAL lot and system manufacturer Bally Stable-game Technologies has completed its acquisition of supplier SHFL entertainment, creating a merged company that covers just about all bases in the supply of casino games, systems and ancillary equipment in what is arguably the industry’s most diversified product suite.

Bally, the oldest slot manufacturer in the business, had already diversified its product portfolio by building the top system organization in the industry. The acquisition of SHFL, formerly Shuffle Master, adds the industry’s leading group of proprietary table games to the Bally lineup— both in the live versions of games like Let It Ride, Caribbean Stud, Three Card Poker and Four Card Poker, and in the fast-growing internetbased versions of those games, the patents for which SHFL has protected fiercely.

As previously announced, SHFL shareholders are receiving $23.25 per share in cash for each share of SHFL stock. The transaction is valued at approximately $1.3 billion, including assumed net debt.

“We are thrilled to announce the successful completion of our acquisition of SHFL, marking the beginning of a combination of two best-inclass, highly complementary and customer-centric gaming technology companies that will be even stronger together,” said Bally President and CEO Ramesh Srinivasan. “I want to personally thank everyone involved in the process which led to a successful and accelerated close.”

With the completion of the acquisition comes the departure of SHFL CEO Gavin Isaacs, the former Bally COO who took the reins at Shuffle Master and guided that company to new heights by increasing distribution of proprietary 78

games and directing an effort to enforce its patents against offshore internet casinos that had been using the company’s titles on their sites with impunity.

Several other senior SHFL executives will remain with the merged company, including Roger Snow, one of the industry’s most prolific game inventors. Other SHFL executives remaining with Bally include Julia Boguslawski, now Bally’s vice president of corporate marketing; Adrian Halpenny, now Bally senior vice president of Australia and Europe; and senior officers including Deron Hunsberger, Alexander “Axel” Grohs, Nathan Wadds, Colin Helsen, John Hemberger, Peter Wilkins, Terri Conway and John Strickland.

Meanwhile, Bally announced several changes to its own senior executive team in light of the merger: • Senior Vice President for Law and Government, Secretary, and General Counsel Mark Lerner retired effective December 31, and SHFL General Counsel and Executive Vice President Katie Lever became senior vice president of legal and compliance, secretary, and general counsel, effective January 1.

• John Connelly, former vice president of business development, assumes the role of senior vice president of business development and interactive.

• CFO Neil Davidson assumes the title of senior vice president, chief financial officer and treasurer.

• Human Resources Senior VP Gary Kapral is now senior vice president of operations and human resources.

• Derik Mooberry, senior vice president of games, assumes the title of senior vice president of games, table-game products and interactive research and development.

• Robert J. Parente, formerly vice president of Canada, Europe and corporate accounts, is now senior vice president of North American sales and corporate marketing.

• Sethuram Shivashankar is promoted from vice president of engineering and information technology to senior vice president of systems research and development and information technology.

G2E 2013 BREAKS ATTENDANCE RECORDS

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he American Gaming Association and Reed Exhibitions, partners in the annual Global Gaming Expo, have announced that almost 16,250 attendees came to the trade show and conference event in 2013. Those are the highest numbers since 2008 and a 3 percent increase over 2012, the partners said.

Global Gaming Business JANUARY 2014

Total attendance at G2E 2013 including attendees and exhibitors reached nearly 26,300. G2E 2013 was held for three days in September at the Sands Expo and Convention Center.

“Year after year, G2E has proven to be the leading trade show and conference event for gaming professionals,” said Greg Topalian, senior vice president at Reed Exhibitions. “The growth in attendance and exhibits and the success of our newest offerings such as the Emerging Leaders Program prove that G2E is a one-of-a-kind event-providing innovative programming that tracks industry trends and implements consumer insights.”

More than 455 companies exhibited at G2E. This year’s trade show is scheduled for September 29 - October 2.

NEVADA APPROVES MULTI-STATE PROGRESSIVES he Nevada Gaming Commission has unanimously Twillapproved changes to state gaming regulations that allow slot manufacturers to link multi-site progressives across state lines.

The change, proposed by slot-makers International Game Technology and Bally Technologies, is expected to create jackpots that will rival the megaprizes in multi-state lotteries like Powerball and Mega Millions, which reach into the hundreds of millions of dollars.

