Global Gaming Business, July 2016

p. 1 cover july:_cover, inside, back.qx 6/15/16 2:24 PM Page 1

GGB Global Gaming Business Magazine

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Building

the Bridge How iGaming benefits brick-and-mortar casinos

Family Feud

Conflicts between Indian tribes can negatively impact federal regulation

Acres Gets Personal Why technology can hinder or enhance customer service

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p. 4 toc july:_table & mast.qx 6/15/16 2:25 PM Page 4

CONTENTS

Vol. 15 • No. 7

july

Global Gaming Business Magazine

24 COVER STORY

COLUMNS

The Hero’s Journey

16 AGA

John Acres has developed the technology offered by Acres 4.0 according to his philosophy that advancing technology should be devoted to returning the casino experience to what it once was—a personalized experience that makes every customer feel like a hero.

United We Stand Geoff Freeman

18 Fantini’s Finance Opportunity Knocks

By Frank Legato

Frank Fantini

28 The Barona Model California’s Barona Resort & Casino provides a model for the relationship between operator and player that many believe is vital for the future of the industry.

By Roger Gros

38 Compliance Do as I Say, Not as I Do Richard Schuetz

54 Table Games The Square Position Roger Snow

FEATURES

14 MGM’s Time From revamping the Monte Carlo to opening major arenas and parks in Las Vegas to buying out the Borgata, MGM Resorts International is on the move.

60 Global Gaming Women Pay It Forward Our monthly section highlighting and analyzing the emerging internet gaming markets.

By Patrick Roberts

20 Setting the Table One of the most difficult achievements in gaming is to create a successful new table game. Here’s how the experts say it can be done.

48 Rethinking Millennials Generalization of how to bring in millennial customers is off-base and perhaps premature, given their spending power.

By Michael Perhaes

50 Thinking Smart Chip technology, the smart card and new banking procedures are moving payment processing technology forward.

By Dave Bontempo

4

Global Gaming Business JULY 2016

6

The Agenda

8

By the Numbers

12 AGEM Page

32 Tribal Wars

By Dave Palermo

DEPARTMENTS

10 5 Questions

By Marjorie Preston

Inter-tribal disputes over off-reservation casinos, organized labor and other issues force some to the controversial position of reexamining the Indian Gaming Regulatory Act.

Virginia McDowell

56 Frankly Speaking Feature

40 Bricks, Mortar and Cyberspace Once viewed as unwelcome competition, iGaming is increasingly seen as a new strength for land-based casinos.

58 Emerging Leaders With Cherokee Nation’s Joshua Anderson, Shoshone Rose Casino’s Vernon Hill Jr., and Saskatchewan Indian Nations’ Crystal Janvier

62 New Game Review

By Steve Ruddock

66 Goods & Services iGNA Outlook 44 Come Together

69 People

Sue Schneider

70 Casino Communications

46 iGames News Roundup

With Lawrence Ho, Chairman and CEO, Melco Crown Entertainment Limited

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THE AGENDA

Stand Alone

Vol. 15 • No. 7 • July 2016 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | cooley7@sunflower.com

Roger Gros, Publisher

n this month’s issue, a sidebar to the story about John Acres highlights the Barona Casino Resort in California. I had been to Barona many years ago, and was impressed by the property even then. But Acres had suggested I visit the property as a customer, not a journalist, to experience the full impact of the special kind of customer service they offer there. And, as usual, he was correct. I was astonished to experience the kind of service that I hadn’t seen in many years. And the technology for which Barona is so rightfully recognized had nothing to do with it.

Barona is known for introducing the most cutting-edge technology, whether it be systems or the latest slot games. But after talking to Barona GM Rick Salinas, I realized that great technology is largely unimportant to him and almost invisible to his employees. The powerful image of hand-paid jackpots combined with players enjoying a meal while playing their favorite slot makes the technology seem irrelevant. But of course, it isn’t, and is used to make this kind of personal service possible.

Before and after my stay at Barona, I visited several other Southern California tribal casinos.

And while I didn’t approach those visits as a customer, I was very impressed with the quality of the properties. At Pechanga, which I first visited when it was just a series of trailers lashed together with slot machines packed into every square inch, it is now a first-class integrated resort equal to anything in Las Vegas or Macau—with yet another addition under way.

Down the road, the Morongo casino towers over I-40, and it was busier than any casino in Las Vegas on a Saturday night—on Tuesday afternoon. COO John James proudly showed me the new “ME Bar,” a watering hole dedicated to social media, which has proven to be a huge hit.

At Sycuan down by San Diego, looming competition from the new Hollywood Jamul casino has spurred plans for another addition, including its first hotel rooms.

The Southern California casinos reminded me of the benefits of ownership of a single casino, whether it be tribal or commercial. On the Las Vegas Strip, the transformation of Treasure Island after it was sold to Phil Ruffin by MGM

I

6

Global Gaming Business JULY 2016

Resorts has been been remarkable.

On the Gulf Coast, the opening of singly owned Scarlet Pearl in D’Iberville, Mississippi, has expanded the market.

Now, we all know that the modern casino industry really emerged in the 1980s when big corporations began building new and buying existing casinos. Financing was approved by reputable banks instead of questionable union pension funds. Social and corporate responsibility became a hallmark of the industry.

But corporations also bring problems. The buttoned-up standard operating procedures make innovation difficult. The quarterly focus on revenues puts pressure on every casino general manager to make their numbers or else, no matter what the business environment during that period. And huge debts often cut capital improvement budgets so their casinos can be prioritized with the ones at the bottom of the ladder suffering disproportionately.

The casino owned by a single entity is often more nimble, better maintained, and more focused. Take Barona, for example. If the tribe had another casino closer and more convenient to a major metropolitan area, the existing facility would suffer, customer service would lag, and the attention of the top executives would be turned toward the more profitable property.

But that’s not the case. Barona and the other Southern California tribal casinos are the gems of their owners. They dare not let quality or service decline or customers will find someplace else to play.

Now, not all corporate ownership is problematic. I can tick off a dozen companies that own multiple casinos that have maintained the pride and attention at each property. The Seminole tribe, Boyd Gaming, Landry’s, Eldorado Resorts, Mohegan Tribal Gaming Authority, Jack Gaming and Rush Street Gaming are only a few multiple-casino owners that seem to have dodged the corporate malaise.

So, that attention to every property, to every activity and, most importantly, to every customer is what sets apart a superior casino experience. It’s the secret to success, and the larger companies need to pay attention.

John Buyachek, Director, Sales & Marketing jbchek@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com Columnists Frank Fantini twitter: @FantiniResearch Geoff Freeman twitter: @GeoffFreemanAGA Virginia McDowell | Sue Schneider twitter: @SuziQSchneider Richard Schuetz twitter: @Schuetzinc | Roger Snow Contributing Editors Dave Bontempo | Chris Irwin |Dave Palermo twitter: @DavePalermo4 |Marjorie Preston | Patrick Roberts Steve Ruddock twitter: @SteveRuddock Michael Vanaskie

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

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

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

• Jeffrey Compton, Publisher, CDC E-Reports

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

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Partner, Duane Morris, Baltimore

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Steven M. Rittvo, Chairman/CEO, 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. 901 American Pacific Drive, Suite 180 • Henderson, Nevada 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor.

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

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p. 8 numbers july:Layout 1 6/15/16 2:27 PM Page 8

BY THE

NUMBERS

MakiNg The CaSe T

he American Gaming Association has continued its campaign to legalize sports betting across the U.S. using common-sense facts and integrity-based arguments. This infographic says it all.

Nevada Slots vs. Tables Historically, slots have ruled in Nevada, creating much more revenue than the one-time king, table games. A report titled “Nevada Gaming Revenue: A Comparative Analysis of Slots and Tables,� written by Scott Boylan and published by the University of Nevada, Las Vegas Center for Gaming Research, demonstrates that fact, by comparing the market share of Strip versus off-Strip by slot and table game revenues. The chart at the bottom illustrates revenue growth off slots and tables on the Las Vegas Strip between 1984 and 2015.

Amounts depict the change in gaming revenue attributable to either the change in units in operation or the change in revenue-per-unit (RPU).

8

Global Gaming Business JULY 2016

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p. 10 5questionsjuly:Layout 1 6/15/16 2:28 PM Page 10

NUTSHELL

“They

5Questions

with Mark Brown

CEO, Imperial Pacific Saipan

M

ark Brown is a native of Atlantic City and began his casino career there, eventually operating Trump Taj Mahal as the president and general manager. From 2006 to 2009, he was president and CEO of the Venetian Macao and Sands Macao. In 2013, he joined NagaCorp, the Cambodian gaming company, but less than a year later left for the top position with Imperial Pacific, which is developing gaming on the American territory of Saipan in the Northern Marianas. To hear a full podcast of this interview, visit GGBMagazine.com.

Tell us about Saipan. Most Americans don’t understand what it is and where it is, so give us the Cliffs Notes on the island.

Saipan is a beautiful island, and like most, I didn’t know much about it. There’s a lot of history, with lots of tourists: one-third Chinese, one-third Japanese and one-third Korean. It’s a great vacation resort, with 2,800 rooms on the island, 100 percent occupied. It’s the most beautiful place in the United States you never heard of, because it is an American territory.

1 2 3 4 5

You’ve been operating a temporary casino in Saipan for the past year or so. Tell us about that and how it has performed.

We didn’t have room at our permanent casino site, so we eventually wound up at DFS (duty-free shopping) Galleria mall. They were renovating it, so we took half of it to use as our temporary casino.

We probably spent too much on a temporary facility, but because of the clientele we’re bringing in, it had to be beautiful. We opened in July with 32 mass-market tables, six premium-mass tables, 106 slot machines and seven tables that were in three junket rooms. In November, we introduced our rolling-chip program and shocked people by doing $1.6 billion, and about the same amount in December. Every month it has continued to grow, and now we’re doing roughly $2 billion a month, except for $3.2 billion in April. The VIPs love the island and what we do for them.

What is the plan for the permanent casino?

There has been some mis-reporting that we were going to build a $7 billion resort. That’s not the case, at least initially. Yes, we could invest $7 billion over time with some partners, but initially we’re building our casino pod, the main lobby and some of the restaurants. This is a Paul Steelman design, six-star, and will open by the end of this year, which includes junket rooms. We’ll open a beachfront exclusive area, which is modeled after the One-And-Only in Dubai—15 villas and suites, private lobby, French restaurant. The hotel with 374 suites will open in the first quarter of 2017. We’re spending $550 million on this phase. For the rest of the development we’ll take on partners, which is very much how Macau’s Cotai was developed.

What is your target market? How will you approach that market?

More than 95 percent of our VIP market right now comes from mainland China. But look at a map.

Saipan is convenient to everywhere in Asia. It’s a four-hour flight from China, and there is no visa— you can walk right through customs. They’re spending an average of 3.5 days here. Before we even arrived, the mix of Chinese, Japanese and Korean visitors were coming and continue to come. Then we have the local market—businessmen most of whom are not native to Saipan.

Tell us about the role of the regulators in Saipan.

We are highly regulated. We come under all U.S. laws for anti-money laundering and know your customer, and we abide by them. Contrary to what people might think, our VIP partners like the fact that we’re highly regulated and watched. They feel like it’s a safe place for families and their customers. It’s being run by U.S. and Macau experts, so we are all very comfortable with the regulators.

10

Global Gaming Business JULY 2016

Said It”

“I would like nothing better than to have an agreement with New Jersey, and it seems like there’s been a reluctance on the behalf of New Jersey to do that.”

—Nevada Governor Brian Sandoval (r.), on the prospect for an interstate online poker agreement with New Jersey to increase the size of the player pool for both states

“Yes, Adam Silver gets it. And it’s time leaders of the other major sports do the same.”

—Columnist Tim Dahlberg in an Associated Press piece calling for major sports leagues to follow the lead of NBA Commissioner Adam Silver in supporting the legalization of sports betting in the U.S.

CALENDAR July 25-27: Oklahoma Indian Gaming Association (OIGA) 2016 Conference, Cox Business Center, Tulsa, Oklahoma. Produced by the Oklahoma Indian Gaming Association.

For more information, visit okindiangaming.org.

August 9-11: Australasian Gaming Expo (AGE) 2016, Sydney Exhibition Centre @ Glebe Island, Sydney, New South Wales, Australia. Produced by the Gaming Technologies Association. For more information, visit austgamingexpo.com.

September 26-29: Global Gaming Expo (G2E) 2016, Sands Expo Center, Las Vegas.

Produced by the American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com.

October 18-20: EiG - Excellence in iGaming 2016, Arena Berlin, Berlin, Germany.

Produced by Clarion Events. For more information, visit eigexpo.com.

October 23-24: IMGL Autumn Conference 2016, Dublin, Ireland. Produced by the International Masters of Gaming Law. For more information, visit GamingLawMasters.com.

October 31-November 3: IAGR 2016 Conference, Sydney, Australia. Produced by the International Association of Gaming Regulators. For more information, visit IAGR.com.

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AGEMupdate AGEM KEY BOARD OF DIRECTORS ACTIONS

AGEM MEMBER PROFILE

Boss Gaming Based in England, Boss Gaming manufactures gaming devices such as electro-mechanical roulette. Boss Gaming products have been created to serve the operator’s desire to provide maximum entertainment and comfort to the players.

Boss Gaming was born from the fusion of work, capital and ideas of a group of entrepreneurs with a wide experience in the industry of electro-mechanical roulettes.

Boss Gaming develops games from the perspective of the casino operators who look for fun, attractive and comfortable gaming devices for their customers. Boss Gaming electro-mechanical roulette has an innovative modular design for efficient and easy maintenance, and is complemented by the Boss Gaming guarantee of rapid and effective technical support.

In Boss Gaming production, only the best materials and components are used. The Boss Gaming products are certificated by international testing laboratories and fully comply with strict international gaming standards.

Boss Gaming’s goal is to become the leader in the production and distribution of electro-mechanical roulette in Latin America. Boss Gaming executives believe in hard work, and have learned from years of experience, which is applied in the development and commercialization of Boss Gaming products.

• Reed Exhibitions Senior Vice President Ed Several made a short presentation at the June monthly board meeting updating AGEM members on the recent G2E Asia show and giving details of the forthcoming G2E Las Vegas show. The 10th G2E Asia show had more key buyers than ever before and saw the floor space up 12 percent on 2015 with 180 exhibitors. G2E Las Vegas also shows signs of growth, up 5.5 percent on sold space ahead of this time last year. This year’s show will be bigger with more exhibitors, due to space upgrades and new exhibitors. • As part of its educational alliance initiative, AGEM supported the American Indian Scholarship Program with a grant of $10,000 for 2016. This funded seven scholarships benefiting American Indian and Alaska Native students pursuing post-secondary credentials at College of the Muscogee Nation and Fond du Lac Tribal Community College. • The SEGOB conference was held in Mexico City May 17-18. The event, which was supported by AGEM, was very successful with over 300 attendees, consisting of regulators, government officials and operators from 11 different countries. The conference was very well organized and included a good range of speakers and roundtable discussions. A follow-up meeting is to take place between AGEM and SEGOB to see the next steps of how suppliers can help with the rules for certification, standardization and responsible gaming. • Two new associate members were voted in this month, taking the membership to 153. CMC Trading Engineering is a manufacturer of gaming accessories based in Singapore, and Majestic Realty is the largest privately held developer of business parks in the U.S. and landlord to many AGEM member companies. NYX Gaming Group was upgraded to Silver Level membership.

UPCOMING EVENTS • AGEM recently approved to renew its sponsorship of the AGEM-AGA Golf Classic, the industry’s largest and foremost golf tournament. A contribution of $50,000 over two years will support this worthwhile event, which raises money for the National Council for Responsible Gaming. This Mayyear’s 2016 event raised over $135,000 and saw 152 players take part. • The National Council of Legislators From Gaming States (NCLGS) Summer Meeting will take place in Boston July 29-31. AGEM will be supporting this event, having agreed to sponsor $2,000.

AGEMindex The AGEM Index posted a sharp increase in May after gaining 2.16 points in April. The composite index stood at 255.34 at the close of the month, which represents an increase of 28.83 points, or 12.7 O percent, when compared to April 2015. The AGEM Index reported a year-over-year increase for the eighth consecutive month, rising 58.36 points, or 29.6 percent, when compared to May 2015. During the latest period, 10 of the 14 global gaming equipment manufacturers reported month-to-month gains in stock price, with two up by more than 10 percent. Of the four manufacturers reporting declines in stock price during the month, two were down by more than 10 percent. The broader stock markets reported positive results in May. The S&P 500 reported a month-to-month increase of 1.5 percent, rising to 2,096.95. Additionally, the Dow Jones Industrial Average increased 0.3 percent to 17,787.20.

NASDAQ increased 3.4 percent during the period, rising to 4,938.48.

AGEM Agilysys Ainsworth Game Technology Aristocrat Technologies Astro Corp.

AGEM is an international trade association representing manufacturers of electronic gaming devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

12

Global Gaming Business JULY 2016

Crane Co. Daktronics, Inc. Everi Holdings Inc.

Exchange: Symbol (Currency)

Stock Price At Month End Percent Change May-16 Apr-16 May-15 Prior Period Prior Year

Index Contribution

Nasdaq: AGYS (US$)

11.73

10.68

9.03

9.83

29.90

0.28

ASX: AGI (AU$)

2.40

2.33

3.10

3.00

(22.58)

(0.12)

ASX: ALL (AU$)

12.86

10.00

7.80

28.60

64.87

14.25

Taiwan: 3064 (NT$)

39.30

36.50

30.75

7.67

27.80

0.06

NYSE: CR (US$)

57.40

55.57

60.53

3.29

(5.17)

1.18

Nasdaq: DAKT (US$)

7.97

8.70

10.78

(8.39)

(26.07)

(0.32)

(14.88)

(81.50)

(0.15)

0.00

0.01

3.83 0.04

NYSE: EVRI (US$)

1.43

1.68

7.73

OTCMKTS: GLXZ (US$)

0.26

0.25

0.25

4.42

Nasdaq: GPIC (US$)

9.01

8.90

10.39

1.24

NYSE: IGT (US$)

18.96

17.34

18.09

9.34

INTRALOT S.A.

1.07

1.02

1.66

4.90

(35.54)

Konami Corp.

TYO: 9766 (ÂĽ)

4,200

3,435

2,325

22.27

80.65

9.96

Nasdaq: SGMS (US$)

9.79

9.92

15.22

(1.31)

(35.68)

(0.12)

Nasdaq: TACT (US$)

7.44

8.71

6.51

(14.58)

14.29

Galaxy Gaming Inc. Gaming Partners International International Game Technology PLC

Scientific Games Corporation Transact Technologies

4.00 (13.28) 4.81

(0.09)

Change in Index Value

28.82

AGEM Index Value: April 2016

226.51

AGEM Index Value: May 2016

255.34

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p. 14 mgm:Layout 1 6/15/16 2:29 PM Page 14

MGM Moves Borgata buy and Monte Carlo rebrand highlight major announcements for company

By Patrick Roberts

J

Atlantic City’s Borgata

ust a month after opening its T-Mobile Arena in Las Vegas, MGM Resorts International continued to make news to bolster its position in Las Vegas and also on the East Coast.

The company doubled down on its Eastern presence, announcing it will buy Boyd Gaming’s 50 percent interest in Atlantic City’s Borgata Hotel Casino & Spa for $900 million, giving it full control of the property.

The transaction includes the Borgata casino and hotel and its non-gambling Water Club hotel next door in the city’s Marina district.

Under the deal, MGM will then sell the entire property for $1.18 billion to recently created real estate investment trust MGM Growth Properties LLC and operate the Borgata under a lease-back accord, the companies said in a statement. MGM Growth will receive rent of $100 million a year under the lease, the company said.

MGM already owned 50 percent of the Borgata, but was a passive investor in the casino with Boyd being the managing partner.

Boyd expects to receive $600 million in net proceeds after deducting its share of the property’s debt and also 50 percent of tax refunds owed the casino by the city of Atlantic City. Borgata estimates it’s entitled to tax refunds from the city totaling $180 million, according to Bloomberg News.

MGM Resorts Chief Executive Officer Jim Murren said the company made the deal to continue its expansion into the East Coast, which includes a casino opening later this year in National Harbor, Maryland, in suburban Washington, D.C., and another scheduled for 2018 in Springfield, Massachusetts.

MGM will be able to use its database of 60 million customers to promote the Borgata and achieve cost savings by making the property part of a larger enterprise, Murren said.

“We viewed Borgata as what it is, a high-quality, high-performing property that’s bucked the trend in a very rough market,” Murren said.

Under the joint-venture partnership with Boyd, neither company was permitted to use the Borgata customer database to promote anything other than Borgata.

“Borgata owns the database. Boyd doesn’t own it, and MGM doesn’t own it; it’s Borgata, which is somewhat frustrating,” MGM President Bill Hornbuckle told GGB magazine in an April story on MGM expansion.

The Borgata is the leading casino in Atlantic City and has continued to bring in strong revenue despite a severe downsizing of the Atlantic City market.

Atlantic City saw four casinos close in 2014 and has seen its total casino revenue cut almost in half since 2005 to $2.41 billion last year.

