Global Gaming Business, June 2015

GGB Global Gaming Business Magazine

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June 2015 • Vol. 14 • no. 6 • $10

One StOp ShOp

how Scientific Games is incorporating three iconic gaming brands under one roof

City Centric Why urban casinos work and how to make it happen

Official Publication of the American Gaming Association

Southern Exposure

What’s behind Alabama’s poarch Band of Creek

IN TR O D U C IN G

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CONTENTS

Vol. 14 • No. 6

june

Global Gaming Business Magazine

26 COVER STORY

COLUMNS

Brand New Game

14 AGA Time to Shut Down Illegal Gambling

The world-famous brands of Bally, WMS and Shuffle Master, and the unique talents behind them, are folded into the new Gaming Division of Scientific Games, which is on a mission to get the most out of the industry’s most comprehensive casino product lineup.

Geoff Freeman

16 Fantini’s Finance Perception is Reality Frank Fantini

64 Legal Testing, Testing

By Frank Legato

FEATURES

Laura McAllister Cox, Mark F. Glaser and Jamey L. Tesler

46 Native Diversity The most successful tribal casino operators are those using revenues to diversify their businesses, both inside and outside of the resorts.

By Rodric J. Bradford

50 Table Tech 18 In the City Few have mastered the art of building profitable casinos in cities, which first involves recognizing the different design required for an urban property.

New technology in table games has improved the player experience and the profitability of the pit.

By Dave Bontempo

By Andrew Klebanow

By Roger Gros

42 Poarch Steps Alabama’s Poarch Band of Creek Indians has grown into an economic force in the state—one that could be threatened by expanded gambling.

By Dave Palermo

4 The Agenda 6 Dateline 13 Nutshell 56 New Game Review 59 Frankly Speaking 60 Cutting Edge 62 Emerging Leaders

34 Betting the Game There is a movement among professional sports leagues toward more positive opinions regarding sports betting, but pro-legalization forces still face powerful NFL opposition.

DEPARTMENTS

With MGM’s Craig Jacobs, Aristocrat’s Tonya Roedell and Aria’s Josef Wagner

66 Goods & Services

GGB iGames

69 People

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

With A.G. Burnett, Chairman, Nevada Gaming Control Board

70 Casino Communications

iGNA Outlook

38 Ten Bold Political Moves, Part 2 Mark Balestra

40 iGames News Roundup

MONOPOLY is a trademark of Hasbro. Used with permission. ©2015 Hasbro. All rights reserved. Betty Boop - © 2015 King Features Syndicate, Inc. / Fleischer Studios, Inc. TM Hearst Holdings, Inc. / Fleischer Studios, Inc. www.BettyBoop.com TM

JUNE 2015 www.ggbmagazine.com

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THE AGENDA

Making Time for Millennials Roger Gros, Publisher

I

t’s been the big buzzword over the last couple of years in the casino business: millennials, and how to attract them to your property. Not being a millennial—in fact, as a baby boomer, I’m about as far from it as you can get—I don’t have a lot of advice on this front. Even my older sons are too old to be called millennials.

Just to be clear, let’s define millennials. This is the generation who reached adulthood at about the turn of the century. So anyone born in 1980 or later is a millennial. Generation X, Y and Z are something different, but don’t ask me to define them; it will get too confusing.

There was actually a fantastic presentation on millennials at G2E last year by Scott Hess from Spark SMG. Not many people saw it because it was presented on the last day of the show (those Thursday sessions are challenging but also some of the best). Hess outlined three reasons why millennials are important to any business today, but particularly the casino business.

First, the millennials are the largest living generation. As a baby boomer, that surprised me until I realized that many of the early arrivers in my generation are already gone, sadly. And it makes sense that this generation is the largest because lots of them are my children and grandchildren.

According to Hess, there are 70 million to 80 million millennials. So for anyone hoping to grow a business, millennials are important because size matters.

Secondly, millennials are entering their prime earning and consuming years. And we’ve seen the impact of millennials already on the casino industry. These are the people who fuel the nightclubs and the pools. A very important demographic.

The oldest millennials are already in their mid30s, so they are entering the age when most generations (in fact, all generations up until now) become casino players. So anyone who is not paying attention to millennials is setting up their casino for failure.

Finally, like all generations that came before, millennials are very influential about where society is headed. If you could see my picture from my “millennial” age, you’d see my hair down to my shoulders and my tie-dye t-shirt. So far be it from me to criticize salmon-colored shorts and the

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Global Gaming Business JUNE 2015

spiky Beiber hair styles. But tapping into these influential adapters by using their favorite technologies and devices can be immensely profitable and brand-building (although we don’t know how long those brands will last, given the fact that the lifespan of Las Vegas nightclubs is now down to four or five years).

What’s most exciting about millennials, Hess says, is that they are the ultimate arbiters of culture. That means when they like something, that something becomes big! Think The Hunger Games, Twilight, iPhone 6.

But unlike other generations, there is an uncertainty about how millennials will respond to traditional casino marketing as they age. In all past generations (at least in the 40-50 year history of the modern casino), people—mostly women—became slot players sometime after they hit 40. While we don’t see that yet in millennials, experience is telling us that might not happen. While millennials will gladly come to a nightclub at a casino and drop $1,000 on a bottle of liquor and a cabana, those people have shown almost no interest in gambling. So what happens if they age out of the nightclub scene and don’t age into the casino? Nothing good.

So are we going to have to rethink how to attract this next generation of gambler?

Undoubtedly. While it appears they aren’t completely enamored with gambling, they seem to enjoy social gaming, which is a good sign. But do we approach them as potential real-money gamblers or just social gamers? Some companies want to make that distinction, others are confident that they can be converted.

Or do we change what we consider to be gambling and give them a blend of social and real-money gambling? Do we offer it on machines or allow them to access it on their phones and tablets?

However we do it, we’ve got to come up with strategies. Here at GGB, we plan to cover this extensively for the next year and beyond.

And at G2E in September, you can be sure there will be a collection of seminars on dealing with millennials. Yes, we all might be a bit older, but we have to speak their language for the good of all our enterprises.

Vol. 14 • No. 6 • June 2015 Roger Gros, Publisher | rgros@ggbmagazine.com Frank Legato, Editor | flegato@ggbmagazine.com Monica Cooley, Art Director | cooley7@sunflower.com David Coheen, North American Sales & Marketing Director dcoheen@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com Columnists Laura McAllister | Mark Balestra Geoff Freeman | Frank Fantini | Mark F. Glaser Jamey L. Tesler Contributing Editors Stephanie Adkison | Dave Bontempo Rodric J. Bradford | Joe Dimino | Andrew Klebanow Dave Palermo | Robert Rossiello

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

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Partner, Duane Morris, Baltimore

• Jim Rafferty, President, Rafferty & Associates

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

• Steven M. Rittvo, President, The Innovation Group

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

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 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 2015 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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DATELINE ASIA june2015

The Mohegans plan a casino at Seoul’s Incheon Airport

Mohegans head To souTh Korea MTGA may have other plans in Asia

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he Mohegan Tribal Gaming Authority, which runs one of the largest casino resorts in the U.S., has announced plans to partner with the Incheon International Airport Corp. to develop and operate an integrated resort complex in South Korea.

The proposed complex would include a 1,000-room hotel with two towers, an amusement park, a private jet terminal, a 20,000-capacity performance arena, a retail corridor, 20 restaurants and a spa, among other amenities. They all would be located at the world’s eighth-largest airport, referred to as the gateway to Seoul. The facility serves 45 million customers a year.

The plan also includes an 18,500-square-meter (199,132-square-foot) casino with 250 table games and 1,500 slot machines. Like other gaming halls in South Korea, it would serve foreigners only. Of the country’s 17 casinos,

Japan Tries Again Hopes fade to open by 2020 Olympics

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coalition of Japanese lawmakers last month submitted another bill that would legalize casinos in the country. The coalition includes members of the ruling Liberal Democratic Party, the Japan Inno- Prime Minister Shinzo Abe vation Party and the Party for Future Generations, according to Reuters.

Legal casinos have been under consideration in Japan for about a decade, but have always been held up by opposition from religious leaders.

Komeito, a Buddhist-influenced political party and junior partner in Prime Minister Shinzo Abe’s government, is among the chief opponents, and has expressed concerns about gambling addiction, crime and the possible impact of gaming on young people.

International gaming companies are prepared to invest billions in the country, but have warned that the window of opportunity eventually will run out. Earlier this year, MGM President Bill Hornbuckle said, “At some point someone is going to have to say, ‘This is important to us; let’s push this thing forward.’” If the parliament fails to act, he said, “I think it does lose the momentum of a significant opportunity... so we would look elsewhere.”

The American Gaming Association is lending its support to the campaign to legalize casinos. According to a news release last month from AGA President Geoff Freeman, the organization “is serving as a critical resource for Japanese influencers and decision makers on the positive role that casino gaming has played in the United States and other global markets.”

Ideally, say casino proponents, the first resorts should be up and running by the 2020 Olympic Games in Tokyo, but that goal may be unrealistic given all the foot-dragging and continuing opposition. Over the long term, however, CLSA Ltd. has estimated that Japan could turn into Asia’s second-largest gambling hub.

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Global Gaming Business JUNE 2015

only one permits locals to enter and play. But sources tell GGB that discussions are under way in the Korean government to open up the “foreigners’ only” casinos to locals, most likely with the Singapore model of daily or annual entrance fees.

Announced by both partners last month, the project would be located on 800 acres owned by the airport, dwarfing the 544-acre Mohegan reservation in Connecticut. It is the tribe’s first venture outside the U.S., where it has seen its expansion plans thwarted in New York, Massachusetts and Philadelphia. In addition to Connecticut’s Mohegan Sun, MTGA owns and operates Mohegan Sun Pocono in Wilkes-Barre, Pennsylvania, and manages Resorts Hotel Casino in Atlantic City, New Jersey.

“We look forward to extending the unique Mohegan Sun brand, focused on unparalleled hospitality and guest experience, to Korea and providing a new, global customer base at a one-of-a kind, must-visit destination,” said Bobby Soper, president of the Mohegan Tribal Gaming Authority, in a statement.

The development team also includes Miura Holdings Asia, described as an investor in gaming, hotel and food and beverage in the U.S. and Asia.

The authority still needs to be approved for a gaming license by the Korean Ministry of Culture, Sports and Tourism.

Reuters reports that the partners would spend about $1.6 billion on the first phase of development, which could be complete by 2020. The complete resort complex would not be finished until 2040.

Studio City Headed for Default?

‘Future borrowings’ in doubt Lawrence Ho elco Crown Entertainment could technically default on a multibillion-dollar loan if it cannot get a mandated minimum of 400 table games at its Studio City resort on Macau’s Cotai Strip.

“We are required to satisfy certain conditions relating to the formal opening of the property by October 1, 2016,” the casino operator told NASDAQ. “In the event that we are unable to meet these conditions, it may constitute an event of default under the Studio City Project Facility.”

In a separate filing, the company, co-owned by James Packer and Lawrence Ho, said it is highly leveraged and may not be able to access “future borrowings” should the need require.

The Motley Fool’s Mike King said the company is taking chances.

“Some of the ventures are risky, obviously,” he wrote. “Going into the U.S. to compete against incumbent casinos in Las Vegas could be an issue. Taking on too much debt could be another issue.”

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DATELINE EUROPE june2015 U.K. Prime Minister David Cameron

TesTing The Tories

U.K. elections could decide FOBT debate

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ast month’s victory by Britain’s Conservative Party could finally lead to a resolution to the issue of fixed-odds betting terminals (FOBTs).

And with no need for a coalition government, that resolution could come quickly.

FOBTs, first introduced in the U.K. in 2002, have been getting a lot of bad press lately. Government officials are expressing concern about the proliferation of FOBTs in betting shops around the country. There are now more than 34,400 machines in operation, a 75 percent increase since 2005.

According to SBC News, the government is worried that FOBTs, memorably dubbed the “crack cocaine” of betting, are “seriously increasing problem gambling.”

Punters in Scotland bet more than £4 billion (US$6.1 billion) on FOBTs last year, reported the Daily Mail, including £2 billion wagered by lowincome Scots. And the Campaign for Fairer Gambling in Northern Ireland says the high-stakes betting machines won £535 million from bettors there in a single year. The crux of the problem is that bettors can bet up to £100 every 20 seconds on the machines, which feature games such as roulette, blackjack and poker and have a maxi-

mum payout of up to £500.

Forces throughout the U.K. are pressuring the gaming industry and the government to reduce the maximum stake to £2 per spin “to reduce the harm that this highly addictive product causes,” wrote Derek Webb, Adrian Parkinson and Matt ZarbCousin of the Nottingham-based Campaign for Fairer Gambling.

The ABB introduced additional “player protection measures” last November, requiring customers to choose whether they wanted to set a time and/or money limit, SBC reported. And in a grand public gesture, members of the Senet Group (comprised of Corals, Ladbrokes, Paddy Power, William Hill and now Scotbet) have revised their code of conduct and pledged not to advertise FOBTs in betting shop windows.

That may not be enough for local councilors.

Last November, 93 councils demanded that the maximum stake be cut to £2. Under the terms of the Sustainable Communities Act 2007, the government has a duty to make a decision on the proposal by November 2015.

With a general election now over, it’s unclear what the Conservatives will do. The question is

Sailing & Gambling Gibraltar super yacht to feature casino

T

he Sunborn Gibraltar, a super yacht owned by Finnish hotel company Sunborn, will officially launch a casino on board May 16. Casino operator Paf, which is state-owned by the Finnish Aland Islands, has partnered with Sunborn for the project. The most exclusive casino experience for the region has been promised to guests.

Casino Sunborn, as it will be called, will feature the latest slot machines, five roulette tables, and five card tables which will spread blackjack, punto banco, and a unique Sunborn Stud Poker. A VIP private gaming suite is also available with high-end amenities. A large balcony and terrace are part of the suite as well.

even more confusing in Scotland because representatives of the Scottish National Party ousted many Labor politicians in the elections.

But the ABB claims that a £2 maximum stake on FOBTs would put 90 percent of betting shops out of business and result in the loss of nearly 4,000 jobs. Moreover, the organization contends, it would cost the Treasury nearly £650 million in taxes.

Greek Gambling Looking Up OPAP sells racing rights, reports higher revenues fter a long tough stretch, the Greek gaming industry last month began to see some light at the end of the tunnel.

OPAP, the government-owned operator, is selling its sole license for horse-race betting, according to Reuters. It is the first sale of a state asset by the new leftist-led coalition government, which is trying to right the country’s ship of state. On April 24 the Hellenic Asset Privatization Development Fund was set to formalize a deal selling the license to Athens-based Greek Organization of Football Prognostics.

Greek Prime Minister Alexis Tsipras told Reuters that the country may be forced to divest of other state assets as it struggles with a devastated economy.

Meanwhile, the gaming industry, pummeled by the recession and a still-troubled economy, is showing signs of life, according to recently released figures from the country’s gaming commission.

Kathimerini reports that Greek bettors spent €5.9 billion on games of chance in 2014, up 9 percent from the previous year. It was the first increase since the depths of the global recession in 2009. Gamblers also took more risks last year, with the average bet rising 7.5 percent.

Of the total bets, €3.8 billion went to gaming firm OPAP and €500 million to Hellenic Lotteries, for 72 percent of the market. Casinos accounted for 27 percent, or €1.6 billion, down from €1.7 billion in 2013; and 1 percent, or €50 million went to horse racing, also down from 2013’s €65 million.

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JUNE 2015 www.ggbmagazine.com

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DATELINE USA june2015

Out With the Old… Riviera Closes, Genting’s Resorts World breaks ground

Ground was broken on Genting’s Resorts World Las Vegas (featuring Nevada Governor Brian Sandoval and Genting CEO KT Lim) last month, which is slated to begin opening in stages by mid-2018

i

t was an odd week in Las Vegas last month for the past and future of the city. On May 4, the Riviera closed for good. The property, purchased by the Las Vegas Convention and Visitors Authority for $182.5 million, will be taken down this summer to serve as a link between the Convention

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Center at the Strip. And the next day, ground was broken on Genting’s Resorts World Las Vegas.

The Riviera was, perhaps, the quintessential example of Old Vegas on the Strip. When the property opened on April 20, 1955, Liberace received $50,000 a week to wow audiences with his talent and showmanIndiana Governor Mike Pence

Indiana gaming bill becomes law without governor’s signature

I

ndiana Governor Mike Pence last month allowed HB 1540 to become law without signing it, which could help the state’s 11 casinos compete against the increasing number of gaming options in surrounding states, including thousands of video gaming terminals in Illinois and the threat of a potential Pokagon Band of Potawatomi Indians casino in South Bend.

House Speaker Brian Bosma said the sticking point in the bill never was moving riverboat casinos to land. “Coming onto land for the boats, we were all in consensus on that as not being an expansion, The Tropicana Las Vegas

including the governor, in the way it was done,” Bosma said.

Pence, however, had indicated he considered allowing live dealers at the state’s two racinos to be expanded gambling, which he would veto. As a result, the final version of the bill sent to Pence moves allowing live dealers to 2021, after Pence would leave office providing he wins a second term.

Meanwhile, Pence vetoed a bill that would have permitted online betting on horse races run at the two Indiana tracks.

Penn Reaches Strip Regional gaming company buys the Tropicana fter years of trying to find its way on to the Las Vegas Strip, it appears Penn National Gaming has finally made it happen.

Last month, the company announced the purchase of the Tropicana Las Vegas for a reasonable $360 million, which will go to shareholders, including private equity firm Onex Corp.

A

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Global Gaming Business JUNE 2015

ship. Joan Crawford welcomed guests inside.

Through the years, “The Riv,” as it is affectionately known, has had performers such as Elvis, George Burns, Milton Berle, Don Rickles, Dolly Parton… You name it. If they were big, they played there. Even Liza Minnelli graced the cover of the Versailles Theater menu.

Unfortunately, through the years, the Riviera hung on to its storied past, refused to give in to the changing times, and was given an offer they couldn‘t refuse. The Convention Center was in desperate need of two things—more space to accommodate additional conventions, and access for those people to get to the Strip. The Riviera was the perfect purchase, as it will help on both fronts.

Just across the street and a day after the Riviera was shuttered, Genting’s Resorts World Las Vegas broke ground—although “breaking ground” was a bit of a misnomer since large swaths of the development are already under way, courtesy of Boyd Gaming, which had hoped to build its penultimate development, Echelon, on the site of the old Stardust. But the national recession intervened and two years ago, Boyd sold the site to Genting, which will use much of the infrastructure already built for Resorts World.

The groundbreaking was a gathering of Nevada’s rich and powerful, starting with Governor Brian Sandoval, orchestrated by Vegas’ man behind the scenes, Sig Rogich, and including Steve Wynn and other hotel bosses. Resorts World is the first Nevada development by Genting, which owns the most lucrative casino in the U.S. with Resorts World New York at Aqueduct Raceway.

Genting Chairman KT Lim gave a lengthy description of the Las Vegas property, explaining why they chose a Chinese theme (it will attract Americans, as well as international visitors). Included in the project will be a replica of the Great Wall of China, the first 20th Century Fox theme park and other attractions. Most doubted that a “possible” panda exhibit would be completed due to the complication of “panda politics.”

“To have the ability to experience the authentic history, culture and cuisine of China in Las Vegas, within a few hours’ flight from all U.S. cities, will provide yet another compelling reason to visit or to revisit Las Vegas,” Lim said. “And it will not be just old China that visitors will see, but also the vibrant new China—a true representation of the importance of this ongoing and ever-growing relationship across the Pacific in this century.”

Lim said the project will open in phases starting in mid-2018.

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DATELINE TRIBAL june2015

Interior Secretary Sally Jewell is resisting efforts to slow process down

InterIor InItIatIve

Federal recognition process nearly a reality

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ast month, the U.S. Bureau of Indian Affairs announced that its new regulations for recognizing tribes are nearly complete.

The regulations have been forwarded to the Office of Management and Budget’s Office of Information and Regulatory Affairs for its final review.

According to BIA spokesman Nedra Darling, “This rule is the culmination of a multi-year effort by the department to reform the federal government’s tribal recognition process by making that process more transparent, efficient, timely and flexible, while at the same time maintaining the integrity of the acknowledgment process.”

Although the new rules are almost certain to go into effect soon, that isn’t stopping the House Subcommittee on Indian, Insular and Alaska Native Affairs from holding hearings on them.

The House Committee on Natural Resources has also scheduled hearings under the topic: “The Obama Administration’s Part 83 Revisions and How They May Allow the Interior Department to Create Tribes, Not Recognize Them.”

Without a state compact, the Seminoles will be forced to shut down all card games except for poker at the end of July at all its Florida casinos, including Hard Rock Hollywood

The BIA developed the rules to address criticism that federal recognition was too slow and difficult.

Some tribes have taken a dozen years or more to be recognized. The paperwork involved has also increased.

Kevin Washburn, who heads the Bureau of Indian Affairs, told lawmakers in March, “We want it to be a rigorous review, and that is not something that’s negotiable. We aren’t going to make it less rigorous.”

However, some in the committee clearly feel that the purpose of the new regulations is to “create” new tribes.

Opponents to the new regulations are very determined in Connecticut, where tribes claiming federal status have made large land claims and say they want to build casinos. They include the Eastern Pequot Tribal Nation of North Stonington, the Golden Hill Paugussett Nation of Bridgeport and the Schaghticoke Tribal Nation of Kent. The tribes were previously denied recognition, but would be allowed to apply again under the new rules.

Arizona Showdown Governor threatens Glendale casino; Senators pursue bill

E

Dead Stop

Seminoles pursue compact negotiations after legislature abruptly adjourns

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fter adjourning for the year abruptly, the Florida legislature left behind Senate Bill 7088, which would have extended the state’s 2010 compact with the Seminole Tribe of Florida another year. The pact, set to expire July 31, gave the tribe exclusive rights to offer blackjack, chemin de fer and baccarat at five of its seven casinos, in exchange for $1 billion over five years.

The unexpected end of the session was due to an impasse over $4 billion in health-care funding, including an expansion of Medicaid the Senate supports and the House strongly opposes. Legislative leaders had been in negotiations with tribal lawyers and had “made some progress,” said state Senator Rob Bradley, one of the Senate negotiators. In a statement, the Seminoles said, “The tribe remains hopeful that negotiations can commence soon to reach an agreement that will result in favorable action during a special session of the Florida legislature.”

Without the compact, the Seminole casinos will keep slots and poker but stop offering the three card games.

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Global Gaming Business JUNE 2015

ven though Arizona’s Tohono O’Odham Nation has broken ground on a casino in Glendale, Governor Doug Ducey declared that if it opens as Arizona Governor planned in December the state may decline to certify Doug Ducey its slot machines.

He is basing his decision on the claim that the tribe deceived the public about its intentions when voters approved of gaming compacts in 2002. The public narrowly approved the compacts because they were told that no more than seven casinos would be built in the valley that includes Phoenix.

In exchange for those restrictions voters granted tribes a monopoly on offering gaming. The governor and other opponents claim that then-Chairman Ned Norris planned to violate that principle even as voters were given the assurance that gaming would be limited.

Meanwhile, the U.S. Senate Committee on Indian Affairs moved forward on a bill that would prevent the Tohono O’odhams from operating the casino. The bill, called the Keep the Promise Act, is being carried by the state’s two U.S. senators, John McCain and Jeff Flake. An identical bill is also moving forward in the House, where the House Natural Resources Committee approved it in March.

It seeks to prevent the Tohonos from operating the $400 million West Valley Resort on land the Bureau of Indian Affairs put into trust almost a year ago. The bill would prevent its operation until 2027, when the current tribal-state gaming compact runs out.

The casino is also opposed by two tribes whose market would be pierced by the rival operation: the Gila River Indian Community and the Salt River Pima-Maricopa Indian Community. All have been unsuccessful in challenging the casino in federal court.

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DATELINE GLOBAL june2015

Baha Mar Blast

Resort CEO lambasts Bahamas government, Chinese contractor

F

ideal support and a less than bestaced with a delayed opening of in-class business climate, which are the $3.5 billion mega-resort critical to the Bahamas’ success.