Of course, that would be dependent on other gaming states approving similar regulations. According to a report in the Las Vegas Review-Journal, attorney Dan Reaser of Lionel Sawyer & Collins, which drafted the amendment to Nevada regulations, says New Jersey, Louisiana, Delaware and Mississippi are all exploring changes that would allow multi-site jackpots to be linked across state lines.

NEWAVE INSTALLS ‘CHECK PROVE’ AT PALMS aming compliance software supplier NEWave G announced that it has installed its “Check Prove” software at the Palms in Las Vegas.

Check Prove is the most widely used payroll check-cashing software in southern Nevada, designed to guard against payroll check-cashing fraud. The software has been in use in casinos in Las Vegas and across the U.S. for more than 20 years, and updates

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to the software keep it current. The software sends instant updates of discovered fraudulent checks and/or fraudulent IDs of potential check-cashers, giving real-time security to software users.

Check Prove is an optional module of NEWave’s award-winning myRevenue Manager software suite, a collection of sophisticated software modules that automates myriad processes in the revenue stream across the entire casino operation.

EGT, NOVOMATIC SELECT FUTURELOGIC rinting supplier FutureLogic, Inc. announced Pogythat it has been selected as the preferred technolpartner for all printing and couponing solutions worldwide by Bulgarian slot manufacturer Euro Games Technology, and that its GEN2 Universal printer has been selected as the exclusive printer for all AGI video lottery terminals in Romania.

According to FutureLogic, EGT was seeking a technology partner capable of supporting their global growth strategy and growing firmware demands. Following an analysis of competing technologies, FutureLogic was selected. Under the three-year agreement, FutureLogic’s printing technology has been chosen to be the preferred option in all of EGT’s current and future TITO gaming platforms around the world.

In other FutureLogic news, the company announced that the Austrian Gaming Industries subsidiary of the Novomatic Group has selected the company’s GEN2 Universal printer as the exclusive ticket-printing medium for all 10,000 of its VLT machines slated for the Romanian Lottery, Loteria Romana.

Optionally, Future Logic’s desktop TITO/coupon printer, CouponXpress, will be available at various transaction points.

CORRECTIONS On page 7 of our 2013 Casino Design supplement, we incorrectly identified the architect for the Isle of Capri Cape Girardeau, Missouri project. The project architect for the Isle Cape Girardeau project was Kuhlmann Design Group, Inc. On page 52 of the December issue of GGB, we incorrectly identified “SlotScanner” as a product of Bally Technologies.

SlotScanner is not a Bally product; it is a product of Advansys.

We regret the errors.

JANUARY 2014 www.ggbmagazine.com

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PEOPLE SCIENTIFIC GAMES APPOINTS NEW PRESIDENT, CEO

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n the wake of a billion-dollar acquisition in October, lottery provider Scientific Games has retired A. Lorne Weil, its Former Sci chairman and chief executive Games CEO A. officer, and replaced him with Lorne Weil board member David Kennedy. The new CEO is also the company’s largest shareholder. Splitting the chairman and CEO roles, the company has appointed board member and investor Ronald Perelman as chairman.

Some analysts said Weil was not ousted but already planned to leave the New York-based company. But the timing was still surprising. The change of command came less than a month after Scientific Games completed the $1.5 billion buyout of WMS Industries, the world’s third-largest manufacturer of slot machines. And Wells Fargo analyst Barry Jonas referred to Weil’s “rash departure,” suggesting the former CEO was not considered the one who could lead the company in a new direction.

Weil had been chairman of the company since 1991. He served as CEO from 1992 to 2008, then returned as CEO in late 2010.

Kennedy has served as vice chairman of the board and a member of its executive and finance committee since October 2009 and was an executive from November 2010 until March 2012. Previously, he was president of MacAndrews & Forbes Holdings Inc. and president and chief executive officer of Revlon.

AMAYA EXECUTIVE STEPS DOWN TO HELP GAIN NJ LICENSE

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aul Leggett, vice president of online for Amaya GamPaul Leggett ing Group, stepped down to help the firm’s approval for New Jersey online gambling.

Leggett was formerly the COO of Tokwiro Enterprises, which owned both UB and Absolute Poker. Both sites were caught up in “Black Friday” in 2011 when the U.S. Department of Justice moved to shut down internationally based online poker sites illegally operating in the U.S. Both sites folded and many players were unable to recoup their accounts.

Leggett only joined Amaya this year.