Coincidentally, the deal was announced the day after Governor Chris Christie signed a bill that bails out Atlantic City’s fiscal situation and establishes a “PILOT” system (payment in lieu of taxes) for the city’s casinos that establishes a set annual payment to Atlantic City instead of property tax via assessments.

Murren did not mention the North Jersey expansion that gives Atlantic City casinos a 60-day window to bid on a northern project should the referen14

Global Gaming Business JULY 2016

Las Vegas’ Monte Carlo

dum be approved. But Hornbuckle told GGB MGM would be a participant in the process.

“We’re looking at North Jersey because we have to,” Hornbuckle said. “If something’s going to happen there, we have to be involved.” A preliminary bill gives Atlantic City casino companies favorite status when bidding for what will likely be two casinos in North Jersey. MGM would have been permitted to bid even without the Boyd deal, however, since it is a state casino licensee.

In Las Vegas, the plans are proceeding for the future of the Monte Carlo casino hotel. Monte Carlo will now be two hotels—Park MGM, a 2,700room luxury hotel, and NoMad Las Vegas, a development by partner Sydell Group, which operates a hotel in New York City by the same name.

Hornbuckle says the project will transform the “neighborhood.”

“We are thrilled to partner with Sydell Group as we enter the final phase of transforming the neighborhood that we believe represents Las Vegas’ true entertainment epicenter,” Hornbuckle said in a statement announcing plans.

“Coupling MGM’s rich legacy of hospitality and entertainment with Sydell Group’s expertise in creating hotels that cultivate a strong sense of place will result in a destination that both celebrates the history of Las Vegas and ushers in a new era.”

Sydell is also bringing in Eataly USA, an Italian marketplace with fast food, to-go counters and full-service restaurants. Sydell also operates boutique hotels in Los Angeles, Chicago, Scottsdale, Arizona and Palm Springs, California.

Monte Carlo was closed in early 2008 following a three-alarm fire on the top six floors of the hotel. Those floors were redesigned as Hotel32, but will be renovated again for the new project.

At the same time, MGM is completing construction on the $100 million, 5,000-seat Park Theater in between Park MGM and the Park on the way to the T-Mobile Arena.

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AMERICAN GAMING ASSOCIATION

United We Stand How to change sports betting law

T

By Geoff Freeman, President & CEO, American Gaming Association

he American Gaming Association has never been stronger or more inclusive than it is today. Continuing to represent the totality of the casino gaming industry, AGA recently announced the addition of eight new members, marking an increase in membership by more than 50 percent in the last year.

Three of the eight additions joined as board members, including AGS, Cherokee Nation Entertainment and Delaware North. Joining as general members are Acres 4.0, American Casino & Entertainment Properties, FireKeepers Casino, NYX Gaming and Genius Sports.

This growing membership across every sector of the industry is not only uniting the industry, but also positioning us to effectively advocate for the most pressing issues we face.

Like every industry, gaming is focused on identifying the next great growth markets. For decades, this meant geographic expansion.

As we look to our future growth—moving from the $240 billion industry of today to more than $300 billion tomorrow—geographic expansion will pale in comparison to the growth we must drive through public policy modernization.

Reducing egregious tax rates, eliminating antiquated and costly regulations and paving the way for new games that meet the interests of our customers will drive multibillion-dollar growth across our industry.

I can’t think of a better example of that than tapping into America’s passion for sports betting.

Since 1992, federal law has largely prohibited sports wagering outside Nevada. A united casino industry, though, can build and lead a broad, effective coalition of all stakeholders to change this. That means bringing together sports teams and league leaders, professional athletes, law enforcement officials, broadcasters and even other areas of the gaming industry such as lotteries.

Alignment on a single goal is critical in this day and age to modernizing failed law, curbing illegal gambling, protecting consumers and safeguarding sports integrity.

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Global Gaming Business JULY 2016

It’s clear that most sports fans are ready for a change. An AGA survey earlier this year found that 80 percent of Super Bowl watchers want to see a new approach toward sports betting. Two-thirds believe states should decide whether or not to legalize sports betting—just as they decide whether or not to allow casino gaming.

With the possibility of an NFL or NHL team playing home games in Las Vegas, it’s also clear that many who work in and around professional sports still believe that athletes and casinos cannot co-exist in the same city. AGA, however, released information showing that they already do. In fact, more than 80 percent of NFL teams play home games within a one-hour drive of a casino.

Before we can give sports fans what they want, we need action from Congress. We all recognize this isn’t going to happen in 2017. We need to be committed over the long haul to creating an environment where the repeal of the Professional and Amateur Sports Protection Act is possible.

Over the last year, AGA has guided the industry in reaching consensus on sports betting; now that we’re unified, we’re building a broader coalition and putting our strategy into action.

For example, we’re activating key stakeholders—such as law enforcement, sports leagues and athletes—to highlight the failure of the current law and communicate a more effective solution. We’re deploying our third-party allies and our grassroots network to promote change with key members of Congress. And we’re identifying sports betting champions in Congress who will aggressively push for change.

With a united industry, a broad coalition of stakeholders and an effective strategy, we believe it’s possible give American sports fans what they want. That’s an effort that can move the needle for our entire industry, and it’s a future that will benefit us all.

Follow Geoff Freeman on Twitter: @GeoffFreemanAGA.

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FANTINI’S FINANCE

Opportunity Knocks Just because gaming revenues are flat doesn’t mean you can’t make money

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he gaming industry continues to change in ways that are opening new opportunities for investors.

Daily fantasy sports. eSports. Skill-based gaming. Maybe virtual reality gaming. REITs. Social gaming. The continuing emergence globally of online gaming.

Interestingly, in the end, the biggest winners might be the good old brick-and-mortar casinos.

That is because casinos provide for the essential human experience—interacting live with other people.

Further, casinos, long vulnerable to legislative whims, now have become entrenched businesses in many states, meaning they have become a lobby with influence over the who’s and where’s of new forms of gaming.

Let’s look at these two strengths:

THE EXPERIENCE The trend of casinos generating increasing revenues from non-gaming courses is not new.

But we have passed the point of a business decision to diversify revenues by charging for what was once widely comped—meals, shows, hotel rooms.

The rise of the mega-resort and, most recently, the uber nightclub, reveals something more profound—casino companies have become the masters of creating entertainment experiences.

And that plays right into the big trend of our times: people are placing ever-greater value on experience, and that is especially true for the muchdiscussed millennials, thus the uber nightclubs.

Or take eSports. There is a fascination with the emerging form of entertainment in which thousands of young people pack arenas to watch others play video games.

It gets to the heart of why casinos will continue to succeed—people can be as absorbed as they are by video games, but they are still people.

They want to interact. They want to experience.

And casinos are a natural home for eSports, as we already see, whether with Downtown Grand in Las Vegas hosting weekly tournaments, or MGM Resorts intending to fill its arenas with tournaments.

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Global Gaming Business JULY 2016

By Frank Fantini

Along the way, those thousands of eSports spectators will flood casino floors, sports books, poker rooms, table pits and night clubs, and stay on customer rolls as marketing targets.

Las Vegas Sands is offering another example of how the casino industry has become the experience industry.

LVS plans to build a 17,500-seat arena with Madison Square Garden Company that will the first ever designed solely for music and entertainment.

And, as with eSports, the clear expectation is that the thousands of concertgoers will spill out into the casino, nightclubs and swimming pools.

The advantages aren’t limited to destination resorts. Boyd is demonstrating what adding non-gaming amenities can do for the bottom line even in gambling-centric regional casinos.

The point is, social interaction is part of human nature, as is taking a chance. Only the casino industry provides both. And today, it’s the business model.

STRATEGIC MOVES For a company that doesn’t have the glamor name like Wynn or Las Vegas Sands, Boyd Gaming sure has made some bold moves recently. And, we think, shrewd moves at that.

The big headline-grabber was selling its half of the Borgata in Atlantic City to joint-venture partner MGM Resorts for $900 million.

Two interesting points about what Boyd will immediately achieve: 1. It gets enough cash to pay down debt and bring its debt-to-EBITDA ratio to the company’s goal of below 4.5 times.

2. In effect, proceeds from the Borgata sale pay for Boyd’s purchases of Aliante, Cannery and East Side Cannery casinos in the Las Vegas locals market.

Boyd paid a combined $610 million for those casinos and expects to generate $62 million in EBITDA from them in their first full year, and then to grow.

There has been some question whether Boyd got too little for market-leading Borgata at 8.8 times EBITDA and whether it paid too much for the locals casinos at an average of 9.5 times EBITDA. BYD’s current stock price is around eight times.

However, judging a deal by those current

EBITDA multiples is quibbling. The real question is the strategic value of the deals. In that regard, we think Boyd CEO Keith Smith has got it right.

Boyd is selling Borgata at its height. Atlantic City is going to continue to come under pressure as casinos arrive in New York, Cordish and Parx open another Philadelphia casino, and MGM opens its own National Harbor casino near Washington, D.C. And, of course, there’s a chance of two casinos coming to North Jersey, a prime AC market.

Then there is competition within Atlantic City.

Caesars, under new CEO Mark Frissora, is showing a reinvigoration as an operating company and may well grow share in AC. Golden Nugget and Resorts have grown share under focused management. And Taj Mahal should reverse its decline now that its distractions have ended.

Then there are the Las Vegas purchases.

Smith called the purchases compelling opportunities, especially in rapidly growing North Las Vegas where Cannery and Aliante operate.

We agree.

Las Vegas is a Sun Belt city that will grow for a long time. Buying up locals casinos will give Boyd assets that it can grow commensurately.

Further, the purchases strengthen the value of Boyd’s B Connected players club and provide economies of scale that will drive down costs at what are now less cost-efficient, independent operations.

Combined with its properties in resurging Downtown Las Vegas, Boyd is buying cash cows at a fraction of the price to build them, or enter the Las Vegas Strip, in the nation’s third-fastest-growing metropolitan area.

The fact is that Boyd’s entire portfolio is strategically located throughout the country. And, while the company doesn’t have the glamor and glitz, it has steadiness that should reassure investors concerned with both preservation of capital and growth of capital.

This is a case where strategic vision should beat short-term financial metrics.

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

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Stacking the Deck There are lots of hurdles on the road to success as a table game inventor— and just as many inventors willing to go for broke.

How can you tip the odds in your favor?

By Marjorie Preston

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reating a successful casino table game is like winning the lottery or becoming a movie star—the odds against it are astronomical, but that doesn’t keep people from trying.

“I’ve probably done the mathematics for hundreds of table game ideas over the decade-plus I’ve been doing this, and I cannot think of one that’s gotten really widespread placement,” says Eliot Jacobson, and he should know. The president of Santa Barbara-based Jacobson Gaming is also the author of Contemporary Casino Table Game Design.

Of the scores of table games that make the rounds each year, Jacobson calculates that one in 50 may get to market, and of those, just one in 10 really takes off. So for every Three Card Poker or EZ Pai Gow, there are hundreds, perhaps thousands of games that come up snake eyes.

So what’s a table game inventor to do? Is it possible to boost the odds that an idea will catch fire, and not end up on the landfill of broken dreams?

“It’s a tough road,” says Todd Cravens, former president of AGS and now CEO for the Americas of TCSJohnHuxley in Las Vegas. “No. 1, we have an industry that’s highly regulated. No. 2, in order to move a table game off the floor, what replaces it has got to do better.”

“If there’s a new blackjack side bet, it’s important to me that I don’t have to change my strategy on the base game.”

—Todd Cravens, CEO for the Americas, TCSJohnHuxley

Testing, Testing Inventors must navigate a labyrinth of tests, trials and regulatory speed bumps before a new game drops. Once it’s live, the game must prove itself fairly quickly—depending on the jurisdiction, within 30, 60 or 90 days. Most flame out fast, says Craven. “I wouldn’t say it’s an 80-20 rule. It’s more like 90-10.

It’s an uphill battle. But the guys that do well with it do really well.”

“There are some characteristics that may increase a game’s chances of success,” says Jacobson. “In these poker-style games—for example, Ultimate Texas Hold ‘em, Texas Hold ‘em Bonus Poker and games similar to that—there is 20

Global Gaming Business JULY 2016

sort of a cookie-cutter approach where you have an ante bet, some sort of blind bet, and then a series of play bets as certain cards are revealed.”

But following the recipe is no guarantee you’ll get soufflé.

“I’ve seen dozens of games that are smart, but after a while they start to look a lot like each other,” he says. “The territory is so worked over, it’s hard to make room for a new one.”

New takes on blackjack are problematic, too. “It’s tough to learn. So all the variations that try to make the game better or easier add something or take something away. You can think of any number of iterations, but again, it’s hard to get a new game in.”

He cites a few big successes—Spanish 21, Blackjack Switch, Free Bet. “Also, there was a game about 15 years ago, Super Fun 21, that made it big for a while, but its success went downhill after ‘blackjack pays 6:5’ started to spread in 2003.”

When it comes to side bets, there’s good news and bad news. “A side bet is probably the easiest thing to bring to market. There are mainstays in the side bet area that have been successful for a long time—21+3 comes to mind, or Pair Square. The problem is they pay very, very little. You almost have to give them away to get them onto a table.”

And then there are the one-offs: spanking new, out-of-the-blue game ideas that are especially hard to pitch, because “people don’t trust new.”

If there’s any rule at all, Craven says, it’s KISS: Keep It Simple, Stupid. A game must be easy to explain, easy to understand, and easy to play.

Keep in mind, dealers can help make or break a game; their endorsement is essential.

“The dealers get X amount of hands per hour; that’s one of their metrics. If a dealer says, ‘Hey, you should play this game, throw five bucks on there,’ that’s a really big part of it. They don’t want to be dealing a cumbersome game that won’t allow them to do their job well.”

Ditto for side bets. “If there’s a new blackjack side bet, it’s important to me that I don’t have to change my strategy on the base game,” Cravens says.

Paper Covers Rock Roger Snow is the brain behind popular games like Four Card Poker, Crazy 4 Poker and Dragon Bonus Baccarat. As Scientific Games’ senior vice president of table and shuffler products, he’s seen all kinds of wacky ideas—games based on tic-tac-toe, dreidels, and even Rochambeau (i.e., rock, paper, scissors).

Every inventor feels certain he’s come up with the next Ultimate

“I’ve seen dozens of games that are smart, but after a while they start to look a lot like each other.”

—Table game expert Elliott Jacobson

Texas Hold ‘em (a Snow invention). The Rochambeau guy, for example, “gave me all the data you can imagine: ‘People know rock, paper scissors, it’s played in a gazillion countries by a gazillion people.’ Well, he got his game on the floor and it lasted about two weeks.”

To improve the odds, Snow suggests, don’t reinvent the wheel. “In the last 26, 27 years, the overwhelming majority of games that have succeeded are poker games. The No. 1 game in the industry is Three Card Poker. The No. 2 game is Ultimate Texas Hold ‘em. No. 3 is Mississippi Stud.

“Pai Gow Poker, Crazy 4 Poker, Four Card Poker, Texas Hold ‘em Bonus—almost all poker games. Even Casino War is essentially one-card poker. So when people say there’s no formula, OK, fine. But it’s not alchemy. My money is on poker games, side bets or blackjack derivatives.

Geoff Hall is like the king of blackjack; everything he does is blackjack and he’s been very successful at modifying blackjack to make it more fun.”

Three Card Poker is the most successful new table game ever to be introduced in the gaming industry—the genius of inventor Derek Webb

“21 years ago when (Three Card Poker) was introduced, it had just as unlikely a chance of success as every other game.”

—John Hemberger, vice president of table products, AGS

What hasn’t worked: dice games, cribbage games and backgammon games—as well as most of the games Snow himself devised. “If you include everything, I’m probably batting 1 out of 6 or 7, which in baseball would put me on the bench. But because of the resources of the company behind me, I’m able to take a lot of at-bats.

“We evaluate successes differently,” he adds. “If I have a game with 25 installs, I don’t consider that to be a success. But for an inventor off the street, that might be pretty cool.”

Hopeful inventors can take comfort in the story of Derek Webb, who invented Three Card Poker in England in the mid-1990s, and was compelled by British regulators to shop it first in the U.S. to get some performance stats. Webb once likened the process to “pulling teeth.”

“It became the most popular proprietary game of all time, a staple on most casino floors,” says John Hemberger, head of the table products division at AGS. “But 21 years ago when it was introduced, it had just as unlikely a chance of success as every other game.”

Three Card Poker provides “a blueprint for things that resonate with players: simplicity and speed,” says Hemberger.

Anatomy of a Winner That simplicity extends to the look of the game, which must invite and not intimidate players, says Hemberger. “You don’t want the layout to scare them off, with designs that are too hectic or cluttered with pay tables everywhere. You’re always trying to keep that clean, simple look, so when players walk up, within watching a hand or two they can figure out how this game works.”

One of the firm’s most successful products is Buster Blackjack, a side bet introduced last year JULY 2016 www.ggbmagazine.com

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Only the Strong Survive Joe Bertolone, President & CEO, DEQ Systems Corp. that now has some 600 installs. “We’ve scaled it out in the marketplace pretty quickly because it’s so simple,” says Hemberger. “If the dealer busts, you’re going to get paid, and the more cards in the dealer’s busted hand, the more the payout increases. With a side bet like that, there’s a community dynamic. Everybody’s rooting for the same event, and everybody gets paid when it happens. The hit frequency is 28 percent—quite high for a blackjack side bet— so one in every four hands is a winner.

“When people see winners, they feel like there’s an opportunity for them to get paid.”

A casino can spread the word through marketing, and the provider may pitch in with play-for-fun versions of proprietary games on its website. “That’s a huge sales tool for us; it allows decision-makers and shift managers to play the game and get a good feel for it,” says Hemberger.

While the road to success is littered with non-starters in the table games space, Snow says SGI “is always trying things, on all different fronts, constantly testing—people have no idea.

Ninety-nine times out of 100, those ideas never see the market, but we try everything, because if there’s one thing you learn over time, it’s that the marketplace is not predictable. If things go one way, we’ll be there. If they turn the other way, we’ll be there. We’re not a company that says we are banking on one thing, and if it works we’ll be successful, and if not, we’re all on the unemployment line.

“We may be in the gambling business,” he says, “but we’re not in the gambling business.”

Meanwhile, Jacobson has a great name for the next great game: Louisiana Baccarat.

According to his formula, a winning name “sounds like it’s been around a long time.” Like Mississippi Stud and Caribbean Stud, names that “evoke geography” tend to be strong, he says. In addition, Louisiana “has a ring to it, because it contains the word ‘easy,’ and there’s a positive value to that.” Completing the equation, “the French are associated with Louisiana and also with baccarat.”

There’s just one hitch: the game doesn’t exist.

“I’ve told a lot of game inventors, here’s the name, now go invent the game,” says Jacobson.

“I’m still waiting.”

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GGB: How hard is it to get a new table game out on the floor?

Bertolone: You’ve heard the expression, “Markets are efficient.” It’s truly survival of the fittest… The number of spots available on a casino floor is limited, by definition, by how much square footage a casino allots to table games.

If you know you can make a certain amount of money with free, public-domain blackjack, that’s what you’ll put on your floor.

The table game director is responsible for the revenue generated out of his pit. He’s got to make more money than if he stuck a regular blackjack or roulette game out there. It all comes down to win per unit. That square footage has to make money and compete with blackjack, baccarat and roulette.

How many people bring you games in a given year?

We evaluate between 150 and 200 new games a year. But it’s very, very difficult to guess which is going to be successful. You can pick out certain metrics that will work—the math, the pay table, the hit frequency. A successful game has to have the right feel, which has to do with the math, the playability and simplicity of the game. We have a standard: if you can’t explain a game within 10 to 30 seconds, it’s probably not going to go anywhere, because it’s too complicated.

There is a regional-jurisdictional angle to all this, too. Games that are successful in Asia are going to be different from games that are successful in California, which are going to be different from games that succeed in regional markets around North America.

What happens when a game shows some promise?

Say you’re an inventor. You own a game, you have strong patents, you’ve tested and trialed it, and you know you’ve got something. The next hurdle is the commercial angle—whether you sell the game outright, or enter into a royalty deal with a distributor. You have to have realistic commercial expectations. It’s got to be a win-win. If you’re going through a distributor, for example, both sides have to make money. If you sell the game, you’ve got to sell it for a reasonable price.

What’s your definition of success?

When you talk about successful slot rollouts, you’re talking about tens of thousands of machines. For the first year of a table game’s life, if you can distribute 25 to 50 games, that is stellar performance. We’re trying to find games we can distribute out to 250 to 500 properties. That would be an incredibly successful game for any company in this space.

How long does a trial last?

In 30 to 90 days, you can see if a game is gaining traction. Unfortunately, there’s no science here. There are so many variables behind the success of a game and whether it catches on.

We’ve had games that we put in one market that didn’t get any traction at all, then launched in another market and were successful.

Do players expect more high-tech elements today?

We coined the term, “Slotify your table game.”

We’re in the business of putting progressives on tables, so we believe there’s an ability to drive the operator’s coin-in through those technologies. But it’s tricky. There are many, many traditionalists out there who believe the pit is the pit, and they don’t want you to mess up the games with a bunch of extra technology. Are you able to maximize hands per hour if you have a bunch of bells and whistles going off on the table? Obviously, that has to be weighed against the house advantage and the hold on the table.