Baha Mar in Nassau, Bahamas, Unfortunately, a number of promCEO Sarkis Izmirlian is blaming ises important to the future of the the Bahamas government and his Bahamas, over the past 12 years, Chinese construction contractor, have not come to fruition. the state-owned China Construc“All of us must be concerned tion America Bahamas Ltd. (CCA). about the unfulfilled promise of Speaking at the second annual improvement in the reliable supply Bahamas Chamber of Commerce of power and the reduced costs of and Employers Confederation Conpower. We all should be concerned clave, Izmirlian blasted the Baabout the gap in necessary educahamian government and the construction company for failing to Baha Mar CEO Sarkis Izmirlian tion and training programs that would allow workers to be better deliver on promises, saying the resort’s prepared for jobs, and we all should be concerned opening—first targeted for December 2014, then that growth incentive commitments are not viewed moved to May and now delayed indefinitely—was as reliable.” delayed because of a lack of support from the govHe also tore into the China state contractor for ernment in providing education and sluggish failing to meet its deadlines. “As you know, we have progress in the construction process. had to delay Baha Mar’s opening, and as a result the “It is important to realize how we got here and people of the Bahamas have not yet felt the full ecolearn from it,” Izmirlian said. “As Baha Mar has nomic benefit of Baha Mar,” he said. “This will hapbeen developed, we have had to do so with less than

One Up, One Down

Not For Us

Mexican state bans casinos

Guanajuato Governor Miguel Márquez Márquez

E

ven though progress is being made at the federal level to approve the full legalization of casino gaming, one Mexican state is pushing to ban the industry. Opinions differ on whether that can happen.

Governor Miguel Márquez Márquez of the Mexican state of Guanajuato has pushed through a measure to ban casinos and

12

pen, but before it can our general contractor needs to meet its assurances so we are in a position to properly open this world-class destination resort.

“Indeed, this amazing property is supposed to be the symbol of international cooperation. It is now up to our general contractor to decide how this next chapter will be written. We sincerely hope they understand this and are realizing the discontent, and concerns, about their performance from numerous quarters including us as owners, the government of the Bahamas, and the people of the Bahamas.”

Izmirlian reiterated his faith in the project and in the Bahamas while lamenting the current status of Baha Mar. “I continue to strongly believe that the Bahamas can successfully compete with the best tourism destinations in the world, and Baha Mar will prove that,” he said. “But Baha Mar in and of itself is not the Bahamas and cannot solve all the ills of this country.

“I can assure you this: There are not that many Sarkis Izmirlians or Sol Kerzners out there who would be willing to invest in the Bahamas as we have.”

bailes de mesa (table dances) in the region. Márquez, of the National Action Party, contends that such businesses can be used to launder money and also are responsible for compulsive gambling.

Congressman Adrián Camacho Trejo Luna, a member of Mexican President Enrique Peña Nieto’s PRI party, says the initiative is unconstitutional because it “encroaches on municipal autonomy.” The federal constitution “clearly stipulates that it’s the role of the Congress of the Union to legislate in matters of gambling and betting games,” he added.

Global Gaming Business JUNE 2015

Queensland scraps ASF resort, allows Fung to proceed he future of the huge integrated resort Former ASF cruise ship/casino plan rejected developments in Queensland, Australia, was clarified last month when lawmakers rejected one bid and allowed another to proceed.

The Queensland legislature agreed with environmental groups that the development of a mammoth cruise-ship terminal at a planned Gold Coast casino posed too great a risk to the natural area. They have shut down the plan by Chinese-backed ASF Consortium to go forth with the $7 billion-plus project.

“The Gold Coast and Queensland need the 20,000 jobs this project will create,” the company said in response to the news. “ASF Consortium wants to work with the Queensland government to make this happen to ensure the Gold Coast remains the international tourism capital of Australia well into the future.”

Meanwhile, Hong Kong billionaire Tony Fung’s Aquis Great Barrier Reef Resort north of Cairns has won environmental approval from the federal government.

“The completion of the environmental approvals and planning assessment means that the only outstanding item to be completed is the casino agreement with the state government, which we hope to achieve in a timely manner,” said Aquis project director Pat Flanagan.

Aquis projects that its new resort which will have 4,000 hotel rooms, an aquarium and other attractions as well as a casino will create 10,000 new jobs and generate up to $10.2 billion when it is complete.

T

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NUTSHELL At a United Nations conference on crime in Qatar, British gaming expert Patrick Jay said the worldwide sports betting market is worth up to $3 trillion, but most of the money is made illegally. According to Agence France Presse, around 65 percent of bets are placed on football, while tennis and cricket are responsible for 12 percent each. Asians are the biggest gamblers, Jay said at the U.N. Congress on Crime Prevention and Criminal Justice in Doha, Qatar’s capital city. He added that the most conservative estimate for global sports betting is $1 trillion.

Elaine Wynn’s fight to remain on the board of the company she co-founded, Wynn Resorts, is over.

Last month, the company announced that the two candidates nominated by the board were elected by a wide margin. “While I am certainly disappointed by the result of today’s vote, I am hopeful that I have once again served as an agent for change and improvement for this company, which I love so deeply,” Elaine Wynn said in a statement.

The former wife of the chairman, Steve Wynn, was criticized by the board on several points, including conflicts of interest and being disruptive. The Las Vegas Hard Rock Hotel & Casino experienced a compromise of sensitive data April 30. The breach was limited to credit and debit card transactions occurring between September 3, 2014 and April 2, and only at restaurant, bar and retail locations inside the property. The exact nature of the breach and responsible party were not disclosed. Penn National Gaming is planning a two-phase redevelopment of the Tropicana, according to word on Wall Street. The first phase will consist of $20 million in facility improvements. The second phase will add retail space, restaurants, bars and lounges, and possibly additional hotel rooms. New Jersey Senate President Steve Sweeney says a vote to allow casinos in northern New Jersey may have to wait until 2016 during the next presidential election. Sweeney told the Philadelphia Inquirer that it may be better to wait rather than put the measure up for a vote this year— which is an off-year election with no major race in the state to turn out voters.

History repeated it-

self last month when the New Hampshire House voted to defeat a bill that would have allowed casino gaming in the state by a vote of 208-156.

The House, as it has done every other time, voted to kill the bill. The large margin of defeat was surprising to some. “I don’t think anyone who was opposed to this bill ever suspected that it was going to be that large of margin,” Rep. David Hess commented. Rep. Eric Estevez, a supporter, predicted that the “no” voters would have to explain to their constituents why they opposed a bill that would have created jobs. Scientific Games Corporation announced it has signed an extension to its instant products contract with the Arizona Lottery.

Under the extension agreement, Scientific Games will continue to provide instant games and services to the lottery through January 14, 2016. “We have worked with Scientific Games since 1981 and look forward to continuing that partnership,” said Tony Bouie, executive director of the Arizona Lottery.

“Their products, services and strategic recommendations have helped the Arizona Lottery grow year after year. This has returned important dollars to support economic and business development, education, environment, and public health and welfare in our state.”

Pennsylvania Governor Tom Wolf has released information on how the $780 million in taxes on slot revenue from the state’s casinos will benefit average citizens. According to Wolf, the state’s cut of slot revenues will finance property tax reductions of about $200 per household this year. Homeowners in Pennsylvania’s 66 counties will see the money subtracted from school property tax bills they receive this summer. The Mohegan Sun casino in Connecticut is one of “America’s Best Employers,” according to Forbes magazine. Twelfth best in the Travel & Leisure category, to be exact. That makes it comparable to Disney and Marriott. Mohegan Tribal Gaming Authority CEO Bobby Soper called the designation “a huge honor for us and a testament to our dedicated team members who work tirelessly to make our resorts the best in the industry.”

CALENDAR June 10-11: Indian Country Online, Pala Casino Spa and Resort, Pala, California. Produced by Pechanga.net and Spectrum Gaming Group.

For more information, visit IndianCountryOnline.com.

June 15-18: NAGRA Annual Conference 2015, The Inverness Hotel & Conference Center, Englewood, Colorado. Produced by the North American Gaming Regulators Association.

For more information, visit NAGRA.com.

June 16-18: Canadian Gaming Summit, Caesars Windsor, Windsor, Ontario. Produced by the Canadian Gaming Association. For more information, visit CanadianGamingSummit.com.

June 23-26: iGaming Super Show 2015, Amsterdam RAI, Europaplein, Amsterdam, Netherlands. Produced by iGaming Business. For more information, visit iGamingSuperShow.com.

August 11-13: Australasian Gaming Expo, Sydney Convention and Exhibition Centre. Produced by the Gaming Technologies Association. For more information, visit austgamingexpo.com.

September 29-October 1: Global Gaming Expo (G2E), Sands Expo Center, Las Vegas.

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

October 5-8: North American Association of State & Provincial Lotteries (NASPL) 2015 Annual Conference, Hilton Anatole, Dallas, Texas.

Produced by NASPL. For more information, visit NASPL.org.

“They

Said It”

“Kirk Kerkorian originally designed this hotel, and we’re going back to that design.

Kirk Kerkorian opened this hotel, and what he did was genius.”

—Mark Waltrip, chief operating officer of Westgate Resorts, on the transformation of the Westgate Las Vegas property—opened as the International and the site of Elvis Presley’s comeback concerts beginning in 1969—around a massive Elvis revival

“Sports is a marketplace, and what the marketplace is telling us is that fans want to engage in wagering.”

—Adam Silver, NBA commissioner, again supporting a federal sports betting law during a meeting with a group of Associated Press sports editors

“In Macau, when a problem gambler has used up all of his available funds, he can still get more loans immediately. But no one can gamble forever, whether they’re a millionaire or a billionaire.”

—Zeng Zhonglu, gaming expert, Macau Polytechnic Institute, who recently said the city’s decline was caused by out-of-control junket operations

“This is about allowing an industry to remain competitive. It’s not a last-ditch effort; it’s a smart move.”

—Kevin P. Brown, chairman of the Mohegan Tribal Council, speaking on the need to approve more casinos in Connecticut to protect existing tribal casinos

“They’re certainly going to go after us with a bull’s-eye on our backs. It’s really about jobs and the economic impact for the entire state.”

—Felix Rappaport, chief executive officer of Foxwoods Resort Casino, on the coming competition in Massachusetts

“If the Communist Party and its leadership are dedicated to a peaceful, growing and harmonious China, then it’s hard to believe that they would do anything to sabotage one of their key possessions, Macau, going forward.”

—Steve Wynn, chairman and CEO, Wynn Resorts, on the ongoing decline of Macau’s gaming industry

“He was one of the least competent and potentially destructive executives I had in over 50 companies in my 69-year business career.”

—Las Vegas Sands Chairman Sheldon Adelson, testifying on why he fired former Sands China President Steve Jacobs, in a hearing for Jacobs’ wrongful termination lawsuit

JUNE 2015 www.ggbmagazine.com

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AMERICAN GAMING ASSOCIATION

Time to Shut Down Illegal Gambling Let’s highlight benefits of the legal, regulated gaming industry

By Geoff Freeman, President & CEO, American Gaming Association

F

or decades, long before legal, regulated casinos contributed billions of dollars in tax revenues and created tens of thousands of jobs and generated billions of dollars to the local economy, illegal gambling operations ran rampant in Biloxi, Mississippi. So it was a fitting locale to speak before attorneys general—the top law enforcement officers in each state—from around the country to launch a new initiative to crack down on illegal gambling in all 50 states.

Attorneys general have no shortage of law enforcement priorities demanding their time and stretching their already-overstretched resources.

Yet we made the case for why illegal gambling— an underground industry that fuels criminal networks and large criminal enterprises that profoundly harm states, schools and consumers—should be right at the top of the list.

In stark contrast to the companies the American Gaming Association proudly represents, which are some of the most heavily regulated companies in America, they are neither licensed nor subject to criminal background checks; and they prey on the vulnerable, including children.

And they serve as a breeding ground for a host of violent criminal activities, such as human and drug trafficking, money laundering schemes and other large criminal enterprises.

Illegal gambling comes in four major forms.

One is illegal sports betting. Conservatively, illegal sports betting in the U.S. is a $150 billion enterprise—but some estimates put it as high $500 billion. Illegal operators are free to cheat and skim, pay no taxes and their proceeds can fund violence.

This market thrives in the shadows. During the Super Bowl, about $120 million was wagered legally in Nevada sports books. We estimate that $3.8 billion was wagered illegally.

Another form of illegal gambling is blackmarket machines. Slots, video poker and blackjack are commonly found in bars and taverns, managed by the bartender, and presented with

14

Global Gaming Business JUNE 2015

the disclaimer, “For amusement only.” Who verifies the fairness of these black-market machines? Who owns them? Where does the money go? In a recent New York Times article, it was estimated that up to 150,000 of these illegal machines proliferate across an underground $1.9 billion industry in Texas.

A third form of illegal gambling is internet sweepstakes cafes (ISCs), which can be found in storefronts, gas stations and convenience stores in more than a dozen states. These modest operations together represent a criminal Fortune 500. As many as 5,000 storefronts rake in an estimated $10 billion a year. In Ohio, a Cuyahoga County prosecutor reported that a single ISC vendor earned almost $50 million in proceeds.

They take advantage of state sweepstakes laws by purporting to sell unwanted products, such as internet time or long-distance telephone minutes.

The customer receives a supposed bonus of “entries” in the sweepstakes to be redeemed in online games indistinguishable from gambling, games such as “Pot of Gold Poker.” ISCs are flourishing, even in Utah, the most anti-gambling state in the nation.

Finally, there’s illegal online websites that rake in $4 billion a year from Americans. These websites—operating out of Central America or the Caribbean—are easy to mistake for a legal operation and they look legitimate, with a sleek, corporate presentation. Yet if a customer finds his or her online account cleaned out, there is no one he or she can turn to.

The public needs to be warned about illegal gambling. They need to be protected and illegal operations need to be shut down. Thanks to strong action of attorneys general, district attorneys, sheriffs and police chiefs around the country, we are seeing progress.

Our large, comprehensive and forceful public initiative, called “Stop Illegal Gambling—Play It Safe,” is a full-fledged effort to partner with law enforcement and public officials to protect consumers, communities and the vital public services that depend on tax revenue. Through the initiative,

we will launch groundbreaking research to dig into the roots of this problem, identify clear criminal patterns, and develop actionable intelligence to attack the central hubs of illegal gambling.

We will also create cutting-edge online tools, including a comprehensive, central repository for illegal gambling resources—a one-stop shop for law enforcement and the public, including ways to refer tips to law enforcement.

Additionally, we’re coalescing experts on a new advisory board that will guide our strategy.

The board will be composed of subject-matter experts with experience in every level of law enforcement.

Finally, we’ve already begun vigorously advocating for change. No organization will be more outspoken on the illegal gambling problem than the AGA. We’re using our position in the industry to call attention to the issue and to push lawmakers to dedicate the resources needed to take down illegal gambling operations.

The industry and law enforcement must work together to solve this problem that is anything but a victimless crime. People across the country have lost their life savings from being ripped off by an illegal gambling operation and being left with no recourse. Communities are being wrecked by drug trafficking. Children are getting caught up in human trafficking rings. Illegal gambling operators are the authors of these heartbreaking stories.

Gaming has grown, matured and prospered as result of its lawful, regulated status. Legal gaming now supports more than 1.7 million American jobs and generates $38 billion in tax revenues to local, state and federal governments.

The illegal gambling that is rampant across our country is a completely different story.

Through our “Stop Illegal Gambling—Play it Safe” initiative, we will take steps toward shutting down shady operators and highlighting the benefits of legal, regulated gaming in communities across the country.

速

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FANTINI’S FINANCE

Perception is Reality It’s Bizzaro World where regional casinos prosper and Macau struggles

F

irst-quarter earnings reports are out, and they present two divergent worlds—recovering regional gaming markets in the United States, and the reality of the impact of a declining Macau.

In a way, it’s a poetic-justice kind of irony, given how U.S. regional gaming markets have struggled during the same years that Macau surged to become the world’s biggest gaming market. Regional companies reporting better than expected earnings as of this writing were Penn National, Pinnacle, Boyd and Monarch Casino.

Their stories were the same—cost efficiencies combining with rising revenues among all tiers of players creating profit growth greater than revenue growth.

The big question was how much of the improvement was attributable to better weather this year and how much to recovering consumers. The answer is that we don’t know, though improved business continued into the early part of the second quarter when weather comparisons made negligible difference. That offers hope that the recovery is sustainable.

Macau operators Las Vegas Sands and Wynn Resorts also had similar tales: the disappearance of VIP players from Macau devastated profits.

Beyond, their founder-CEOs took decidedly different views.

Feisty LVS CEO Sheldon Adelson talked of his commitment to investing even more money in the city. The company is already asking to build 2,500 more hotel rooms, independent of gaming, he said in remarks that seemed as much aimed at persuading Macau officials of LVS’ worthiness as to reassure investors.

Steve Wynn, on the other hand, painted a bleak picture of Macau in strong, even harsh language. He also called the recovery of Las Vegas exaggerated. Wynn’s strong words were followed by action as the company slashed its dividend by two thirds.

LVS is maintaining its dividend. Return of capital is a prime Adelson theme, illustrated by

16

Global Gaming Business JUNE 2015

By Frank Fantini

his now-famous cry “Yeah, dividends.” However, LVS has suspended its program to buy back a minimum of $75 million a month in stock. It bought no shares in the first quarter and says it will be opportunistic in the future.

The reaction to Macau earnings was a violent sell-off in the stocks, especially WYNN, which fell more than 16 percent on the day after earnings were released to $108 a share, less than half of its 52-week high of $222.

The sell-off created an irony for LVS. It was buying its stock when shares were in the $70s and $80s, but is not buying them now in the $50s.

That, of course, is the risk of stock repurchasing.

One thing that Adelson and Wynn have in common is prudently resisting the call of investors to borrow money to buy shares or pay dividends.

Our perspective, as readers of this space know, is that we had long warned that Macau is a high-risk market thanks to the antipathy towards gaming of the mainland Communist China government.

However, the steep sell-off of Macau casino stocks had the whiff of capitulation about it, which suggests the worst might be over.

Indeed, gaming revenues appear to have leveled out in recent months even though they are still well below last year.

And there are signs that attitudes of Macau government officials might be turning.

Their callousness toward casino woes appears to have been replaced by concern. We now see reports about the government, which once ran surpluses it couldn’t reasonably spend, talking about the possibly of having to cut its budget.

Talk of capping mainland Chinese visitation appears to have faded. And why not? Current visitation is running well below the floated annual 21 million-visitor cap.

Investors who previously saw nothing but clear skies ahead now see only gloom, another indication of a possible bottom for Macau stocks.

Back in the U.S., the improvement among regional operators also has company-specific elements that bode well.

Penn National has its new racinos in Ohio, and soon will own a several-year monopoly on gaming

in Massachusetts when its slot casino opens June 24 in Plainridge.

Pinnacle is successfully driving revenue at the Ameristar properties it bought 20 months ago and is enjoying the grow-the-market effect of Golden Nugget opening adjacent to L’Auberge in Lake Charles, Louisiana.

PNK stock is also benefiting by its plan to spin off real estate into a REIT, and the offer by Gaming and Leisure Properties to be its REIT vehicle. Yet another strength for PNK is its free cash flow and dedication to using it to pay down debt.

Monarch is benefiting from growth in Black Hawk and Reno, but the big story is the transformation of Monarch Casino in Black Hawk into a destination resort. That long-discussed project is drawing near.

Its impact can be considerable. Chad Beynon of Macquarie calculates that a 13 percent to 14 percent EBITDA return on the Monarch Black Hawk expansion translates into $3.50 a share for a stock trading at just 6.9 times estimated 2016 EBITDA. Boyd has been cutting costs while slowly transitioning to greater non-gaming amenities to make its casinos more entertainment destinations.

Thus, investors are presented with situations both in regional markets and in Macau that suggest the most prudent action is to wait.

In another three months, we’ll know if Macau gaming revenues have leveled off and if the government’s tightening of the screws is finally over, or has even reversed.

In the U.S., we’ll know whether improvements in regional markets are being sustained, and whether they bode well for the remainder of the year.

Making bets on a Macau bottom and a U.S. recovery might be risky now, but those bets also offer more rewards today than they will when everyone knows the answers.

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

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Urban Alliances The unique challenges of building casinos in a city

By Andrew Klebanow

C

asinos located in cities have long had an uneasy alliance with their host communities.

Local municipalities have enjoyed the tax revenues and jobs that casinos brought and civic leaders have recognized the charitable contributions casino leadership have made to their communities, as well as their greater economic contributions. Yet, cities have long treated casinos with a certain degree of disdain, relegating them to locations that would be unappealing to any hotel developer.

At the same time, many city governments have showered developers of sports venues, hotels and convention centers with a wealth of benefits including tax abatements, generous land leases, municipal bond funding and sales tax rebates in the hope that those developments would somehow lead to a revitalization of their urban cores.

Since the passage of the Casino Control Act in 1976, which legalized casino gaming in Atlantic City, New Jersey, casinos have been narrowly viewed as a tool for urban redevelopment, providing tax revenues to state and local governments and jobs to its citizens.

Their success in providing those benefits cannot be disputed. Collectively, the casinos in Atlantic City, the riverboat and barge casinos in the Midwest and southeast United States, Indian casinos and land-based commercial casinos in a number of U.S. cities, as well as those on the Macau Peninsula and Singapore, have contributed billions of dollars to government coffers and created hundreds of thousands of jobs. However, their success as a tool for stimulating commercial activity within the neighborhoods that they are located has produced less dramatic results.

Much has been written about casinos, including their social and economic impact. Despite what some critics may say, casinos are rather popular places— as evidenced by the number of places around the world where one can go to enjoy casino gambling. Casinos also attract lots of people. The Venetian in Macau draws over 80,000 people a day and on peak holidays can attract 100,000 or more visitors. In the United States it is not unusual for a casino operating in a regional market to draw 20,000 people a day, yet despite this fact, government policymakers and local municipalities tend to locate casinos in the most isolated regions of their cities.

Former industrial sites along the city waterfront, green-field parcels on the edges of the city or, in the case of Sands Bethlehem, an abandoned steel mill, have traditionally served as places that seemed appropriate to locate casinos.

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Global Gaming Business JUNE 2015

Atlantic City was the first jurisdiction to use gaming as a “unique tool for urban redevelopment”

Despite these isolated locations, casinos have succeeded in providing the tax revenue and jobs that so many of those communities desperately needed.

Nevertheless, city governments have collectively missed another opportunity: to take advantage of those thousands of daily visitors and allow them to spend their money in the shops and restaurants of their central business districts.

The notion of using casinos to drive foot traffic back to the urban core eluded many city planners and those in government tasked with determining where to locate proposed casinos. Casino developers were allotted plots of land far away from cities’ traditional central business districts or entertainment zones.

To many community leaders, casinos seemed incompatible with other entertainment activities such as sporting events, dining and shopping. And so, casinos were relegated to less attractive land parcels where they could conduct their business activities, provide the jobs and tax revenues—all out of sight from the rest of the community. This strategy, repeated in cities throughout the United States, ignored the fact that casinos were capable of delivering thousands of visitors on a daily basis, and with them, the ability to stimulate other commercial enterprises.

The Island Casino The vast majority of casino development in North American cities, and more recently on the Cotai Strip in Macau, can be best described as island casino development. This term refers to casinos that are built as self-contained developments, with all non-gaming amenities located within the casino complex.

Island casinos integrate gaming, restaurants, lodging, conference and meeting space, retail and parking in an integrated development. They are essentially

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The lack of space in Macau’s Peninsula region caused the development in Cotai

Atlantic City

Galaxy Macau

islands within a larger community. While they contribute to the greater community in terms of taxes paid, jobs created and goods and services purchased from local vendors, they are physically separated from the surrounding community.

Galaxy Macau is an excellent example of an island casino. Phase I of the master-planned integrated resort included three hotel brands with 2,200 keys, more than 30 restaurants and bars, and a casino with 600 tables and 1,500 electronic gaming devices. The casino-resort is an imposing structure, surrounded by a perimeter of lush landscaping and walkways. Directly across the street from the property sits the island community of Taipa. The casino is separated from the island’s street grid by a busy boulevard and a light-rail transit system that is currently under construction.