SMITH JOINS SLS LAS VEGAS AS HOTEL VP

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ospitality veteran Albert Smith will take the reins as vice president of hotel operations when the new SLS Las Vegas opens in the fall of 2014.

According to a statement from SBE, the Los Angeles company behind the property, Smith brings 17 years of luxury hospitality experience to his new role, along with a strong background in operations, sales and finance, the company said. He will develop and oversee multiple departments responsible for enhancing the guest experience, including front desk, housekeeping, bell and valet services.

Most recently Smith was regional director of operations for Kimpton Hotels & Restaurants, where he was responsible for seven properties in Southern California. He has also managed several hotel properties for Kimpton and Viceroy Hotel Group, including the Hotel Palomar Los AngelesWestwood and Viceroy Santa Monica.

PENN NATIONAL NAMES REIBSTEIN CFO

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enn National Gaming has named Saul V. Reibstein, a member of the operator’s board of directors, as its new chief financial officer and senior vice president. Reibstein replaces William Clifford, who assumed the CFO role earlier this month at Gaming and Leisure Properties, Inc., the real estate investment trust spun off from Penn that will own gaming properties managed by Penn.

In his new position, Reibstein will be responsible for Penn’s financial and treasury functions, including financial and periodic reporting to the Securities and Exchange Commission, bank relationships, conducting internal and industry analysis to support the company’s goals for growth, investor relations and transactional activity.

NEVADA REJECTS POSTER FOR GAMING LICENSE

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he Nevada Gaming Control Board last month declined to issue a finding of suitability for Tim Poster, the former co-owner of the Golden Nugget casino in Downtown Las Vegas and also Tim Poster a former executive with Wynn Resorts. Poster resigned last year from Wynn and also from Ultimate Gaming, the online gaming arm of Station Casinos, after an investigation into his background revealed questionable relationships and illegal sports betting.

Along with now-Chairman of Ultimate Gaming Tom Breitling, Poster founded Travelscape, one of the first internet travel sites, later selling it at a huge profit to Expedia. The two then purchased the Golden Nugget, working a deal for a reality show on the Fox Network about running the casino. The show lasted just one season. They later sold the hotel to Landry’s Restaurant owner Tilman Fertitta.

Poster had been hired in a casino marketing position for Wynn Las Vegas and was briefly named COO, while also involved with Ultimate Gaming.

He had applied for a license for those positions when a GCB investigation revealed that he had continued a relationship with convicted strip club owner Rick Rizzolo, who has reputed ties to organized crime. Poster says Rizzolo was a good customer at the Golden Nugget but attempted to sever the relationship.

Meanwhile, the investigation discovered that Poster had made huge sports bets—$100,000 or more—with an illegal offshore sports book, Pinnacle Sports, which has since been taken down by federal agents and its executives indicted. Poster denied allegations that he had been an agent for Pinnacle, despite the fact that he often included friends in his wagers with Pinnacle.

January 2014

Index of Advertisers AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Acres 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 American Gaming Systems AGS . . . . . . . . . . .29 Bally Technologies . . . . . . . . . . . . . . . . . . . . . .2 Casino Technology . . . . . . . . . . . . . . . . . . . . .49 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . .79 Genesis Gaming . . . . . . . . . . . . . . . . . . . . . . .21 GGB iGames . . . . . . . . . . . . . . . . . . . . . . . . . .69 GGB News . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Global Cash Access GCA . . . . . . . . . . . . . . . .31 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61, 71 G2E Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17, 51 ICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56, 57 iGaming Player . . . . . . . . . . . . . . . . . . . . . . . .75 iGNA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Innovation Group . . . . . . . . . . . . . . . . . . . . . .43 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Konami Gaming . . . . . . . . . . . . . .9, Back Cover LT Game . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Macquarie . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Multimedia Games . . . . . . . . . . . . . . . . . . . . .15 NAGRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 NEWave . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 NIGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . .14 Rymax Marketing . . . . . . . . . . . . . . . . . . . . . .35 Tribal Government Gaming . . . . . . . . . . . . . . .73 World Game Protection Conf. . . . . . . . . . . . . 67 WMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Zitro . . . . . . . . . . . . . . . . . . . .Inside Back Cover