Technology allows you to put a little excitement in your pit, but it’s not the defining element. You still had to have good base games.

Without that, people won’t play.

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the

Personal

Touch

John Acres strives to return the classic appeal of the casino— making customers feel special

By Frank Legato

A

lot has changed in the casino business over the years, but most of the technological changes have made it more convenient to play slot machines and other games.

You no longer have to flag down a host to see if you can get your room comped or get a coupon for a free buffet. You don’t even have to stand in line to cash in coin coupons, which used to be one of the necessary rituals of player’s club membership.

In many casinos, you don’t even need to flag down the cocktail server. You can press a button to order your drink and a server appears with what you ordered. Comps and cashback are automatic—press the “$” button, see how much you’ve got, and download it to your credit meter.

These conveniences have surely kept players at the machine, and playing.

They have also driven players away.

According to John Acres, who invented player tracking in the 1980s, the same automation that has cut time from the customer service process has also curtailed one crucial element of the casino business: personalized service.

Acres pioneered much of the technology that forms the basis of modern casino marketing—from slot accounting and player tracking to bonusing, reward points and more. Now, however, he says the methodology used to reward players must be re-engineered, because today’s casino industry is not the industry for which the technology was originally developed.

While the idea was to make sure the best players were taken care of, Acres says, automated player tracking created a class system of sorts, with most missing out on the royal treatment, or even a greeting from a familiar face on the casino’s staff.

“When we created player tracking systems in the early ’80s, it was simply

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about accruing play information on individuals,” Acres says, “so that we could focus marketing on the people who were spending the most. We didn’t do anything past that.”

The reason it worked for so many years? Sheer numbers.

“Because there were few casinos and lots of people looking to gamble, it was more than enough to say, ‘Joe Smith and Debbie Arnold here are our big players; let’s focus on them. And Tim Jones over here, he didn’t spend much, so let’s ignore him.’ Now, the world is different.”

The fact that some players feel left out, he adds, is a symptom of a larger problem facing the industry—a dwindling pool of customers and a marketing culture that is not creating new players.

“We as an industry have never learned to develop new players,” Acres says. “We simply served the people who wanted to gamble that we could identify, through their existing play. And as we’ve grown our industry, we’ve not grown our market to keep track, and therefore, our revenue per machine or per casino is down.”

Aggravating the problem is that fewer people, particularly in the younger generations, are gambling in casinos, and many former good customers have stopped visiting. Acres says it’s another sign of the times in an industry that has gone from special to commonplace.

“Thirty years ago, traveling to Las Vegas or Atlantic City to gamble for a day was an exciting adventure,” Acres says. “It was something not everybody did. It made you feel like you were leaving that ordinary world for an extraordinary world… Now, because of the plethora of casinos we have, they are part of the ordinary world. There’s nothing exciting about them.

“So what we have to do is help the operator build that excitement. We

“We as an industry have never learned to develop new players. We simply served the people who

wanted to gamble that we could identify, through their existing play. And as we’ve grown our

industry, we’ve not grown our market to keep track, and therefore, our revenue per

machine or per casino is down.” —John Acres, Founder, Acres 4.0

24

Global Gaming Business JULY 2016

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“The real issue is that the big system suppliers still think they’re in the bigplayer identification business, instead of being in the ‘discovery of the new player’ business. And that’s not a well-developed field.”

—John Acres, Founder, Acres 4.0

have to make those promotions seem more special. We have to recognize (players) as individuals, and we have to help them feel like they’ve accomplished something meaningful by winning a $100 jackpot, even though they spent $200 trying to win it.”

It’s part of providing what Acres calls giving the “hero’s journey” to casino customers—creating an experience that makes them feel special, regardless of their spending level. “They go home feeling like they accomplished something,” he says. “That they’re better than when they arrived. That, ‘Even though I go to work and I got beat up by my boss, I didn’t get the promotion I wanted, I went to the casino, and I achieved a $100 jackpot… I got to go into this place, where I’m special.’”

The loss of that special casino experience is not because of the advance of technology, he says, but because, by and large, the industry has not used advancing technology to its full advantage. Today’s system solutions, combined with the wealth of information through big data and the cloud, allow casinos to access a wealth of information that can create new players and improve the experience for current players. The key, says Acres, is to develop new ways to use that information.

“The real issue is that the big system suppliers still think they’re in the bigplayer identification business, instead of being in the ‘discovery of the new player’ business,” Acres says. “And that’s not a well-developed field. We know that we can make it work, but we have to take the data out of these systems, and we have to repurpose it. And the big guys just aren’t very good at that.

They can’t pay attention. And that’s where guys like us come in.”

New Marketing Paradigm “Guys like us” refers to a group of industry consultants and technology suppliers currently helping casino operators create a new marketing paradigm dedicated to the customer—and to creating more of them. Prominent among them is Acres’ current company, Acres 4.0, which is dedicated to using mobile technology to help operators simplify the process of providing service tailored to each individual customer.

The flagship product of Acres 4.0 has been Kai, a management and communications tool that automatically mines all customer data and translates it into actions that can be taken immediately. The information is drawn from all the available data on each player, from play preferences to favorite food and

beverages to birthdays, anniversaries, the sports teams he or she follows—both internally through the player’s club and externally over the internet cloud.

That information is tapped in response to any number of triggers, such as a player inserting a card into a machine, checking into a hotel or logging on to a property’s social casino. The proper host or marketing official, or even the GM in the case of a top player, can be notified on their mobile phone of the player’s presence, and take the proper action instantly.

Kai can be integrated into any of the existing player tracking systems to add features fostering personalized service to customers.

“With Kai, we’re starting to dispatch hosts and other people to go greet players by name, to bring them their preferred beverage as soon as they slide in their card, without their ever asking to have it brought,” Acres says, “to summon their car when they need it, to recognize when they have a birthday, to put them in touch with their friends, and a whole variety of other things to help people feel special.”

It’s also a perfect system to address service needs on the machines. “Show us a machine with a problem, because there’s a player with a problem standing in front of it,” says Acres. “If a machine’s not working, a player is disappointed, right now. They’re waiting, and that wait time is agonizing. With Kai, by connecting to the data that the systems are throwing away, we’re able to use mobile technology to dispatch a qualified person to go over and solve the problem.”

Acres says Kai cuts an average of three minutes per game, per day, off service time. “In a 2,000-machine casino, that’s 6,000 minutes a day. That’s a lot of time. It’s 100 hours of labor time saved a day, and there’s an equal amount of time—100 hours of player waiting time—that goes away as well. We’re saving casinos millions of dollars in labor, and getting them millions of dollars in additional play.”

Acres says the ability to demonstrate return on investment has been critical to industry acceptance of such major changes in the casino marketing paradigm. “Technology like Kai provides a return on investment from day one,” he says. “We see that we can save labor, and we see that we can save player waiting times. We can improve that experience. And if the casinos can convince themselves to not take those labor savings as short-term profits, but rather reinvest in hosted offerings, and creating a proactive experience instead of a reactive service, then you have the ability to start attracting those new customers.”

One proving ground for these concepts has been San Diego’s Barona Resort & Casino, which has not only implemented Acres’ Kai product but has embarked on a complete marketing program that aims to improve the experience for all customers. The casino is working with consultant VCAT on the marketing program. (See page 28.)

At Barona, there are fleets of hosts taking the time to greet customers. Two or three employees will greet guests by name with birthday greetings, anniversary wishes or whatever else is appropriate from the information available to them on their smartphones.

And the best part? The casino is making more incremental money than it costs to generate the extra business. “Barona stands alone,” says Acres. “Their revenues are up and up and up. They defy logic; where other properties are cutting labor to save money, Barona is adding labor, and they tell us consistently JULY 2016 www.ggbmagazine.com

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that every time they add labor, their that. And the way we fix that is we help players stay within their budget inrevenues increase by more than the stead of tempting them to go beyond it.” cost of the labor.

At the same time, he says, operators should provide the “hero’s journey” at “And all you have to do is go every level. “We can create individual hero’s journeys, that are satisfying within there and see the environment. You every budget,” Acres says. “There’s got to be a difference between the person drive in and everybody’s waving at that spends $20 for an evening, and the person that spends $200, and the peryou, saying, ‘I’m glad you’re here!’ and son that spends $2,000, but there’s also got to be a sense of accomplishment you walk through the door and emat every level, without making them feel like they’re nothing because they ployees shout out to you and seek you, can’t afford to spend more.” to say, ‘Hi, what are you looking for?

Acres paraphrases what casino mogul Steve Wynn told him back in the How can I help you?’”

1990s: “(The player is) a renewable resource. You want to Barona is an example of how casino give them a good time, charge them an affordable fee, and marketers can use key new technologies in concert, says have them anxious to come back again.”

Acres.

These methods will keep current customers coming “We have this trifecta of new technologies that are back, but other marketing changes can bring former players very exciting to me,” he says. “We have mobile commuback and create new ones, Acres says. nications—the phones that we have in our pockets, Acres contends that current marketing efforts are ignorthat have absolutely transformed how we run our ing a huge source of potential new business—players who everyday life. We have big data, which is part of the invisited once or twice and didn’t return. ternet, to be able to consolidate and analyze informa“Our studies show that something like 80 percent of all tion from hundreds of thousands of people, and find adults in the United States visit a casino less than two times a patterns within that, that we can use to create new year,” he says. “That means we have huge upside. If we go into satisfactions.” our player tracking databases, and instead of looking at the top Instead of projecting that information on some players, we look at the people who didn’t come back, and start At Barona, there are fleets of hosts boardroom screen for analysis, Acres says, operators can taking the time to greet customers to market to them, we realize that they came in here for a reause the third part of the trifecta—artificial intelligence. son. They gave their name for a reason, but we disappointed “We take this artificial intelligence and let it parse them. Can we now bring a percentage of those people back? If through the data, and determine what changes to effect,” Acres says. “It then we brought back one-tenth of the people that didn’t come back, we’d double measures the results and learns as we go. our business. That’s a lot.”

“As human beings, we don’t have a hope of treating each player as a true inAgain, the database can dictate the right way to do that, with food, amenidividual… Casinos are 24/7 operations. You can’t create good communications ties, activities the customer history indicates they may enjoy, etc. But mostly, between shifts. Even if you could, there’s no way that any one person on the floor says Acres: at a given time can know all the players that are in there, much less measure “Invite them. And invite them in a way that makes them feel important. them. But, artificial intelligence and big computers can. They can measure every Right now, what do we do? We send out a mass mailing, addressed to ‘Dear single player and analyze their own behaviors, bend them into psychographic and Player.’ We save the personal greetings for people we feel have value. demographic profiles, and create new hero’s journey experiences for them.”

“We have to find ways to estimate people’s value and treat them according Acres says new technologies like artificial intelligence, voice-response comto their potential worth, not according to their proven worth. The definition puters and more are poised to launch a new era in casino marketing. “If you look of developing new players means that we’re treading into the unknown. And at the rate of change in this technology, it’s going to enable a personalization that as long as we keep the conversion percentage reasonable that we can make a we have never before imagined,” he says. “The next 20 years will be incredible.” profit, we can do that. And these new technologies let us invite new players— people that maybe came in once or twice before—in ways that can be profEmbracing the Paradigm itable, and which say we care, come here, escape your everyday life, enter into While the next 20 years may be incredible from a technological standpoint, the our extraordinary world, become a hero. way casinos market should be changed now, Acres says, to a process that retains “Yes, you’ll spend some money, but it’s going to be an affordable amount current customers and creates new ones. of money, and then you’re going to go home feeling better.”

The player’s club tier system, he says, is outdated. “We need tiers of one,” Attracting new players who are not traditional casino customers—the milsays Acres. “In the old days, before we had the advanced technology, (the tier syslennials, in particular—may require other enticements for the journey, like tem) helped us bin our customers into places where we could profitably categonew skill-based games, or games with levels of achievement. Acres says more rize services. The other thing it did was it provided aspiration. I’m a Silver regulatory change could create those opportunities. member; I want to be a Gold member. If I’m Gold, I want to be Platinum. And But new game styles alone, he says, are not the solution. “If we have peowe do see people moving through the ranks. ple looking for ways to create new games, that’s great,” says Acres, “because we “But what we don’t realize is that there are other people who cannot, within do need new games, and we’ll have to work through the regulations. But their budget, reach those new levels. And we are telling them, ‘It’s futile. We again, if we create that hero’s journey experience around the existing games, don’t care. You’re stuck at Silver. You are unimportant to us.’” we can attract new players.”

Instead, he says the industry should help players spend within their budget, And much of that, he concludes, lies with simply giving players a fair shake. with recognition as a good customer at each level. “The No. 1 enemy we have in “If we really want to move forward, we have to give better value,” Acres says. marketing our products is the bad reputation we’ve got,” he says. “There’s 20 “And that better value will not come necessarily by just cutting price. It has to percent of the population that thinks we should all be closed. We’ve got to fix come by improving the experience—by making every person feel special.”

26

Global Gaming Business JULY 2016

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Barona

The Road to Although tucked away in a remote valley, customers find their way to the best gambling experience in Southern California

By Roger Gros

V

isitors traveling to the Barona Resort & Casino in Southern California have to be truly dedicated to reach their destination. This hidden gem of a property, like all California casinos, is located on an Indian reservation. But the Barona Band of Mission Indians’ reservation is even more remote than its neighboring tribal casinos.

It’s about eight miles from the nearest “We don’t use analytics as much as you might think. highway, and the country road is winding in places. A single-lane road and some We want our senior people, in fact, all 3,000 staff steep grades make the trip an adventure to say the least, but after a short drive through members, to be focused on the things that are the beautiful rolling hills, you drop into the important: friendly relationships with all of our Barona Valley and feel a sense of wonder about the experience to come, as you are players, providing unparalleled customer service, welcomed by a friendly waving security guard to the well-designed casino property. and fulfilling their goals. We learned to only focus Located outside of Lakeside, California, on casino players and to do things our competitors a suburb of San Diego, Barona is probably the least likely candidate to be the favorite of cannot or will not copy.” gamblers in Southern California, but it has been —Rick Salinas, General Manager, Barona voted the Best Casino in Southern California year after year by gamblers, several publications and websites, and Barona has dominated the market U.S. Open local qualifiers and numerfor a long time. And because of the difficult navigation to get to the casino, no ous local tournaments on the golf alcohol is served on the casino floor, only in some of the restaurants. course,” he says, “and the notoriety of So what makes people travel the extra miles to this remote casino? One the course makes it a great reward for our players who word, and it’s the focus of everything that happens at Barona—gambling. play golf.”

Barona General Manager Rick Salinas says the philosophy at Barona is to Ironically, Barona is one of the most progressive casinos when it comes to make gambling exciting, to bring back the personal touch and service that chartechnology. Barona developed and launched the first voucher-in/voucher-out acterized successful casinos for years, and to provide the players with an unfortechnology on the casino floor back in 2000, was the first casino to install servergettable experience that will follow them home and make them want to return. based gaming technology and has developed impressive systems to recognize cus“We are focused on the players,” he says. “Anything that takes that focus tomers as soon as they start playing. But that’s where it ends for Barona away is of no use to us.” employees.

Barona purposely has very few non-gaming amenities, outside of the 400“We don’t use analytics as much as you might think,” says Salinas. “We want room hotel, restaurants and the golf course. But everything they do is targeted. our senior people, in fact, all 3,000 staff members, to be focused on the things The restaurants win award after award and the golf course, Barona Creek Golf that are important: friendly relationships with all of our players, providing unparClub, is a championship course ranked as one of the top courses in California. alleled customer service, and fulfilling their goals. We learned to only focus on While all top-notch amenities, they still aren’t the focus. casino players and to do things our competitors cannot or will not copy.”

“Those things are used to reward gamblers,” says Salinas.

Barona also plays host to many of the latest slot machines in a specific section “We have attracted top tournaments like the Web.com Tour Championship, 28

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“The slot manufacturers love to put their latest games in our casino because they can really see how they perform under pressure.”

—Rick Salinas, General Manager, Barona

of the casino, points out Salinas.

“We always felt that was rubbing salt in the “The slot manufacturers love to put their latest wound,” says Salinas. “If you want to get money to games in our casino because they can really see how play in our casino, we shouldn’t be charging you to they perform under pressure,” he says. do that.”

Players love it too, and are asked to provide feedWinning is also important at Barona, and Saliback to a special email address. nas and his casino executives believe a lower hold The table games are fun and exciting too, with percentage is important to retain players and mainmanageable minimums and favorable rules for the tain their loyalty. players, even though the results for games like craps “It’s all about time on device,” he says. “If we and roulette are governed by cards, as required by can give our players an entertaining experience There are no kiosks on the Barona floor.

California regulations. And at Barona, the Party Pit where they can have fun at their favorite machines, A “Jackpot Processing” center provides concept really works, where sometimes it is not so we’ll be successful and maintain our leadership poall the service a player needs. successful at other casinos. sition in the San Diego market. So if that means You won’t find those kiosks that are becoming giving them a better chance to win, that’s fine with omnipresent in most casinos where players can cash us, because it makes our players happy and they in their tickets. Barona still employs a small army of keep coming back.” nearly 140 slot cashiers making change and cashing Salinas, who was a human resources executive vouchers with mobile scanners. before becoming general manager, says he encour“We prefer that our players interact with our emages his employees to create relationships with cusployees,” says Salinas. “It’s more exciting for them to tomers. share their good fortune and experiences with actual “It has to be genuine,” he says. “Customers can people, not machines. Our management stays away tell when you’re forcing a relationship on them. from offices and meetings and spends their time with But when you can really connect with them and players and staff.” recognize them when they return, that’s important.

In fact, Barona uses cutting-edge technology like It makes them feel wanted and special.” the Kai mobile system from Acres 4.0 precisely to Salinas says it has to start at the top, however, so drive that personal interaction between employees Players enjoy a meal while enjoying he meets every employee hired by Barona before their favorite slot machines and customers. Hosts are alerted on their smartthey begin their job and makes an effort to rememphones of player birthdays, anniversaries, favorite ber their names. drinks, food and other preferences. Players are greeted “I tell them one thing: just be a nice person,” he by casino employees early and often. says. “If they do that, they can go far in this organization.”

“Barona is showing us that you can take everyday technology and make (serEvidence of the personal service offered at Barona is replete across the casino vice) improvements,” says John Acres, CEO of Acres 4.0. “They have technolfloor. Jackpots are hand-paid. Nothing beats the image of a winning player reogy that helps them recognize when a player has a birthday or other personal ceiving a pile of Benjamins in his or her hand. Or the sight of players having a event, and they will make a point of going over and greeting them not just once, meal at the slot machine. While this has been tried in other casinos, it hasn’t albut two or three times, by two or three different people. ways been successful.

“And they want their people to have enough time to greet players in a “We’ve got it down,” he says. “Not every casino can serve food on the floor. meaningful, personalized way. It’s not enough to say ‘happy birthday.’ The point Unless you have a real system, it can be clunky. But we consider the casino floor is to say ‘happy birthday’ in a way that makes me feel like a friend.” to be another restaurant outlet, and we have a manager in charge of food service Even the process of getting cash is friendly. You won’t pay the $4 service on the casino floor.” charge when you take money out of an ATM at Barona. The withdrawal is free So while the journey to Barona may be an adventure, it’s worth it because and easy. the excitement factor ramps up as the player arrives at the casino.

30

Global Gaming Business JULY 2016

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Brother vs. Brother Casino conflicts threaten federal Indian policy

By Dave Palermo

I

van Makil, who for 12 years served as chairman of the Salt River PimaMaricopa Indian Community near Scottsdale, Arizona, isn’t taking sides in a bitter dispute that has divided the state’s American Indian tribes.

It saddens him that Tohono O’odham in December opened a casino in the Phoenix suburb of Glendale, angering tribes and state officials who promised voters in a 2002 ballot initiative there would be no new gambling in the city.

But he also is discouraged that his tribe and the Gila River Indian Community in May abruptly left the Arizona Indian Gaming Association (AIGA), frustrated that the group took a neutral position in the Glendale dispute.

For 22 years, AIGA has been a unifying force for Arizona’s 16 casino tribes, lobbying lawmakers and educating the public about the jobs and economic gains achieved through government gambling. Losing its two most lucrative member tribes will hurt.

“While tribes are becoming very successful individually, we still have many challenges that require us to be unified in our efforts,” says Makil, a pioneer in tribal economic development and founder of Generation Seven Strategic Partners, a consulting firm.

“No one likes to see tribes not working together.”

Tribal Turmoil Makil is one of a growing number of indigenous leaders who fear intertribal disputes over casino competition in Arizona, California and elsewhere threaten to unravel long-established federal Indian policy, eroding tribal sovereignty and self-governance.

They also believe casinos on newly acquired Indian trust lands—dubbed “off-reservation gambling”—are aggravating tribal relations with congressional and state officials.

Opposition to the $29 billion Indian gaming industry is blamed for congressional efforts to give state and local governments a larger role in Department of the Interior decisions to place land in trust for indigenous governments, hindering tribal efforts to reacquire ancestral territory.

Opposition to federal Indian policy comes despite the fact that of 2,151 land/trust applications processed by Interior since 2009, only 20 were for casinos. Interior under the Obama administration is hoping to place 500,000

acres of land in trust for tribal governments.