The vast majority of patrons arrive by bus, taxi or private vehicle. A visitor seeking to leave the casino on foot can do so, but the walk can be imposing. Pedestrians must first navigate their way to the street, and then find a pedestrian crosswalk where it is safe enough to cross. This is no easy feat.

This is unfortunate, since the streets just across from the casino-resort are replete with restaurants, shops, coffee houses, nightlife and architecture built during Portuguese colonial rule. It is an attractive and appealing neighborhood that would be inviting to tourists, but is currently known mainly to its residents and the occasional visitor.

The planners of Galaxy Macau cannot be faulted for their design. Their task was to build an attractive, themed, integrated casino-resort with a wide variety of amenities to service their guests. They succeeded in building a magnificent property. They were never asked, nor did they probably consider, linking the resort to the surrounding neighborhood. It was designed as an island in the greater urban landscape.

Beginning in 1976 with the legalization of gaming in Atlantic City, and again in the early 1990s with the introduction of riverboat and barge casinos, state governments restricted where casinos could be located and defined their physical forms.

In Atlantic City, casinos were restricted to two finite zones: along the Boardwalk and in an area known as the Marina District. Further, the New Jersey Casino Control Act of 1976 detailed the specific gaming and nongaming amenities that had to be included in any property applying for a gaming license. These included the number of hotel rooms, meeting space and other amenities that had to be included within the property. Regulations also defined the various access points into the casino so minors could be denied access while allowing their movement to non-gaming areas of the property.

The net result, in the case of the Boardwalk casinos, was that pedestrianfriendly entrances were located along the Boardwalk on the east side of those properties; porte cocheres were located along the north and south sides of these buildings where visitors could drop off their cars, while the western sides of these developments were occupied by parking garages and loading docks.

This functional design had the unintentional effect of restricting pedestrian traffic from the nearby street grid to the west, cutting off those neighborhoods from the casinos, which in turn led to their further economic decay. The Boardwalk casinos of Atlantic City failed to stimulate urban regeneration in the adjacent neighborhood, and in fact, contributed to their further isolation from the Boardwalk tourism zone in large part because of their physical designs.

Riverboat Casinos Beginning in the 1990s, state governments in Iowa, Illinois, Indiana, Mississippi, Missouri and Louisiana legalized gaming on riverboats and barges.

Iowa, Indiana, Illinois, Missouri and Louisiana further required that gaming activities be conducted only while riverboats cruised.

This required the development of dockside mooring areas, boarding pavilions, parking lots and eventually more elaborate non-gaming amenities to service patrons prior to and after their gaming cruises.

The specific sites on which many of these casinos were located were selected not by some grand urban planning scheme but by more practical concerns: the ability for riverboats to navigate on certain portions of the river as well as the availability of a sufficient amount of riverside land on which to build parking lots and boarding pavilions.

Many sites that were initially designated for casino development had JUNE 2015 www.ggbmagazine.com

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Eldorado Shreveport

previously served as industrial sites, precisely because they afforded those industries access to the river for shipping and sufficient acreage for industrial production at affordable prices. The net results were that a vast majority of these casino sites were located far from other forms of commercial activity, and as such, could not be integrated into the urban fabric. Casinos that were restricted to riverboat gaming were built as stand-alone operations, and their primary contributions to the local community came in the form of tax revenue and jobs.

Shreveport, Louisiana The development of the two casinos in Shreveport, Louisiana is a notable exception to this pattern of riverboat casino development, and offers an interesting case study in the evolution of urban gaming.

The first casino to open was Harrah’s Shreveport, approximately one half mile north of Interstate 20. Originally comprised of a riverboat and boarding pavilion, Harrah’s eventually added a hotel tower, complete with restaurants, meeting space and a multi-story parking garage. The property was eventually sold to Boyd Gaming and rebranded as Sam’s Town Hotel & Casino.

Hollywood Casino Shreveport (now called Eldorado Shreveport) was built just south of Harrah’s. The developer built a hotel tower, dining pavilion and parking garage in a single phase. Today, both properties have similar site footprints and physical relationships to the central business district, two blocks away.

The casino barges flank the river. Directly behind each casino sits a hotel tower. Across the street and connected by overhead walkways are multi-story parking garages. Behind the garages is the central business district. Patrons enter the casinos from their respective garages through enclosed walkways. Given that the casinos are located one block apart, there is some pedestrian traffic between the two casinos; however, the two parking garages act as a wall separating the casinos from the central business district and keep pedestrians off the street grid.

The Shreveport central business district is a traditional downtown office center with an 8 a.m.-to-5 p.m. traffic pattern. For the most part, it is devoid of commercial activity in the evening. Nonetheless, a modest nightlife district, underneath the bridge that runs to the south of the Eldorado, has emerged over the last 10 years.

While city planners no doubt envisioned casinos generating increased economic, commercial and tourism activity in the adjacent central business district, there was no formal planning effort to link the casinos to downtown. The location of the garages effectively blocked pedestrian movement from the casinos into downtown and the overhead walkways further segregated pedestrians from the street grid.

The net result is a gaming district that is separate and segregated from the central business district.

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Global Gaming Business JUNE 2015

Greektown Casino

Recent Trends Greektown Casino is located in the historic Greektown entertainment district in Detroit, Michigan. The property, an adaptive re-use of an existing building structure, was originally conceived as a true urban casino—one that was integrated into the surrounding entertainment and dining district to act as an anchor attraction. The property has always performed at levels below its two other primary competitors, and its financial performance maligned its reputation as a successful urban casino project.

The property has some inherent deficiencies. Unlike its two primary competitors, it does not offer convenient highway access. Arriving patrons must navigate through the downtown street grid to reach the property. The casino did not originally open with convenient and adjacent garage parking, forcing patrons to pay to park in nearby lots or private garages, while its competitors offered free garage parking with direct access to the casino. This turned out to be a critical success factor in a city that has long been riddled with high levels of street crime.

As an adaptive re-use the casino was inherently inefficient, with gaming divided among multiple levels. It also was limited in the number of non-gaming amenities. While the original operators envisioned marketing relationships with surrounding restaurants and retail outlets, licensing those businesses proved problematic.

Michigan gaming regulations required strict background checks of all vendors that do business with casinos, and some of those businesses could not obtain licensing or refused to submit to the onerous investigations demanded by the state’s gaming regulators. The casino has also gone through a succession of owners, with Rock Gaming its current owner. With the addition of a hotel and parking structure in 2009, the casino now serves as an anchor attraction to the entertainment district.

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It was this design and consideration of the needs of the surrounding neighborhood that allowed MGM Resorts to receive approval from the local community, and with it, a license to operate one of three resort casinos in the state.

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To win one of the three coveted gaming licenses in Massachusetts, a developer had to first receive approval from the local population through a referendum. For the first time, casino developers had to consider how they could design their properties to not only be efficient but also be an attractive addition to the host community, and those residents had an opportunity to decide whether to allow a casino into their community.

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MGM Springfield received voter approval and subsequently a gaming license for a new kind of urban casino, integrated into the fabric of an existing neighborhood. The site for the casino-resort, bounded by an interstate highway to the west and a commercial zone to the east, had fallen into a state of disrepair after a 2011 tornado destroyed a number of buildings. Rather than build an island in the middle of the city, MGM proposed a design that allowed the casino to connect to the street grid and encouraged the free flow of pedestrians and tourists into and out of the property.

It will include restaurants that will face the main boulevard and bring what is a massive project down to street-level scale. It was this design and consideration of the needs of the surrounding neighborhood that allowed MGM Resorts to receive approval from the local community, and with it, a license to operate one of three resort casinos in the state.

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Downtown Breakdown In many ways, a casino is like any other large commercial enterprise that attracts thousands of people a day. An arena, ballpark or convention center all attract and accommodate large amounts of people. A portion of those visitors in turn spill into the surrounding commercial zones and spend money in restaurants and stores.

What sets a casino apart is that it attracts people every day of the year, rather than on game days or when a convention is scheduled.

Properly planned and executed, a casino can have a greater, positive impact than other forms of urban regeneration at far less cost to the city.

No other reason better explains why casinos built in cities have not lived up to their potential than government’s mission versus the casino developer’s mission. For the operator, the mission is to enhance wealth for its shareholders. For local government, the mission has always been about job creation and tax generation. Those have always been the fundamental missions of casino development.

In addition to profitability, taxes and jobs, an urban casino’s mission must also be to enhance the quality of life for those businesses and people who live near the casino, and to act as a catalyst for growth and urban regeneration.

Once these new missions are defined, the casino developer and local government can collaborate to achieve them.

Andrew Klebanow is managing partner for Global Market Advisors. This article was derived from a white paper of the same title. It can be viewed and downloaded at www.globalmarketadvisors.com/library.

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12

Twelve Critical Success Factors in Urban Casino Development

Properly planned and executed, a casino can have a greater positive impact than other forms of urban regeneration. At the very least, an urban casino should include the following critical success factors.

1.

Walkability to Compelling, Commercially Viable Neighborhoods

The casino must be within a short walking distance to a neighborhood that is not only commercially active but offers appealing retail and cultural activities. The mere fact that a casino is located near retail space does not assure mutual success. Dining, nightlife, cultural activities and unique shopping experiences are compelling reasons for casino patrons to venture out of the gaming property and into the surrounding neighborhood.

2.

Access to Public Transportation

A key element of any urban gaming development is for patrons of the casino development to have close access to a region’s mass transit network. Buses, light rail systems and commuter rail stations need to be in close proximity to the casino development in order to limit the casino’s dependence on customers arriving by automobile, and to limit automobile traffic into the urban core.

3.

Access to the Local/Regional Highway Network

All casinos require access to local roadways that interconnect with regional highway networks.

Even with the availability of mass transit, many casino patrons prefer the safety, security and convenience of commuting to the casino in passenger cars.

A Site Large Enough to Support Casino

4. and Amenities

An integrated casino resort requires a footprint of sufficient acreage to accommodate a full-service casino, hotel, conference/meeting space, retail and support services such as parking and warehousing. A site that is too small forces the developer to build a vertical structure that overwhelms the adjacent street grid. An urban casino site must be large enough to allow the developer to “step down” the scale of the project to street level.

24

Global Gaming Business JUNE 2015

Multiple Access and Egress Points

Street Calming and Pedestrian-

5. A well-designed urban casino offers pedestri-

10. Friendly Environments

ans the ability to enter and leave the casino directly into the street grid. It must be porous.

Vehicular traffic between the casino and the commercial/entertainment district must be calm enough for pedestrians. City government must calm traffic in order to stimulate pedestrian flow and provide the sidewalks, crosswalks, streetlights and street lighting to make transit between the commercial/entertainment zone and casino safe and attractive.

The Absence of Physical Barriers

6. Urban planners have long recognized that physical barriers such as highways, train tracks, parking garages, large expanses of surface parking and other physical buffers impede pedestrian traffic and separate neighborhoods. This is precisely what happened in Atlantic City and Shreveport.

To be successful, the casino’s designers must locate their parking garages in a manner that does not negatively impact pedestrian traffic flow.

7.

Scale the Casino Project to Street Level

8.

Proper Location Of Back-Of-House Facilities

Casinos, like hotels and convention centers, are large edifices. Scaling the entrances of the casino to street level makes ingress appealing. This can be achieved through a number of architectural design elements, including the introduction of retail space that acts as a link between the casino and commercial district, large sidewalks and other street-level activities (push carts, kiosks, fountains) that bring the project to a street-level scale.

Relationship with the

11. Surrounding Community The casino operator should have in place marketing programs that drive traffic to the adjacent retail district while adding value to the casino’s player rewards program. Allowing casino patrons to redeem their frequent-player points at neighborhood businesses enhances the value of the rewards program while benefiting neighborhood shop owners. Relying on local restaurants and clubs to provide additional dining and entertainment options reduces the casino’s capital and operating costs, and fosters development of neighborhood dining and entertainment venues.

A Rational Approach to

Casinos require copious amounts of goods delivered each day to properly service their guests.

These essential back-of-house services must be located out of pedestrians’ pathways and sightlines.

Encourage Development of an

9. Entertainment/Dining District

The single greatest factor in designing a successful urban casino is identifying a casino site that is in close proximity to other retail, dining and entertainment options. If a casino is located too far from such a district, it will never be able to generate the foot traffic between the casino and the commercial zone. Zoning, tax abatements, sidewalk construction and other civic improvements can be used to encourage local entrepreneurs to open businesses near the casino.

12. Gaming Tax Rates

Unlike other businesses, casinos pay gaming taxes that are deducted from gaming revenue prior to paying operational expenses. In some jurisdictions, these tax rates can exceed 50 percent of gaming revenue. After those taxes are deducted, casino operators must still pay for the costs of running their businesses as well as have a sufficient amount of net income remaining for the payment of debt service.

Casinos built in urban environments cost more than those built on the fringes of the city. They are also less efficient. When government utilizes a casino as a tool for urban redevelopment, it must develop a rational approach to gaming tax policy so the casino can be successful as a business and as a contributor to urban development.

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The gaming division of Scientific Games merges the power of three legendary brands

BY FRANK LEGATO

S

ome names are synonymous with gaming. In that comparatively small collection of iconic brands, three have been among the most recognizable for decades, to anyone remotely connected to the casino industry.

Bally. WMS. Shuffle Master.

Now, they can all be found in one place—well, at least the nerve center for them all. If one is to be accurate, the brands themselves can be found around the world. Literally.

Bally is the oldest brand in the gaming industry, the script logo a fixture since 1932. WMS—originally Chicago-based Williams, a competitor to Bally in pinball long before slots—defined the American version of the multi-line video slot and brought some of entertainment’s most legendary brands to the slot floor. Shuffle Master revolutionized how table games are dealt, before adding iconic table-game brands of its own like Let It Ride and Three Card Poker to the pit and later to the emerging worlds of the etable and online gaming.

By now, everyone knows of last year’s consolidation binge on the supplier side, dominated by deals that created two massive, end-to-end suppliers. Both of those deals involved international lottery leaders, GTECH and Scientific Games, acquiring top-five slot manufacturers IGT and Bally Technologies, respectively. However, from a pure casino gaming standpoint,

26

Global Gaming Business JUNE 2015

the Scientific Games deal stands alone in the number of strong brands brought under one roof.

Bally was itself carrying a group of strong brands aside from its eponymous slot and system lines. The company had just finished incorporating SHFL entertainment, the descendent of Shuffle Master Corporation, and its treasure trove of table brands. Through a combination of invention and acquisition, Shuffle Master had become the world’s top supplier of specialty table games, shufflers and e-tables.

Meanwhile, Scientific Games, one of the pioneering suppliers in the worldwide government-operated lottery industry, had recently acquired WMS, with its own distinctly recognizable slots—including Monopoly, The Wizard of Oz, Zeus and other iconic brands—not to mention some of the most popular game styles in the business, from Gamefield xD to Sensory Immersion to Transmissive Reels.

With last year’s deal, all those assets were combined with the mind-boggling array of casino games and systems that constitutes Bally, from the Wave cabinet and Quick Hit to oversized portrait monitors to Michael Jackson to NASCAR bonus races on iVIEW DM. “It’s a dazzling amount of content riches we have at this company,” says Allon Englman, who as senior vice president and chief design officer is charged with mining that rich vein of content going forward. “In this business, content

p. 26 scientificGames:Layout 1 5/14/15 2:25 PM Page 27

“It’s a dazzling amount of content riches we have at this company.”

—Allon Englman, Senior VP and Chief Design Officer, Scientific Games wins the fight, so it’s at the middle of everything we do.”

Englman heads up electronic gaming machine content strategy at Scientific Games’ newly formed Gaming Division. The new Scientific Games is split into three divisions—Lottery, Gaming and Interactive. All three interact with each other at various points, but the one division that touches all others is the Gaming Division, with its variety of content, all those brands, all those beloved titles and game styles, all moving effortlessly from one distribution channel to the next.

Heading that effort is Derik Mooberry, the longtime Bally executive who is now group chief executive for gaming at Scientific Games.

He’s done this before. As senior vice president of games at Bally Technologies, he oversaw the integration of Shuffle Master content following Bally’s 2013 acquisition of SHFL entertainment. For the past five months, he has repeated the process, this time adding the top brands of a company that was once one of Bally’s top competitors.

“What’s great is the level of excitement that I’m seeing towards the merger,” Mooberry says, “not only with our employees, but certainly with our customer base. The priorities have remained the same—to keep the fantastic product momentum that the individual companies had going prior to the merger. We’ve maintained our focus on delivering product that can continue to add value for those in the casino industry.”

Brand Equity For now, that means the three main historic brands—Bally, WMS and Shuffle Master—will remain separate and distinct. “We believe there’s a lot of equity in each of the three distinct brands,” Mooberry says. “Each of the slot brands has unique characteristics. They have distinct followings and target customer bases. That allows our sales team to work with our casino partners to design an experience across their floor, using an array of different games.”

In charge of the strategy to utilize all Scientific Games’ brands is Englman, who, according to Mooberry, is developing “a product plan and roadmap of where and when we will need content, and in what cabinets and form factors, around the world. The portfolio and lineup is very diverse, so he certainly has his hands full.”

While Englman says his expanded role is designed to have “a one-stop shop for all the product decision-making,” his immediate strategy is

to utilize the talent already in place that is associated with each brand. “We’ve tried to bring common procedures and practices across the creative talent of the three brands,” he says. “Now, it’s just a matter of letting the team do what they do best.”

Englman is still diving into this new sea of content and talent. “The three different brands have very different talents,” he says. “For example, the Bally team has historically been strong in vertical-screen content, whether it be the Wave (curvedmonitor cabinet), the V32 or other formats.

They’re great at making new and innovative hardware and the games that go on that hardware. The WMS team excels in innovative game designs like Money Burst and Colossal Reels, and is wellknown for branded games, like Monopoly and Willy Wonka. Shuffle Master is great at the hardcore Australian content—the gambler content, the locals content.

“All three brands have unique strengths, and we try to focus those teams on what they do best.”

Of course, Bally has some well-known brands and a variety of unique game mechanics of its own, not to mention an extensive portfolio of systems solutions that are both open-architecture and interoperable—reducing customer need for coordinating numerous vendors and versions—and with this, a reputation for exceptional customer service. About 50 percent of the largest casinos worldwide currently use Bally systems.

WMS, conversely, had some of the most innovative hardware on the market, making possible games like Wizard of Oz and Willy Wonka. While each brand team will leverage its unique strengths for the foreseeable future, Englman does envision eventual mixing and matching of those strengths.

“Our overall approach is for the brands to remain separate,” Englman says, “but I would never rule out ideas like doing a Monopoly game on the Wave, or a Michael Jackson game on Gamefield xD (the WMS format combining horizontal and vertical monitors into one display). We’ve gone into this merger with an open mind.”

“The priorities have really remained the same—to keep the fantastic product momentum that the individual companies all had going prior to the merger.”

—Derik Mooberry, Group Chief Executive for Gaming, Scientific Games

JUNE 2015 www.ggbmagazine.com

27

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Combined Strength In the end, there’s not a lot that’s out of the realm of possibility for the combined Gaming Division of Scientific Games.

Since completion of the merger last November, the newly merged company, under CEO Gavin Isaacs, has worked to set up the structure that will allow the best use of all that content.

The Gaming Division will remain headquartered in Las Vegas (also the location of the Scientific Games corporate headquarters), the Bally plant there now serving as the manufacturing hub for the merged company. While the WMS manu-

facturing facility in Waukegan, Illinois is ramping down, the WMS research and development campus, revamped five years ago on Chicago’s North Side, will remain an R&D center.

The team at this state-of-the-art facility joins a studio system in place for the Bally and Shuffle Master slot brands that has long been the envy of other slot-makers. Bally alone had close to 40 game design studios around the world, from Las Vegas to Reno to San Diego to Scottsdale, Arizona, to three locations in India and another in China. Shuffle Master’s Sydney studios, also responsible for successful slot lines, added yet another dimension.

“The beauty of it is that we have 24-hour coverage on someone making a game for us,” says Englman. “The sun never really sets on someone making a game for Scientific Games.”

Mooberry says that situation will be sustained. “We will continue that diversification, and certainly our global presence, in terms of game development,” he says. “We believe that that’s been an integral part of our success.

fortunate to have the wherewithal to have tried and proven leaders.”

Parente’s current post at the top of Scientific Selling and marketing the Games sales and marketing is a continuation of his new Scientific Games role at Bally Technologies, where he was senior vice president of North American sales and corporate hen you’re dealing with product lines that marketing. As with other former Bally executives, have pretty much sold themselves for his current task of merging sales and marketing decades, the marketing discipline becomes that forces in the new company is a continmuch easier. uation of the job recently completed But for Bob Parente, who as SHFL was integrated into Bally. oversees global sales and mar“The market space has been a keting as the new chief revfairly strong overlap of what we were enue officer for Scientific doing at Bally, obviously enhanced Games’ Gaming Division, the now with the WMS product line,” sheer volume of products assoParente says. “WMS was another ciated with the Bally, WMS major supplier to the marketplace, and and Shuffle Master brands reit brings additional strengths on the quires coordination of a vast interactive side.” global sales and marketing netAdd in Scientific Games’ lottery work that might daunt the products and distribution channels, Bob Parente, Chief Revenue most experienced marketer. and the international sales force alOfficer, Scientific Games Luckily, Parente is wellready in place there, and Parente has equipped for the task, both in his boots on the ground familiar with the own personal experience and in the global sales needs of each customer around the world, and a network already in place for each product group. better understanding of what’s needed in each ju“Based on the combination of the multiple risdiction. companies, I have a vast talent pool to work with “This enables me to have more customer face globally,” Parente says. “I’ve assigned business time, and a comprehensive understanding of the leaders to manage each of the three geographical customer’s operations and needs,” Parente says. territory segments—the Americas, EMEA and “This gives us the ultimate potential to offer more Australasia. Each of those leaders is a consolidated consultative selling—partnership-building.” head of marketing, sales administration and sales The same goes for the Scientific Games maroperation. They all have years of gaming experiketing apparatus. “We have a unified global marence and success in the respective markets, and I’m keting team, but we have subsets of those

Selling SG W

28

Global Gaming Business JUNE 2015

marketing teams with local representation in each of the key markets around the world,” Parente explains.

Parente acknowledges that his toolbox of product groups and brands would be the envy of most marketers. “The brands that resonate with the customer are Bally, WMS and Shuffle Master, and we’re excited to have those well-known brands reinforced and positioned as our product lines,” he says. “Between these different areas of product expertise, having us integrate that solidly and seamlessly is very important from a customer standpoint.”

He adds that the Interactive group—the former Williams Interactive, now SG Interactive, plus the worldwide interactive lottery element brought by Scientific Games—adds another dimension to bolster the company’s marketing strength.

“We’ve been able to take a 360-degree view of our customers,” Parente says. “We have an incredible amount of data in our customer experience to really understand how to be the best partner. And how often do you get to look under the hood of a major competitor—in this case, three major gaming suppliers—and compare data? Electronic tables is one of the fastest-growing segments in the company, and that’s due to us bringing key competitors into the fold, as well—Tom O’Brien, for example, came over from Interblock because he sees the opportunities here.

“We have a melting pot of information from several different viewpoints, to understand what works well for the customer and what doesn’t.”

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“We’ve really tried to keep our engineering talent, and product management staff, as close to the end customer as we can. And with gaming being on a global basis now, it’s imperative that we do that, because it’s rare that you actually see a game work well globally without changing it to meet the specific market demands. Having that unique ability to staff engineering resources in the markets where we do business positions us well for the future.”

“I don’t think there’s any supplier that’s better equipped to take on the future than we are,” says Englman. “Working at WMS, I’ve had the pleasure of working with those who have made some of the best games the industry has seen. And now I’m working with the Bally folks as well, with equally as

As Parente continues to consolidate marketing teams and exploit the vast talent pool at his command, he keeps his eye on new markets including Greece VLTs, Massachusetts and evolving markets in Asia such as Macau and Japan.

“We continue to monitor legislation for potential market openings,” he says. “One of our areas of focus in the short term is integrating our product solutions across slots, tables, systems, interactive and even lottery, to really create and manifest new markets for our customers.”