JANUARY 2014 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Q

&A

Mike Eide CFO/COO, Dotty’s

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f you want one area of agreement among the Nevada casino operators, one sure-fire issue is Dotty’s. All the large casino operators seem to hate them. Dotty’s is a collection of 120 taverns/casinos mostly in the Las Vegas area, but also in Northern Nevada, that have caused consternation among operators because Dotty’s customer is the middle-aged woman. The taverns are designed for women: bright, cheerful and convenient. The Nevada Resort Association convinced regulators and government agencies to change the regulations regarding taverns, but Dotty’s refuses to go away, merely adapting to the changes. COO Mike Eide, a former principal in the old VLC slot manufacturer, says Dotty’s, owned by the Estey family, simply developed a great business plan aimed at the gambler few casinos wanted. And now Dotty’s has entered the casino business, buying the Hacienda outside of Boulder City, Nevada. Eide spoke with GGB Publisher Roger Gros at the company’s new offices in North Las Vegas in December. To hear a podcast of this interview, visit ggbmagazine.com.

game video machine with embedded bill acceptors in 1988. We found that the current manufacturers weren’t serving this market anymore, so we decided to develop one. We rehired all the VLC engineers. It took four years to get to the market, but it’s been a success in Nevada and Montana, where we also operate taverns. We also lease it to other taverns and casinos. With these machines, we’re able to design games that specifically target our customers.

GGB: Dotty’s has become a dirty word for the big Nevada casinos. What has Dotty’s done to deserve such a fate?

Eide: All I can say is that we’ve taken care of our customers, a customer nobody else wanted. It didn’t happen overnight, but once we developed it and refined it, the market now has understood what we did, and they want them back.

The regulations concerning taverns have changed since the NRA has objected to the way you operate. Do you feel this is unfair?

And who is that customer?

We target a 35-and-older female customer. The décor, the design and the flow of the property is all built around that customer. And we have discovered that older men like to frequent the establishments also.

You design games and machines for this demographic, correct?

Yes. My background is in the gaming machine business. At VLC we designed the first multi82

Global Gaming Business JANUARY 2014

How long did it take to develop the process that has made Dotty’s so successful?

I don’t want to give the impression that the process is over. It’s continuing to evolve and develop over time. The Estey family and the management team we have focus entirely on our customer, and we develop the process in response to what our customer wants.

operations and food and beverage. He’s always wanted to be in the casino business, so this is a natural evolution.

We are planning to rename the casino the Hoover Dam Lodge, and give it that kind of feel, with a big stone fireplace in the lobby. The casino will include a Dotty’s, and maybe a second one if that first one works. The rest of the casino will be a typical casino environment, with the lights and the machines that people expect. And we’ll have a Bourbon Street sports bar at the center, a new concept we’re developing.

In addition, we’ll start by refurbishing more than 60 hotel rooms with all the amenities: new king beds, flat-screen TVs, and all the amenities you’d find in a first-class hotel. In that way, we expect to raise the ADR and attract more visitors.

‘I’m a firm believer in that when you’ve been approved as many times as we have with full disclosure in what we’re doing, there should be no changes made retroactively.’

What is unfair is to retroactively change the regulations. The government has the right to change whatever they want going forward, and we as business owners can then determine whether we want to go forward. I’m a firm believer in that when you’ve been approved as many times as we have with full disclosure in what we’re doing, there should be no changes made retroactively.

Now you are entering the casino industry with the recent purchase of the Hacienda outside of Boulder City, adjacent to the Hoover Dam and the Lake Mead National Recreational Area. What are your plans there?

The owners of the property hand-selected Mr. Estey to buy the property. His experience prior to Dotty’s was in national park concessions, hotel

What is the market for that property?

We will be catering more to people coming to the Hoover Dam and Lake Mead, as well as the local customers from Boulder City and Henderson.

We’ll be a part of the community and will change the image of the hotel. Remember, there are 17,000 vehicles that pass by there each day. We hope that the changes we make will cause some of them to stop and check us out.

So, is this the first step into the casino industry?

We’re going to take it one step at a time. I think we have a concept that can work in the casino industry as well, but only time will tell.

How about spreading the Dotty’s concept to other states where VLTs and other slot devices are being legalized in bars and restaurants?

Mr. Estey’s daughter owns a slot route license in Illinois. We’ve licensed the Dotty’s name and idea there, as well as the state where Dotty’s originated, Oregon. We’re looking at Louisiana and Pennsylvania, where slots are ready to go.

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