Meanwhile, tribes frustrated with ambiguities in the Indian Gaming Regulatory Act (IGRA), implementing regulations and Interior policies dealing with gambling on newly acquired trust lands are seeking to amend the act, an unprecedented move opposed by much of Indian Country.

“It’s getting to be a free-for-all out there,” a prominent tribal attorney says of tribal disputes arising out of efforts to establish new casinos in a maturing, if not saturated, Indian gambling market with some 480 casinos in 28 states.

Proposed federal legislation rising out of gambling controversies in Arizona and California could have a residual impact on the nation’s indigenous communities.

The Keep the Promise Act (HR 308/S 152)—promoted by the Gila and Salt River Indian communities—would let the federal government renege on terms of a land claims settlement that enabled Tohono O’odham to build the Desert Diamond Casino on property adjacent to the Phoenix suburb of Glendale.

The Gila Bend Indian Reservation Lands Replacement Act of 1986 allowed Tohono O’odham to acquire the land as partial compensation for 10,000 acres of reservation flooded out in the 1970s by a federal dam project.

Gila and Salt River, who own competing Phoenix-area gambling resorts, contend Tohono O’odham used deceit and vague Interior policy to open the casino against the wishes of voters and state and tribal officials.

Federal courts have ruled the tribe’s acquisition of the land for gambling did not violate the tribal-state compact. Judges were precluded by the tribe’s sovereignty from considering allegations of fraud and misrepresentation, which may arise in subsequent litigation.

The three tribes have spent more than $25 million in a bitter lobby war for and against the bill.

“Keep the Promise would forcefully amend Tohono O’odham’s compact and undermine their land claim,” says a tribal official who requested anonymity. “This has never happened in modern history. And it’s being pursued because two tribes want to protect their gambling markets.

“Every tribe in the United States should be concerned about the precedence this sets. For any tribe with a land or water rights settlement… this means the federal government can step in 25 years later and say, ‘We’re going

“While tribes are becoming very successful individually, we still have many challenges that require us to be unified in our efforts.”

—Ivan Makil, former chairman, Salt River Pima-Maricopa Indian Community

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“Now that we’re having all these internal conflicts, even with the Indian gaming organizations, there’s the possibility Congress may come back and redo the federal gaming regulatory act, or even do away with it.”

—Edward Manuel, Tohono O’odham Chairman

to change the terms.’

“There’s a tendency to think this is only an Arizona issue. It’s not.”

“It’s going to have a far-reaching impact on other tribes, not just in Arizona but all over the country,” Tohono O’odham Chairman Edward Manuel says of the proposed legislation. “It sends the message you can’t trust the federal government. They make promises and then they break their promises.”

Alison Binney of Akin Gump Strauss Hauer and Feld, lobbyist for Gila River, says the bill is Arizona-specific, and has a termination date preventing it from establishing legal precedent or federal policy.

“We’ve been very careful” in wording the bill, Binney says, adding that restricting property use is common in tribal land/trust matters.

“Any time land is taken into trust for a tribe there’s a gaming restriction on it. Most settlements include some sort of gaming prohibition,” she says.

“The argument it sets bad precedence is not valid. There have been a number of parochial bills with gaming restrictions.”

Golden Slumbers Meanwhile, California tribes opposing efforts by the North Fork and Enterprise rancherias to establish casinos are lobbying for congressional legislation to amend provisions of IGRA allowing gambling on newly acquired lands.

It marks the first serious effort by politically powerful casino tribes to amend IGRA. The National Indian Gaming Association (NIGA), National Congress of American Indians (NCAI) and California Nations Indian Gaming Association (CNIGA) enacted resolutions opposed to opening the landmark federal law to amendments.

The California Compact Protection Act (H 5079), sponsored by Rep. Doug LaMalfa with financial support from the nearby Picayune Rancheria of Chukchansi Indians, operators of the Chukchansi Gold Resort & Casino, would require the Department of the Interior to reject “off-reservation” casinos not otherwise approved in a state referendum or by the state legislature.

The LaMalfa bill would limit Interior’s ability to use secretarial procedures to impose tribal-state regulatory compacts in situations where states refuse to negotiate agreements.

California tribes pushing for the legislation include Pala Band of Mission Indians, Cachil Dehe Band of Wintun Indians and Maidu Indians of Mooretown Rancheria. Several Southern California casino tribes also support the bill.

Indian lobby firms (notably IETAN and Pace LLP) have met with NIGA officials asking that the organization remain neutral, and calling the LaMalfa legislation California-specific. Other states with casino-related disputes are also seeking clarity with IGRA and Interior land/trust policy.

“We need to get with our tribal leadership and find out where everyone is at on this issue,” NIGA Executive Director Jason Giles says.

“The problem with IGRA is that it has a ton of ambiguities in it, as do the regulations for implementing the law,” Binney says. “That’s a main reason

there is so much strife.

“There’s a general consensus in Indian Country not to open up IGRA to amendments. But many problems can’t be resolved without either amending the law or redoing the regulations to provide more clarity and transparency.

“The rules change every time there is a new Interior secretary or assistant secretary for Indian affairs.”

Reacting to a 2012 Supreme Court ruling extending the deadline for opposition lawsuits, Interior placed property in trust for North Fork and Tohono O’odham in the midst of ongoing litigation, enabling the tribes to open Class II, bingo-style casinos not subject to state taxes and regulations.

“The feds, in arriving at policies, hide behind the law in some ways,” one lobbyist says. “They don’t make clear how they’ll exercise discretion. That leads to decisions like North Fork, Enterprise and Tohono O’odham. They end up causing significant disunity among tribes.”

Many of the same California tribes opposed to North Fork and Enterprise also fought recent Interior efforts to streamline what most call a “broken” federal process of granting official recognition to Indian groups. Indian leaders said they feared newly recognized tribes would open casinos in Los Angeles and elsewhere.

The LaMalfa bill stands little chance of succeeding, at least during the summer session. But the legislation has bipartisan support from members of Congress who, one lobbyist says, are “fed up with Indians fighting each other” over casinos.

Hands Off IGRA Former Interior Counsel Bryan Newland, a citizen of the Bay Mills Indian Community in Michigan, calls the attempt to amend IGRA dangerous.

“I have a problem with tribes that use a stick of dynamite to kill a fly,” Newland says. “That’s what I see in California.

“When you talk about amending IGRA—cutting across the core of a federal-tribal compromise that led to compacted gaming 30 years ago—all because you have a narrow focus on one or two projects that might impact you, that’s not good for Indian Country.”

Indian advocates believe the LaMalfa bill and Keep the Promise legislation play into the hands of legislators on Capitol Hill seeking to abridge tribal rights on gambling and pan-Indian issues.

“It is self-defeating to go to Congress and say, ‘You need to take action directed at specific tribes in specific circumstances because it impacts our competitive situation.’ That’s terrible policy,” says a prominent Indian lawyer who requested anonymity.

“When someone in Congress conflates that to other issues—land management or jurisdictional issues, for example—you find efforts to change longstanding federal Indian policy.”

Tribal unity and the impact of gambling and casino competition on federal JULY 2016 www.ggbmagazine.com

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“The problem with IGRA is that it has a ton of ambiguities in it, as do the regulations for implementing the law. That’s a main reason there is so much strife.”

—Alison Binney, attorney with Akin Gump Strauss Hauer and Feld, and a former staff member of the Senate Committee on Indian Affairs

and state Indian policy is a sensitive issue in Indian Country because it often strikes at the heart of a tribe’s right to self-governance.

“We must remember that each tribal leader is primarily responsible to his or her constituents, not to Indian Country as a whole,” says Kevin Washburn, former assistant secretary for Indian affairs and University of New Mexico law professor.

“That said, Indian Country tends to remember best the tribal leaders who have forged strong coalitions and work hard for the betterment of all tribes,” says Washburn, a member of the Chickasaw Nation. “Those are the tribal leaders who are remembered as heroes.”

“A lot of times what a tribe does can be viewed as short-sighted,” Newland says. “But tribes have to look out for their best interest. What is in one tribe’s best interest may not be in the best interest of Indian Country.

“On the other side of the coin, tribes have a responsibility, in defending their interests, of not jeopardizing or negotiating away the rights of other tribes.

That’s where the problem lies.”

Washington tribal lobbyist Michael Anderson says pan-Indian issues in Congress, such as the Tribal Law and Order Act and General Welfare Exclusion Act, often compete for House and Senate floor time with parochial gamblingrelated issues.

“Arizona is a case where a compact dispute affecting a handful of tribes was nationalized,” Anderson says. “The House of Representatives prioritized that for a floor vote when there were more important national issues Indian Country cared about.

“Gaming issues are so fiercely contested and vigorously supported with financial and lobbyist efforts, it does distract from truly national issues.”

A Matter Of Trust Tohono O’odham is accused of breaking a ballot initiative promise made when Arizona tribes negotiated a tribal-state compact in 2002 that implicitly limits the number of casinos in metropolitan Phoenix.

The Glendale property was purchased the following year for Tohono O’odham by a shell company. The casino project was publicly announced in 2009.

The federal courts have ruled the compact does not prohibit the Glendale casino. But tribal sovereignty precluded alleged fraud and false representation from being part of the legal arguments.

Gila and Salt River feel particularly aggrieved because they each ceded their rights under the prior contract to open an additional Phoenix-area casino in an effort to appease state officials who pressed for no additional urban casinos.

“They really feel as though they’ve been hoodwinked by another tribe,” a Phoenix attorney says. “They’ve lost a significant amount of money.”

The Keep the Promise legislation, co-sponsored by Senator John McCain of Arizona, stands little chance of success because it would close the casino, put 500 out of work and, according to the Government Accounting Office, cost the federal government $1 billion in damages.

Arizona tribes fear retribution when they again go to the voters to approve new tribal-state compacts scheduled to expire in 2023. They are also wary of 34

Global Gaming Business JULY 2016

“AIGA very clearly took a stance that no additional casinos would be built in metropolitan Phoenix.”

continuing efforts by legislators to legalize commercial gambling at state racetracks.

A 1996 ballot initiative on tribal gambling was approved by 61 percent of the voters. But the 2002 vote was very close, a victory credited to AIGA unity and the promise of no more urban casinos.

“We skimmed by,” Makil said of —Governor Stephen Lewis, the 2002 initiative. “Fourteen years Gila River Indian Community later we have a different situation in terms of how the public views tribes and gaming issues. At one time there was public support for the tribes and the need for revenue to build their economies. My observation is over the years the public has become numb to that need.”

“AIGA very clearly took a stance that no additional casinos would be built in metropolitan Phoenix,” Governor Stephen Lewis of the Gila River Indian Community said in a prepared statement. “AIGA’s staff laid out this position in public documents, including an election publicity pamphlet that went to millions of voters.”

Lewis and Salt River President Delbert Ray, in written statements, said they regretted leaving AIGA but accused the organization of not speaking out against the Glendale project.

Neither Lewis nor Ray would discuss what impact tribal disunity could have on compact renegotiations or other statewide gambling issues.

Tohono O’odham Chairman Manuel does not believe the dispute will antagonize tribal-state relations, but he anticipates the state will seek a bigger share of tribal revenues when talks resume on new compacts. Tribes currently give the state 8 percent of their casino revenues.

Tohono O’odham’s concern is the impact disunity in Indian Country will have on IGRA. “Now that we’re having all these internal conflicts, even with the Indian gaming organizations, there’s the possibility Congress may come back and redo the federal gaming regulatory act, or even do away with it. That’s our concern,” says Manuel. “As far as the state of Arizona, I don’t think it’s going to have an impact as far as our relations on state and tribal gaming issues.”

Others predict the controversy will result in greatly diminished public support in Arizona for Indian gambling, which has generated roughly $1 billion for education and other programs.

“This mess has all tribes concerned. And they should be concerned,” says a prominent Arizona tribal attorney who asked not to be identified.

“The tribes need to have good relationships with the governor. They also need to have good relations with the public. If they don’t have those things, they’ve got a real problem.”

AIGA Executive Director Valerie Spicer says the group’s leadership elected

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“The threat (of commercial gaming) is always there. It is always real. It’s important now more than ever for the tribes to stay unified and prevent that from happening.”

—Valerie Spicer, executive director, Arizona Indian Gaming Association

to stand mute on the controversy. A number of Arizona tribes believe with the court rulings and the casino opened for business, it was time to move on.

“It’s unfortunate. It was really a sad day when it happened,” Spicer says of the decision by the two tribes to leave AIGA, putting the group’s membership to 15 tribes. “Their leaving will have an impact, of course. But the focus of the organization has not changed. We have big issues on the horizon that we must keep our eyes on.”

Top on the list of those issues is the continual threat of commercial gambling, specifically slot machines at state racetracks.

“The threat is always there. It is always real,” Spicer says. “It’s important now more than ever for the tribes to stay unified and prevent that from happening.”

California Tribes Anything But Unified Tribal unity in California dissipated shortly after 61 tribes signed identical, landmark agreements in 1999 and 2000.

About a dozen tribes seeking additional slot machines began individually renegotiating compacts in 2004 with then-Governor Arnold Schwarzenegger, ceding revenue sharing payments to state General Fund which the 9th Circuit Court of Appeals in 2010 ruled to be an illegal tax in violation of IGRA. Renegotiated compacts with Schwarzenegger and Governor Jerry Brown also include mandatory and costly local government agreements and revised TLROs

giving labor organizations easier access to workers.

Meanwhile, CNIGA membership fell from nearly 80 tribes to the current 34 members.

CNIGA in late May published an op-ed in the Sacramento Bee correcting errors in a Bee editorial endorsing the LaMalfa bill.

“I don’t think the vast majority of Indian Country wants amendments to IGRA, especially where an initiative or referendum process can be used to restrict the ability of tribes to operate under the provisions of the act,” says CNIGA Chairman Steve Stallings, a councilman with the Rincon Band of Luiseno Indians.

Stallings says he received criticism from some California tribes, but noted CNIGA passed a resolution opposing amendments to IGRA. “An association has to have a set of principles on which it can stand its ground,” he says.

Stallings agrees that tribal disputes over gambling issues “empower our critics.”

Makil encourages leaders of wealthy casino tribes to consider the consequences of their actions on Indian Country.

“Sometimes I fear we’ve lost that ability to step back and see the vision of what’s happening and what can happen, from the bigger perspective,” Makil says. “We’ve become very myopic, looking at how only we as a tribe benefit.”

JULY 2016 www.ggbmagazine.com

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COMPLIANCE

Do as I Say, Not as I Do Where are the women in regulatory roles?

By Richard Schuetz

T

here are two notions foundational to the essence of gaming regulation. The first is the notion of a suitable means or method of operation, and this is something of a catch-all phrase that basically is intended to cover any inappropriate behavior on the part of industrial participants that isn’t specifically covered in the statutes or regulations.

The second is a commitment that industry participants demonstrate a high level of character, honesty and integrity. And while agency after agency appears to demand these standards of the people they regulate, there appears to be a belief that these same standards do not apply to the regulatory entities themselves.

Many of these agencies, it seems, are practicing the notion of “Do what I say, not as I do.”

The roots for this dilemma date back, it seems, to Queen Anne, who was one of the first world leaders to address the notion of gaming regulation. Back in the early part of the 18th century, the good queen was bothered by the behavior of many casino operators within and about London, argued to be associated with excessive drunkenness, prostitution, inappropriate credit practices, cheating and the like. The queen’s solution to this was to appoint a group of “fit and proper gentlemen” to oversee the casinos. Well, Queen Anne got her wish, for we are overwhelmed in our regulatory leadership with gentlemen.

In the state of Nevada, there are three basic bodies that oversee the issues surrounding gaming in the state. These are the Nevada Gaming Commission, the Nevada Gaming Policy Committee, and the Nevada Gaming Control Board.

The commission is designed to have five members. It currently has four, and they are all men.

The Policy Committee currently has 12 members and they are all men, and the board has three members, and they are all men.

Furthermore, the Nevada Gaming Control Board has been around since 1955, has three appointed members, and has had in its entire history one woman member who stayed for one year and eight months. That means that in 183

38

Global Gaming Business JULY 2016

board-member years, a woman has been a member for 1.66 years, or less than 1 percent of the time.

And for the last 61 years, the rate of a woman being on the Nevada Gaming Control Board is less than 1 percent. I do pray that this is not the reason they often refer to themselves as the Gold Standard.

The state of Pennsylvania currently has seven commissioners. They are all men, and for good measure so is their executive director. Mississippi has three commissioners, and they are all men, as is their executive director. The U.K. Commission has seven members, one of whom is a woman. And where I am now executive director, our commission is comprised of one woman and four men. And so it goes from jurisdiction to jurisdiction, albeit New Jersey does have the curious situation of a commission with three members, two who are women.

Leave it to New Jersey.

“

I am most critical of the industry, for the regulatory agency is an important component in helping shape the brand of an industry, and to have a regulatory agency that looks like a good ol’ boys’ club is not good branding.

”

If one has concluded that I am being critical of these regulatory agencies, I am glad they have continued to read, for I am not. I believe that in the agencies I have mentioned, the men, and the occasional women who occupy the top spots are honorable people, and they answered the call to serve their jurisdictions.

The logical target would be the politicians, for they are the ones making these appointments, but the politicians operate at a distance from the indus-

try and are seldom alive to the details of its existence. It is also probably normal to expect a political system dominated by a bunch of men to develop regulatory agencies in their image.

I am most critical of the industry, for the regulatory agency is an important component in helping shape the brand of an industry, and to have a regulatory agency that looks like a good ol’ boys’ club is not good branding.

Imagine walking into a casino and seeing that fewer than 1 percent of the employees were women, and the history of the organization was to not hire more than 1 percent women. At some point the regulators would probably question this operator using the dual challenge of not being a suitable means of operation, and not operating with an appropriate level of character, honesty and integrity.

Yet is having a public organization that seemingly openly discriminates against women in the top spots a suitable means of operation, and reflective of sound character, honesty and integrity?

The catch phrase of the modern era for industries is sustainability, and in gaming, a regulatory agency is a critical component in ensuring sustainability for the industry. One then wonders how long the people who control our regulatory agencies are going to continue working to exclude women from the top positions.

Furthermore, is this really what the industry wants? The gaming industry is being run by a bunch of people like me, elderly men, and this ancien régime should soon wake up, for to cosign and support such blatant discrimination is not a sustainable position.

Richard Schuetz is the executive director of the Bermuda Casino Gaming Commission, and was formerly a commissioner for the California Gambling Control Commission. The opinions expressed in this article are his alone, and do not necessarily reflect the position of the government of Bermuda, the Bermuda Casino Gaming Commission, or any other entities or individuals within that country.

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Resorts Atlantic City offers an iGaming Lounge that teaches bricks-and-mortar customers how to play online at the casinos operating under the Resorts license, ResortsCasino.com, MoheganSunCasino.com and PokerStarsNJ.com

All

Now O T R T GE HE

How land-based casinos have benefited from iGaming

By Steve Ruddock

A

fter hitting rock bottom on April 15, 2011, the United States online gaming industry has risen from the ashes, and has done so with the assistance of a very unlikely ally— brick-and-mortar casinos.

After years of fighting and casting aspersions on one another, the entrenched brick-and-mortar and online gaming industries have not only learned to cohabitate, they are now collaborating in ways neither could have imagined just five years ago. The antagonists have become compatriots, and both sides have benefited.

After three years of legal online gambling in Nevada, New Jersey and Delaware, the longstanding cannibalization fears harbored by the brickand-mortar casino industry have proven false. In fact, not only were these fears misplaced, they were 180 degrees off from reality.

Far from being cannibalistic, the legal online gambling structure that has been installed in three U.S. states, with existing land-based casinos acting as the licensed operators and partnering with online gaming companies, 40

Global Gaming Business JULY 2016

has proven to be extremely beneficial for everyone involved.

The two industries have united, and their newfound symbiotic relationship has led to the former rivals entering a brave new world and uncovering a slew of new possibilities in the process.

Was Online Gambling Key To AC Turnaround?

The struggles of Atlantic City’s casino industry have been well documented over the past half-decade. Four of the city’s 12 casino properties shuttered their doors in 2014, and analysts are warning more contraction could be on the horizon should New Jersey pass a referendum that would expand casino gambling beyond the borders of Atlantic City this November.

The city’s casinos have also seen gambling revenue plummet since the industry hit its historical high-water mark in 2006, when Atlantic City casinos generated over $5.2 billion in collective revenue. In 2015, Atlantic City’s eight remaining casinos posted gross gaming revenue of just $2.5 billion, less than half of their 2006 haul.

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“The practical effect that we have seen is (online gaming) has not cannibalized our business. If anything, it has enhanced our bricks-and-mortar business.”

—Michael Cohen, senior vice president and general counsel, Caesars Interactive

That being said, it could have been worse. A lot worse.

Online gambling has provided a critical backstop for the remaining brickand-mortar casinos in Atlantic City, boosting revenues for its land-based properties by as much as 8 percent in 2014 and by as much as 13 percent in 2015.