A prime example is Baha Mar, the new $3.4 billion mega-resort, where Scientific Games secured a deal to provide solutions in slots, table game products, systems and interactive products. Baha Mar’s main 100,000square-foot casino will be managed through the Bally ACSC casino management system, along with Bally Business Intelligence and iVIEW Display Manager bonusing solutions—and of course, popular Bally and WMS branded games on the slot floor and Shuffle Master in the pit and e-table areas. Baha Mar will also be the first casino to leverage the full SG Universe suite, anchored by a single-wallet mobile application featuring concierge, social gaming and realmoney, on-property wagering.

“As a company with offerings across all these product lines, we’re unique, and that’s really helped us expand the level of relationship we have with our customers,” says Parente. “Beyond what I’ve heard of us being referred to as the new gaming superstore, we want to be the partner of choice.”

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“We have people who are dedicated to long-term ideas— things that might seem like science fiction today, but in the future will become reality. Shuffle Master didn’t have the resources to dedicate to those kinds of ideas, but now we do.”

—Roger Snow, Senior VP of Table and Utility Products, Scientific Games

many people on that side who have created some of the industry’s finest games. We have people who have changed and revolutionized game content— people like Phil Gelber, Mike Mitchell and Nathan Wadds—sitting at the same table now, with the combined force of that talent.”

Setting the Table That certainly includes Roger Snow, senior vice president of table and utility products and a holder of more than 30 patents in the table game area.

Snow says the purchase of Bally by Scientific Games seemed natural, particularly because it meant working again with Isaacs, who was CEO of SHFL at the time of the Bally purchase.

“We were very comfortable with this purchase, because as Shuffle Master people we were very familiar with Gavin,” he says. “That really helped.”

Far from being swallowed up by a whale, Snow says his division of the company now feels special.

“It’s a bit of a paradox,” he says. “As we became part of the bigger company, internally for the table game and shuffler people that I work with, it feels like we’ve gotten smaller. It feels like we’ve made a comeback, as the Shuffle Master brand came back. It feels like a smaller, more intimate team.”

The return of the Shuffle Master name was also important, says Snow.

“Even before we were bought by Bally, our customers were telling us what a great brand it was, and how we were wrong to change the name.

That never occurred to me, but now that the name’s back, it feels right.”

The purchase by Scientific Games has boosted morale and productivity within the dedicated Shuffle Master branded products team.

“Similar to the Bally deal, Scientific Games has brought us much more resources,” says Snow. “While Shuffle Master was a great company, it was still a small company. We never had the breadth of resources that we needed. We’d have to wait until we could prove the need for those resources, and it sometimes took nine or 10 months to get something off the ground.

Now with Scientific Games, things get done more quickly. In addition, we have people who are dedicated to long-term ideas—things that might seem like science fiction today, but in the future will become reality. Shuffle Master didn’t have the resources to dedicate to those kinds of ideas, but now we do.”

The strength of Shuffle Master remains its namesake, the shuffler. Snow says they used to keep a low profile and be somewhat discreet, but now they are grabbing the limelight.

“In the beginning, shufflers were hidden under the table and the part you could see was painted matte black with no branding,” he says. “But our 30

Global Gaming Business JUNE 2015

newest shuffler, the i-Deal Plus, which just debuted at the Red Hawk casino in California, has a big display that is designed to attract their attention.

So I think that’s going to be the next inflection point in our shuffler business: getting it more involved in the actual play on the table.”

Proprietary table games also remain very much a part of Shuffle Master. In addition to the tried-and-true games like Three Card Poker (see sidebar on the Shuffle Master Classic, page 32), Caribbean Stud and Casino War, Snow is particularly impressed with a new game developed in-house called DJ Wild Poker, a game played with five wild cards: the Deuces and one Joker.

“I had my doubts in the beginning,” he says, “but it really has become popular.”

One of the reasons, says Snow, is the company’s use of focus groups.

“I always shied away from focus groups,” he admits, “because I thought I knew table games better than anyone. But I gave it a try and it’s uncanny how accurate they are.”

Snow says Scientific Games is committed to finding new and innovative table games, and says he personally studies every submission, whether from inside the company or out.

“It’s incredibly difficult to make a success of a table game or even a tablegame derivative, but when you do, it often becomes a real home run,” he says.

Completing the Picture The new Scientific Games and its Gaming Division are still a work in progress, but the work is progressing rapidly. According to Mooberry, the Las Vegas plant has already done initial pilot runs of WMS games, and will be ready to crank out the brand before the Waukegan plant is fully closed. Retooling for that extensive product line, as well as the Shuffle Master slots from the Sydney studios on the Equinox cabinet, is right on schedule, he says.

“There’s a fair amount of work that we’ve had to do in terms of planning, in terms of the consolidation and the movement of all the manufacturing to Las Vegas,” Mooberry says. “We expect to have that completed sometime this summer. And a good deal of effort from many people has helped make that a big success.”

As that progresses, Mooberry continues to work closely with the Interactive and Lottery divisions going forward. “Our Interactive Division takes a lot of their content from the traditional gaming channels, so there’s coordination between the development teams,” he says. “There’s a lot of knowledge and data-sharing in terms of what we learn in the social environment, and how

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Card Classic New national Three Card Poker tournament ramps up interest in Scientific Games’ proprietary tables able game tournaments usually require different strategies and betting styles, but Scientific Games has come up with qualifiers that require nothing more strenuous than enjoying the game of your choice.

The Shuffle Master Classic has signed up almost 200 casinos, where players merely have to hit a form of a royal flush on one of eight proprietary games, including Three Card and Four Card Poker, Caribbean Stud, Let It Ride, Mississippi Stud and others, to win a spot in the national tournament, held at the Venetian Las Vegas, September 28.

Roger Snow, the Scientific Games senior VP in charge of table games, says the tournament was invented to celebrate the 20th anniversary of Three Card Poker.

“We wanted to do something special for the players, so everything is free—for the players and the casino,” he says. “In the month of June, everyone who plays one of these games gets a chance to win a trip to Las Vegas for the Shuffle Master Classic.”

Three Card Poker is the most successful specialty table game ever invented, says Snow.

“It’s a big ‘thank you’ to the casinos that have stood by this game for all these years, and to the players,” he says.

The timing is great, says Snow. The tournament will be held during the week of G2E so casino executives can be in attendance to root on their players.

“It’s going to create a lot of excitement at the property level,” says Snow. “When a player gets one of those winning hands, they’re going to get the Golden Ticket for their trip to Vegas. I’m sure you’re going to see some innovative marketing and incremental revenue at all the properties.

“It’s going to be a lot of fun, and I can’t wait to see how it plays out.”

—Roger Gros

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that correlates to success that we see in the land-based environment.”

The Lottery Division, with its multiple worldwide distribution points and channels, also is a natural fit for Scientific Games’ substantial cache of content. “There’s crossover between lottery and gaming,” says Mooberry. “We’ve seen proliferation and expansion in many markets around the world, as countries and/or states have looked at video lottery terminals. We saw growth throughout the Canadian provinces over the last couple of years. In the current year, we’re seeing the state of Oregon placing new machines.”

He also mentions growth in the Illinois VGT market, as well as VLT expansion around the world, as a huge point of gaming/lottery consolidation—and another distribution point for all that content. “We believe that our depth in the Lottery Division does complement what we’re doing in gaming,” Mooberry says, “and it does give us a chance to work together to combine systems and provide a better overall experience to all of our end customers.

“The three groups are becoming closer and closer together,” says Mooberry, “because whether it’s Gaming, Interactive or Lottery, what we’re trying to do is create experiences. That revolves around developing world-class content that keeps the consumer entertained, and delivering that content through state-of-the-art technology.

“Another major benefit of this merger was that it allows us to integrate Bally’s award-winning, one-stop shop for gaming systems with Scientific Games’ regulatory systems business for video lottery markets— we’re now able to bring our customers both proven technology and profitable content from a broad spectrum of various gaming segments.”

This is the first year the sheer size of Scientific Games’ collection of content is being displayed as a combined group at all the trade shows.

“Last year, we had about an acre of slot machines,” says Englman. “We’ll be trimming that down a little, but we’re going to have all our brands front-and-center.”

Englman says that while it’s too early to reveal details about Scientific Games’ first combined Global Gaming Expo lineup this fall, it will definitely be a coming-out party for the new gaming giant. “If you look at the core competency of our company, what we’re bringing out in the next couple of years will be some of the most exciting products ever,” says Englman.

“It turns out that Bally was working on some really exciting stuff, and WMS was working on some exciting stuff. When we combine those two together and start leveraging them in the next couple of years, we’ll astound our customers.”

“We have so much tremendous talent,” adds Mooberry, “and we’ve got to keep them very much engaged, and focused on what we’re delivering to the customer and the player.”

No argument from Englman: “I look at our stable of talent compared to the rest of the industry, and I can’t see how we can’t win.”

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Light at the End of the Tunnel Legal sports betting in the U.S. is now on the radar.

When is it likely to see some action?

By Roger Gros

L

“Putting aside whether or ike the Christmas Eve Jusnot we’re actually actively intice Department ruling on volved in any of the betting, it the legality of online gamcreates more engagement,” he ing, the November op-ed piece says. “We all know as fans if penned by National Basketball you have, even, like a gentleAssociation Commissioner Adam man’s bet or a $5 bet with your Silver in the New York Times friend on a game, all of a sudcame without fanfare and no den you’re a lot more interwarning. But the impact on the ested.” possibility of legal sports betting Joe Asher, the CEO of in the U.S. could not have been William Hill U.S., says Silver’s greater. pronouncements have made a Sports betting has always big difference in the national been the weak sister in the U.S. perspective. to iGaming or online poker. It is The Super Book at the Westgate Las Vegas “That (op-ed) piece comoften the third rail of wagering in pletely changed the dynamic around the issue,” Asher says. “He didn’t wake up the U.S., always engendering passionate and costly opposition from the major one morning and decide to write this. There clearly was a lot of thought, delibsports leagues and the NCAA. Just look at Delaware when that state decided eration and knowledge that went into this. They clearly understand the nuto “opt in” on its exemption to 1992’s Professional and Amateur Sports Proances. That was apparent not only in the op-ed but also in the subsequent tection Act. The Delaware move was challenged by the sports leagues from the comments that the commissioner has made and continues to make.” start, and even when it was approved, the leagues continued the challenge, Silver (and others) have pointed out that sports betting in the U.S.—legal winning a court decision that limited Delaware bets only to the NFL and to and illegal—is a $300 billion to $400 billion industry. Asher says the strategy parlay bets, exactly what the lottery offered prior to PASPA. of the federal government must change.

So the expensive sports books built by the Delaware casinos go virtually “The current policy on sports betting has failed,” he asserts. “You have this unused a majority of the year, and the lucrative football betting is limited to massive black market all around the country. The only place it’s legal is Nethe admittedly inferior parlay experience. vada, Delaware and Montana. Outside of those states, all the money is going to New Jersey has also take the full brunt of the major league opposition. criminals. And whose interest does that serve? Certainly not the interests of the After a “Don Quixote” moment for state Senator Ray Lesniak, who faced leagues; it does nothing to protect the integrity of their games. It does nothing down the leagues on his own, state government picked up the ball under Govto promote job growth or create tax revenue, and it definitely does not protect ernor Chris Christie and challenged PAPSA on constitutional grounds. The the customers. Something needs to be done to fix that.” major sports leagues brought their firepower to bear and won the first two Lee Amaitis, CEO of CG Technology (formerly Cantor Gaming) believes skirmishes. The Supreme Court now has the case, and the leagues continue that the New Jersey lawsuit may succeed, but otherwise there needs to be strattheir opposition. egy the industry embraces to move the ball forward.

“Legally, all eyes are focused on New Jersey,” he says. “Legislatively, the Silver Lining American Gaming Association is setting up committees to study it. There’s a Despite being a party in the case against New Jersey, Silver has double downed federal law that says we can’t offer wagering outside of the states where it alrecently on his op-ed piece. Appearing on the Boomer & Carton radio show ready exists. So do we pass a law that says we can, or do we repeal the law that in New York, Silver said gambling is “good” for his league.

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What Say the Sports? says we can’t and let sports gaming evolve into the states that want it?”

Asher also believes the challenge from New Jersey could succeed.

“The decision in the New Jersey challenge to PASPA in Circuit Court was 2-1 (on a threejudge panel). It’s not hard to conclude that you may get a different decision before a different group of judges,” he says.

Asher agrees that sports betting is a states’ rights issue, and the matter should be left to the states.

“If New Jersey wants to have sports betting and Utah doesn’t, that’s OK,” says Asher, who believes each state should be able to make its own decision.

Since Silver’s op-ed and subsequent comments, U.S. Senator John McCain (R-Arizona) has said that Congress should take another look at sports betting.

“We need a debate in Congress,” McCain told ESPN. “We need to have a talk with the American people, and we need to probably have hearings in Congress on the whole issue so we can build consensus.”

McCain, who once tried to outlaw betting on amateur sports even in states where it is legal, seems to have been swayed by the amount of money bet illegally in the U.S. “I think that there are places for sports gambling in states, where gambling is legal,” McCain said. “We obviously know that there are huge amounts gambled on sporting events, particularly football.”

Phil Katsaros is head of business development in the Americas for Inspired Gaming, a British company that specializes in gaming content and sports-betting systems. He believes the experience in Nevada should convince naysayers.

“Just look at Nevada, the most notable exception to the prohibition on sports wagering,” he says. “It’s a $4 billion sports betting market with an adult population of around 2 million.

Now obviously, visitors come from all across America and abroad to gamble there, but they do so because first they want to gamble, but so they can do so in a safe, legal and regulated setting, while raising millions in tax revenue for the state. Nevada only scratches the surface in terms of sports wagering. Most experts estimate the total U.S. market is at around $400 billion.

That’s a lot of illegal, unregulated and untaxed sports wagering dollars.”

A

dam Silver, the commissioner of the National Basketball Association, started the ball rolling toward legalized sports betting in the U.S. with an op-ed column in the New York Times on November 13. Silver wrote, “The laws on sports betting should be changed. Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.

“These requirements would include: mandatory monitoring and reporting of unusual bettingline movements; a licensing protocol to ensure betting operators are legitimate; minimum-age verification measures; geo-blocking technology to ensure betting is available only where it is legal; mechanisms to identify and exclude people with gambling problems; and education about responsible gaming.”

While none of the other sports commissioners were as supportive as Silver, the only one who isn’t considering changing his position is in charge of the most powerful sport in America.

Commissioner of the National Basketball Association Adam Silver

National Hockey League Commissioner Gary Bettman

Major League Baseball Commissioner Rob Manfred

National Football League Commissioner Roger Goodell

“Gambling in terms of our society has changed its presence on legalization, and I think it’s important for there to be a conversation between me and the owners about what our institutional position will be.”

“We oppose sports gambling. We haven’t changed our position on that, and I don’t see us changing our position on that.”

“I think there needs some attention to be paid to what sport is going to represent to young people. Should it be viewed in the competitive teamoriented sense that it is now, or does it become a vehicle for betting, which may in effect change the atmosphere in the stadiums and the arenas?”

JUNE 2015 www.ggbmagazine.com

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Testing Technology The rapidly developing sports betting technology is now in use in other jurisdicof gambling.” tions. Amaitis believes that states considering the legalization of sports betting But the legality of daily fantasy sports is a bit hazy, even though a waiver was need to follow the examples already set. given in the Unlawful Internet Gambling Enforcement Act of 2006.

“The European model has been extremely successful,” he says. “It’s legal “Just because it’s gambling doesn’t mean it’s legal or illegal,” Asher says. “But and regulated in many jurisdictions. To my knowledge in the current structure that’s a separate issue. Even if you accept the argument that it’s skill-based, you in the E.U., they let individual countries run their sports wagering business. The still have those issues about whether it’s legal or not.” exact same model could be used in the U.S.” He doesn’t buy the argument that it’s a legal alternative to sports betting.

In Nevada, where mobile sports betting has been legal for several years, “The average player doesn’t really care,” says Asher. “We may care if it’s legal Amaitis says the results have been amazing. or not; the leagues may, but he doesn’t. He just wants to get a bet down.

“When legalizing sports wagering in the U.S., it’s wise to look at who has “We’ll see if some attorney general will take some enforcement action. Poker the best technology rather than just setting up betting shops and hoping it was widespread and folks said there’s never been a prosecution. Yet one day, the works. That’s not the way to go,” he insists. “Nevada has successful, advanced domain gets seized and all the accounts are closed. We’ll see if that happens with sports wagering platforms. Since we introduced DFS.” our technology in Nevada, the state handle has When it first launched mobile betting in Nevada, increased from $2.2 billion to $3.9 billion.

CG Technology had a fantasy aspect to its betting That’s clearly because of account wagering and choices, where the player would choose a specific technology.” number of players and bet against the house and other Asher says William Hill has taken its Europlayers. Amaitis says it spread his company too thin. pean experience and improved it in Nevada.

“We took the position that we wanted to add “We know how to run sports books,” he fantasy for real money in Nevada,” he says. “We put says. “We have tremendous economies of scale. our toe in the water to see what happened. But we You can’t compete with us on the scope of prodsoon realized that our focus had to go on real-money uct. We have in-play wagering on all the major sports wagering, and building the best app, the best sports. You can offer that scope of products withaccount wagering system and the best technology for out the benefits of economies of scale.” our customers to help them grow their business.

In-play or in-running betting—wagering on We’ll leave fantasy to those who do it best.” the outcome of events while the game is being While Inspired doesn’t have a specific fantasy played—has been a tremendous success in Euproduct, the company offers “Virtual Sports,” a —Joe Asher, CEO, William Hill U.S. rope and is catching on in the U.S., says Asher. compilation of data and content that give players the “It’s grown significantly. I think it will be 20 opportunity to wager on sporting events that don’t percent to 25 percent of our revenues by the end of the year.” actually happen in real life. Katsaros explains how this works: CG Technologies was the first to offer the wager in the U.S., and Amaitis “Virtual Sports have become a proven category of sports wagering, enjoyed by says it is still evolving. millions of players across the globe, driving structured, incremental growth for oper“We were ahead of the curve with in-running,” he says. “The huge appetite ators,” he says. “The added beauty of Inspired’s Virtuals is that they suit all different on pre-gaming betting in the U.S. has taken away from in-running. Most peotypes of players—from betting novices who want to pick a lucky number or name, ple’s betting bankroll is focused on the pre-game. And there’s so much to bet to sports betting enthusiasts who place more complex parlay and proposition bets.” on. There’s a small part of the year when the four major sports overlap, and Katsaros says the Nevada Gaming Control Board is formulating regulations there are other parts of the year where big things are happening in multiple that would allow casinos and sports books in the state to offer the virtual games. sports, which takes away from in-running.”

But CG Technology is pressing ahead.

Betting on Timing “You’ll see a new in-running product from CGT in the fall, just in time for None of the sources interviewed for this article were willing to speculate about football season,” says Amaitis. “It will be different categories and different kinds when sports betting may be legalized. Most want to see a resolution of the New of bets. It’s a big investment for us, and it’s a technology-driven investment.”

Jersey challenge, but believe that the fact it’s being discussed on a regular basis is Asher says in-play betting keeps people interested in what might normally good news. be a boring game.

Amaitis says he’s constantly seeing press reports on the issue. “The topic of le“I went to an NBA game in London in January, Bucks versus the Knicks,” galizing sports wagering used to come up every three to six months; now it comes he says. “It wasn’t a particularly competitive game, but the guy sitting next to up almost every day,” he says. me was betting in play as well. It keeps people engaged in the game even when Asher says it will take the cooperation of the major sports leagues to make an the outcome is largely decided.” impact. “(Baseball commissioner) Rob Manfred wants to take a look at the issue. I Fantasy Man won’t suggest where they might come out. He works for 32 owners and we’ll see No doubt the rise of fantasy sports has increased the interest in sports betting. what they decide,” says Asher.

With millions of dollars in marketing for the two top sites for daily fantasy waKatsaros says once public officials look at the experience in Europe, and more gers on TV non-stop, some question whether it’s just sports betting in different importantly, in Nevada, there should be some movement. clothes.

“It’s impossible to predict when and how legalization will occur,” he says.

“Look,” says Asher. “They have a line in their commercials saying this is not “Obviously, there is an excellent example with Nevada. If, and when, legalization gambling. That’s nonsense. Of course it’s gambling. You’re risking something of efforts progress, and I assume it’s only a matter of ‘when,’ Nevada should be value (money) on something with an uncertain outcome. That’s the definition ground zero in understanding how U.S. markets could regulate wagering.”

“They have a line in their commercials saying this is not gambling. That’s nonsense. Of course it’s gambling.You’re risking something of value (money) on something with an uncertain outcome. That’s the definition of gambling.”

36

Global Gaming Business JUNE 2015

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iGAMING NORTH AMERICA

Ten Bold Political Moves, Part 2 What issues shaped iGaming in North America

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ast month, we presented Part 1 of the 10 Bold Political Moves. Inspired by Las Vegas Sands CEO Sheldon Adelson’s war on internet gambling that has sent shockwaves through Nevada, Delaware, New Jersey and everywhere else looking into regulating the industry, these 10 events demonstrate that anything can happen in Washington, D.C. This is Congress’ second go at the Adelson-backed federal Restoration of America’s Wire Act, and it looks like business as usual.

While we might be surprised by the aggressiveness of the rejuvenated prohibition movement, let’s not forget that internet gambling has been a victim of this kind of backroom politics before.

So without further ado, here’s the final five bold iGaming policy moves taken since internet gambling emerged in the mid ’90s.

New Jersey Governor Chris Christie 5. Where No Man Dared to Go Sometimes it seems as though New Jersey Governor Chris Christie never does anything that isn’t bold. Christie has remained true to form with his efforts to legalize sports betting in New Jersey. The concept isn’t as edgy today as it was perhaps five years ago, but when Christie began the campaign for legalized sports betting, such an idea was unheard of. The pet project was written off by many as a pipe dream, but the legalization movement doesn’t seem to be going away, and no longer sounds all that farfetched.

Former Tennessee Senator Bill Frist 4. Fristing the Night Away (Version 2) Considering how quickly and effi38

Global Gaming Business JUNE 2015

By Mark Balestra

ciently a measure authorizing internet gambling passed through the Council of the District of Columbia, one might have been compelled to wonder whether it was just a bit too easy. It was.

The measure was added to the district’s lottery contract months after the contract passed a council vote and was ultimately approved in 2010—in a vote taking place at 2 a.m.—as a late addition to a spending bill. Weeks later the stunned council—many of whom didn’t know they had legalized online gambling—repealed the measure.

without exception, by amending the 1961 Wire Act to expressly cover the internet.

Conyers drove a wedge between staunch supporters of absolute prohibition and the KylGoodlatte camps, which had been accumulating support by way of carve-outs.

As expected, the Conyers bill was dead on arrival, but it served its purpose as one of several distractions curtailing a prohibition movement that didn’t gain enough support to succeed for another six years.

Rep. Bob Goodlatte 3. When All Else Fails, Pick up Your Ball and Go Home The U.S. Department of Justice’s late ’90s crackdown on internet gambling crushed what was a thriving iGaming hub in Antigua and Barbuda.

The island nation responded by filing a complaint with the World Trade Organization, essentially claiming that the restrictive U.S. policy was a restraint on trade and a violation of the United States’ commitments under the General Agreement on Trade in Services (GATS). In 2003, the WTO appellate body handed down a ruling favorable to Antigua and ordered the United States to bring its domestic policies into compliance with its GATS commitments. But, with no path to any desirable outcome, the United States simply chose to ignore the ruling. To date, it has not complied.

Rep. John Conyers 2. Poison How does an adamant opponent of prohibition counter the momentum of his adversaries?

Why, he introduces his own prohibition bill. That was Rep. John Conyers’ precise strategy in co-sponsoring the Comprehensive Internet Gambling Prohibition Act of 2000, a measure that would have prohibited all types of internet gambling,

1. The Piggyback For months after the terrorist attacks of September 11, 2001, Congress was on a bipartisan mission to enact policy protecting the country from terrorism. Not surprisingly, it was collectively understood in Washington that adding non-germane provisions to anti-terrorism legislation at such a crucial time was not to be tolerated. Nevertheless, prohibition sponsor Rep. Bob Goodlatte shifted his strategy immediately after 9/11 to focus on the dangers of internet gambling as a source of funding for terrorism. It didn’t work, and the proposal was swiftly removed from the discussion. While UIGEA ultimately passed as a provision of a homeland security policy, piggybacking such legislation in 2001 and 2002 was about as bold as it gets.

Mark Balestra is the founder of Bola Verde Media Group and a partner in the iGaming North America conference, held this year in April in Las Vegas.

A Winning Combination GTECH, the global leader in lottery, and IGT, the world’s top gaming supplier, are merging to create the world’s largest end-to-end gaming company. By adopting the IGT name and GTECH’s visual identity, we are melding two iconic brands into one. Together, we’ll be uniquely positioned to provide the commercial gaming industry with a complete interactive gaming solution that covers the full spectrum of games, systems, and support services for every type of wager.

© 2015 IGT. All rights reserved.

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Pennsylvania Lawmakers Consider iGaming future committee votes and hearennsylvania lawmakers began hearings. ings last month on the first of four The vote doesn’t mean the internet gaming bills—three legalize bill has passed, merely that it can various forms of iGaming, while one be discussed on the floor of the would ban it—as opposition to billionchamber.

But in previous sessions, aire Sheldon Adelson’s campaign to ban unsuccessful votes meant that simiiGaming surfaced in the state. lar bills were left to languish withThe Pennsylvania House Gaming out discussion.

Oversight Committee met to consider The San Manuel Band of Rep. John Payne’s bill to establish a regMission Indians, a tribe that has ulatory framework for online poker and Las Vegas Sands Senior been pushing for the legalization of Vice President Andy casino gaming. The measure originally iPoker for years, reacted with enAbboud argued against addressed online poker only, but was allowing iGaming in thusiasm.

“Now it puts a vehicle in amended to include casino games.

Pennsylvania play for legislators, and for stakeOne of the highlights was the public holders to have discussions in reaction to testimony by Las Vegas earnest about what ought to be in this bill to auSands Senior Vice President Andy Abboud, who thorize intrastate internet poker in California,” said appeared as a representative of LVS Chairman tribal spokesman Jacob Coin.

Sheldon Adelson to speak against all online gamSan Manuel and the Morongo Band of Mission ing. Abboud was shouted down after delivering Indians are in a coalition with card rooms and the Adelson’s usual arguments that iGaming is a Amaya Gaming Group, owner of PokerStars. “threat to minors,” and that the largest internet There is still plenty of disagreement about the companies have had “tremendous difficulty” rebill, however.

The Pechanga Band and its ally the stricting access to their websites by minors.

Agua Caliente Band insist on a “bad-actor” clause Rep. Tina Davis, sponsor of one of the four that would specifically target PokerStars, which has iGaming bills before the legislature, took the opbeen accused by the Justice Department of violatportunity to ask Abboud about the record of Sands ing federal law by allowing Americans to play its Bethlehem, which has been fined in each of the real-money games on its offshore websites in 2011. past five years for allowing teenagers to drink and Pechanga tribal Chairman Mark Macarro said last gamble in the land-based casino. Abboud declined month his tribe’s position remains unchanged.

“We to answer. believe it is necessary to protect consumers and the Mirroring the general public’s disdain for high suitability standards of the gaming industry Adelson’s campaign to ban internet gaming, the from companies that do not and have not respected full Pennsylvania House passed a resolution last the law.” month urging the U.S. Congress to reject the AdelAnother deal-killer is the insistence by some son-supported bill H.R. 707, the Restoration of tribes that racetracks may not be included in the America’s Wire Act (RAWA), which would impose mix of possible operators of internet poker. a federal ban on all internet gaming.

Macarro declared, Also sponsored by Payne, the measure is ex“California voters have plicit in its criticism of RAWA. always had the final say on gaming expansion, Hurdle Crossed for iPoker and they have already Bill in California rejected expansion of gaming for horse racor the first time ever, an iPoker bill has passed ing.” In 2004, voters the gauntlet of a key committee vote in the rejected a proposal that California Assembly. would have allowed Last month, the Assembly Governmental Orracetracks to operate Pechanga Chairman ganization Committee voted unanimously to move Marc Macarro opposes slot machines. Macarro Assemblyman Adam Gray’s bill forward. Gray is the introduction of iPoker also insists on the badchairman of the committee. at racetracks in actor clause.

Details of the bill remain to be hashed out in California

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Global Gaming Business JUNE 2015

He claims that allowing racetracks to participate would amount to expanding the scope of limited gaming in the Golden State. “The future of our people, the future of our tribes, depend on that policy, that law,” he said.

Supporters of PokerStars point out that Amaya Gaming Group purchased PokerStars last year, so it is not the same company the Justice Department sued. Morongo calls PokerStars “the pre-eminent online poker entity in the world.”

Morongo Chairman Robert Martin has joined several other tribal leaders in calling for compromise. His tribe fears that without the added clout of the racetracks the bill won’t be passed, since a two-thirds vote of both houses is required due to the financial nature of the bills.

Macarro counters that as long as the racetracks are excluded, the tribes should be able to work out a compromise. Governor Jerry Brown has previously stated that he won’t sign a bill without the inclusion of the tracks.

Portugal Legalizes Online Gambling

A

bill to legalize online gambling in Portugal has been approved by the Portugal Council of Ministers and will go into effect in late June.

The bill brings all different forms of gambling in the country under the control of Portugal’s gaming regulator Santa Casa de Misericordia de Lisboa.

The bill is in line with European Union regulations on competition laws and fair business practices, officials said.

“The bill will proceed with the regulation of online gambling in line with the recommendations issued by the E.C. on this matter and the international best practices,” the government said in a press release. “Licenses will be awarded to all the companies that will ensure the full respect of a set of financial, economic and technical requirements.”

Operators that gain approval will be allowed to advertise and market their products on approved national media.

Reports say the government is hoping to raise €25 million in online gambling taxes under the new framework.

Operators of online games will face a taxation rate of between 15 percent and 30 percent while sports betting services will pay a turnover tax of between 8 percent and 16 percent.

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Nevada Charges Illegal iGaming Operator

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evada Attorney General Adam Paul Laxalt announced charges in an investigation of an illegal online poker website.

The state has filed a criminal complaint against Bryan Micon, 36, of Las Vegas stemming from an investigation by the Nevada Gaming Control Board.

Micon was charged with one count of operating an unlicensed interactive gaming website between March 2014 and February 2015.

A warrant for Micon’s arrest was issued.

It marks the first state-level criminal prosecution Nevada Attorney of an illegal online poker website in Nevada’s history, General Adam Laxalt officials said.

Micon is charged with operating an unlicensed interactive gaming website in Nevada. The website, known as “Seals with Clubs,” was allegedly an internet poker site that used the virtual currency Bitcoin, according to a state affidavit.

According to the affidavit, the board learned of the site in August 2013 after receiving a complaint. Later, in Skype conversations observed by gaming agents, Micon estimated that Seals with Clubs earned $10,000 to $12,000 profit each month.

Gaming Board Agent Ricardo Lopez then created an account in February 2014 and used digital currency to play poker.

“I placed bets using my chips, and won some hands while losing others,” Lopez wrote. “I had successfully purchased Bitcoin using U.S. currency and then gambled the Bitcoin on the website sealswithclubs.eu on two separate dates for a total of 30 hands of poker.”

Operating an illegal site in Nevada is a category “B” felony, punishable by up to 10 years imprisonment.

Resorts Owner: PokerStars Close to New Jersey Launch

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t’s been a long wait for PokerStars in New Jersey, but the owner of Atlantic City’s Resorts casino says the online company is close to launching a realmoney site in partnership with Resorts.

Morris Bailey, owner of Resorts, told reporters that the long-awaited deal is close to being finalized.

Bailey, however, stopped short of saying on what date the site would open, but did say the paperwork and licensing was close to being finalized.

The casino—which recently launched its own site Morris Bailey, owner of for online casino games and opened an online lounge Resorts Atlantic City on its casino floor—plans to build a new live-action poker room to complement the PokerStars site.

His comments come shortly after the head of Amaya Inc., the parent company of PokerStars, David Baazov said a launch will come in the next few months.

“As it relates to New Jersey I would say that we feel that this is coming. We would expect to receive and launch in the next quarter,” read a statement from Baazov at the end of March.

Bailey’s comments came at the opening of the new online gaming lounge at Resorts. The casino has launched resortsCasino.com through a partnership with SNG Interactive.

In New Jersey, all online gambling sites must be partnered with an Atlantic City casino. The casinos, however, can partner with multiple sites.

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Alabama

EMPIRE Poarch Creek threatened by talk of expanded gambling in Alabama

By Dave Palermo

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ddie Tullis, chairman of the Poarch Band of Creek Indians for some 25 years, joked in an interview last year about Alabama’s moral hypocrisy when it comes to gambling. Politicians and Bible-thumpers proselytize against wagering, he said, yet gambling remains widespread.

“You can go to any country club in Alabama on Saturday night and get into a high-stakes poker game,” Tullis said, and money frequently changes hands at NASCAR races and SEC football games.

Bingo is a prominent activity at churches and VFW halls, he noted. And electronic bingo games often targeted by law enforcement officials nevertheless flourish throughout the state.

But Tullis believes resentment flares up when American Indians are running the games.

“You let the tribes operate gambling and people perceive that Indians and money are incompatible,” he said, stirring animosity among non-Indians desiring a piece of the action.

Much anti-Indian sentiment diminished over the last three decades as Poarch Creek, Alabama’s only federally recognized tribe, grew a government gambling industry that today consists of three large casinos with 6,300 electronic bingo machines earning $330 million a year.

Poarch Creek has become a major economic force with gambling and non-casino business enterprises employing 3,000 mostly non-Indian workers in and around the communities of Atmore, Wetumpka and Montgomery, sites of the tribe’s Wind Creek casinos.

And the tribe has become a political player, contributing hundreds of thousands of dollars to local and state elected officials.

“We realized early we need a good relationship with local communities and politicians,” Tullis said.

Budget Stopgap Those relationships are being put to the test as lawmakers in May introduced a bill calling for a constitutional amendment to legalize a lottery and commercial casinos at four parimutuel dog tracks to help alleviate a looming budget deficit that in a few years could grow to $700 million.

Such a widespread expansion of gambling would have a devastating impact on Poarch Creek casinos, which as government operations generate funds to provide for the health, welfare and education of more than 3,000 adult tribal citizens.

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“We believe expanding gaming that way would threaten what we have worked so hard to build and could affect our economic stability,” Poarch Creek Chairwoman Stephanie Bryan says.

The tribe quickly offered $250 million to bail the state out of its immediate fiscal problems, a defensive measure Bryan calls “part of an overall strategy to limit gaming within the state” while protecting Poarch Creek’s casino exclusivity.

“Our strategy now is to make sure that legislators and their constituents understand that the tribe has a history of being a good corporate citizen and good neighbor,” Bryan says.

The legislation also calls for negotiating a tribal-state regulatory compact with Poarch Creek that would allow the tribe to operate casino-style slot machines and table games with a share of the revenue going into the general fund.

But Poarch Creek officials say there is little incentive in a compact if commercial casinos are allowed elsewhere in the state, potentially crippling the tribe’s economy.

It is not clear if the legislative effort will generate enough votes to get a gambling initiative on the September 15 ballot. A number of legislators spoke out against the measure and Governor Robert Bentley, who is proposing a $541 million tax increase on cigarette products and car sales and rentals, calls the draft bill “one of the worst pieces of legislation I’ve ever seen.”

Putting a constitutional amendment on the ballot would require approval by 60 percent of the legislature. And it’s questionable a gambling ballot initiative would survive Bible-Belt scrutiny. An Alabama lottery initiative in 1999 was defeated by 54 percent of the voters.

“You let the tribes operate gambling and people perceive that Indians and money are incompatible.”

—Former Poarch Creek Chairman Eddie Tullis

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“We believe expanding gaming would threaten what we have worked so hard to build and could affect our economic stability.”

“(The gambling expansion bill) is one of the worst pieces of legislation I’ve ever seen.”

—Governor Robert Bentley

—Poarch Creek Chairwoman Stephanie Bryan

Expansion Gains Momentum Even if lawmakers are not successful in getting expanded gambling in Alabama in the current legislative session, Poarch Creek tribal leaders believe the latest move to legalize commercial and lottery gambling won’t be the last.

Tribes in several of the 28 states with Indian casinos are being pressured by lawmakers who are looking at commercial gambling as a means of generating needed tax revenues. The neighboring Florida Seminoles, fearful of ongoing efforts to legalize resort casinos as a tool for generating taxes and tourism, are urging legislators to instead renegotiate the tribe’s expiring tribal-state compact.

Poarch Creek has had a tenuous relationship with Montgomery lawmakers, the religious right and anti-gambling moralists since the tribe opened a highstakes bingo parlor in 1984.

As Tullis told GGB, many Alabamans view with suspicious envy Poarch Creek casinos—which according to tribal figures generate $600 million a year in gross gaming revenues—and wonder why they can’t share in the wealth.

Meanwhile, Attorney General Luther Strange has been waging a campaign to outlaw electronic bingo machines on tribal lands, an effort thus far rebuffed by the courts and National Indian Gaming Commission, which has opined that the devices are, indeed, legal.

The current push to expand gambling in Alabama is all the more alarming to the tribe because it appears to be bipartisan, sponsored by Republican Senate Pro Tem Del Marsh and supported by a number of colleagues along with House Democrats.

“Republicans understand how serious the situation is,” Democratic Senator Roger Smitherman told the Montgomery Advertiser. “And there isn’t an appetite for new taxes, either among voters or in the legislature.”

Poarch Creek is not opposed to a lottery. But tribal leaders are miffed state officials would legalize slot machines and table games at the four greyhound

Victoryland greyhound track casino was shuttered in 2014 following a highly publicized raid by an anti-gambling task force

tracks, even though the facility in Mobile is owned by the tribe.

Tribal leaders strongly suspect the bill to be the brainchild of Milton McGregor, whose Victoryland greyhound track casino was shuttered in 2014 following a highly publicized raid by an anti-gambling task force.

“I do think this is a Milton McGregor bill,” Robert McGhee, Poarch Creek councilman and director of government affairs, says of the wealthy and politically influential owner of two of Alabama’s four parimutuel tracks.

Poarch Creek On The Defensive An Auburn University study shows a lottery would generate $330 million a year while slots and table games at the greyhound tracks taxed at 13 percent would generate $65 million annually.

“The numbers are pretty impressive,” Del Marsh says.

McGhee disagrees.

“It’s really not a lot of money,” he says. “You’re going to dramatically change the gaming landscape in Alabama for $65 million? That’s ridiculous.”

The tribal councilman says Alabama could generate more money establishing a lottery and entering into a tribal-state compact that, under the Indian Gaming Regulatory Act, would allow the tribe to offer Class III, casino-style slots and table games.

While McGhee declined to suggest what the revenue share might be in a compact, others put the figure at about 15 percent of the net income, roughly equal to the proposed tax on commercial casinos.

Poarch Creek for nearly two decades has been rebuffed in attempts to negotiate a tribal-state compact. It is stepping up those efforts now that Alabama seems more intent than ever to open up gambling in the state.

Ironically, swapping out Class II bingo machines for Class III, casino-style devices would not greatly impact the bottom line at Poarch Creek casinos. (See related story, page 44.) Operating Class II machines in a non-competitive market has proven as lucrative as Class III devices.

However, a compact would enable Poarch Creek to offer table games—notably blackjack, baccarat, roulette and craps—and, more important, guarantee the tribe long-term statewide exclusivity to operate casino-style gambling.

The tribe would likely negotiate a site for a fourth casino in the potentially lucrative Birmingham market.

A compact could also discourage ongoing litigation by AG Strange and others challenging Poarch Creek’s status as a federally recognized tribe.

A 2009 U.S. Supreme Court decision in Carcieri v. Salazar questioned the JUNE 2015 www.ggbmagazine.com

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Wind Creek’s casino floor

status of tribes not “under federal jurisdiction” in 1934. Poarch Creek was recognized in 1984, the same year it opened a high-stakes bingo parlor in Atmore.

“A compact would be the best scenario. It would be beneficial for the tribe and the state moving forward,” McGhee says, ensuring the tribe casino exclusivity, generating a revenue stream for the general fund and only minimally expanding gambling in the state.

If the state were to legalize commercial casinos, McGhee says the tribe could request a compact with the Department of Interior through secretarial procedures, an agreement that would likely not include a revenue share for the state.

The tribe had previously avoided going the secretarial procedure route out of fear of Carcieri-related litigation.

Bentley wants to secure a tax increase before discussing a compact with the tribe.

“I have no intention of doing anything with gambling, with negotiations with the Poarch Creek Indians; I have no intention of doing anything until we get $541 million,” he told the Montgomery chamber.

Facing An Insecure Future Although there may be growing public acceptance of gambling in Alabama, it’s difficult for many to imagine voter approval of a bill to legalize both a lottery and commercial casinos.

Launching a lottery in the conservative state “is not a particularly gutsy move,” wrote Birmingham News columnist Charles Dean. “But combining a lottery with casino-type gambling?

We haven’t been there before.”

“I don’t like the lottery and gambling being joined together as a one-size-fits-all,” Senator Paul Bussman told Decatur Daily. “I’d hope that they’d separate them out. Then we may feel a little bit better about letting people vote for a lottery.”

What annoys tribal officials is the lack of a cooperative, government-to-government relationship between Poarch Creek and Alabama officials. They believe the state is not acknowledging the impact Poarch Creek has had on the state and local economy and employment.

It was the intent of IGRA that gambling help tribes create diversified economies and strengthen their governments, McGhee says.

“People don’t want to hear that.”

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Classless Approach Poarch Creek ‘not sure’ about switch to Class III Machines o Hot, Triple Stars, Double Diamond Strike, Quick Hit, Triple Red Hot 7s, Money in the Bank, Wild and Free and Egyptian Goddess may not be among the thousands of slot machines lining the floors of Las Vegas Strip casinos.

But the Class II, bingo-style electronic slot machines are wildly popular among gamblers patronizing the Wind Creek casinos in Atmore, Montgomery and Wetumpka, Alabama.

In fact, if the Poarch Band of Creek Indians entered into a tribal-state compact with the state of Alabama enabling the tribe to swap out the machines for Class III, casino-style devices, Wind Creek executives may shake their heads and reply, “No thanks. We’ll stick with what we’ve got.”

“From a machines perspective, I’m not sure there would be any big difference on the casino floor if we got a compact,” says Jay Doris, CEO of Wind Creek Hospitality, the tribal gambling authority. “I’m not sure we would necessarily make the switch.

“Our customers are quite happy with the games we provide.”

The Indian Gaming Regulatory Act requires tribes seeking to operate Class III machines and housebanked table games such as blackjack, roulette and craps to enter into tribal-state regulatory agreements, or compacts.

Because Alabama officials have for decades balked at entering into a compact with Poarch Creek, Wind Creek players have grown accustomed to the electronic bingo games.

Meanwhile, technical advances to bingo machines,

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which operate off a central server, have made them nearly as fast and entertaining as Class III games, which run off random number generators.

“The manufacturers have developed Class II games that a lot of our players have found to be really appealing,” Doris says. “They are every bit as attractive, or more so, than some of the Class III machines.”

And in Alabama, where Poarch Creek casinos have no competition, the Class II games are just as profitable.

“They are the only game in town,” Randy Carnett, Ortiz Gaming consultant and principal in Pineapple Ventures, Ltd., says of Poarch Creek.

“Their win numbers are excellent.”

The 6,300 machines in Wind Creek casinos generate in excess of $600 million a year, according to tribal figures.

“The Poarch Band of Creek Indians has been able to flourish economically in an environment such as the state of Alabama that is not conducive to Class III gaming,” says Robert McGhee, Poarch Creek councilman and director of government affairs.

“A tribal-state compact simply has not been an option.”

At least not until this legislative session, when Alabama officials found themselves faced with a looming $290 million budget deficit that may triple in just a few years.

Some lawmakers are pressing for a ballot initiative to legalize a lottery and commercial casinos. And they are also pursuing compact talks with Poarch

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Creek, apparently willing to let the tribe operate Class III games in exchange for a share of the revenues.

Poarch Creek would not be receptive to a compact if casinos were permitted at four parimutuel greyhound tracks. But the tribe would welcome a compact that ensures their exclusivity to operate casinos and, perhaps, allows Poarch Creek to open a fourth casino in Birmingham.

Class II On The Upswing The Poarch Creek experience is similar to tribes in Florida and Oklahoma, where state officials for years rejected attempts to negotiate compacts, forcing indigenous communities to operate Class II games.

Oklahoma’s Class II inventory reached 36,000 devices in 2004, when tribes and Governor Brad Henry finally agreed on a Class III compact later approved by the voters. “When we got the compact, Class II gaming in Oklahoma was extremely advanced,� says Tracy Burris, former Chickasaw gaming commissioner.

Player loyalty to Class II machines remains strong. Class II devices made up 42 percent of Oklahoma’s 2013 inventory of nearly 70,000 machines, according to economist Alan Meister, author of Casino City’s Indian Gaming Industry Report, and the number continues to grow.

Of the more than 350,000 slot machines in Indian Country, roughly 10 percent are Class II devices. Alabama ranks behind Oklahoma in Class II machines, the possible exception being the uncalculated number of bingo-style devices in California.

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A Winning Formula “We want our players to be engaged,� Doris says, so the strategy is to keep the floor hold at 6 percent. “We give customers a game that is fun to play and we give them more time to play it. Over time they know their gambling budget is going to go much further than anywhere else.�

A Class III compact will allow the tribe to install table games, but tables are less profitable and more labor-intensive than machines. “You take several banks of machines that are producing quite well and replace them with table games, the economics don’t work,� Doris says.

The tribe will install tables, if the state agrees to a tribal-state compact, if for no other reason than to satisfy customers looking to roll the dice or fan cards across green felt. “We would definitely take a look at it,� Doris says. “But when you look at our results, it’s not a market that’s going to generate significant upside for us. We know what our niche is. We need to stay focused on that.� —Dave Palermo JUNE 2015 www.ggbmagazine.com

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All Money is

Good Money How tribal casinos develop non-gaming revenue to expand their brands, clientele

by Rodric J. Bradford

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sustainability. s casinos continue to transform “We have learned to look at our non-gamfrom gambling hotspots to ening amenities not just as loss leaders, but as an tertainment destinations, tribal important and profitable part of the overall casinos are on the forefront of this trend, property experience,” says Gamache. “One of using their unique geography and regional the guiding principles of the tribe has been to pull to land a completely new type of dream big, and dream differently. Our aim guest for 2015 and beyond. from the beginning was not only to create a Every tribe, it seems, has a different profitable gaming environment, but to create strategy. a property with amenities that are best in class “When guests come here and see and present a substantial draw for guests to everything that we have to offer in person, come to our property and attract visitors to it changes their perspective of what we are the region as a whole.” to them,” says Holly Gagnon, president For the San Manuel Band of Mission Inand chief executive officer of the Pearl dians, a diverse economic base includes idenRiver Resort in Mississippi, operated by tifying real estate opportunities and having a the Choctaw Resort Development Enterkeen sense of business entrepreneurship to prise. “We are within driving distance of stimulate revenue. San Manuel is primarily Birmingham, Memphis and New Orleans, interested in a diversified economic base beso it was important that we transformed yond gaming to add direct community beneourselves into a doable getaway so guests fits through its business ventures. This can experience a uniquely fine travel expeincludes San Manuel Village, a 12-acre rience influenced by the Choctaw’s culture mixed-use development project located within and people.” the jurisdiction of the city of Highland, CaliFor the Kalispel tribe and Northern fornia. San Manuel served as developer for Quest Resort and Casino in northern Cal- The Spa at Northern Quest Resort and Casino, owned by the this commercial real estate investment project, ifornia, a concentrated effort has been made Kalispel Tribe of eastern Washington which is located less than five miles from the to create various non-gaming amenities that San Manuel Indian reservation. The property includes a hotel, restaurants, rework to both diversify and complement their gaming operation. tail and commercial space, and professional offices.