Percentage of total revenue from online gaming in 2014: • Caesars: 3.5 percent • Borgata: 6.9 percent • Tropicana: 8.2 percent • Golden Nugget: 6.3 percent Percentage of total revenue from online gaming in 2015: • Caesars: 3.5 percent • Borgata: 6.1 percent • Tropicana: 10.4 percent • Golden Nugget: 13.4 percent • Resorts: 4 percent In 2015, online gambling accounted for over 6 percent of all gaming revenue in Atlantic City, and is on pace to better that in 2016. And who knows where the likes of Tropicana and Golden Nugget would be without online gambling, as iGaming accounts for over 10 percent of total revenue at both properties.

And the benefits of online gambling go far beyond additional revenue.

Revenue is merely the tip of the iceberg.

The Silent Majority As noted, online gambling hasn’t cannibalized brick-and-mortar casinos; it’s bolstered their revenue numbers, and perhaps more importantly, brought in new customers.

During a public policy hearing in front of the Pennsylvania legislature in the spring of 2014, not long after the launch of New Jersey’s online gambling sites, David Satz, the senior vice president of government relations and development for Caesars Entertainment Corp., shocked the gaming industry when he stated that 91 percent of the company’s online signups in New Jersey were

new to Caesars’ database.

This number has fallen off since Satz’s testimony in early 2014, but the percentage was still 80 percent as late as April 2015, according to testimony by the senior vice president and general counsel of Caesars Interactive, Michael Cohen, at a hearing in front of Pennsylvania legislature.

“The practical effect that we have seen is it has not cannibalized our business,” Cohen told the Pennsylvania legislature. “If anything, it has enhanced our bricks-and-mortar business.”

And Caesars is not alone.

During an earnings call in February 2014, Boyd Gaming President and CEO Keith Smith said 85 percent of Borgata’s online players hadn’t been rated in at least two years.

In 2015, the Tropicana reported that 60 percent of its online casino players are new customers.

Even the second wave of online operators has seen player databases swelled by online gambling. As of May 2016, a full 52 percent of Resorts Casino’s online registrants are new to the database, and an additional 9 percent have been inactive for at least two years.

This phenomenon isn’t exclusive to New Jersey. Dover Downs Hotel & Casino in Delaware has had similar experiences with online gambling. “Our analysis shows 53 percent of the people who’ve signed up online were already our customers,” says Ed Sutor, president and CEO of Dover Downs. While it’s not as robust as New Jersey’s numbers, as Sutor notes, “Almost 50 percent of the people signing up were not here before.”

Once a player is in the casino’s database, they can then fill out that player’s profile, based on their live and online play, and create customized marketing and promotional offers.

As Sutor notes, a lot of this has to do with how rewards are structured, and how effectively you can market to these online players. Sutor is of the opinion that online players quickly learn that to get the best goodies, they need to registered in the brick-and-mortar VIP clubs and play online and live.

During his 2015 testimony in front of the Pennsylvania House Gaming Oversight Committee, Cohen confirmed this belief with real-world numbers, noting that 15 percent of the online players new to the Caesars database subsequently visited one of the company’s brick-and-mortar casinos. Essentially, online gambling allowed Caesars to identify potential customers and tailor marketing efforts to these players, resulting in 15 percent becoming brick-andJULY 2016 www.ggbmagazine.com

41

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“Our analysis shows 53 percent of the people who’ve signed up online were already our customers, so almost 50 percent of the people signing up were not here before.”

—Ed Sutor, president and CEO, Dover Downs

mortar customers.

“Our demographic is different than the bricks-and-mortar demographic,” Amaya Vice President of Corporate Communications Eric Hollreiser says. “Partners like Resorts see promotional value and foot-traffic value reaching a new audience, even if that audience is already in their backyard.”

“We’ve always taken the approach to blend online and brick-and-mortar.”

—Mark Giannantonio, president and CEO, Resorts Atlantic City

A Foot In The Door and More While a lot is made of iGaming’s positive impact on brick-and-mortar properties, far less attention is paid to how this door swings in the opposite direction.

For the online gaming companies that have set up shop in the U.S., the benefits appear obvious, as partnering with brick-and-mortar properties in the legal online gaming markets has given them the opportunity to operate in the United States. The proverbial foot in the door. “That’s the way in,” Hollreiser says. “You can only do it if you’re teamed with a licensed ground operator.”

Yet, Amaya and other online operators have found their partnerships with brick-and-mortar properties to be far more than a simple tit-for-tat negotiation, or some grand concession to gain access. After several years, online operators are, like their brick-and-mortar counterparts, finding the partnerships to be synergistic.

For an online gaming platform provider, having a committed brick-andmortar partner, whose interests are now tied to your own successes, has opened up a slew of marketing possibilities. It’s no longer necessary to search out the best venue to host a poker tournament, or locate a willing land-based partner to help you run a promotion. These relationships are now built into the industry model, and they are paying off in spades, as both the online operator and the brick-and-mortar property have skin in the game.

As Hollreiser notes, “There’s much greater synergy and partnership value when you have that existing long-term commercial relationship, as we do with Resorts.”

One example of this was the recent “Run It Up: Resorts Rumble” that Resorts and PokerStars hosted in May. The event saw PokerStars, Resorts and a cadre of Team PokerStars Pros host a daylong festival featuring meet-and-greets, online poker tournaments,

and an exclusive party at the Land Shark Bar and Grill for a nominal donation to the Autism Speaks charity. Resorts President and CEO Mark Giannantonio says the total donation to Autism Speaks from the event was $100,000, and how well run the event was.

“They work really well with my team here, and these types of events aren’t the easiest things to put on,” Giannantonio says.

A lot of that has to do with teamwork, and having a committed partner.

Quite frankly, an event of this nature is harder to pull off when the host casino is merely renting out the space, as it requires a tremendous amount of trust— trust that must be earned and built up over the years. “We’ve been working with Resorts for several years, and built up a good working relationship, so we have confidence in what each of us can bring to the table,” Hollreiser says.

Run It Up: Resorts Rumble ticked off all the boxes. It increased foot traffic, received good press for its charitable contribution, and increased brand awareness and loyalty for PokerStars in New Jersey and Resorts Casino. “It very much fulfills the initial vision that we can drive brick-and-mortar via online,” Hollreiser says.

The proof is in the pudding. “We brought a couple hundred people to Atlantic City on a May weekend,” Hollreiser says.

The event also helped christen a new conference center at Resorts, but this could just be the beginning. Both Resorts and PokerStars are still optimistic that a PokerStars-branded brick-and-mortar poker room could be in the cards, and Giannantonio intimates a much larger event is being planned for November, where upwards of 1,000 people might be attending.

If Run It Up: Resorts Rumble was a trial run for a larger-scale event, it passed with flying colors.

For an online gaming platform provider, having a committed brick-and-mortar partner, whose interests are now tied to your own successes, has opened up a slew of marketing possibilities.

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Global Gaming Business JULY 2016

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Still Not Convinced?

Resorts has been perhaps the most aggressive online gaming operator in the U.S. up to this point.

“We’ve always taken the approach to blend online and brick-and-mortar,” Giannantonio says.

“When (Resorts owner) Morris Bailey first began discussing online partners, he decided he wanted to partner with the very best.”

With these strong partners Amaya/PokerStars and NYX Gaming, Resorts has gone above and beyond. In April 2015 the casino launched an iGaming Lounge, a small designated area on the casino floor where visitors can go and hang out and learn about the company’s online gambling products from Resorts employees, and even register online accounts on the spot.

“We wanted to create something like an Apple Store, so our brick-and-mortar customers can go in there and learn firsthand about online gambling, so when they return to their home they’re more apt to play at ResortsCasino.com or MoheganSun.com,” says Giannantonio.

But the synergies, and collaborative efforts between online and brick-and-mortar, are seen throughout the legal iGaming markets.

“We’ve held tournaments specifically for online poker players,” says Sutor, who notes that the tournaments are held once a quarter, or thereabouts, and give Dover Downs the opportunity to expose the property to new customers, many of whom have never set foot in any casino.

Sutor also indicates that Dover Downs Casino’s marketing department has weekly conference calls with the other racinos and 888. Instead of trial by fire, Dover Downs is able to call upon 888’s experience in the online gaming market to help shape their promotions and offers.

When you step back and take a look at what is going on from 30,000 feet, you start to see even more potential, and how these mutually beneficial partnerships can lead to more states passing online gambling legislation.

There is the potential for these partnerships to sow political value. The successes in New Jersey, and to a lesser extent in Nevada and Delaware, demonstrate the potential benefits to brick-and-mortar operators in other states that may be on the fence when it comes to online gambling, perhaps still clinging to the now-debunked fears of cannibalization.

In effect, online operators have the chance to benefit through future expansion when potential stakeholders in other states see the benefits they’ve brought to their existing partners.

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iGAMING NORTH AMERICA

A Sporting Proposition How sports betting and iGaming have many issues in common

By Sue Schneider

E

ver since I joined the iGaming industry at its inception in 1995, a coherent public policy advocacy effort has always been a challenge. In some ways, it was much easier “back in the day.”

Our first advocacy efforts began with a few of us organizing ourselves under the rubric of the Interactive Services Association (ISA) in 1996.

Within a year or two, we broke off and formed the Interactive Gaming Council (IGC). At its peak, we had over 120 member companies and spent most of our time, effort and resources fighting a variety of federal prohibition bills put forward by the likes of Senator Jon Kyl and Rep. Robert Goodlatte. I had the privilege of chairing that organization from 1996 to 2004.

But, unfortunately, the iGaming side of the industry has long been unable to speak with a single voice. The land-based sector has had the American Gaming Association as its advocate since its formation in 1996. It grew out of the threat put forward by Congress’ formation of a National Gambling Impact Study Commission.

The AGA has been a viable and formidable group since then, in spite of having differences of opinion among some of its key members at times.

For a short period in recent years, the AGA was also considering advocating for the growth of legal iGaming in the U.S. But, when it became clear that its members were split on the subject, they decided to remain silent on the topic and stay on the sidelines. They are, however, beginning to engage on the topic of legalizing sports betting. Their primary strategy is pointing out the negative impact that illegal sports betting has, the offshore version as well as domestic.

The Poker Players Alliance (PPA) has done a great job of maintaining the players’ focus on seeing this popular game be available in both the terrestrial and online worlds.

But beyond that, there’s a big void on the advocacy front. Whether it’s moving toward legalizing new gaming products on the state level or assisting in seeing sports betting become legal beyond its current jurisdictions, there’s little to

44

Global Gaming Business JULY 2016

no coordinated effort. In fact, these two goals are ripe for some coordination and “quarterbacking” if we’re to make any progress.

Progress in sports betting, as you may know, is held back by the Professional and Amateur Sports Protection Act (PASPA). This law, passed by Congress in 1992, offered a point in time when a state could legalize sports betting. It also authorized the sports leagues to bring legal actions on behalf of the federal government for supposed infractions.

Only a few states, most notably Nevada, took advantage of this opportunity at the time.

Sports betting is at an interesting crossroads.

With the movement in at least some of the sports leagues toward a more realistic and rational policy, it may be time to try to find some solutions. In addition, you actually have a handful of states which have already passed bills saying that, if allowed, they would legalize sports betting in their respective jurisdictions.

In fact, at the iGaming North America conference in 2015, U.S. Senator John McCain even

ated these thoughts more recently with interviews on ESPN and other media outlets.

There have been some similar thoughts issued by Major League Baseball and the National Hockey League. Clearly, it’s anticipated that the National Football League and the National Collegiate Athletic Association will be the last to come along in such thoughts but, regardless, there is some forward movement.

Similar progress has been made on bringing some form of iGaming to several new jurisdictions, albeit in fits and starts. There are some 30 states that are debating fantasy sports, which makes it the most active form of new gaming product to come to the public policy realm. And several states such as Michigan, Pennsylvania, California and New York are looking at legalizing the likes of online poker and/or casino games during their legislative seasons.

So perhaps now is the time to make another attempt to bring the industry together. In my mind, we’re better served with a sort of think-

“

If the debacle which the daily fantasy sports industry has lived through since the fall of 2015 has offered any lessons, it’s that there’s clearly a constituency out there for sports products as a form of entertainment. called for hearings on the issue of sports betting and suggested that the industry get involved in that education effort. So now may be the time to initiate those efforts, in conjunction with the AGA, which is beginning to engage.

If the debacle which the daily fantasy sports industry has lived through since the fall of 2015 has offered any lessons, it’s that there’s clearly a constituency out there for sports products as a form of entertainment.

This banner has been picked up by National Basketball Association Commissioner Adam Silver, who authored an op-ed for the New York Times in November 2015 on the topic. He’s reiter-

”

tank effort that focuses on player protection. We don’t need to reinvent the wheel when iGaming is operating successfully in jurisdictions all around the world.

They successfully handle such critical issues as age verification, geolocation, anti-money laundering and other concerns often raised by policymakers.

It’s time to come together.

Sue Schneider is one of the pioneers of iGaming.

She is the founder of the iGaming North America conference and is also editor of Gaming Law Review and Economics.

p. 46 igames:Layout 1 6/15/16 3:11 PM Page 46

California Online Poker Bill Hits New Hurdle

C

priations bill by Pennsylvania congressman Charlie Dent. The amendment was similar to language inserted into the Senate’s appropriations bill by Senator Lindsey Graham.

Dent was a co-author of the Unlawful Internet Gambling Enforcement Act, passed in 2006. The amendments are seen as a “back-door” attempt to revive the RAWA legislation, which has stalled in Congress.

However, the House amendment drew opposition and Dent ended up withdrawing it. Since the final appropriations bill must be passed by both houses of Congress, the withdrawal essentially kills the amendment.

alifornia Rep. Adam Gray’s bill, appreciate your leadership in bringing AB 2863, which would legalize stakeholders together to try to resolve and create a regulatory framework the outstanding differences regarding infor online poker in the Golden State, ternet poker legislation. Although we seemed to be finding more success have made some progress under your than any similar bill since the atleadership, we regret that your amendtempt began several years ago. Rements related to suitability standards and New York Legislators cently the Assembly’s Governmental taxation force us to oppose the bill.”

Organization Committee unaniThe bill does provide direction to Reach Agreement on DFS mously moved the bill forward, and state regulators, i.e. the Gambling Conew York state legisthe Appropriations Committee ap- Pechanga Chairman trol Commission, on the screening of lators say they have Mark Macarro applicants. It provides for a partial application and peared ready to act soon as well. reached an agreement on But in an attempt to get over the remaining a “full” investigation of each applicant. new daily fantasy sports hurdles, Gray’s bill has stumbled once again.

The bill does not address whether anything legislation in the state.

Gray himself wrote a bill that cleared both that comes to light in the investigation would cause Senator John J. committees, and what makes the current bill differan application to be denied, which the coalition Bonacic, who heads the ent from others that have come before is that it pointed out “fails to provide any meaningful mechstate Senate Committee sought to resolve a bitter sticking point between anism to assure that unsuitable entities are preon Racing, Gaming and two factions of the gaming tribes that support some vented from participating in the California Wagering, said, “We sort of bill: the issue of “bad actors.” market.” have an agreed-upon New York Attorney The Pechanga-Agua Caliente coalition also obPrevious incarnations provided licenses for bill,” according to the General Eric Schneiderman gaming tribes and card rooms but excluded racejected to the proposed graduated tax rate of 8.47 New York Times. The tracks, which made the point that currently they percent to 15 percent for websites generating $350 legislation would still need to be passed by both are the only entities in the state that carry out wamillion a year. houses of the legislature and signed by Governor gering activities online. Some tribes were dead set Pechanga Chairman Mark Macarro denied that Andrew M. Cuomo. against their inclusion because they felt it would vithe coalition was acting as obstructionists.

Cuomo’s office told the paper that negotiaolate gaming exclusivity that the tribes believe the “We have made concessions. Racing has made tions were continuing. state constitution grants them. concessions. It’s time for the other group to make Separate bills on DFS have advanced through Gray’s bill addresses the issue of racetracks by meaningful concessions if they truly want iPoker committees in both houses of the state legislature, paying them up to $60 million annually from onlegalized in California,” Macarro said in a statebut the bills contained several differences. line poker profits as a compensation for not being ment. “If we wanted to stop iPoker we would not Under the deal outlined by Bonacic, DFS able to operate such sites themselves. be dedicating the time, energy and resources to companies would pay a $150,000 fee to operate in On the issue of bad actors—i.e. online shaping good public policy that will protect our New York, or 1.5 percent of the previous year’s revproviders that have previously run afoul of the law rights now and for the decades to come.” enues, and turn over 15 percent of revenues to the for allowing U.S. residents to play online poker in state after prizes were awarded to players. The violation of federal law—a clause aimed at excludRAWA Language games would be classified as games of skill, ing PokerStars, the largest online poker provider in the Times said.

Removed from the world, is supported by one coalition of tribes New York has been the site of the most and opposed by the consortium that hopes to partHouse Bill contentious battle over the legality of daily ner with PokerStars. That consortium would like to anguage supporting the fantasy sports. The state’s Attorney General leave it to California regulators to determine what controversial Restore Eric Schneiderman sued to block the sites groups are “suitable” to participate as licensees.

America’s Wire Act bill—which from operating in the state, saying they are ilLately, “bad actor” has been replaced by “suitwould ban online gaming in legal under state law. His move was tied to an ability” in the lexicon of the bill. Gray’s bill doesn’t the U.S.—was removed from a unprecedented advertising blitz at the start of so much grasp the issue as it steps around it.

House appropriations bill after the NFL season last year by the two biggest Senator Lindsey Graham But that wasn’t good enough for the coalition objections from groups such as DFS sites, FanDuel and DraftKings. of six tribes, led by Pechanga Band of Luiseño Indithe Poker Players Alliance.

The two sites later agreed to stop taking ans and Agua Caliente Band of Cahuilla Indians. In The language supporting a ban on online gamentries from New York while the legislator worked a June 10 letter to Gray, the tribes said, “We deeply bling was proposed as an amendment to the approon a DFS bill. That deal expired June 30, however,

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and without legislation, will see the two sides likely back in court.

Bonacic, a Hudson Valley Republican, said legislation is now within reach and could generate $3.5 million to $5 million a year for the state. Bonacic also told the Times that Cuomo’s office still needed to weigh in with “technical amendments” to the bill, but said he expects the measure to pass.

Quebec Bill Would Restrict iGaming Operators

L

awmakers in Quebec, Canada, have passed a controversial bill that would block all online poker sites that are not licensed and regulated by the Quebec government—which would preclude every operator except Espace-Jeux, which is run by government regulator Loto-Quebec.

One of the only major iGaming providers supporting the law is Amaya, Inc., owner of the world’s largest iGaming site in PokerStars. Amaya is already a partner with Loto-Quebec, and hopes to secure one of three new licenses planned for operators to provide branded products for the Espace-Jeux platform.

GLI Certifies First Interactive System for Bahamas

L

eading gaming testing company Gaming Laboratories International announced that it has com-

pleted the first independent certification of a Gaming House Operator’s full interactive gaming systems under the new Bahamian gaming legislation.

GLK Limited, a Gaming House Operator headquartered in Nassau, Bahamas, worked with GLI to have its full complement of casinos, numbers and sports book offerings tested for compliance with the new Bahamian gaming legislation, which incorporates a reliance on GLI’s iGaming technical standards (GLI-19: Interactive Gaming Systems).

The Kahnawake Gaming Commission warns that Quebec online restrictions will cost the First Nation millions of dollars

The passage of Bill 74 drew criticism from operators claiming it violates net neutrality, and from the country’s internet service providers (ISPs), which currently offer hundreds of unlicensed gambling sites, including those operated by Canadian First Nation Indian tribes.

The bill is likely to face lawsuits on constitutional grounds by the ISPs and other opponents, who claim its implementation would be extremely expensive and impractical, maybe even impossible.

And illegal: Canada’s 1993 Federal Telecommunications Act prohibits communications providers from “controlling the content or influencing the meaning or purpose of telecommunications carried by it for the public.”

“It’s extremely costly and challenging technically from a wireless standpoint,” Kurt Eby, director of government relations at the Canadian Wireless Telecoms Association, told Canada’s Financial Post.

“Our three largest members are national in scope, and many others are multi-provincial. Their networks are designed as a complete network, so they don’t have the means to block content at a provincial level. Even for what this law is asking for to be feasible, it would cost millions of dollars and take months of engineering.”

The Kahnawake Gaming Commission, which licenses and regulates 90 online gaming sites from around the world and offers them to Quebec residents, complained that the tribe would lose millions in revenue if the law is implemented.

JULY 2016 www.ggbmagazine.com

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Keep Your Eye on the Ball Take a pass on this “millennial marketing” thing

By Michael Perhaes

P

ick any consumer-facing industry. The odds are good that right now its trade journals are churning out reams of pages and posting millions of bits bellowing about the latest demographically charged zeitgeist, the millennial.

Their reporters and their blogosphere, egged on by business journalists at the major media companies, are wringing every drop out of this new generational pile-on, and there’s no end in sight. Worse, the business press riding this train is now urging its advertisers to climb aboard.

Paradoxically, I’m joining the party with this contribution. But stay on the platform and wait for the next Trend Train, because they run quite often.