“We have found that what is truly important in this day and age is diversi“In the case of San Manuel Village, building a sustainable center for new fication,” says Kyndra Gamache, spokeswoman for the Kalispel tribe and businesses in the nearby city of Highland has been a process of helping existing, Northern Quest Resort and Casino. “In order to sustain ourselves in the long local businesses expand their successful business model to serve a growing comrun, we are always looking for new opportunities that provide growth in nonmunity,” says Lynn Valbuena, chairwoman of the San Manuel Band of Mission gaming areas. Progress is important both in the context of Northern Quest Indians. “We continue to look at new economic opportunities both on and off Resort and Casino and the community at large, but always with an eye on the reservation as part of our overall efforts.” what makes sense with current market conditions and regional saturation levIn New Mexico, the Hilton Santa Fe Buffalo Thunder has decided its marels of amenities.” ketplace lies in the resort and recreation sector. Located in the dramatic scenery Northern Quest Resort and Casino has learned how to operate smarter of northern New Mexico’s Pojoaque Valley and owned by the Pueblo of Poand more efficiently while making every amenity stand on its own in terms of

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“Prosperous communities are great places to do business and to attract and retain talent. We will continue to invest our dollars, time and resources to help our community partners make that happen.”

—Jon Lucas, executive vice president of hotel and casino operations, Hard Rock International

joaque, the property boasts Towa Golf Club, three independent nine-hole courses that challenge eager golfers with dramatic elevation changes, seasonal weather conditions and scenery of extraordinary beauty.

The golf course even offers a practice facility featuring a driving range situated so players will never find the sun in their eyes. To further enhance the experience, two putting and chipping practice greens are also located on-site.

“Adding non-gaming revenue has always been a long-term vision for our property,” says Gene Stachowski, executive director of corporate marketing at the Hilton Santa Fe Buffalo Thunder. “We want to use our large ballroom for events and concerts, VIP parties and even a cigar lounge as much as possible.

We make sure when we talk to our guests and the media, they know we are not just a place for casino gaming.”

Pearls of Wisdom For Gagnon and the Pearl River Resort, transformation into a non-gaming destination is a sign of success and demonstrates their ability to serve multiple markets to increase revenue.

“We have a large number of gaming customers from Alabama who are interested in slot and table games and want the quintessential casino experience, and we provide that,” says Gagnon. “But we also have a large base for family entertainment, which came when we built our waterpark. We bill ourselves as a fun getaway for the family, and our motto is that we are the ‘beach within reach.’”

The waterpark at Pearl River Resort is accompanied by a golf course, and these recreational opportunities provide further reasons for residents from Birmingham, Memphis and New Orleans to make the short drive to their property. In July, Pearl River completed a renovation project for 300 hotel rooms, further adding to its non-gaming revenue.

“In three years we have refinanced our balance sheet, and our future financial success is very much tied to non-gaming revenue,” says Gagnon.

As the only fully land-based non-coastal resort in the state of Mississippi, Pearl River enjoys a unique level of exclusivity which inspires an even more dynamic offering of non-gaming amenities. This includes a fine-dining steakhouse and a recent renovation to the buffet. These food and beverage options

are made for private guests but also for corporate clients.

“Our long-term goal is to continue growth on the convention and conference side of the business,” says Gagnon. “We want to see our midweek hotel occupancy rates increase, while we are spending much more energy in marketing and letting people know there is something for everyone here.”

Rockin’ Revenue Perhaps the model of non-gaming revenue for tribes is the Seminole Tribe of Florida, owner of Hard Rock International, which boasts a total of the 174 venues in 55 countries, including 136 cafés, 19 hotels and seven casinos. They own the world’s largest collection of music memorabilia, which is on display at its locations around the globe.

So it comes as no surprise that they opened Hard Rock Rocksino Northfield Park in late 2013 in Cleveland, Ohio. This was the first of Hard Rock’s Rocksino brand, a specially branded venue that combines the music experience with the gaming environment.

Hard Rock Rocksino Northfield Park offers harness racing, always a valuable commodity, and the property has created a buzz among the people in northeast Ohio.

“We have a steadfast, undying commitment to help make a difference in the community, and want our business and the community to be prosperous and thrive,” says Jon Lucas, former president of Hard Rock Rocksino Northfield Park, and now in charge of hotel and casino operations in the corporate offices. “Prosperous communities are great places to do business and to attract and retain talent. We will continue to invest our dollars, time and resources to help our community partners make that happen.”

The Rocksino boasts a Hard Rock Live music venue, the fifth of its kind, which is home to ac-

“These amenities benefit us, and now all we have to do is continue to build more awareness.”

—Holly Gagnon, president and chief executive officer, Pearl River Resort Geyser Falls Water Theme Park at the Mississippi Choctaw’s Pearl River Resort

JUNE 2015 www.ggbmagazine.com

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Hilton Santa Fe Buffalo Thunder, owned by the Pueblo of Pojoaque

Located in the dramatic scenery of northern New Mexico’s Pojoaque Valley and owned by the Pueblo of Pojoaque, the property boasts Towa Golf Club, three independent nine-hole courses that challenge eager golfers with dramatic elevation changes, seasonal weather conditions and scenery of extraordinary beauty.

“As a sovereign tribal nation, San Manuel engages in economic development with an eye toward securing long-term, reliable and diverse government revenue streams.”

“In addition to developing these amenities as part of our casino resort property, the Kalispel Tribe has branched out with a commercial laundry service, a Chevron franchised gas and convenience store and a Fatburger franchise with two locations, one of which is —Lynn Valbuena, chairwoman, San Manuel Band of Mission Indians a freestanding location away from the resort,” says tribal Social Services Director Wendy Thomas. claimed musicians and sellout crowds of over 2,500 music lovers, and also serves These amenities have allowed Northern Quest to be a serious player in the as a venue for variety of functions and banquets. The Rocksino also offers The eastern Washington entertainment market.

Club, a live venue featuring comedians and illusionists, which is also readily available for private parties and events. And of course there is the world-famous Hard Rock merchandise in the Rock Shop.

The non-gaming revenue system at Buffalo Thunder in Santa Fe thrives more on

The Santa Fe System

Making it Real For the San Manuel Band of Mission Indians, the ability to purchase and develop commercial real estate has been the foundation to non-gaming revenue.

San Manuel has invested in real estate across Southern California. With an eye for redevelopment, San Manuel holds parcels at San Bernadino International Airport, the former Norton Air Force Base. The tribe also holds real estate in communities near the reservation located in San Bernardino, California.

Phase two for development of the San Manuel Village began in 2011 and included the opening of Mi Cocina, a Mexican restaurant, St. Bernadine’s hospital urgent region care and the Sandman center, a state-of-the-art event center for hosting social events and business meetings, available to the public.

“San Manuel has learned to find partners that are committed to long-term, sustainable growth models to our stable tenants at San Manuel Village,” says Valbuena. “As a sovereign tribal nation, San Manuel engages in economic development with an eye toward securing long-term, reliable and diverse government revenue streams. The tribe is finding success with business partners who share a long-term approach.”

Northern Exposure The Kalispel Tribe, operators of the Northern Quest Resort and Casino, also shares a dedication to provide the best experience possible for both gaming and non-gaming guests. Offering the non-gaming amenities allowed them to further establish service standards, product quality and an elevated guest experience.

On-property guests can find the AAA Four Diamond and Forbes Four-Starrated hotel resort, 14 restaurants and lounges, and a strong entertainment lineup that attract guests to 1,200-seat indoor and 4,200-seat outdoor music venues, and over 22,000 square feet of flexible meeting and event space.

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its outdoor experience to take advantage of the warm climate in southern New Mexico. This includes having a music festival concert on the driving range of its golf course. Combining physical resources such as golf courses, pools, rooftops and even hotel lobbies to generate non-gaming revenue is a major trend within the entire gaming industry.

“We are constantly looking at bringing different types of events to the property,” says Stachowski. “It brings in a different type of clientele under a new circumstance for both the casino and our guests.”

Buffalo Thunder also places a heavy emphsis on food and beverage revenue, including hosting an international beer tasting festival this spring. In May they are hosting a poolside barbecue event that features a 72-ounce steak eating contest.

“Our goal is to have people who have never been here to come, then tell their friends how much fun they had,” says Stachowski. “And at Buffalo Thunder that could be accomplished by experiencing a variety of amenities on our property.”

Focusing on the Future Future financial success for tribal casinos is definitely not limited to the roll of the dice, the pull of the slot machine or the dealing of the cards. Tribal casinos have made the transition to tribal entertainment venues and resorts, with the best-in-class amenities, facilities and service both domestically and even internationally.

This allows the leaders of the tribal casinos to see their role in much larger view than their predecessors a decade ago. Now they can truly position themselves as regional destinations with hotel, entertainment, dining and nightlife options every day of the year.

“What I expect in the next few years is a busier midweek with more hotel rooms sold, and that is why we renovated our rooms,” says Gagnon. “These amenities benefit us, and now all we have to do is continue to build more awareness.”

GAMING CAREERS: PATH TO MIDDLE CLASS Supporting Workers of All Backgrounds Casino gaming is more than just a source of entertainment for millions of people. It is an economic powerhouse that improves communities and offers millions of U.S. workers a gateway to the middle class. Get to Know Gaming (G2KG) is a multiyear, integrated public affairs campaign led by the American Gaming Association that is rooted in authoritative research and promotes the value of gaming nationwide.

gettoknowgaming.org

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Walking the Fine Line

Table game innovation draws new players, protects integrity

By Dave Bontempo

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able-game technology evolves along two planes.

The “fun” area of game creation sports the bells, whistles, innovation and excitement of new products. Spiking customer passions and the house edge, this component spans the adrenaline rush of wild-card games and the graphic eye candy of silkscreen displays. This realm projects 24-hour, high-intensity action.

On the second plane, security balances gaming’s euphoria. As game speed heightens, cheaters test the system with props including counterfeit chips, marked cards and infra-red contact lenses to count cards via invisible ink.

Some players have been jailed for the practice and lawsuits have emerged over this multimillion-dollar problem.

For the casinos, these areas fit hand-in-glove, like the front and back of the house. Both realms are prominent. The game segment sells their fantasy.

Security protects their reality.

PROTECTING THE PIT The security aspect has become stronger as technology has advanced. For instance, London-based table-game leader TCSJohnHuxley’s new Gaming Floor Live platform includes a wheel-bias shield called GFL Wheel Analysis.

Gaming Floor Live is a suite of products that allow more efficient track-

ing, analysis and operation of a roulette game. GFL Wheel Analysis is what the company calls an “intelligent roulette wheel optimization tool, designed to maximize key performance areas and profitability.”

The module provides complete visibility of performance and the ability to highlight and detect any wheel bias. “GFL Wheel Analysis allows operators to assign wheels to certain tables and collect data in the background to generate concise and detailed reports on wheel integrity,” says Tracy Cohen, director of marketing for TCSJohnHuxley. “Based on user authority, casino staff can then access a web-interfaced dashboard for snapshots, or more detailed reports, of their operations. The tool provides an array of analytics, easy-to-read diagrams and reports.”

The system also provides a record of all maintenance activity as well as exceptional alarms, which indicate when the device is offline, if the wheel is spun too fast or too slow or there is any drop zone anomaly. “This presents operators with the tools required to make good decisions and to take appropriate and immediate actions, where necessary,” Cohen says.

The GFL Wheel Analysis is offered as a companion to TCSJohnHuxley’s Saturn Auto Roulette Wheel, the industry’s first compact, tabletop, automated roulette wheel. “Not only is it outfitted with most secure and advanced technology features available, but it also boasts the same footprint as TCSJohnHux-

“GFL Wheel Analysis allows operators to assign wheels to certain tables and collect data in the background to generate concise and detailed reports on wheel integrity. Based on user authority, casino staff can then access a web-interfaced dashboard for snapshots, or more detailed reports, of their operations. The tool provides an array of analytics, easyto-read diagrams and reports.”

—Tracy Cohen, Director of Marketing, TCSJohnHuxley 50

Global Gaming Business JUNE 2015

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Shuffle Master brand’s i-Deal Plus

ley’s Saturn 2 wheel, meaning it’s built to sit perfectly on any live roulette table,” Cohen says.

“Thanks to its distinct design, Saturn Auto can sit on an existing roulette table, integrate it into furniture or be displayed on a bespoke, stand-alone podium. This means that regardless of a casino’s layout or design, they can take advantage of Saturn Auto’s advanced technology; it’s flexible for any gaming floor.”

Benefits include “Drop Zone Detection” reports on non-random results and drop zone bias, as well as real-time security enhancements such as a builtin ball track inclinometer with abnormal event detection, which alleviates the need for daily leveling of the wheels.

Saturn Auto also features a unique patented launch system that grips the ball and fires it with a spin to increase the randomness of the outcome.

THE SCREEN MACHINE Las Vegas-based Scientific Games became one of gaming’s most prominent forces after annexing Bally Technologies, WMS and Shuffle Master, among others.

The Shuffle Master brand recently unveiled an ideal innovation. Or maybe that’s i-Deal... Plus.

The i-Deal Plus splashed across the gaming scene in April and May. This

fourth-generation upgrade from the i-Deal shuffling machine debuted at the Red Hawk casino outside Sacramento and the Chumash casino in Santa Ynez Ca. It later reached the Ohio market and looks poised to enter more jurisdictions throughout the year.

The i-Deal Plus sports the usual benefits of a new-generation unit, including enhanced reliability to increase game speed and technical improvements for detecting jams and card imperfections.

Yet, something else catches the buyer’s eye.

“One thing that stands out with i-Deal Plus is the visual component,” says Roger Snow, senior vice president of table and utility products for Scientific Games. “It has a screen that faces the player and can be used to display the minimums and maximums of the table, the rules of the games, payouts and promo-

DISCOVER. SIMPLIFY. OPTIMIZE.

JUNE 2015 www.ggbmagazine.com

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“One thing that stands out with i-Deal Plus is the visual component. It has a screen that faces the player and can be used to display the minimums and maximums of the table, the rules of the games, payouts and promotions. Casinos can do what they would like with it. They can also run video through it.”

—Roger Snow, Senior VP of Table and Utility Products, Scientific Games

tions. Casinos can do what they would like with it. They can also run video through it.”

The company that had called i-Deal the fastest single-deck shuffler on the market, replete with cutting-edge card-recognition technology able to read the rank and suit of every card shuffled, takes it one step further.

“There was a lot of internal debate regarding player reaction while the concept was being developed,” Snow recalls. “The mindset has long been that you have to hide this thing, deflect the attention. What we are now finding is that players like the fact they can see something on the screen. This will become an integral part of all our machines going forward at this rate. This will embolden us to be more experimental.”

Ken Harvey, table games manager for Red Hawk, says i-Deal Plus made an auspicious debut.

“Long term, I am looking to have it showcase items such as the upcoming Shuffle Master Classic tournament,” he says. “We’d also like to see it incorporate our progressive meters and winner splash screens when a player wins big. It’s a new twist to have these screens marketing to the player, and I’m sure we will come up with even more ways to utilize this new technology to promote our games and events.”

YOUR DJ For Snow, the implementation of i-Deal Plus has a sweet twist of irony. It caters to several poker games, including the company’s latest, DJ Wild, a five-card poker game featuring four Deuces and a Joker as wild cards (hence the DJ name).

The secret of the game is that both players and dealers can improve their hands with wild cards. Payouts significantly reflect the wild-card impact. A natural flush, for example, will pay in the neighborhood of 25-to-1, while a similar wild-card-aided flush delivers a small fraction of that.

This is no side venture for Snow, who has developed about 75 original table games and holds more than 40 patents.

“I like to keep all this in perspective,” he says. “There are games which have succeeded beautifully and some that can’t make it. You lose games if the math (hold) isn’t right for the house, but there has been excitement about DJ Wild.”

A Bally Technologies focus group and an optimistic sales force validated DJ Wild on one level. Then he had to see it for himself on a live Las Vegas game.

Talk about instant feedback.

“I took my wife to New York-New York and both times she could not get on to the game because it was packed,” he recalls. “That was a great feeling, because the idea was nerve-wracking for me. I was going to feel like a loser if we walked up to the table and nobody was playing it. Thank God the table was full 52

Global Gaming Business JUNE 2015

and people were not leaving.”

Harvey at Red Hawk says players quickly embraced the game’s volatility.

“The concept of multiple wild cards factored into their hands as well as the integration of our ‘Two Way Bad Beat,’ which makes the game exciting to the player and the dealer,” he says. “Players say they’ve never seen so many higher-ranked hands, and while that is true, it also leads to some interesting bad beat hands when the dealer bests their full house.”

INFRA-RED INSIGHT Las Vegas-based Galaxy Gaming is known for the fun part of its games. The company says it is the largest independent provider of worldwide games, which include the blackjack, poker, dice and baccarat realm. It has installed bases at more than 4,000 tables at 500 worldwide casinos.

This month, Galaxy fashions the flip side of the coin, security. It launches SpectrumVision, a card-cheating detection device containing a computer monitor placed atop a cabinet. Inside the cabinet, four cameras and various realms of light ranging from infra-red to ultraviolet help casinos identify suspicious cards.

SpectrumVision was unveiled at the World Game Protection Conference in the spring and will debut at several properties in June, according to Tim Caffarelli, the chief of technology and innovation for Galaxy Gaming.

“This is a unique product for us,” Caffarelli says. “We can analyze the cards placed through there and discover things not available to the naked eye. It is especially significant for games in which cards are being re-used.

Players have all kinds of methods to try introducing cards (having purchased an ace or picture-card, for example, elsewhere) or using infrared contact lenses to pick up indications on the card. The casinos can counter that with SpectrumVision. A unit can be placed in the pit, in the back area or throughout the property.”

Caffarelli says a casino would not wish to advertise that it is countering card cheats, especially for a game like poker in which an individual player can be victimized by a professional crook. Yet some information can’t be hidden. Caffarelli says a Google search of marked cards provides 13 million results including vendors openly offering marked cards and invisible ink to cheaters.

Galaxy Gaming CEO Robert Saucier likened the cat-mouse struggle between cheaters and operators to the anti-virus, new-virus fight in the computer world.

“The battle continually goes back and forth,” he asserts. “A lot of the scams that worked in the casinos 10 or 20 years ago no longer do. Casinos are on to them. Yet there has been a huge increase in the amount of marked

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“Players have all kinds of methods to try introducing cards (having purchased an ace or picture-card, for example, elsewhere) or using infrared contact lenses to pick up indications on the card. The casinos can counter that with SpectrumVision. A unit can be placed in the pit, in the back area or throughout the property.”

—Tim Caffarelli, Chief of Technology and Innovation, Galaxy Gaming

cards in recent years. Because of that, we have to detect those cards. This innovation could not have come along any sooner.”

While it is impossible to gauge exactly how much cheaters affect casinos, Saucier says the retail industry has an average of about 2 percent to 3 percent “shrinkage.” That usually entails shoplifting, employee theft and embezzlement.

Gaming, because of the sophisticated nature of cheaters, may sport a higher number.

“For a good number of retail clients, the shrinkage was more than their profit,” Saucier adds. “If you say 2 percent to 3 percent, it may not sound like much, but when you multiply that by the volumes of players and casinos, you are looking at a very real number. The big scams receive a lot of attention, but it is the little scams, that go in in the casino every day, that eventually erode their bottom line. Even now, as I’m talking to you, some casino is getting scammed by a player.”

SECURING THE CHIPS Las Vegas-based Gaming Partners International is a leading industry currency supplier. It has developed several products to help customers better safeguard their money.

One of the company’s newest rollouts is the B&G American-style, injectionmolded V-Series chip.

The V-Series line is produced using a new injection material formula that renders a more durable gaming chip. Available in five diameters, the V-Series offers customers an extensive range of configuration possibilities with their chip mold designs.

Customers can select from 480 new edge spot pattern and decal size combinations. This is a vital feature for operators who require a higher level of differen-

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tiation among their chip sets, GPI officials contend. The V-Series line is available with the same security feature options available in the company’s B&G JAV line for optimum currency protection.

ChipShield, an anti-microbial that helps inhibit the growth of stain-causing mildew, is included in the chip material. The result is a cleaner and more sanitary chip surface. For customers who order chips with four or more injection colors, the company includes an exclusive infra-red security feature in their chips.

GPI has also enhanced its Paulson chip line to offer a higher-end chip option to customers. The new Paulson Premium line combines the company’s dealer-preferred, traditional clay composite Paulson chip with the same decor materials used in its high-end European-style plaques and jetons.

The Paulson Premium features an outer decor ring that can be designed using a variety of mother-of-pearl decors and gold lace. The decor ring helps serve as a quick and easy visual authentication tool for dealers and casino staff, and helps deter potential counterfeit attempts.

New technology such as this is found across the table-game realm, and whether it is a new invention getting players to the felt or new security features protecting them once they get there, the technology of table games is still one of the most dynamic areas of gaming.

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NEW GAME REVIEW

by Frank Legato

The Big Bang Theory Aristocrat Technologies

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his latest game on Aristocrat’s “Wonder Wheels” product line—the elaborate setup that includes three mechanical wheels—recreates TV’s No. 1 comedy series, The Big Bang Theory. With the cooperation of series owner Warner Bros., Aristocrat game designers combined a multitude of video clips, character images, 3D animation and theme music from the show into a video slot packed with a variety of themed bonus events.

The slot has a multi-game base game on which players can play up to four reel sets. One of 10 mystery bonuses can be triggered within the base game at any time with any bet. Additionally, three scatters trigger The Big Bang Theory Bonus Wheel, which awards one of six bonus features: • “Large Leonard Hofstadter Collision Feature,” with free Mega symbol spins with player-selected volatility; • “Dr. Sheldon Cooper Roommate Agreement Feature,” with eight free Reel Power spins; • “Penny Friendship Paradigm Feature,” with five free scatter-pay spins awarded on a 4X4 reel set; • “Howard Wolowitz Mystic Warlords Of Ka’a Feature,” where the player selects cards to reveal multipliers and credits;

• “Raj Koothrappali Scavenger Vortex Feature,” where the player selects scavenger objects to reveal credits or Win All; and, • “The Big Bang Theory Progressive Feature,” where the player selects symbols to win credits or a progressive jackpot prize.

The multi-site progressive, resetting at $250,000, can be won on any base-game spin with at least 200 credits wagered, by landing the Jackpot symbol on all four games. The game features a three-level progressive with the multi-site option.

Manufacturer: Aristocrat Technologies Platform: Wonder Wheels Format: Five-reel, 25-line, four-screen video slot Denomination: .01-20.00 Max Bet: 600 Top Award: Progressive; $250,000 reset Hit Frequency: Approximately 50% Theoretical Hold: 10%-12%

The Fates

International Game Technology

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his new video slot on IGT’s CrystalDual dual-screen cabinet debuts a new game feature called “Lucky Spot” that provides enhancements to base-game play.

The base game is a five-reel, 27-line video slot with a choice to the operator of cost to cover—50 credits for the 15,000-credit top award; 10 credits for the 3,000-credit top prize. IGT officials say this operator-configurable cost-to-cover allows for flexibility in game placement, to appeal to multiple player segments.

At the beginning of play, the player is given the option to choose a section of the third reel as his or her “Lucky Spot.”

When a feature symbol lands in the chosen Lucky Spot, the player is awarded one of three base-game features, which include random multipliers, character and wild-symbol scatter-pays or wild reels. There also is an innovative free-game bonus with a video-game-style twist: When the free-game bonus is triggered, it lasts until four “capture” symbols occur.

According to the manufacturer, this goes up to an unlimited number of free games, theoretically.

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Manufacturer: International Game Technology Platform: AVP Format: Five-reel, 27-line video slot Denomination: .01, .02, .05 (operator-configurable) Top Award: 15,000, 3,000 Hit Frequency: 33% Theoretical Hold: 2%-12.5%

G&TAwardsad.2015

5/11/15

8:52 PM

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14th Annual

CALL FOR ENTRIES The gaming industry’s most prestigious technology awards program is coming again and requesting nominations. The winners of the GGB Gaming & Technology Awards 2016 will be announced at the Global Gaming Expo (G2E) in October. Don’t miss this chance to showcase your company’s latest innovation. Nominations are due August 14, 2015.