The gaming and hotel industry in particular is struggling to decipher the code to unlock that vault holding reasonable behaviors to be expected from the those precious secrets of “millennial marketing.” Major millennial and any other value-conscious concasino-resort operators and global hotel brands are scramAre hospitality and sumer. bling to create “inviting experiences” and “experiential casino marketers However, this begs an obvious, if difficult, spaces” within and around their properties to better adtrying too hard to question: Why should we work harder and dress the desires of this “vitally important group.” seduce this group? spend more capital to engage and acquire more Entire new subcategories of brands have sprung from The millennials, a massive group of these consumers, inevitably leading to furthe wombs of Hilton, Marriott and other hospitality girepresenting 80 million people ther shrinkage of profit margins? Are hospitalants, all to better reach the new demographic on the between the ages of 18 and 34, ity and casino marketers trying too hard to block. They’re spending zillions to interact, intersect, imhas little to no disposable income. seduce this group? merse, inspire, engage, and hopefully, sell.

This is to be expected of people On price alone, hotels can’t compete with A survey of three large casino resorts in three different early in their adulthood, Airbnb and transportation companies can’t regions of the country reveals that on average, the millenparticularly those starting families compete with Uber. There’s no app yet that nial customer occupies 13 percent of loyalty program or at the dawn of their careers. can replicate the excitement experienced by a databases yet contributes just 5 percent of their casino revrowdy group of gamblers whooping it up at a enue. craps table, but just wait.

This should not come as a surprise. Regional casino operators Construction and maintenance of “experiences” is, of course, expensive, are largely dependent on slot machine or electronic bingo revenue, yet re-engineering your product and service to attract more young people is a games that appeal more to an older demographic. Las Vegas Strip opgood thing; don’t be discouraged from doing so if your operation can afford erations, particularly those behemoths with brand-name nightclubs, it. But let’s broaden our thinking. The simple fact is that all age groups crave restaurants and other non-gaming amenities, have wider gaps between their new experiences, all age groups engage with their family, friends and favorite millennial database membership and generated revenue. brands on social media (using a mobile device), and all age groups will emThe increasing reliance on non-gaming revenue to offset disappearing brace a more “socialized” experience at your casino, hotel, restaurant or gaming dollars is pushing the new construction to attract this growing cusnightclub. tomer segment. Subsequently, increased operating expense is now driving We have been bombarded with this gospel: the millennial seeks out new margins downward, and the proof is in the earning reports of all publicly experiences (especially when they travel) and, of course, the millennial fully traded Las Vegas-based casino companies. It’s a cycle that keeps on taking. grasps the utility of our sharing economy. Being a digital native, the millenWe would be wise to approach this marketing trend cautiously, because nial embraces the intersection of social media and mobile device connectivity the millennial, a massive group representing 80 million people between the intuitively and aggressively. But, news flash! So do the rest of us. The fact is, ages of 18 and 34, has little to no disposable income. This is to be expected of you don’t have to be 28 years old to enjoy local food, artisanal cheeses and people early in their adulthood, particularly those starting families or at the craft beer and then hashtag it all. dawn of their careers.

Before you dismiss me as yet another baby-boomer codger showing obviAny consumer on a tight budget will seek out affordable room accommoous contempt for the next generation of consumers, please consider this. The dations when they travel (driving the success of Airbnb), rent fewer cars hospitality industry expends plenty of intellectual capital (and that other cap(hello, Uber) and gamble less than wealthier customer segments. These are all

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ital, cash) devising clever tactics to reach into wallets, but in the process, often entangles itself in the weeds of data segmentation.

What about Generation X, that previous flavor of the month and coveted demographic group we were all obsessing over just five years ago? You know, that group occupying the space between the millennial and baby boomers? Did they lose their sex appeal after a brief tryst with marketers because they didn’t fit neatly into the post-internet, technology-native narrative?

This group is now entering their prime earning years. Are we taking them for granted? They’re just as likely to consume entertainment, news and information on Facebook while binge-watching their favorite Netflix episodes. They’re just as likely to enjoy “socialized spaces” with friends and families, while nose-down in their phones and tablets, eating artisanal cheeses and drinking craft beer.

This is certainly not to dismiss the importance of establishing brand loyalty early in life with particular customer segments, especially younger consumers.

Tobacco companies wrote that marketing playbook two generations ago.

Cementing desire early can equate to lifetime wallet access, and the millennial will have money, eventually. (But wait, I skipped over the part about the millennial having no brand loyalty. These broad assumptions about 80 million people can get really tricky.) But let’s set aside the slightly ridiculous notion that age-based marketing to adults is relevant in 2016. Why fixate on a demographic slice, albeit a big one, that has no money and no brand loyalty? Why, indeed?

Behaviors that describe the millennial demographic apply to every adult age group today, and that’s the key. It’s not the age of our potential customer that we should fixate on, but the content they consume and share, and in what context they consume and share it.

In other words, it’s all about behavior. How we consume media, entertainment and information today is very similar across all demographic boundaries.

When was the last time you heard someone ask the question, “How many people are using smartphones?” Three years ago that was an important question to ask, particularly before setting about to build a strategic marketing plan. Today, that question is about as relevant as the term “color TV.” Smartphone use is now ubiquitous, and the better question to ask is, “Should I sell my Apple stock?”

(Well, too late on that one, unless you’re Warren Buffet.)

The future of the hospitality industry’s marketing success will continue to depend on good demographic data, but the sheer size and age range of the millennial group is problematic. The 18-year-old and 34-year-old consumer are worlds apart. But we can address this challenge when we embrace Marketing 3.0: understanding customer engagement management (CEM), which is entirely behavior-based, versus transaction-based customer relationship management (CRM).

We should all ask ourselves the question, “How can we create brand experiences that inspire customer word-of-mouth?” We must build, and then sustain, conversational currency to enable brand advocates and continuously earn their loyalty. And conversation, which includes sharing, commenting and posting online, must be encouraged to grow organically, whether on Facebook for boomers (who are the fastest growing subset of Facebook’s population) or Instagram and Snapchat for Generation X and the millennial.

If you still insist on spending $1 million to create a cozy spot for 28-yearolds to text each other, go for it. But remember these words from New York Times media journalist Sarah Lyall: “Is there a representative millennial? No, just as there is no representative goat.”

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

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Smart Move

Payment processing is being revolutionized with new systems

By Dave Bontempo

F

redo Corleone was right.

The famed Godfather movie character, who screeched for respect because he was “S M A R T!,” could inspire the same level of urgency in gaming today.

It’s never been more important to be “smart” maneuvering new products through a shifting regulatory landscape.

Merchants acknowledge the trend. They shoulder expensive up-front chip-card technology fees to eliminate more costly liability exposure stemming from laws enacted last year.

Casinos brace for stiff upcoming regulations covering ATMs and kiosks. By October, they will be on the hook for fraud if they don’t use chip technology. The operators need to be protected, yet tap the income potential encouraged by massive funds accessibility to customers.

No one doubts the need for security, especially in light of data breaches at Target and elsewhere. EMV (Europay, MasterCard and Visa) technology makes payments less susceptible to fraud, since, unlike traditional magnetic stripe cards, the chip’s security code changes with every purchase. It is more difficult to counterfeit.

Yet intelligent business entails more than embedding a chip inside a card, or merging that card with a compliant kiosk. It means planting the convenience of a chip card, whether it’s a gift, loyalty or prepaid version, inside the scope of a new revenue stream. These cards let operators serve online players, extend shopping privileges beyond their own stores and target their market.

It’s a worthwhile pursuit for vendors, and casinos. The global market for smart cards is projected to reach $17 billion by 2023, with Asian customers, both gaming and non-gaming, leading the way. What if the American gambling world embraced its operation? That number could skyrocket.

Consumers love the convenience of plastic, and if the multibillion-dollar gaming world becomes more secure, they can bring credit card-style indulgence to all forms of it.

The Vision Merging smart cards and holders has been Omer Sattar’s dominant theme for several years. Representing Las Vegas-based Sightline Payments, the high-octane entrepreneur forged powerful friendships in the casino, “We know that using credit card and banking realms two years cash can be difficult. ago.

He brought Borgata, Discover and Van- You normally have to tiv together. The combination merged credit get in your car, go to the casino, go to the card and payment connection strength with sports book, deposit Sightline’s Loyalty Plus Card, enabling casinos to reward patrons both in their property the cash in order to play the wager and and at nearby stores.

Sattar believes he has scored again in Ne- then place the wager. vada, with the Play+ system being auditioned That’s a lot of effort for a bet. Or now, you in sports books. Sattar says the product gained recent deployment in Nevada because could be sitting on your couch and place a state bank issued a card for in-state resia wager. So it’s really dents. Citing proprietary concerns, Sattar about creating this does not wish to name the bank until the custom experience program develops further. That outfit befor gaming.” comes the underwriter in this process, and has likely hedged its leap of faith by dealing —Omer Sattar, with familiar in-state residents.

Sightline Payments This is a move encouraged by recent developments. The Nevada Gaming Control Board clarified its position on prepaid cards in 2014. It allows them. The governing body does not allow smart cards yet, but will be approached before year’s end about doing so. For now, a prepaid card that has most of the flexibility of a credit card, but presumably can’t be overdrawn, will do.

Amid this gray area between smart cards and prepaid, reloadable units, Sattar pursues a fertile market. Nevada has nearly 200 sports books, which handle billions of dollars annually. The Super Bowl alone routinely tops $100 million.

Cardholders can fund their prepaid account online, through their mobile phone or by loading funds at the casino with cash, jackpot payouts and methods like TITO tickets.

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Red Square

Love,

anything for Brooke’s Hard Rock clients?” Don’t answer that. Let’s talk first. Call us up.

Hard Rock hotels and casinos all over the country. That got us thinking, “Hey, how come we haven’t done

And we make really smart advertising for casino brands. Here’s another pertinent factoid: we work on various

The prepaid method also can be used at NRT kiosks to print slot tickets or redeem them to place value back on the card. They can be utilized for chip purchase or redemption at table games or in the online realm via an API connecting the iGaming mobile site to the prepaid card account, providing the highest approval rates for patrons, according to Sattar.

And now comes Play+.

“This is an extension of the Loyalty Plus card, which is actually the mechanism that is used to move money in and out of this account,” Sattar explains. “The gaming operator rewards you for using this product, it is FDIC-insured and it is readily protected. Most importantly, the customer has access to their money at almost any point of the sale, online in any part of the country or at any ATM in the country.”

For all of their interactions, customers are ultimately going to get rewarded by the gaming operator.

“We know, by talking to our payments solutions partners at Vantiv Entertainment Solutions, that the preferences of consumers are changing,” he adds. “We know that using cash can be difficult.

You normally have to get in your car, go to the casino, go to the sports book, deposit the cash in order to play the wager and then place the wager.

That’s a lot of effort for a bet. Or now, you could be sitting on your couch and place a wager. So it’s really about creating this custom experience for gaming.”

How does it work? One must simply “app”ly him or herself.

“This gives you the ability to use a mobile or electronic device—iPad, Android, iPhone or anything in between—sitting effectively anywhere to fund and withdraw from your sports wagering account,” Sattar contends.

We’re hoping you’ve heard of us (otherwise the next few sentences may be a little awkward). We’re Red Square.

March Madness, the World Series, college and pro football and the Indy 500 augment the high betting totals.

Nevada books, through casinos, can tap these players who wager from mobile devices. Casinos can also target the gamblers, provide tier points for dollars bet, offer loyalty rewards and stayand-play packages.

Operators observe a likely gain with this technology. The advance becomes seismic should casinos ever obtain a bigger share of the multibillion-dollar illegal wagering pot in America each year.

It would be logical for a vendor to avoid the sports-book market until smart-card rules were finalized. Yet that would open further competition.

Sattar says now is the time to act.

“Generically, this product is named Play+,” says Sattar, the co-founder and executive vice president of strategic initiatives of Sightline. “Customers use the Play+ name in conjunction with their own branding. For example, at Mohegan Sun, the program is called Momentum Play+, with Momentum being the name of the Mohegan loyalty program. I can tell you this: similar iterations of this product are soon to hit the industry—and state of Nevada—in full force.”

GGB readers are familiar with the Loyalty Card Plus Prepaid, which helped launch Play+. It was created by Sightline Payments, in collaboration with Vantiv and Discover, to provide a prepaid card for the gaming industry’s nearly 40 million casino loyalty cardholders.

Gaming cardholders can transfer funds in real time, utilizing Sightline’s proprietary closed-loop SPAN network, to and from accounts for use at slots, table games, race and sports books, social gaming sites and iGaming sites, subject to jurisdictional approval.

Using the open-loop, general-purpose reloadable prepaid card, which runs on the Discover network, cardholders can make cash withdrawals (including ATM) or purchases within or outside the casino property for travel, dining, hotel and other transactions where Discover is accepted.

Cardholders can fund their prepaid account online, through their mobile phone or by loading funds at the casino with cash, jackpot payouts and methods like TITO tickets.

Dear Brooke Fiumara,

Mohegan Sun’s Play+ program

JULY 2016 www.ggbmagazine.com

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Enhancing patron convenience while reducing brick-and-mortar congestion really is smart.

Sports books themselves represent a visual paradise for serious gamblers. Operators who can blend convenience with gaming’s quick pace can thrive.

“For the first time, you physically go in and provide your ID to the sports book, and open a wagering account,” he adds. “You can sign up for your Play+ account at the casino as well, if you don’t want to do it online or on mobile. If you want to do it on mobile, you actually download the casino’s wagering app, and from right within the app you can enroll for your Play+ account. It’s a clean and simple experience for the patron. After that, you’re ready to go.”

Sattar says the app is tied to the back end of the race and sports system, and the account is credited in real time. Any credit or debit card registered to one’s address can be used to fund this account. Other deposit methods include setting up an ACH from a bank account or using cash/chips/TITO tickets at the casino cage.

Players can effectively replicate what’s happening at the sports book in a mobile environment. Every line, bet made and payout is recorded, and all of that can be taken and streamlined into a mobile platform.

“Think about it like a football field, but full of data,” he says. “You put it all into a pipe and you feed it into someone’s cellphone and, boom, you’re watching that football game.

“So, if you’re sitting at home right now, you could launch your app, you could see how much money you have and you could see all the different sports lines that are going on,” Sattar indicates. “You can look at your account balance and see if you have enough money or not. If you don’t have any money, you could use a debit or credit card and fund it in real time. You could take all of those funding balances or part of them, and can wager what you want to play. That bet is recorded at the casino operator’s sports book, but it’s all happening in real time. If the game ends and you win that wager, money can come back to you in real time. If you lose the wager, you get an update from your sports book.”

Book It Casino operators stand to benefit. Sports wagering joins other games in the realm of online accessibility. Substantial sports-book money has likely been lost over the years because patrons won’t fight massive lines. Sports books, on a college football Saturday or pro football Sunday, are chaotic. Customers must arrive an hour or so before kickoff just to obtain a seat. Not to mention their battle with the congested Las Vegas Strip.

In the mobile age, many won’t bother.

“This equates to more efficiency at the casino cage or the race and sports book,” Sattar contends. “It means reduced lines, especially on big betting days, like the Super Bowl or Indy 500. Also, when any casino offers an enhanced point of interaction for patrons, over time it fosters greater loyalty.

Long term, we also expect this technology to reduce expenses for the casino because it streamlines the race and sports book process.”

Enhancing patron convenience while reducing brick-and-mortar congestion really is smart. Sports books themselves represent a visual paradise for serious gamblers. Operators who can blend convenience with gaming’s quick pace can thrive. William Hill sports books, for example, offer consistent lines for patrons and the in-game phenomenon. Odds of a game change after each score in football.

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Compliant Convenience Everi has both a security and innovation platform.

In March, the Las Vegas company said it was the first in the casino industry to offer an EMV-chip signature option for an ATM device. It is fully endto-end EMV-compliant with all its financial transaction devices, platforms and systems used at hundreds of casino properties across the U.S. Everi was well ahead of the October compliance deadline. It’s an accomplishment gaming operators expect from their vendors. Casinos don’t want to worry about EMV compliance at all.

Everi provides video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions and compliance and efficiency software. Its service range includes ATMs, fully integrated kiosks, products that improve credit decision-making, compliance and data solutions, and online payment processing for operators who offer intrastate, internet-based gaming and lottery activities.

Within its realm lies the Stored Value Card now in the field.

The card allows casinos to align their current marketing and loyalty programs with Everi’s Stored Value Card (SVC) for gift and reloadable card programs.

Everi’s SVC allows casino operators to utilize gift, reloadable and promotional cards to drive customer behavior and develop additional revenue streams. With control of when cards can be used, casinos can capture new revenue from customers and merchants by sending promotional dollars to their establishments. Casinos can also customize their cards with artwork and card names unique to the property.

Here again, in the smart-card realm, the company knows its nuance.

Under federal guidelines, gift cards are not reloadable but the reloadable open loop and RAN cards are, Everi officials say. Player loyalty cards are loaded by the property and work like rebate cards—with associated restrictions on funds usage such as location or time.

Everi supports the full range of stored value cards (gift, reloadable, player loyalty, open loop and restricted network/RAN) and integrates its card and wallet solutions. In the RAN gift card, consumers purchase (or are given) a card that works at any MasterCard-accepting merchant the property wants to include. This could be property only, extend to the mall across the street, or include merchants in the players’ home area.

The casino usually purchases cards in batches and can, for some programs, pre-load the cards. Customers can re-load them.

And so it goes. Besides Sightline and Everi, other establishments are proactive with forthcoming regulations. Companies like Vantiv continually educate regulators to ease security concerns. Vendors like DiTronics have been closing in on EMV compliance, and will be ready for the October bell.

Vendors and operators know the value of being smart. And the reward of being genius.

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TABLE GAMES

The Square Position You can lead players to the logic, but you can’t make them drink

By Roger Snow

I

n a pitchy Southern drawl: If you’ve ever split 10s in blackjack because, and I quote, “The name of this game is Twenty-One, not Twenty,” you might be a square… If you shoot craps by dropping both dice on the table like you’re taking your turn in Monopoly, you might be a square… And if you think Omaha Hi-Lo Poker is a lewd act among three consenting Nebraskans, you might be a square.

The world of table games, like all worlds inhabited by humans, is cohabitated by superstition and silliness. Not to mention stupidity. Oh, what gamblers dare do! What gamblers may do! What gamblers daily do, not knowing what they do!

Or why they do it, right, Mr. Shakespeare? (Or Mr. Foxworthy, for that matter.)

Speaking of do, as in without any further ado, here are the top myths, fallacies, fables and goochers that somehow, someway, manage to endure in this age of enlightenment.

BROOKS WAS HERE

Had a girlfriend once who was convinced she could beat roulette, in part because she had never not beaten it. The secret to her success? 1. Find an anomalous trend already in progress; 2. Bet against it continuing; and 3. Double up to catch up. When she saw, for example, red had hit five times in a row, she would bet $50 on black.

Lose the first $50? Bet $100. Red redux? Bet $200. Again? Bet $400. Again? Bet $800. Again?

What, me worry? Bet $1,600.

She argued—oh, how she argued and argued and argued—the odds against one color coming up on 10 consecutive spins were astronomical.

Well, they’re actually not, unless you’re talking about green. Which she wasn’t. In double-zero roulette, red or black will hit 10 spins in a row once every 833 sequences. But the chances of it happening once the streak is already at five, her

“

Gaffing a card shuffler in favor of the casino is the very definition of superfluous. Every table game already has a built-in mathematical advantage.

Sometimes it’s big and sometimes it’s small, but it’s always there to ensure, barring any shenanigans, the house always wins.

In baseball, third base is a critical position. You have to guard the line as well as the hole, charge in on bunts and drift back on pops, cover the bag and cut off throws. From Robinson to Schmidt, Brett to Boggs, the men manning the hot corner made all the difference between winning and losing.

In blackjack, eh, not so much.

Many gamblers believe if everyone at the table follows “the book,” everyone else at the table is more likely to win. Sounds sound, but it’s not.

Dopey decisions only hurt the actual dope. Sure, you can cherry-pick examples when some nudnik took a card he shouldn’t, causing the dealer to pull a seven-card 21 out of his you-know-what. But the opposite is equally as likely, where you benefit from his blunder. As the law of large numbers says, it all evens out in the end.

54

SO WAS RED

Global Gaming Business JULY 2016

”

starting point, is 42 to 1.

Forty-two to one. Those were the same odds Buster Douglas got against Mike Tyson, and we know how that turned out. All betting systems work until they don’t, and this one was designed to accumulate a series of small wins, followed by one galactically large loss. And true to form, that’s exactly what happened on a New Year’s Eve in Las Vegas, and—also true to form—that’s exactly what prompted maybe the most ill-timed I-toldyou-so in relationship history.

BLAME IT ON THE SH-SH-SH-SH-SHUFFLER You’ve probably never heard of “Dealer Bluff,” unless you are one of its creators (guilty), or you are a frequent visitor to Thunder Valley Casino Resort near Sacramento. The game uses a camera in the shuffler to read the dealer’s cards, and make a bet that players must respond to, either by folding, calling or raising. When the dealer bets low, he usually has a weak hand; conversely, when he bets high, he usually has a strong hand.

Of course, with “bluff” in the title, the game isn’t completely honest. The dealer will randomly represent strength when weak and represent weakness when strong. In other words, it’s like regular poker.