CALL FOR ENTRIES

THE CATEGORIES ARE: BEST CONSUMER-SERVICE TECHNOLOGY This category concerns technology that directly touches the customers.

Whether it is an enhanced kiosk, a new player tracking system, reservations system, parking management system or any other customer-friendly device, this technology directly impacts the experience of the customer. Why is this a step up from previous technologies?

BEST PRODUCTIVITY-ENHANCEMENT TECHNOLOGY This category describes a technology that makes a job or task easier and more efficient. Examples could be an online accounting system, better technology for printing tickets on cashless slots, or an employee communications device that allows a property to better explain its programs to its workers. How does this technology improve on the way the task or job had been previously performed?

BEST SLOT PRODUCT Very simply, this product is the judges’ favorite new slot product. It can be a brand new game or a traditional game that has been updated within the past 12 months. What makes this machine or game a step forward technologically?

BEST TABLE-GAME PRODUCT OR INNOVATION The growth of table games continues to occur around the world and makes it important to recognize innovative developments in this area. In this category, nominations can be made for table games or any product related to table games.

For more information contact Global Gaming Business Sales Director David Coheen at dcoheen@ggbmagazine.com or call 702-248-1565 X227.

To place an online nomination go to

www.ggbmagazine.com

Global Gaming Business

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Mega 5 Way AGS

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his is a unique new multi-screen game on AGS’ giant Colossal platform, on the new 4200 oversized cabinet. The base game is a five-reel, 243-waysto-win video slot, with no paylines. Wins are awarded for adjacent symbols on the screen, with up to 243 potential winning combinations on each spin.

The large, vertical screen displays four bonus reel sets in addition to the main five-reel screen, all under a bonus wheel with four colors. There is a wild symbol that appears on the third reel.

Three scattered bonus-trigger symbols activate the Mega 5 Way Free Spins Bonus. The game awards a random number of free spins— it can be up to a maximum of 50 spins. (There are no bonus symbols on the free-spin reels to re-trigger the event.) During the free-spin session, up to all four of the bonus reel sets can be activated in addition to the main screen, with

all bonuses and wild symbols applying on each of the active sets of reels.

Wild symbols are included on all three middle reels in the bonus, as opposed to the third reel only for the base game.

Reel 3 of the main screen contains a “Spinner” symbol. Each time it lands, an additional free spin is added, and the wheel on the top of the display spins to one of four colors corresponding with the bonus reel sets, and activates the additional reel set on which it lands for the remainder of the free-spin bonus.

When the wheel indicator lands on one of the colors, it “unlocks” a lock displayed and reveals a multiplier number from 1X to 5X. That multiplier applies to all wins on that particular reel set for the remainder of the free spins.

Manufacturer: AGS Platform: Colossal Format: Five-reel, 243-ways-to-win video slot Denomination: .01, .02, .05 Max Bet: 250 Top Award: 10,000 Hit Frequency: 27.02%-27.76% Theoretical Hold: 7.83%-14.84%

Winferno Cadillac Jack

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adillac Jack’s latest video slot uses the tall Stratos cabinet to display a five-level progressive with controlled lighting and animation surrounding the meters with a flame effect. The cabinet features a 32-inch vertical top monitor.

The base game uses a unique reel setup—the middle reel has three spots, while the four outer reels have four spots each. The game is set up as a ways-to-win platform—no paylines, with 768 possible winning combinations on each spin.

Progressives are awarded through a feature called “Turbo Boost Progressive.” During normal game play, a player may randomly be awarded a “boost” to one of more of the progressives. When a player is awarded a progressive from the boost, there often will be “spillover” remaining from the boost. Any spillover is immediately applied to that progressive’s reset value.

There are two types of wild symbols—a standard wild on the third reel in the base game and wilds on reels 2 and 4 in the free-spin bonus. In the free spins, the Tiki God Wild functions as an “XStatic Wild”— Cadillac Jack’s brand of wild symbols that remain locked in place for the remainder of the free spins.

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Bonus symbols scattered on the middle reels trigger 10 free spins, with triggers in the bonus round leading to an additional 10, 15 or 20 free spins on a single spin.

Manufacturer: Cadillac Jack Platform: Stratos Format: Five-reel, 768-ways-to-win video slot Denomination: .01 Max Bet: 200 Top Award: Class II: Progressive, $50,000 reset Class III: Progressive; $5,000 reset Hit Frequency: Approximately 50% Theoretical Hold: 8.5%-12%

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FRANKLY SPEAKING

by Frank Legato

Polished Bronze, Chopped Heads

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company CBRE Group paid $70 million for Hooters.

To Penn National: Please put back the gold trim across the top of the Tropicana’s hotel towers.

It’s supposed to be the Tiffany of the Strip, not a veteran’s hospital in Cleveland.

To CBRE Group: Please do some good placement services for those female Hooters dealers. As they say, a poker table at Hooters is the only place where a pair beats a full house. (Ba-boom!) As far as the rest of the place, lose those surfboards and other beach displays in the room corridors. It’s not like male gamblers crowded into Hooters for the pool.

Oh, and replace the hotel with something that’s, you know, nice.

Hey, maybe they can make a statue of the Hooters dealers. I know of a bronze statue that could be repurposed. Let me know when the flatbed truck gets there.

And whatever you do, don’t leave it in the parking lot overnight.

Or heads will roll.

VICT OR R INALD O

ell, thank goodness the bronze butts are safe.

One of the memorable sights from last month’s closing of the Riviera in Las Vegas was the Crazy Girls statue strapped to a flatbed truck. The statue, of course, depicts seven topless showgirls with bare behinds, from the back, arms around each other— and standing in front of countless bald, middle-aged tourists in Bermuda shorts getting their naughty pictures with the bronze babes in front of the Riv showroom over the years.

First time I ever saw the statue in the sunlight. The bronze-babe butts are actually gold-colored.

I’d like to know who polishes them. And how I get that job. But I digress…

Crazy Girls, the irreverent, sexy show that finished its 28-year run at the Riv only because they closed the casino that was wrapped around it, will reopen at Planet Hollywood. Just as soon as they get more stuff.

While the bronze babes were shipped off to one warehouse, everything else from the show— costumes, lights, computers, an entire box-truck full of lingerie—left for a separate warehouse.

Then, that second truck was stolen. Someone pinched the stuff from the parking lot of the Stage Crew Productions warehouse in the middle of the night by hot-wiring the Enterprise rental truck containing all the show equipment.

They found the rental truck empty and abandoned a day later. They say 98 percent of the show’s wardrobe and 80 percent of its technology are gone—$200,000 worth of stuff altogether.

Producers say they’ll have to start from scratch to put the show back on at Planet Hollywood.

Or, they can just keep their eyes out for someone putting on a sexy revue show from the back of a truck. Seriously, what is someone going to do with all that used lingerie? Never mind. I don’t even want to know.

The only other thing that vexes me is how thieves managed to get through the iron web of security used to protect the $200,000 worth of equipment: “Hey, should we leave this stuff in the parking lot overnight?”

“Don’t worry—it’s in a truck. No one ever steals a truck.”

I’m guessing heads will roll over this, but hey, I’m speaking figuratively. It’s not like Sheldon Adelson was in charge of protecting that truck.

In case you don’t understand that right-smart segue, casino mogul Sheldon Adelson found himself answering questions in a Las Vegas courtroom last month about whether he knew of a plot to behead his employees in Macau.

Adelson was testifying in a preliminary hearing for the wrongful-termination lawsuit filed against him by former Sands China chief Steven Jacobs. Jacobs is claiming Adelson ordered him to collect sensitive information on Chinese officials for potential blackmail purposes, which Adelson vehemently denies. But Jacobs’ attorney threw him a curve by asking him if he knew of a plot to behead Las Vegas Sands employees in Macau. He was alluding to dealings LVS was rumored to have with a Macau organized crime figure who ran junkets.

After stressing that LVS never did business with the junket operator, Adelson said, “If somebody is going to chop my employees’ heads off, of course I would be interested. But he wasn’t.”

It’s good to know Sheldon Adelson opposes beheading his employees. That would be a bit harsh. Unless, of course, they were running internet casinos.

By the way, this was only the preliminary hearing to determine whether this lawsuit will be heard in Las Vegas or Macau. I can’t wait for the main event.

Finally, both the Tropicana and Hooters casino-hotels in Las Vegas were sold last month. Penn National’s real-estate investment trust bought the Trop for $360 million and New York investment

JUNE 2015 www.ggbmagazine.com

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CUTTING EDGE

by Frank Legato

Easy Pay Product: PayLucky Solutions Manufacturer: First Data

hether it’s at a land-based casino or online, players want freedom and flexibility, and to be able to add funds, withdraw winnings and see their balances. To meet player needs and simplify payments, First Data provides operators with a comprehensive payment solution suite, PayLucky Solutions, giving players secure, flexible payment options, and helping operators enhance their brands, while increasing revenue and loyalty.

The system features the “Linked Value Marketplace,” treating the entire property as a holistic guest experience.

The Linked Value Marketplace is the casino and all businesses within the property: spa, golf course, restaurants, retail shops, entertainment venues, hotels and the community businesses surrounding the property, including gas stations and convenience stores.

The payment and loyalty offerings of each business are designed to work together to make experiences memorable, as well as increase spending and time spent on property, and

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incenting guests to return.

PayLucky uses beacon technology to allow casinos to provide unique offers to their players— added perks, exclusive offers and personalized service. Operators install one or more beacons, simple broadcast devices, throughout the property. Beacons communicate with Apple iOS or Google Android mobile devices.

During the reservation or at check-in, the guest can download the loyalty app and enable Bluetooth and location services on their mobile. Every time a beacon picks up a player’s signal, it recognizes them and if appropriate, sends personalized offers.

Advanced analytics then provide information on how Linked Value Marketplace businesses are performing. Combined with benchmarking tools, analytics enable the casino to make more informed offers to drive business during non-peak times.

For more information, visit firstdata.com/paylucky or email paylucky@firstdata.com.

Old Space, New Space Product: Renovation and Repurposing, Stones Gambling Hall Manufacturer: CCS Architecture

perators looking to take advantage of new technology on the gaming floor may look to one kind of supplier, but architecture and design of new property space is another matter, requiring specialists in each kind of project.

In the case of renovating and repurposing existing space into a new gaming-resort offering, San Francisco-based CCS Architecture, headed by Cass Calder Smith, proved its expertise in this area only recently with last year’s completion of the Stones Gambling Hall in Citrus Heights, California.

Stones, a 25,450-square-foot gambling hall, restaurant and bar, combines two former card room licenses under one roof (a first in itself) in a boutique casino created through expansion and renovation of a former Salvation Army warehouse that had been vacant for years.

The owner, a California real estate developer taking on its first gaming project, asked CCS to create a place that would have a better experience than the typical casino—more intimate, more unique, and an entertainment destination meant to be engaging and exciting, without the typical Las Vegas glitz.

The exterior of the building is completely new—modern, yet not ostentatious, unlike the typical over-designed casino or under-designed card room. Both sides of the building have similar facades for maximum exposure and dual attraction.

PHOTOS: PAUL DYER

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The interior has three main spaces with specific uses. The Main Hall has a ceiling of existing Douglas fir wood trusses that were saved and sandblasted, spanning 40 feet across. Two rows of blackjack tables and a catwalk down the middle lead to the large central bar and Sammy’s Bar & Grill, which has a live-fire exhibition kitchen, and assorted dining areas for 150 people.

Flanking the main hall are more intimate spaces that are specific to gaming. Common to all rooms is a colored plywood wall. The front and rear facades are offset grids of multi-colored glass similar to what you would find in a cathedral, yet modernized for a casino.

For more information, visit CCS-Architecture.com.

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11/7/14

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Don’t miss the

13th ANNUAL SUPPLEMENT Published December 2015

For Advertising Opportunities Call

DAVID COHEEN, SALES DIRECTOR 702.248.1565 ext. 227 or dcoheen@ggbmagazine.com A PUBLICATION

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EMERGING LEADERS

eSuccessful Tonya Roedell

Casino 9-1-1

Director of Digital and Professional Services, Aristocrat Technologies, Inc.

Craig Jacobs Director of Incident Response and Problem Management, MGM Resorts International ith more than 41 million visitors to Las Vegas in 2014, the need for quick incident response and problem management professionals within the gaming industry has become increasingly high. As the director of incident response and problem management for MGM Resorts International, Craig Jacobs and his team are essentially the “FEMA” for casino technology.

“When something is going wrong, we step in to make sure resources are being allocated and we strive to make sure that all services are restored, especially when it comes to those affecting our guests,” Jacobs says.

Jacobs’ team ensures that all IT-related issues that may arise are handled effectively and efficiently.

As a professional in the field of information technology, Jacobs has also published Breaching America, which strives to educate readers on the basic techniques used to siphon billions of American dollars each year.

The book provides simple steps to improve security and prevent issues like the data breaches experienced by companies such as TJ Maxx, Target, Home Depot and Las Vegas Sands. Much of the insight provided within this publication is from Jacobs’ personal experiences, gathered from a data breach that occurred during his time with Affinity Gaming.

Upon graduating from Murray State with his MBA in 2006, Jacobs happened upon the gaming industry when he was offered a position with Sands Regency in Reno. Shortly thereafter he was introduced to Las Vegas through Herbst Gaming (now Affinity Gaming), which acquired the Sands Regent casinos in 2007. New to the industry, the seasoned hospitality and gaming veterans around him compelled him to stay. “They taught me a lot and just made it an amazing learning experience,” he says. “The industry is a complex environment that requires a lot of attention, so it fits with the way I like to operate.”

Of Jacobs’ many mentors, Ferenc Szony, the CEO of Truckee Gaming, has been the most important as it relates to the gaming and hospitality industry.

“I was fortunate to work with Ferenc and many other industry leaders during the economic downturn, which led to a bankruptcy and reorganization of Herbst Gaming,” he says. “I have always appreciated the trust Ferenc had in me, which gave me in-

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valuable learning opportunities at a young age.”

The economic downturn and subsequent bankruptcy of Herbst Gaming represent Jacobs’ largest challenge in his career to date. The entire gaming industry was on the verge of bankruptcy, with stock prices falling 50-70 percent for many companies. This led to adjustments in volumes and workforce, creating stressful situations for many industry employees.

As a regional IT manager for Herbst Gaming at the time, many looked to Craig to find operational efficiencies to “do more with less,” improving the bottom line and cutting costs.

“Around this time there was a turn towards data from a lot of regional operators,” he explains.

“Free play had been a largely unchecked marketing tool prior to the downturn. Free play went from a ‘marketing tool’ to increase frequency to a true ‘cost’ of doing business.”

It was during the downturn that a major shift in hotel room pricing affected the industry. This shift became the inspiration behind RateShepherd.com, a reporting tool to help hotels track the rates of their competition.

“Before the downturn hotel room rates were largely based on historical performance and occupancy,” Jacobs says. “In the downturn, room pricing was all over the place, and without software it was impossible for hotels to keep track of their position in the market. Today, many hotels use the software to maximize revenue in their forecast.”

As a successful industry professional, Jacobs has advice for anyone looking to advance their career in the gaming industry.

“Generalize and specialize. It is important, especially early in any career, to focus on what you do well. By developing an expertise that has value, your personal brand can be established, recognized and leveraged.”

This mantra was borrowed from Jacobs’ father, Dr. Marty Jacobs, who is an expert in learning and curriculum development. The advice has served him well.

—Joe Dimino, The Innovation Group

chance meeting at Del Mar’s opening day led Tonya Roedell to her career in the gaming industry. From the start, it was clear she would be a front-runner in the industry.

Her experience working in e-commerce set the stage for her role in internet marketing at Caesars Entertainment and her current role as director of digital and professional services at slot-maker Aristocrat Technologies.

During her time at Caesars, Roedell rolled out internet marketing campaigns for Caesars Entertainment casinos and the Total Rewards program across the United States. At Caesars, she utilized the skills she had acquired as a graduate of Northwestern Oklahoma State University, one of the first e-commerce programs in the country. Her main task was to create campaigns that met both the needs of the regional casinos and the goals of the corporate marketing team.

One of the challenges she faced was finding that balance between the overarching goals of the corporate leadership and individual operations of the family of casinos and brands.

While she met some resistance at first, Roedell worked with the operators to move from the traditional mailers to build a strong online presence at each property.

Encouraged by her mentor, Katrina Lane, Roedell applied for and moved into a management position at Caesars Entertainment. As the vice president of channel marketing at Caesars, Lane ensured that Roedell had a seat at the table with decision-makers and provided her with strategies to have her voice heard. Although Lane has moved on to her current role as executive vice president of operations and marketing at American Express, she continues to mentor Roedell and provide support.

Again, Roedell finds herself at the forefront of technology and marketing at Aristocrat Technologies. She was brought on board in 2013 to lead a new division of the company which focuses on providing support to customers, increasing product performance and building lasting relationships.

As gaming platforms expand from the traditional brick-and-mortar building to social and online gaming, Roedell works with clients to ensure that these components work together to provide a quality experience not only for the property’s customer, but also the operator. En-

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Making Mentors Josef Wagner Vice President of Food and Beverage, Aria Resort and Casino t’s not often that you find someone who has true passion for his career. Josef Wagner is an excellent example of how a person can truly enjoy his professional life as much as his personal life.

This balance of happiness has fueled Wagner’s overall success in the gaming industry. As the executive director of food and beverage for the Venetian and the Palazzo Resorts, he takes pride in ensuring that every detail is met for the perfect guest experience.

Wagner has literally come a long way to get to where he is today. Born and raised in the small town of Spiegelau, Germany, he began working in his family’s bakery, grocery store and bed and breakfast at a young age. This routine instilled a strong work ethic that helped him become the dedicated executive he is today.

Upon graduating from Karl Obermaier Hotelfachschule with a bachelor’s degree in business and hotel management, Wagner held an apprenticeship at Golfhotel Maximilian in Germany. It was during this time, which he refers to as the “most integral part of my career,” that Wagner met his career mentor, Baerbel Frey.

As the general manager at the time, Frey taught Wagner the basics of the hospitality industry, giving him an “eagle-eye view” of how to run all operations of a hotel property. With his mentor’s close guidance, he was able to work diligently to shorten his apprenticeship from three years to two years.

In addition to providing career advice, Frey also encouraged Wagner to see the world, which he took to heart when he accepted a position at the Omni Ambassador East in Chicago.

Since moving to the United States in 1999, Wagner has worked in a number of prestigious resorts such as Park Hyatt Chicago and Wynn Las Vegas. While he loves the hospitality industry, it would be six years before he’d get his foot in the door of the gaming industry.

Instantly attracted to the “sheer energy” of casinos, Wagner refers to the gaming industry as a “perfectly choreographed dance” due to its high energy and seamless appearance. When asked why he decided to make the switch in career fields, he says, “Gaming adds a level of excitement that you do not typically find in traditional lodging establishments.”

Wagner’s entrance into the gaming world began with a serendipitous call from Wynn while he was vacationing in Las Vegas. After several interviews, he

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“I am proud of the work we do at Aristocrat to find and address disconnects between the product and the operator in order to provide the highest level of return on their investment.” suring that each of her clients is using Aristocrat’s technology to the fullest extent is one of the most rewarding parts of her job. “I am proud of the work we do at Aristocrat to find and address disconnects between the product and the operator in order to provide the highest level of return on their investment,” she says.

This commitment, combined with Roedell’s experience as an operator, is one of the major drivers of her success. From the beginning of her career in the gaming industry, Roedell has found ways to integrate new technologies into effective and innovative marketing programs.

Roedell is a firm believer in setting high expectations for one’s self and teammates. Her advice for up-and-coming leaders is simple: “Don’t be afraid to make mistakes and ask questions.” As she continues to move forward with Aristocrat, Roedell will no doubt continue to lead innovative projects, and minimize the mistakes.

—Joe Dimino, The Innovation Group

“I love seeing talented team members and helping take them to the next level.” was offered the position of restaurant floor manager for Alex. During his years at Wynn, Wagner gained experience in several of its restaurants before accepting a position with the opening team at Mandarin Oriental.

In 2010, he was offered his position at the Venetian and the Palazzo Resorts. Although it took him several years to get started in the gaming industry, Wagner climbed his way to an executive-level position in just five short years.

When asked what he enjoys the most about his current job, Wagner’s eyes light up. “I love seeing talented team members and helping take them to the next level.”

As a part of this, Wagner has been taking part in a University of Nevada, Las Vegas mentoring program for the past two years. Within this program, he serves as an inspiration to those who are getting started in the gaming industry.

Wagner offers advice to those who are new to the gaming industry and are aspiring to hold executive-level positions: “Do as much as you can and work in as many departments as possible; do not tie yourself down. Try different things and find a mentor to guide you.”

Given Wagner’s success in such a short period of time, he is well on track to continue growing professionally and inspiring others for years to come. In fact, as of May 2015, he took the next step to further expand his industry experience by accepting a position as vice president of food and beverage at Aria Resort and Casino in Las Vegas.

—Stephanie Adkison, The Innovation Group

JUNE 2015 www.ggbmagazine.com

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LEGAL

Testing, Testing…

Why private test labs are independent to the industry and accountable to the regulator

By Laura McAllister Cox, Mark F. Glaser and Jamey L. Tesler

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ince the advent of modern gaming regulation, the testing of gaming equipment has been a key component of regulatory efforts to ensure the integrity of gaming.

When Nevada and New Jersey emerged as the first two U.S. states to regulate large-scale commercial gambling, they established government technology laboratories to undertake the task of developing technical standards for gaming equipment and procedures to test gaming devices and systems to measure compliance. As gambling began to spread across the U.S., it became clear that establishing a proprietary technology laboratory for each state and tribe could create unaffordable inefficiency, higher compliance costs and longer time-to-market for new games and technology.

In 1989, the concept of a U.S.-based private, independent testing laboratory (ITL) was pioneered by Gaming Laboratories International (GLI) just as numerous tribal casinos were opening, and concurrently states such as South Dakota, Iowa, Illinois, Mississippi and Colorado voted to legalize various forms of casino gambling.

Recognizing that regulators must develop policies and risk control criteria for technology used in gaming facilities and to ensure that all games offered for play are fair to players, secure, accountable and reliable, the ITL offered an efficient alternative to leverage resources from many gaming jurisdictions to accomplish this objective.

Today, most jurisdictions have opted to outsource the testing and certification of gaming equipment to ITLs. However, the involvement of regulatory technical staff still remains a critical element to the proper oversight of gaming technology. Regulatory agencies should establish robust processes for the testing procedures and managing the ITL while still employing technical professionals trained to understand gaming technology, set policy governing the use of gaming technology and oversee ITL testing processes.

One such process is the use of a competitive

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request for proposal (RFP). For a regulatory agency which believes that the ITL should be accountable solely to the regulator, rather than the manufacturers or operators, a direct, contractual relationship between the parties can assure that control remains with the agency. By allowing multiple respondents to an RFP for ITL services to competitively bid their best service offering and pricing, regulators can focus on obtaining the highest level of service quality to ensure the integrity of gaming while also allowing for competitive pricing to control costs.

This process has also been a motivating factor for some of the most innovative technical solutions in the ITL sector. Technology that makes it easier for manufacturers to submit, transfer and remotely test their equipment was all born out of a desire to improve scoring in the competitive RFP processes.

Similarly, regulatory tools for software verification, game inventory management and testing process transparency have been developed to demonstrate additional value to regulators considering ITL bids.

The RFP process for an ITL is not unlike that utilized by a government for its banking or internet service providers. An open, transparent, competitive RFP process provides the broadest opportunity for third-party oversight and the best protection against fraudulent practices. Some critics have suggested that this process creates a “monopoly.” The winning bidder, selected for a specified period of time set forth in the contract, is not a monopoly, but rather the ITL providing the best quality, service and cost efficiency after thorough consideration by the regulator.