And in other, other words, it’s like New Coke or the Edsel. A commercial flop. Save for Thunder Valley, every casino that tried Dealer Bluff yanked it.

Players felt the game—and its accessory before the fact, the shuffler—were cheating them. They figured if the shuffler could read the dealer’s hand (which it can and does), it must be able to read their hands (which it can but doesn’t) and then manipulate them into making bad decisions (which it could but doesn’t need to).

Gaffing a card shuffler in favor of the casino is the very definition of superfluous. Every table game already has a built-in mathematical advantage.

Sometimes it’s big and sometimes it’s small, but it’s always there to ensure, barring any shenanigans, the house always wins.

Alrighty then. Case closed. The defense rests.

Game, set and match. Final score: Logic 3, Hunches 0.

Of course, come to think of it, if players truly played by the book, they wouldn’t play at all.

Hmmm. Then we would have to go out and get real jobs.

Say, tell you what. How about we just keep this our little secret, huh?

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

GAMING EMPLOYEES: MAKE YOUR VOICES HEARD IN THE PRESIDENTIAL RACE Inform candidates that gaming is a valued community partner in 40 states delivering benefits that include:

1.7 MILLION JOBS

$240 BILLION IN ECONOMIC IMPACT

$38 BILLION IN TAX REVENUES

A PATH TO THE MIDDLE CLASS FOR WORKERS OF ALL BACKGROUNDS & EXPERIENCES

GET INVOLVED Join the American Gaming Association as we hold on-the-ground events in key states.

Tell candidates to meet you and your co-workers and learn more about the industry. Visit gamingvotes.org and register to vote. Use #GamingVotes to get candidates’ attention on social media and let them know you’re paying attention to them.

WITH YOUR ENGAGEMENT, CANDIDATES WILL GET TO KNOW GAMING IN 2016.

Learn more at www.gamingvotes.org and www.americangaming.org

facebook.com/americangaming @AmerGamingAssn

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FRANKLY SPEAKING

by Frank Legato

Crime, Secrets… and Boardwalk Horses

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VICT OR

RINALDO

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oy, casino criminals just aren’t too bright. Or, maybe they should read this column. Exactly one year ago, I wrote about a winning gambler who was robbed after he had left an urban casino. The robber followed the guy home, and took his cash winnings and his smartphone. The cops traced the GPS on the phone and nabbed the crook.

Last month, there was a nearly identical robbery involving the same casino. A guy leaves with a pile of cash, calls a cab, and the cab is followed. He’s robbed outside of his house, of cash… and his smartphone.

Yep, you guessed it. GPS app. Cops followed the signal and arrested the bad guy.

Don’t these casino stalkers talk to each other? Don’t they have a blog or something?

Seriously, though, the victim is suing the casino. His lawyers say they didn’t provide him adequate protection.

Now, I’m not saying the casino couldn’t have done more. The guy said he had complained about people standing around watching the game but not playing. The dealer told them to step back a foot or two.

Surprisingly, telling them to take a step back, even with a stern look, didn’t cower the stalkers from carrying out their crime.

Then again, the guy himself could have done more. We’re talking about what was reportedly more than $10,000 in cash. That’s a hundred $100 bills.

The guy must have had cash bulging from his pockets.

In this particular city, that’s like walking into a lion’s den wearing a meat jacket.

You know, when you win a pile of cash in a casino, you can actually ask for a check, or a wire transfer. There’s no need to walk around the city like Scrooge McDuck.

OK, you youngsters might not understand the reference.

Scrooge McDuck was Donald’s rich uncle who used to dive into the pile of money in his cash vault, and…

Oh, never mind. Ask for a check.

In other news, the Las Vegas Convention and Visitors Authority put on a cool contest in connection with the June 15 implosion of the Riviera. Playing on its “What Happens Here, Stays Here” marketing campaign, the authority invited people to submit their “confession” of something they did in Vegas. According to the LVCVA website: “We’ll print it,

seal it into a high-security, maximumanonymity, no-judgment, ultra-safe confessional, then send it off into oblivion with the Riviera. Forever.”

The best confession was to garner a free trip to Las Vegas. No word on who won. My deadline came before the implosion. And no, despite more than 30 years of going to Las Vegas, I didn’t have anything I needed to have blown up.

Or maybe I did, and it got blown up. You’ll never know.

Speaking of June 15, that’s when Glenn Straub was slated to reopen the hotel at the Revel in Atlantic City. As late as a couple of days before the event, there had been no job fair, no announcements of restaurants to be included, no marketing to fill the rooms, no website, and no announcement of who is going to operate the hotel.

I originally concluded that Straub was going to open the hotel and stay there himself. However, just as we went to press, it came out that he wouldn’t make the June 15 date. Maybe June 17, he said.

Straub said he’d put people with reservations up at other hotels, so evidently, he’s not staying there himself.

By July 4, he was to have “a big chunk of the restaurants” open, Straub told the Press of Atlantic City. By August 15, he said, “there will be a skydiving machine where you have a big propeller that blows you up off the ground.

And the climbing wall will be done by that time.” He also told the newspaper there will be “mini-deluxe theaters,” a nightclub, and “horse riding, especially on the beach.”

I guess horse riding in the corridors would leave too much of a mess.

Anyway, just days before the projected soft opening, the hotel didn’t even have a name. Straub last month invited people to submit new names for the Revel, which garnered tweeted suggestions ranging from “The Future Former Revel Hotel” to my personal favorite, “Boaty McBoatface.”

By the time you read this, we’ll know whether Straub somehow completed all renovations, hired a hotel operator and staff, and sold rooms in complete secrecy. If he did, it was a truly remarkable accomplishment, and I’ll be the first to visit Boaty McBoatface. I’ll ride the zip line. I’ll fly through the air with a propeller hat.

I’ll ride a horse.

On the beach, even.

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EMERGING LEADERS Slot Success Vernon Hill Jr. Slot Manager, Shoshone Rose Casino

“I like how the industry is constantly changing and new aspects are always being created.

This gives young professionals more of a chance for advancement or to show what they can do.”

t times, the key to success can be, in part, attributed to embracing the unknown and fully taking advantage of opportunities when they are presented. Vernon Hill Jr.’s career provides an excellent example of this.

When Hill entered the gaming industry, it was foreign to him for a variety of reasons. Hill, who has been the slot manager at the Shoshone Rose Casino since 2007, has done very well navigating through, and excelling in, an industry that was once unknown to him.

“When I started my career, gaming was new in our area. I didn’t really know what to expect,” says Hill. “The Eastern Shoshone tribe was sending four people to slot training to prepare for the opening of their new casino. I was one of the four chosen.”

While the gaming industry was a kind of novelty to Hill at the beginning of his career, he had a solid foundation of skills and personality traits that allowed him to succeed.

“I am self-motivated and enjoy a challenge,” says Hill.

“I was originally going to school for information technologies. Working with slot machines is similar to working with computers, so that made the transition easier.”

Since completing his slot training, Hill has not looked back. As mentioned above, he manages the slot operations at the Shoshone Rose Casino. On top of this, his tenure at the casino is longer than any other employee. It was not just his computer skills and personal qualities that allowed Hill to achieve these feats—Hill recognizes he was fortunate to have two mentors early on in his gaming career.

“I had a lot of help from our previous senior management, Anthony Mele and Brian VanEnkenvoort,” explains Hill. “They both had a lot of experience in the gaming industry and were able to point me in the right direction.”

As Hill reflects on his accomplishments thus far in his career, he believes the team he has built at Shoshone Rose is his greatest.

“I am most proud of my staff,” says Hill. “They are very good at what they do, so they make my job easier.”

Hill’s team has one of the lowest turnover rates at the casino—a testament of solid management.

Hill believes the prospects for young professionals in the gaming industry are strong.

“I like how the industry is constantly changing and new aspects are always being created,” explains Hill. “This gives young professionals more of a chance for advancement or to show what they can do.”

Even if taking advantage of these industry changes calls for embracing the unknown, Hill’s career path can serve as a guide for young gaming professionals. In addition to capitalizing on the rapid industry changes, Hill stresses the importance for young gaming professionals to be leaders when called upon.

“Don’t be afraid to take the lead when it is needed,” says Hill.

—Michael Vanaskie, The Innovation Group

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Health Conscious Crystal Janvier Researcher/Analyst, Federation of Saskatchewan Indian Nations rystal Janvier can be quite the motivator and mover when it comes to change. A graduate of Saskatchewan Indian Institute of Technology (SIIT) then continuing to the University of Saskatchewan, career opportunities took a turn for the better when she had to make a choice of working full-time or living on a part-time income.

She was determined to make a difference from the environment she was living in and make a change for her children. She started with the Federation of Saskatchewan Indian Nation (FSIN) as a summer student back in 1996 and became full-time in 2002.

After working in a number of different capacities, she is currently the co-chair coordinator for implementing the FSIN’s “First Nations Addictions Rehabilitation Foundation” program.

Janvier has taken numerous workshops, webinars and various trainings from Train the Trainer for Domestic Violence Intervention, Introduction to Treating Problem Gambling, Assessment, Treatment Delivery and Prevention, and Holistic Training in the Prevention and Treatment of Problem Gambling, and has received two scholarships from the National Center for Responsible Gaming.

However, all her success in both her career and educational and extracurricular activities did come at a price. “Emerging into the field of gaming and gambling,” she says, “I had to learn

C

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“I had to learn and understand for myself what gambling means and how this has impacted my own First Nations people.” and understand for myself what gambling means and how this has impacted my own First Nations people.”

She goes on to explain that it is up to her and her team to bridge the gap between the new and those that have been in the field for a long time. As co-chair of the team implementing the FSIN’s addiction rehabilitation foundation, she feels it is her duty to understand if gambling is the primary issue for the First Nation people, or if it is a co-morbidity issue. Gambling may be the issue on the surface, but could be covering up some more serious issues underneath, a key co-morbidity finding of the National Council for Responsible Gaming.

Having passion for those who are in need of help and the drive to never give up are positive traits that she will have to hold true to in order to accomplish her goals—both of which she gives credit to her mentors for instilling on her early in her career. “Regardless of home life or work, we all need some type of guidance and assistance, and it is up to us as individuals to seek that help and let our guard down,” says Janvier. “It is not the job of the people we look up to, to seek us out, but rather our duty to reach out to these individuals in our life to ask for help. More often than not, they are more than happy to help in any way possible.”

—Chris Irwin, The Innovation Group

Taking the Leap Joshua Anderson Director of Surveillance and Technology, Cherokee Nation Entertainment reaking into and advancing in the gaming industry was a humbling experience for Joshua Anderson, the director of surveillance and technology for Cherokee Nation Entertainment.

Anderson had to look outside of his education and previous work experience to get an opportunity to work for his desired organization. “I was honestly looking for a way to begin my career with the Cherokee Nation, in any fashion,” explains Anderson. “My previous experience and educational background focused more on business management as opposed to a specific sector.”

Anderson got his chance to work with the Cherokee Nation through an opportunity in their security and surveillance department. However, getting in the door of the Cherokee Nation was not his only challenge.

“The biggest obstacle I faced was identifying ways to gain the respect of a staff that was older and much more experienced than me,” admits Anderson. “It was truly humbling as I was a cocky young man who thought I knew it all.”

Anderson was ultimately able to gain the respect of his peers, and has been able to advance through the security and surveillance ranks of the Cherokee Nation to his current role. He credits his decisions to move into, and stay in, the surveillance side of the industry as the most important decisions of his career to date.

“It has allowed me to see the potential of positively driving the business in a department that is not known for boosting revenue numbers,” comments Anderson. “For me, this role is the perfect blend of the business and the technology that helps drive and protect our bottom line.”

When considering his professional and personal mentors within the industry, Anderson is aware that he is lucky to have had several mentors. He believes two mentors, in particular, have had the most lasting impacts on his career. “My VP has been supportive, instructive, and has directed me toward a brighter future… He has an innate ability to motivate,” says Anderson. Additionally, Anderson credits a previous boss “who truly helped shape me as a person and a professional.”

Anderson further explains, “While there have been many, and I am thankful for them all, I will always be indebted to these two.”

Anderson believes the rapid technological advancement within the gaming industry presents an opportunity for emerging leaders. “The technological movement that is taking place opens many doors for a new generation that have grown up with the technology,” says Anderson.

“They understand it better than most, and that is amazing leverage for a young man or woman looking to begin their career in this industry.”

Anderson’s advice for young professionals within the industry draws directly from his own experience. “Stay grounded and humble,” he says. “It is very easy to start in a career and want to be the best immediately. The quicker you realize you don’t have all the answers and that it is OK to lean on your colleagues, the better off you will be.”

—Michael Vanaskie, The Innovation Group

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JULY 2016 www.ggbmagazine.com

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GLOBAL GAMING WOMEN

Pay It Forward Investing in women is always profitable

A

t the inaugural Global Gaming Women panel at the East Coast Gaming Congress in Atlantic City in May, a lively discussion ensued between the panelists on the topic of the path to gender equality in the workplace. In the gaming industry, women represent almost 50 percent of the employee base in the United States, but are significantly underrepresented in the management ranks. Numerous studies outside of gaming have shown that economic growth improves with more women in senior management positions, and companies that invest in women’s employment can gain a competitive advantage.

Central to the theme of advancement is education. As the centerpiece of Global Gaming Women’s expanded programming in 2016, four separate programs are being offered that build an educational pyramid to help women improve their business skills, and aid in personal growth.

“

By Virginia McDowell

tomizable program at locations where there is an interest, sending a skilled trainer to the location.

The next level in the pyramid has been developed for Front Line Leaders. The program consists of one and a half days of content relevant to those new to leadership positions, and includes stress management, time management, team building, and utilizing feedback for performance improvement. Lunch speakers will include women in senior management positions, and the regional conferences will give women the opportunity to network and build relationships with other professionals in their respective locations.

The third step on the pyramid is Leadership Development, with conferences taking place regionally throughout each year. The program curriculum has been developed for managers and director-level participants to increase management skills, with topics including finance for the non-financial manager, conflict management, emotional intelligence and presentation skills.

The two-day educational summit will also assess individual communication techniques, leadership styles, critical thinking skills and effective decision-making in the workplace. Attendees will develop an action plan and commitment strategy to apply the skills and knowledge learned at the summit to their personal career goals, and will have the opportunity to participate in an exclusive mentoring event with female executives in the gaming industry.

The highest level of the pyramid is the W Development Conference for senior executives. This conference is offered in Las Vegas, and will be held annually for women in top leadership positions. The W program sessions include emotional intelligence, leadership development, strategic thinking and public speaking. Attendees will have the opportunity for unique one-on-one mentoring as they engage with female gaming executive leaders.

The program will provide the opportunity for

Numerous studies outside of gaming have shown that economic growth improves with more women in senior management positions, and companies that invest in women’s employment can gain a competitive advantage.

To make certain that the GGW education programs are accessible to as many women as possible, three are being offered in four different regions in the United States beginning this year—South, West, East and Midwest—with plans to expand internationally in 2017.

The first level of the pyramid is our Emerging Leaders program. The target audience of the oneand-a-half-day program is women not currently in the management ranks but interested in gathering skills for advancement. The core curriculum for this stepping stone into GGW’s educational programming focuses on planning and goal setting, developing confidence and setting expectations as women step into supervisory roles. GGW will partner with interested companies to hold this cus60

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”

enhancement of technical skills, training and resources necessary to succeed in our fast-paced industry. In addition, specific breakout sessions will be available in marketing, accounting, IT, resort operations, risk management and other professional areas.

The speakers are the most accomplished professionals in gaming, and participants will have the opportunity to meet and dine in an intimate setting with other established senior executives. As the final step on the educational pyramid, W graduates will have the opportunity after completing the program to “Pay It Forward” and continue the cycle of building the next generation of female leaders in gaming.

All classes are offered via scholarship, meaning there is no charge for the employer or the employee for the programs or courses. There are some prerequisite requirements for application, and there may be associated lodging or travel costs for participants.

The applicant selection process is done by an independent Global Gaming Women subcommittee which seeks both company and job diversity for each class, and eligible women are encouraged to apply multiple times if they are not selected in the first round. The current schedule of events for the remainder of 2016 is as follows: • W Development Conference: August 31-September 2 at Red Rock Resort in Las Vegas; • Leadership Development-Midwest Region: August 22-24 in Chicago; and, • Leadership Development-Southern Region: November 2-4 in Florida at the Seminole Hard Rock Hollywood.

Global Gaming Women is also seeking volunteers to help organize the various conferences and programs, as well as participate on the committees that are working on our other important initiatives.

To learn more about these programs, as well as other educational opportunities, including the Zen online public speaking program and scholarships offered by the GGW Charitable Education Fund to attend the MGM Resorts Foundation’s Women’s Leadership Conference and Global Gaming Expo, please visit the newly launched GGW website at www.globalgamingwomen.org.

Virginia McDowell, former president & CEO of Isle of Capri Casinos, is chairman of Global Gaming Women.

SAVE THE DATE. You’re changing the game at this year’s G2E. Take the next step and build on your success.

ATTEND G2E 2016.

SEPTEMBER 27-29, 2016 | SANDS EXPO | LAS VEGAS, NV

EXHIBITS

EDUCATION

SEPTEMBER 27-29, 2016

SEPTEMBER 26-29, 2016

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NEW GAME REVIEW

by Frank Legato

Magic Mike XXL Aristocrat Technologies

T

his new game on Aristocrat’s flashy Verve cabinet is themed around the popular sequel film of the same name that follows the Kings of Tampa, a group of male strippers, to a stripping convention.

The male stripper theme is carried through a video slot that contains many strong features on its own, from a two-level mystery progressive jackpot to full-reel wild symbols to both freespin and picking bonus events.

The base game is a five-reel, 40-line video slot in a four-by-five configuration (four rows of symbols per reel). The primary game contains a “Dynamic Symbols” feature. At the start of each base-game spin, each reel has symbol positions that are randomly replaced by Dancer symbols, increasing the chance for wins.

The progressives—a Major resetting at $500 and a Minor starting at $50—are randomly awarded on any bought game, at any bet level. Also randomly awarded is the “Are You Ready to Get Wild” feature, in which all

Dancer symbols become wild.

Three or more scattered Showtime Bonus symbols trigger eight, 15 or 25 free spins, titled “It’s Not Bro time, It’s Showtime Free Spins.” During free spins, Dancer symbols are wild when covering all four rows of symbols, creating wild reels. Bonus symbols during the free spins retrigger the feature.

The main Magic Mike Bonus is a picking game. Players are initially awarded five picks from 15 face-down tiles. Each selection reveals credit awards ranging from 25 to 250 credits, a Dancer symbol that increases the overall bonus multiplier, individual pick multipliers or additional picks. Revealing all of the Dancer symbols awards all remaining unselected tiles for the game’s top award of 20,000 credits times the line bet.

Manufacturer: Aristocrat Technologies Platform: Verve Format: Five-reel, 40-line video slot Denomination: .01-20.00 Max Bet: 400 Top Award: 20,000 times line bet Hit Frequency: Approximately 50% Theoretical Hold: 5.97%-15.5%

Eagle Mountain

Ainsworth Game Technology

T

his game uses all of Ainsworth’s new A560L cabinet for a video slot utilizing large symbols under four progressive jackpot levels, the top prize resetting at $2,500.

Unlike many multiple-progressive slots, this one ties each of the four progressives to a five-of-a-kind line combination with maximum bet. Poker symbols trigger the lower two jackpots, a Mini resetting at $20 and a Minor resetting at $50. The Major, starting at $250, is triggered by three different five-of-a-kind combinations. The top prize is returned by five “Bear” or five “Wolf” symbols. Jackpot combinations cannot contain wild symbols.

To this basic setup—the base game is available to casinos in configurations of 30, 40 or 50 paylines—is added a dual-level free-spin bonus event.

Three scattered “Mountain” symbols trigger eight free games.

During free games, all symbols except scatter symbols are stacked. The “Eagle” appears on the second and fourth reels as wild symbols. “Wild Multiplier” on the third reel substitutes for all standard symbols and multiplies the win. Three or more Mountain symbols on a free spin trigger the second level of the event, the “Eagle Mountain Feature.”

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Once triggered, all remaining free games are played as the Eagle Mountain Feature. A new Eagle Mountain logo symbol appears only on the two outer reels, and substitutes for all symbols except “Wild Multiplier” and “Eagle.”

When scattered Eagle Mountain logo symbols appear on reel 1 and reel 5, all symbols on the same rows (except Wild Multiplier) are transformed to “Eagle” symbols. All pays are tripled when all symbols on all reels are transformed to “Eagle.”

Manufacturer: Ainsworth Game Technology Platform: A560L Format: Five-reel, 30-, 40- or 50-line video slot Denomination: .01-10.00 Max Bet: 150, 200, 250 Top Award: Progressive; $2,500 reset Hit Frequency: Approximately 50% Theoretical Hold: 4%-15%

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Inca Goddess Everi Holdings

T

his game on Everi’s sleek new Platinum MPX cabinet features a five-level progressive jackpot and a free-spin bonus feature. The progressives are won by landing five or more scattered Inca Goddess symbols in the primary game, ranging from a prize resetting at $10 for five of the symbols up to the top progressive, resetting at $2,500 for filling 14 or more of the 20 reel spots with the title symbol.

A mystery feature in the five-reel, 30-line primary game, called “Reel Advance,” can land on reel 5 on any line win. The feature awards extra credits and up to 10 bonus spins of the reels.

A separate free-spin bonus lands with triggering symbols on the first, third and fifth reels. The player is awarded 10 free spins plus a bonus of two times the total bet.

These features are wrapped into a package of beautiful artwork depicting the ancient Inca theme on the tall, vertical monitor of the Platinum MPX cabinet.

Manufacturer: Everi Holdings Platform: Platinum MPX Format: Five-reel, 30-line video slot Denomination: .01, .02, .05 Max Bet: 180 Top Award: Progressive; $2,500 reset Hit Frequency: Approximately 50% Theoretical Hold: 5%-15%

Queen of Wonderland AGS

T

his new video slot uses the program math of the popular “Gold Dragon Red Dragon” game to create a volatile new mystery-progressive slot featuring many of the most popular AGS features—notably, “Fierce Factor” and “PowerXStream.”

Fierce Factor is a feature that raises the pays with higher bets— the pay-table amounts rise with the wager. PowerXStream is a scatterpay reel setup with four spots on each of the inner three reels and three spots on each of the outer reels.

The five-reel setup results in 576 possible winning combinations on each spin. Wins are registered through adjacent symbols; there are no paylines. The wins count regardless of where the combination starts—left-to-right or right-to-left.

The theme centers around the queen of hearts, which is the highest-paying symbol. The game also features wild symbols on the middle three reels.

The base game also includes the AGS “Streaming Stacks” feature, in which a random symbol is selected prior to each spin to appear in a stack. This includes the wild symbol, for the periodic appearance of wild reels to boost the win.

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Scattered bonus symbols on the middle reels trigger eight free spins. The free-game feature can be retriggered within the feature, up to a maximum of 128 free spins.

Finally, the game features a two-level mystery progressive. On any given spin, the player can be awarded a second-tier jackpot resetting at $200 or a top jackpot resetting at $4,000. Both are “Must Hit By” jackpots. As displayed on the screen, the lower-level jackpot must hit by the time it reaches $500. The top jackpot must hit by $5,000. This adds a dose of jackpot fever as each meter approaches its must-hitby level.

Manufacturer: AGS Platform: Genesis Format: Five-reel, 576-ways-to-win video slot Denomination: .01 Max Bet: 500 Top Award: $5,000 Hit Frequency: Approximately 50% Theoretical Hold: 5.07%-14.01%

Thank You For Going

18 FOR 18 A BIG THANK YOU to each of our players and sponsors for teeing up their generous support for the NCRG at the 18th annual AGEM/AGA Golf Classic Presented by JCM Global. Together, we have raised more than $1.5 million in support of problem gambling research. You can help fight problem gambling anytime by visiting NCRG.org.

Global Gaming Business

Patriot Gaming

•

GLI

Hikam America • Waffletechnology Ainsworth • Comer Holdings LLC Millennium Logo Glove • RMC Legal

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GOODS&SERVICES

AGS CABINETS BEGIN TRIAL

EADINGTON CONFERENCE FEATURES WYNN

W

ynn Resorts Chairman Steve Wynn returned to the Mirage last month for the first time since selling his company to MGM Steve Wynn returns to in 2000, to kick off the the Mirage to address the 16th annual Internavenerable Eadington tional Conference on Conference Gambling and Risk Taking, produced by the University of Nevada, Las Vegas.

In delivering the opening keynote for the conference, Wynn reflected on the model he created when he opened the Mirage in 1989 as a completely new type of resort—one that depended on “the experience” rather than gambling. In his opening message, he commented that since the Mirage opening, success on the Strip has come from creating an experience for the customer, with non-gaming revenues eventually outstripping the casino take.

He also took a jab at millennials, marveling at the millions the young customers dump into Strip nightclubs. “I’m one of those old white guys that think the millennials are sort of short on brains,” Wynn said. “But in the meantime, we’re doing well with them. We put the little darlings in the nightclubs and they get drunk and they give us a ton of money and it’s probably the only part of my business where I have cognitive dissonance. I walk into the clubs and I say to myself either we have attracted every moron in the world, or there’s something about the sound that allows normal people to check their human sensibilities at the door.”

The five-day conference, which attracted around 600 attendees from 30 countries, featured gaming research, with presentation of white papers on a variety of gaming topics. It was founded by the late Dr. William Eadington, an economics professor at the University of Nevada, Reno who was one of the pioneers of gaming business education. Eadington died in 2013 a few months before the 15th conference. But the legacy of the event has been carried on by Bo Bernhard, the executive director of UNLV’s International Gaming Institute.

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Narus Advisors partner Chris Grove

CONFERENCE TO BRING eSPORTS, CASINOS TOGETHER

T

he eSports phenomenon has drawn in mainstream media like ESPN, major arenas like Madison Square Garden, and investors ranging from Shaquille O’Neal to Mark Cuban. As eSports continues its torrid growth, the commercial gambling industry is asking how to effectively embrace and engage eSports companies and fans.

Answering that question is the central aim of “eSports & Casino Resorts,” a two-day event produced by Narus Advisors that will connect stakeholders from the commercial gambling and eSports industries. It takes place October 25-26 the SLS Casino and Resort in Las Vegas.

“The relationship between eSports and casinos is at a tipping point,” said Chris Grove, partner at Narus Advisors. According to soon-to-be-released research from Narus Advisors and Eilers & Krejcik Gaming, nearly 54 percent of gaming industry respondents believe that Las Vegas casinos hosting eSports events will be “effective” to “incredibly effective” in getting fans to engage with casino brands. Additionally, 81 percent believe that regional casinos should explore holding eSports events.

“Our research leaves little doubt that casino executives appreciate the significance of eSports, but are less clear on the optimal entry points into eSports for their companies,” said Grove. “Our goal at eSports & Casino Resorts is to provide the gambling industry with a practical framework for identifying and evaluating those entry points today.”

Sessions will feature executive voices from the eSports industry alongside speakers with direct experience integrating eSports and gambling. Topics include nuts-and-bolts breakdowns of eSports event hosting, lessons from eSports gambling products for casino game designers, strategies for creating content that resonates with eSports fans, a survey of the investment landscape for eSports, and practical strategies for maximizing an eSports fan’s casino visit—for both the casino and the fan.

To learn more and to register for eSports & Casino Resorts, visit naruscope.com.

AGS, a gaming supplier with one of the industry’s most diversified product portfolios, announced that Green Valley Ranch Resort & Casino and South Point Hotel, Casino & Spa, both located in Las Vegas, have begun field trials of AGS’ immersive Icon cabinet. These field trials mark the first time Nevada players get to experience AGS’ dynamic core content.

“Introducing Icon to the Nevada market is an extraordinary milestone for AGS,” said David Lopez, AGS’ president and CEO. “One of our key, strategic initiatives from the Cadillac Jack acquisition is to deliver Icon to all major commercial jurisdictions in the U.S. As the country’s largest gaming market, Las Vegas presents a vast opportunity to grow our Class III footprint with our innovative gambler-style core games.”

Featuring two flush-mounted 23-inch, highdefinition LCDs and an integrated digital sound system, the Icon cabinet features striking visual effects enhancing AGS’ suite of customized, premium game content and play mechanics, including the two player-favorite games Green Valley Ranch and South Point have installed— Gold Dragon Red Dragon and Fire Wolf.

KWATAQNUK RESORT PICKS AGILYSYS

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gilysys, Inc., a leading provider of nextgeneration hospitality software solutions and services, announced that KwaTaqNuk Resort and Casino in Polson, Montana, has selected Visual One PMS and InfoGenesis POS to streamline operations and enhance guest service at the 111-room property, which is owned and managed by S&K Gaming.

The resort, which recently underwent a $4.6 million renovation, caters to both business and leisure travelers, with a 24-hour casino, full-service restaurant and lounge, and large meeting facility.

The S&K Gaming executive team wanted state-ofthe-art technology that would increase operational efficiency and enhance guest service across the entire property.

Visual One PMS, a comprehensive and fully integrated property management system, offers a wide range of best-in-class features and functionality, including front office operations, guest history, housekeeping, reservations management and more.

InfoGenesis POS is Agilysys’ award-winning

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point-of-sale system that combines easy-to-use terminal and tablet touch-screen applications with industry-leading offline capabilities. Designed for multi-unit and complex operations, InfoGenesis POS features real-time reporting, support for flexible menu types, and multi-language capabilities that drive service flexibility and increase operational efficiency.

Celebrating

TCSJOHNHUXLEY DELIVERS ‘OCEAN BLACKJACK’ TABLE

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able-game supplier TCSJohnHuxley has delivered the world’s first seawater swim-up blackjack table to the Jewel Casino, in the refurbished Iririki Island Resort & Spa on the South Pacific island nation of Vanuatu.

TCSJohnHuxley custom-designed the table, dubbed “Ocean Blackjack,” for the venue, which is adjacent to the island’s beautiful Port Vila Bay. The Jewel Casino features an expansive view overlooking the bay, and the swim-up table was designed to allow players to take in the view while playing.

of Dedication to Casino Cash Access Service ATMs • Cash Advance Ticket Redemption• FABItrack/Title 31 Integrated Check Cashing • 24/7 Customer Service and much more!

504.837.2626•www.fabicash.com

Featuring high-grade steel metallic fixings to resist corrosion, as well as a traditional-style wooden frame made from marine-grade material, TCSJohnHuxley was able to ensure no swelling or distortion of the table from the surrounding dampness. Once all of the parts were assembled, the entire leg arrangement was fully sealed to further prevent moisture ingress.

KONAMI LAUNCHES FROGGER SLOT

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lot manufacturer Konami Gaming has officially launched the Frogger slot game, based on the legendary arcade game the slot-maker’s parent company, Konami of Japan, made famous in the 1980s.

The game does not have the skill factor of the arcade video game, but it does have a bonus that simulates the animated frog’s famous zig-zagging journey across a busy street. The game also has a variety of random bonus features, including a mystery event that places the familiar Frogger screen on the game’s top monitor.

JULY 2016 www.ggbmagazine.com

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or the last 14 years, GGB magazine has published an annual supplement, Casino Design magazine, highlighting architecture, design and construction of casino resorts. With dozens of casino resorts being built every year, Casino Design showcased the renovations and re-designs of existing properties and highlighted the importance of non-gaming amenities.

Because we believe that design is at the heart of every casino experience, we have expanded our focus of non-gaming amenities. Casino Design magazine will now become Casino Style magazine. We will still cover the design and construction of casino resorts, but our coverage will encompass every aspect of the guest experience:

• Food & Beverage • Hotel Operations • Nightlife & Entertainment

• Meetings & Conventions • Pools & Spas • Other Non-Gaming Amenities

Casino Style will delve into the non-gaming customer; what attracts them to your property, what marketing seems to work best, and how analytics are changing the way casino resorts operate.

Casino Style will be published to coincide with the dates of Global Gaming Expo (G2E) and its co-located trade show and conference, the Integrated Resort Experience. Casino Style will be the go-to guide for trends that shape the future of the casino resort experience.

We’re sure you will be as excited as we are when you get your hands on the first copy of Casino Style magazine.

Roger Gros, Publisher rgros@ggbmagazine.com

For information & sponsorship opportunities contact: JOHN BUYACHEK Sales Director 702.248.1565 ext. 227 jbchek@ggbmagazine.com

FLOYD SEMBLER Business Development Manager 480-231-8433 fsembler@ggbmagazine.com

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PEOPLE DOMINGO NAMED TO LEAD PAGCOR

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ndrea Domingo, former head of the Philippines Bureau of Immigration, has been tapped by incoming president Rodrigo Duterte to head the country’s gaming regulator, the Philippine Andrea Domingo Amusement and Gaming Corp.

PAGCOR was headed by Cristino Naguiat, who was appointed by outgoing president Benigno Aquino.

Domingo has also served as a Pampanga congresswoman and general manager and CEO of the Philippine Reclamation Authority, according to local news outlets. The Philippine Star reported that she formerly worked as an organizer of volunteer groups for Duterte’s election campaign.

Arthur Tugade, former head of the Clark Development Corp., has been appointed secretary of the Department of Transportation and Communications. Clark Development Corp. manages the Clark Freeport Zone at Pampanga on Luzon Island north of Manila, the former U.S. air base.

The zone hosts a number of small, privately owned casino resorts, reported GGRAsia.

In addition, the Philippine Office of the Ombudsman has filed graft charges against Ephraim Genuino, former chairman of PAGCOR, as well as numerous associates on charges of graft.

Graft charges were filed in connection to the release of P37 million (US$799,740) to the Philippine Amateur Swimming Association for the training of swimmers for the 2012 Olympic Games. Those funds reportedly were used to train the athletes at Trace Aquatic Center, allegedly owned by Genuino.

Besides Genuino, others named as respondents included former PAGCOR President Rafael “Butch” Francisco.

GLI NAMES AUGUSTINE MARKETING DIRECTOR

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pril Augustine has been named director of marketing at Gaming Laboratories International, where she will oversee the company’s marketing communications and branding strategy and lead worldwide marketing activities.

April Augustine

An award-winning professional, Augustine brings to her new position more than 15 years of experience managing integrated marketing plans. Prior to joining GLI she was director of marketing at DallasWhite Property Restoration.

Augustine also spent nine years implementing marketing strategies for prominent gaming innovations at Bally Technologies, Inc., where she served as director of corporate marketing, online marketing strategist, director of systems marketing and systems marketing manager. While at Bally, Augustine received five Pinnacle communications awards from the American Gaming Association.

FIELDS JOINS G2E LEADERSHIP TEAM

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aming and marketing veteran Nicole Fields has been hired as the new industry relations and program director for Global Gaming Nicole Fields Expo, presented by the American Gaming Association. In this role, Fields will create strategic business partnerships for the world’s largest gaming trade show.

Fields currently serves in a leadership position at Global Gaming Women and was co-chair of the Women’s Business Group at her former employer, Cintas, one of the nation’s largest providers of corporate identity apparel. She also was employed by Caesars Entertainment.

CEO’S EXIT LEAVES QUESTIONS

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he resignation in April of SkyCity Entertainment Chief Executive Nigel Morrison has sparked questions about his exit, and more questions about the terms of his exit package. According to Nigel Morrison the Asia Gaming Brief, Morrison will walk with “up to NZ$5 million (US$3.36 million) and observe a 12-month restraint of trade.”

According to AGB, market commentators are asking why the payout is so generous, and why the restraint of trade lasts a year given Morrison’s “voluntary departure.” Morrison contends he was “keen to take a break” after eight years in the high-intensity position. “It’s an incredibly demanding job,” he said.

But local sources speculated that SkyCity’s announcement that it would raise a further NZ$263 million (US$178 million) from shareholders sparked new questions, because the company previously said it was able to finance expansion out of existing credit facilities.

PAYNE NAMED GM OF JCM GLOBAL AUSTRALASIA

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CM Global has appointed Ian Payne as the new general manager of JCM Global Australasia. Payne previously served as JCM’s Asia-Pacific business manager for nine years before briefly leaving the gaming industry.

Payne is based in JCM’s Sydney, Australia office and led JCM’s team at G2E Asia, where the company exhibited its portfolio of award-winning bill validation and printing technologies, including iVIZION, TBV, DBV-500, GEN2 Universal and the BlueWave Deluxe firmware upload tool.

Payne is an accomplished sales leader with deep knowledge of the Australia, Macau, New Zealand and Singapore markets. Most recently, he served as Asia-Pacific general manager for the Schaeffler Group, a global integrated automotive and industrial supplier.

GGB

July 2016 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Acres . . . . . . . . . . . . . . . . . . . . . . . .36,37,45,71 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Agilysys, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .27 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Casino Style . . . . . . . . . . . . . . . . . . . . . . . . . .68 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Fantini . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53,61 Gasser Chair . . . . . . . . . . . . . . . . . . . . . . . . . .47 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Greenberg Traurig . . . . . . . . . . . . . . . . . . . . .43 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Innovation Group . . . . . . . . . . . . . . . . . . . . . .31 Interblock . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . .17 JCM Golf Tournament . . . . . . . . . . . . . . . . . . .65 Joseph Eve . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Konami . . . . . . . . . . . . . . . . . . . .39,Back Cover Micro Gaming Technology . . . . . . . . . . . . . . .29 NetEnt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 OIGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Red Square Gaming . . . . . . . . . . . . . . . . . . . .51 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . .16 Rymax Marketing . . . . . . . . . . . . . . . . . . . . . .49 Scientific Games . . . . . . . . . . . . . . . . . . . . . . . .7 Sightline Payments . . . . . . . . . . . . . . . . . . . . 23

JULY 2016 www.ggbmagazine.com

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CASINO COMMUNICATIONS

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&A

Lawrence Ho Chairman and CEO, Melco Crown Entertainment Limited

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awrence Ho is chairman and CEO of Melco Crown Limited. Melco Crown is a joint venture between Ho’s Melco and Crown Entertainment (MCE), controlled at one time by James Packer, who recently stepped down as co-chairman of Melco Crown. The company has been aggressively expanding in Macau, the Philippines and most recently in the Primorye gaming district, near Vladivostok, Russia.

Ho has been instrumental in this expansion. Ho is the son of Stanley Ho, the legendary gaming operator of SJM who held a monopoly on gaming in Macau until the government bid out licenses in 2002. Melco Crown operates under an SJM sub-concession in Macau. To read a full, uncut version of this interview, visit GGBMagazine.com.

GGB: Studio City opened about six months ago.

Tell us how the property has been performing since then.

Ho: Financially speaking, Studio City has contributed meaningfully to MCE. With the opening of Studio City, we have now further increased our exposure to the mass market segment, which we believe will be the long-term driver of profitability for our company and the market as a whole.

Studio City welcomed almost 1 million visitors in its first month alone, and the customer number has been going up every month for the first six months. We are building up a unique customer database for Studio City, and have achieved a meaningful percentage of premium mass and middle mass customers in the past six months.

However, the ramp-up of Studio City has frankly been slower than expected, mainly due to the isolated location of the property at the southern tip of Cotai. We are trying to address this issue, using City of Dreams as one of the pickup points for the Cotai patrons, and recently we have already seen some improvement. We have also been putting in more marketing efforts since April.

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Global Gaming Business JULY 2016

The heavy non-gaming attraction of the property was designed to increase mass market. How has that worked?

achieve a stable and healthy rate of growth, as we continue to create quality supply to diversify Macau’s tourism and entertainment scene.

We believe that a casino is quite a homogeneous product, and non-gaming entertainment is the way to differentiate ourselves from our competitors. Therefore, non-gaming attractions are not just designed to attract the mass market, but also to create brand differentiators, brand stickiness and hopefully brand loyalty in the long term and ultimately help us build a sustainable business. It has long been our strategic direction to strike a balance between gaming and non-gaming, and over the years, we have been at the forefront in the market in building innovative non-gaming attractions.

The VIP segment is still going through structural changes, but I am not too worried; Altira is stabilizing and still has a very stable customer base. We will continue to focus on the optimization of this asset.

We have long foreseen that the gaming market in Macau would not be always dominated by the VIP segment, and we have taken the lead to focus on developing the premium mass market segment with City of Dreams and the mass segment now with the introduction of Studio City.

With the decline of the VIP market in Macau, what is the status of Altira, which was built mainly with the VIP market in mind?

With several more properties slated to open this year on Cotai, and even more next year, are you concerned that there’s going a problem with oversupply?

Altira is our first property, and it celebrates its ninth anniversary this year. Since its launch, Altira has continued to refine its services, and earned a sizable group of loyal customers. As the VIP segment has weakened due to macroeconomic and regulatory changes that have affected our industry as a whole, we have continued to right-size Altira and its cost structure, reducing the number of VIP tables and number of junkets to focus on the big junket operators, trimming the fat from the operation and optimizing table efficiency by constantly evaluating the best position to deploy the tables, be it in Altira or our other properties.

We believe the quality supply of facilities will diversify tourism and drive new demand for gaming and non-gaming entertainment markets in Macau, leading to the growth of the industry as a whole, as we serve more customers coming from mainland China, as well as visitors from the entire Asia-Pacific region and beyond. MCE will continue to be the integrated resort operator offering top-of-mind resorts in Cotai with our many world-class entertainment offerings that set us apart from our competition.

How do you envision the revenue situation in Macau right now? Have gaming revenues hit bottom?

I do think that Macau has bottomed out and is going to start recovering very soon; hopefully, before the year is out the recovery will have started.

After the past couple of years, the VIP segment has weakened, but we can see the mass market is stabilizing, and we believe this segment will be the main profit and growth driver moving forward.

Gone may be the days we experienced doubledigit growth every year, but we believe we can still

Will the VIP market continue to decline in Macau?

Tell us how you expect the Macau casinos to be performing in the next three years.

The Macau gaming market is undergoing stabilization, and this wave of change is beyond the control of any one gaming operator. What we can do, however, is to focus on achieving excellence in our own properties and assets. Next year, Macau will mark the 15th anniversary of casino liberalization. With continuous support from the government and community, and expected improvement in the city’s infrastructure to make Macau even more accessible to visitors, I believe Macau will remain competitive in the region and grow to become a world tourism and entertainment center.

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