ITL oversight is also strengthened by a lab certification process. Here, the regulator establishes a detailed set of qualifications to ensure quality, service and staffing levels can meet the regulator’s expectations for the testing process. In order to ensure quality and fairness, the certification process can require that the ITL provide: • Precise methods to be used in the testing process to ensure that manufacturers will undergo equal levels of scrutiny during the certification process and that the regulator is able to audit the

ITL to determine if it is fulfilling its obligations as a certified ITL. • Properly trained staff such as specialists in math, communication protocols, network security and software engineers that can read a wide variety of computer software source code languages.

• Segregated quality control staff to provide additional assurance that all regulatory requirements have been tested and documented prior to certification.

• A dedicated customer support team to ensure that inquiries from regulators have a rapid response from qualified personnel.

• Minimum service-level requirements that include a fixed number of hours of free training and consulting as well as making the availability of certain basic ITL technology tools mandatory.

While the gaming industry is motivated to further standardize technical requirements for gaming equipment and reduce the cost of regulatory oversight, gaming regulators remain focused on ensuring the integrity of the games. The ITL plays an important role in preserving and protecting this balance.

Thoughtful policies by the regulator, including an open and competitive bidding process, are required to ensure the ITL is adequately staffed, trained, and focused on providing the regulator and the industry with the best possible levels of quality, service delivery and accountability.

Laura McAllister Cox is a shareholder in Greenberg Traurig’s Philadelphia office and a member of the Global Gaming Group and the Corporate & Securities practice. She may be reached at 215-988-7885 or via email at coxl@gtlaw.com. Mark F. Glaser is a shareholder in Greenberg Traurig’s Albany, New York office and a member of the Government Law & Policy practice and Global Gaming Group. He may be reached at 518-689-1413 or via email at glaserm@gtlaw.com. Jamey L. Tesler is an of counsel in Greenberg Traurig’s Boston office and a member of the Government Law & Policy practice and Global Gaming Group. He may be reached at 617-310-6026 or via email at teslerj@gtlaw.com.

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GOODS&SERVICES AGA MEETS IRS xecutives of the American Gaming Association Ecialsmet in Washington last month with senior offiof the Internal Revenue Service, to voice the

GGW HOLDS CHARITY FASHION SHOW he American Gaming Associations’s Global TingGaming Women (GGW) program is holdthe first annual Power of the Suit Fashion Show on June 26 at the University of Nevada, Las Vegas, to learn how dress can deliver confidence in the workplace.

Emceed by Alexia Vernon, founder and director of Influencer Academy, an organization focused on helping women grow their ambition and cultivate their leadership skills, this unique fundraising event is an opportunity for gaming women “to feel empowered, gain selfconfidence in their professional image and learn how to choose the best silhouettes for her body type,” according to a press release from the AGA. Following the interactive fashion show, some of gaming’s top women executives will participate in a panel on women’s personal journeys in the workplace. Moderated by Karla Perez-Larragoite, national director of gaming, Cintas, the panel includes Eileen Moore, regional president, Caesars Entertainment; Staci Alonzo, chief marketing officer, Station Casinos; Jan Carpenito, vice president, Pinnacle Entertainment; and Katie Lever, general counsel and executive vice president at Scientific Games.

The panel will discuss women’s personal career journeys to the top, workplace challenges faced along the way and the present and future opportunities available to gaming women.

All proceeds from Power of the Suit benefit the GGW Charitable Education Fund, a scholarship program for gaming women to further their careers through educational and professional development programs including classes at UNLV, attendance to the MGM Women’s Leadership Conference, attendance to G2E and more.

Visit pots.myab.co to purchase the $75 tickets. Contact Shekinah Hoffman at shoffman@americangaming.org for event sponsorships.

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gaming industry’s concern over the proposed lowering of the reporting threshold on slot winnings from $1,200 to $600.

AGA officials outlined the industry’s current technology, which was built around the $1,200 threshold, and advised IRS officials of the negative impact lowering the threshold would have on gaming operations and gaming customers. The AGA also brought up the possibility of annual reporting of wins and losses, which are already tracked by casino management systems.

“Importantly, the AGA remains committed to ensuring that the IRS understands the technological and operational capabilities of our casinos before unilaterally mandating new reporting systems,” said the AGA in a statement. “We look forward to continuing the AGA’s collaborative, productive dialogue with all key stakeholders.

“Looking ahead, the AGA will continue to lead its task force of tax, operations and government relations experts in direct and meaningful engagement with IRS officials, lawmakers and other policymakers. Furthermore, we will proceed with drafting comprehensive comments to ensure that the industry’s position on these many important issues is effectively conveyed to the IRS.”

SCIENTIFIC GAMES TO SUPPLY BAHA MAR cientific Games Corporation announced that SnewestBaha Mar Casino & Hotel, the Caribbean’s and largest casino resort, has selected a host of Scientific Games solutions in systems, games, table products and interactive products, and “provide end-to-end casino and slot-management solutions,” according to the company.

Baha Mar, the $3.5 billion resort in the Bahamas, conducted an extensive competitive bidding process before choosing a broad array of Scientific

Games’ Bally, Shuffle Master, WMS and Scientific Games Interactive products for its new 100,000square-foot Las Vegas-style Baha Mar casino.

“Scientific Games is an important technology partner to our casino resort, helping us accelerate the services for our gaming operations that will enable us to run our business efficiently while delivering an engaging customer experience,” said Paul V. Pusateri, chief operating officer of Baha Mar. Scientific Games President and Chief Executive Officer Gavin Isaacs said, “Our agreement with Baha Mar Casino & Hotel truly showcases our ability to provide an end-to-end gaming experience across an entire casino resort enterprise. Baha Mar is leveraging a variety of Scientific Games’ transformational solutions across diverse product lines and brands—gaming machines, table-game products, systems, mobile and online—to deliver a truly unique and highly engaging gaming experience to its patrons.”

Working in partnership with Baha Mar, Scientific Games Interactive is breaking new ground by providing the casino the full SG Universe suite, anchored by Scientific Games’ award-winning mobile concierge app. SG Universe is the first solution of its kind to combine the company’s Play4Fun Network social casino system with on-property, real-money mobile wagering and mobile concierge features into a single integrated and casino-branded mobile application.

In addition, an expansive array of Bally systems solutions powers Baha Mar’s high-speed, networked casino floor, including ACSC CMS/SMS, Bally Business Intelligence, Elite Bonusing Suite, iVIEW Display Manager (DM), Servizio and Tableview. Every one of the approximately 1,140 slot machines on the casino floor is connected to the iVIEW network to provide patron self-service, marketing messages and bonusing solutions.

Baha Mar also chose an array of Bally and WMS gaming machines for its elaborate new casino, including the Bally Pro Wave, Pro V27/27, Pro Curve, Pro V32, Pro V22/22, Pro V32 and the WMS Blade, Bluebird xD, Bluebird 2 with Transmissive Reels and Gamefield xD. Scientific Games is providing more than 300 Bally and WMS for-sale and premium games, including such game titles as Betty Boop’s World Tour, Iron Man, The Lord of the Rings Return of the King, Michael Jackson Wanna Be Startin’ Somethin’, Monopoly Boardwalk Seven, Super Monopoly Money, Titanic, Willy Wonka and the Chocolate Factory, Wonder Woman Wild and Wonder Woman Gold, and ZZ Top Live From Texas.

The casino also opened with a Shuffle Master product on each of its 135 card table games, including an array of utility products for automatic card

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shuffling such as i-Deal, i-Score Plus, i-Shoe Auto and MD3.

Baha Mar also selected an expansive suite of popular Shuffle Master proprietary table games, including several with progressive offerings—including Blackjack Switch, Caribbean Stud Bonus progressive, Casino War, Fortune Pai Gow Poker progressive, Free Bet Blackjack, Let It Ride progressive, Six Card Bonus, Three Card Poker progressive, and Ultimate Texas Hold ‘em progressive.

CINTAS RECEIVES IMAGE OF THE YEAR AWARDS or the 16th consecutive year, Cintas CorporaFduring tion received Image of the Year Awards (IOY) a banquet held by the North American Association of Uniform Manufacturers & Distributors (NAUMD) in Orlando, Florida.

Presented by the Image Apparel Institute (IAI), a division of the NAUMD, the 2015 IOY awards recognize fashion, function, creativity and innovation. The industry’s most celebrated de-

MULTIMEDIA LAUNCHES 2015 TOURNEVENT OF CHAMPIONS ultimedia Games and new owner M GCA last month launched the 2015 version of the TournEvent of Champions. Caravans were dispatched from the company’s headquarters in Las Vegas and Austin, Texas. They will cover the eastern and western ends of the U.S. and will wind up in Las Vegas in late September for a two-day championship event at the Encore. The tour buses will cover more than 40,000 miles visiting preliminary events.

“Our staff has been working hard to line up the in-casino qualifying events for the 2015 National TournEvent of Champions even before the 2014 champion was crowned,” said Ram Chary, CEO of GCA. “And now the second phase is under way as our two buses hit the road in search of the best slot tournament player, all vying for a shot at our biggest prize purse yet. The event just keeps getting bigger and bigger.”

The 2015 championship will be held on September 29 and 30 in the XS nightclub at Encore with more than 200 competitors from more than 100 casinos battling for the national championship ring and a grand prize of $1 million. The total purse for this year’s event will be $1.3 million, more than double that of last year.

The second annual TournEvent for Charity will be held on September 28 in the Multimedia booth on the floor of the G2E trade show, featuring 24 celebrities, media members and special

signers, journalists and fashion authorities recognized Cintas customers the Cromwell, the only stand-alone boutique hotel in Las Vegas, and Streamsong Resort with awards in the gaming and single-unit hotel categories.

Winner in the gaming category, the Cromwell partnered with Cintas to create an apparel program to match its boutique-minded guests. Designed so employees could wear it outside of work, the sleek and minimalistic collection includes fitted blazers, shirts and vests that mirror current runway styles.

JUNE 2015 www.ggbmagazine.com

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guests playing for the charity of their choice. Multimedia will make a $40,000 donation to Save a Warrior, which benefits active-duty military personnel, veterans and first responders suffering from PTSD, with an additional $40,000 going to the charities of the winner.

Guy Laliberte

ARISTOCRAT TO CLOSE JAPAN UNIT ustralian slot manufacturer Aristocrat Leisure A Ltd. announced it will close its main Japanese unit KK Aristocrat Technologies and cease new pachislot game development in that country. The decision follows what the parent describes as a “strategic review” of its Japanese business, according to the GGRAsia website.

Aristocrat Leisure added it will maintain a small presence in Japan via another subsidiary called KK Spiky, which will provide service and field support for recent game releases.

The Japan business had become “less relevant to Aristocrat’s predominantly recurring revenue footprint,” said Toni Korsanos, Aristocrat Leisure’s chief financial officer, in a statement. “We will continue to prioritize investments behind our growing core segments across Class II, Class III and digital gaming segments.”

The closure will occur before the end of the calendar year.

INSPIRED SIGNS BIG GREEK CONTRACT Inspired Lthatondon-based Gaming Group confirmed it has signed a contract to provide OPAP S.A., the agency operating gaming in Greece, with 3,960 video lottery terminals for the Greek gaming market.

OPAP has the exclusive 10-year license to operate 35,000 VLTs in Greece— 16,500 VLTs through its own network with the remaining 18,500 VLTs to be subcontracted to four to 10 sub-concessionaires.

“OPAP is one of Europe’s largest and most established operators, and we are proud to be selected as one of their VLT suppliers, following a competitive tender process,” said Luke Alvarez, founder and CEO of Inspired. “We will be launching a significant number of Inspired VLTs in the coming months, and we look forward to many years of ongoing success in Greece with OPAP.”

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FULL CIRQUE-LE hat started as just a small group of street W performers made their way into Las Vegas some 25 years ago in a tent behind the Mirage.

Just a few years later, Cirque du Soleil got its first show at Treasure Island, Mystere, which still runs to this day, in addition to 18 others across the globe.

Founder Guy Laliberte, who has seen his net worth grow to over $2 billion from the business, has decided to sell 90 percent of his stake in the company to U.S. private equity firm TPG. Laliberte said, “I want to set other creative challenges for myself.” Laliberte also created the One Drop tournament at the World Series of Poker, in which the best players from around the world battle it out for a buy-in of $1 million. A portion of the buy-ins go to Laliberte’s One Drop Foundation.

Laliberte said he did not want to pass the business on to his children, but would prefer them to follow their own dreams. “They have their dreams and as a father I have made the commitment to support them as they chase them,” he said. He founded his circus company in 1984 with funding of $1.5 million from Quebec’s provincial government. It is estimated nearly 160 million spectators have seen a Cirque show.

Laliberte also shut down claims that the company is in financial woes, and pointed to the fact they sell 11 million tickets per year. TPG is planning to bring Cirque’s presence to China. The sale should be finalized in the third quarter. Laliberte will remain as a consultant.

BINION, ELDORADO DONATE $10,000 n April 25, gaming industry O legend Jack Binion and Eldorado Shreveport Management, operators of Eldorado Resort Casino Shreveport in Louisiana, presented $10,000 to the Institute for Global Outreach’s “Walk For Humanity” and the Odyssey Foundation Autism Resource

Center. Eldorado Resorts founder Don Carano, Chief Executive Officer Gary Carano, General Manager Mike Whitemaine and 200 other guests attended the event.

Binion became president of Binion’s Horseshoe Casino and Hotel in Las Vegas at age 26.

He hosted the first World Series of Poker in 1970, and was inducted into the American Gaming Association’s Gaming Hall of Fame in 2004 and the Poker Hall of Fame in 2005.

Through the years, he has expanded the Horseshoe brand to regional casinos, including a location in Bossier City.

Said Gary Carano, “We are thrilled to welcome Jack back to Shreveport. He is the quintessential gentleman of the gaming industry, and his renowned warmth, hospitality and generosity will bring a much-needed spotlight to these worthwhile charities.”

GENESIS ANNOUNCES SOCIAL SOLUTION enesis Gaming Inc. announced a compreG hensive content catalog solution for social casinos seeking a plug-and-play catalog of proven video slot content. This new offering allows a social casino to add 20 games in a single integration.

“We have been providing high-performing video slots for some leading social casino sites for a number of years,” said Geoffrey Hansen, managing director of Genesis Gaming. “We are taking our success and experience with these select social casino partners, and making some of our top real-money gaming titles available to social casino partners through a simple plug-andplay solution.”

RESORTS Genesis has brought many real-money online games into a packaged bundle with a “per-game” subscription model, bypassing often-difficult revenue-sharing formulas in the social gaming space and leaving more upside for social casino partners.

The catalog offering features both Flash and HTML5 content, and options are available for native clients on iOS/Android.

Gaming legend Jack Binion

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PEOPLE MARKETING LEGEND ROMERO DIES

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ne of the most respected members of the gaming industry passed away on April 30 when John Romero died at the age of 85. Romero was John Romero renowned for his expertise at casino marketing. He was the inventor of several gaming industry institutions, including table game tournaments, money drops and golf promotions.

Romero was a graduate of San Jose State with a degree in journalism. His first job was with the Las Vegas Review Journal as a sports editor. For 10 years, he covered all the sports, wrote a column and later became a boxing judge in Nevada. During that time, he served in the Navy in the Korean War. In 1960, he became marketing director at Del Webb’s Sahara and stayed in that job for 20 years.

He introduced the “Super Sahara Celebration” with its $100,000 Shower of Money, the first time something like that had ever been attempted. In 1979 he became co-founder and principal owner of International Gaming Promotions Inc., and in conjunction with Players Club, attracted thousands of gamblers to the Sahara. The concept spread quickly and soon many casinos were offering tournaments.

In 1980, he left the Sahara and founded his own company, implementing marketing programs for dozens of casinos, including Harrah’s, the Flamingo, Caesars and Resorts International in Atlantic City.

His first book, Casino Marketing, was published in 1984, and he followed up with Secrets of Casino Marketing in 1998. In his later years, he authored a book about Las Vegas and completed his first novel in 2013, The Eisenhower Enigma.

NIGC NAMES CHIEF OF STAFF, GENERAL COUNSEL

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he National Indian Gaming Commission, the federal agency charged with overseeing tribal gaming in the U.S., has named a new chief of staff to Chairman Jonodev ChaudShannon O’Loughlin huri and a new general counsel.

Chaudhuri announced his selection of Shannon O’Loughlin, citizen of the Choctaw Nation of Oklahoma, as chief of staff. O’Loughlin will lead the day-to-day management of NIGC operations, including compliance, finance, public affairs and the recently created technology divisions.

In addition, O’Loughlin will provide support in implementing the commission’s priorities, which include execution of the agency’s oversight duties, maintaining the NIGC’s commitment to training and tribal consultation and continuing to strengthen dialogue and relationships with all relevant stakeholders.

Chaudhuri also announced Eric Shepard as the NIGC general counsel. Shepard has been acting general counsel since September 2012. He will continue to provide legal oversight, guidance and assistance to the commission.

Prior to joining the Office of General Counsel, Shepard was the attorney general for the Colorado River Indian Tribes, for more than a decade.

FORMER NEVADA CASINO EXEC JOINS GAMING COMMISSION

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oe Brown, who joined the Nevada Gaming Commission in 2008, has officially resigned from the five-member commission for personal reasons. Brown said he will still practice in other areas of govMichonne Ascuaga ernment affairs, administra tive and business law.

Governor Brian Sandoval gave praise to Brown for his “wealth of knowledge” he brought to his work as a gaming regulator.

Brown’s vacant spot will be filled by Michonne Ascuaga, former CEO of John Ascuaga’s Nugget in Sparks. Ascuaga will complete the rest of Brown’s term, which ends next April. In a statement, Ascuaga said, “I have worked in gaming all of my life and am honored to be appointed to such a prestigious board.”

Sandoval also reappointed Patricia Mulroy to the commission for a four-year term.

MARYLAND NAMES NEW GAMING CHIEF

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aryland Governor Larry Hogan has Gordon Medenica appointed Gordon Medenica as director of the state Lottery and Gaming Control Agency.

“Gordon Medenica will bring a wealth of lottery and business experience to the agency,” said Hogan in making the appointment.

Medenica has previous experience running state and private lotteries, most recently as chief executive officer of Northstar New Jersey Lottery Group. He was also previously president of the

North American Association of State and Provincial Lotteries and New York Lottery director from 2007 to 2012.

During that time, the lottery set records in increased revenue, reaching $8.4 billion in sales.

Before entering the lottery industry, Medenica was an executive with the New York Times Company. He has also been an executive vice president of the holding company that controls the Philadelphia Inquirer and Daily News.

He replaces Stephen Martino, who departed in March to practice law at Baltimore’s office of Duane Morris.

GLI NAMES CLIENT SERVICES DIRECTOR

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eading gaming testing company Gaming Laboratories International has named Patrick Moore, a compliance expert for GLI since 2002, as the new senior director of client Patrick Moore services. In his new role, he will work closely with existing and new clients globally, helping them take full advantage of the company’s extensive portfolio of products and services.

Previously, Moore had served GLI and its global regulator, supplier and operator clients as senior director of technical compliance.

GGB

June 2015 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Casino Data Imaging . . . . . . . . . . . . . . . . . . . . .51 Casino Design magazine . . . . . . . . . . . . . . . . . .61 CCS Architects . . . . . . . . . . . . . . . . . . . . . . . . .45 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . . .67 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 GCA + Multimedia Games . . . . . . . . . . . . . . . .25 GGB Gaming & Technology Awards . . . . . . . . .57 GGB News . . . . . . . . . . . . . . . . . . . . . . . . . . . .65 GGB Subscriptions . . . . . . . . . . . . . . . . . . . . . .53 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Greenberg Traurig . . . . . . . . . . . . . . . . . . . . . .29 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5, 39 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Konami Gaming . . . . . . . . . . . . . .11, Back Cover Red Square Gaming . . . . . . . . . . . . . . . . . . . . . .9 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . . .22 Scientific Games . . . . . . . . . .2, Inside Back Cover Spin Games . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 TCSJohnHuxley . . . . . . . . . . . . . . . . . . . . . . . . .41 US Virgin Islands . . . . . . . . . . . . . . . . . . . . . . . .37

JUNE 2015 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Q

&A

A.G. Burnett Chairman, Nevada Gaming Control Board

T

he nation’s oldest regulatory body, the Nevada Gaming Control Board, has been the career springboard for many state leaders and one national leader, U. S. Senate Majority Leader Harry Reid. Now, A.G. Burnett is filling that role, and as NGCB chairman, he recognizes that he is stewarding one of the most respected agencies in gaming. He spoke with GGB Publisher Roger Gros from his offices in Carson City in May. To hear a full podcast of this interview, visit GGBMagazine.com.

GGB: We’ve seen a lot of changes in the gaming industry over the past few years. Is it the responsibility of the regulators to accommodate these changes as quickly as possible?

Burnett: My answer would depend on the

type of changes that you’re talking about. We saw consolidation at the operator level about seven years ago, and then we saw consolidation more recently at the manufacturer/distributor level. And we do accommodate those in terms of analyzing the mergers from different perspectives, whether they be anti-trust issues or other federal concerns. But we also analyze them from a Nevada perspective to make sure that the interests of Nevada will be protected in terms of employees and things of that nature.

We also work with other jurisdictions, as other states legalize, and have gone down the path of regulating gaming. It has been incumbent, I think, upon the Gaming Control Board of Nevada to work with those other jurisdictions.

So the short answer is absolutely yes; it’s incumbent upon us to all work together, to handle all the new things that are occurring in the changing landscape of gaming.

Is there more that can be done, however, with the regulators in all the different jurisdictions, working together? For example, 70

Global Gaming Business JUNE 2015

is there some kind of common application everyone could use?

There have been some attempts at creating that. But there are inherent differences between states and countries; I don’t think that you’ll ever get past those. The International Association of Gaming Regulators has been working on just such a form, and we created what is a base form that I believe regulatory jurisdictions can go to through IAGR, for example, to adopt. But the differences are inherent in the adoption of that base form, because in Nevada, ironically, we chose to keep our form.

How do you approach the rapid growth of technology? Is there a way to increase the speed to market of gaming products?

We’re always trying. In the 2011 session, Nevada endorsed the option of gaming licensees to use independent test labs. And those are your BMMs, your GLIs, other similar labs, and the idea was to try to streamline the process. Now, in 2015, I think the process is well under way, and the biggest thing that we can say to manufacturers is, when you’ve got a new product, communicate all of the specifics on that product, not only to us as regulators in Nevada, and our technology division, but also to the lab that you’re going to use, and after you submit it initially to the lab, keep us in the loop so that we can have a three-way dialogue that’s ongoing. That, to us, seems to be the best way to get these things through in as quick of a timeframe as possible.

Let’s talk about iGaming. Nevada was the first to legalize it way back in 2001. It took a while to implement, but Nevada became the first state to launch iGaming in 2013, with online poker. What has been the regulatory experience in this field, so far?

It’s been a good experience. We had a lot of time to ramp up and get ready, of course. We were trying to understand it for several years,

and then once we got to a place where we felt we understood it, the next question was, “Could we regulate it?” And then when we got to the place where we felt we could regulate it, things really started to move, and momentum started to build, and our legislature over the course of a couple sessions went ahead and legalized it.

Since then, the experience has been—I guess you could say good and bad. It’s been bad in that the results haven’t been as good as everyone had hoped, but everybody knew that that would be the case. Everybody knew, in Nevada, that in order for internet gaming to be successful, two things had to happen. There had to be, No. 1, successful and strict regulation, and I think we have succeeded at. But No. 2, there had to be more liquidity, and there had to be, for that to occur, more states legalizing.

Tell us about the compact with Delaware.

How did it come about, and how it was implemented?

We wanted to keep the agreement as simple as possible. You had the regulators, and then you had the governor’s offices all working on it and doing it at the same time, with that concept in mind. The Delaware people—and I mean the regulators and the government—were really, really good to work with. And they understood from the get-go that Nevada was going forward just with poker, whereas they were going forward with all games. So, we created a multi-state internet gaming agreement, which outlined the agreement between the two states, and how they would handle the relationship, and then we simply attached an addendum to it that listed the games that each jurisdiction has approved. On the Nevada side it just says “poker” and on the Delaware side it says all of the games. So really, what was created was a liquidity sharing agreement for poker players playing in the two states.

The more complex parts were actually the creation of the platform itself. And that was something that the operators had to do.

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