Global Gaming Business, Nov 2013

GGB Global Gaming Business Magazine

November 2013 • $10 • Vol. 12 • No. 11

888’s ITAI FREIBERGER G2E 2013 WRAP UP

FIGHT GAME:

THE

BOXING MMA?

OR

EMERGING

LEADERS ’

AGA’s Geoff Freeman leads the 2013 class of ‘40 Under 40‘

Casino Competition

What you need to know about saturated markets

Jersey First Atlantic City’s

casinos lead the introduction of full online gaming in the U.S.

Official Publication of the American Gaming Association

GGB

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CONTENTS

Vol. 12 • No. 11

november

Global Gaming Business Magazine COVER STORY

COLUMNS

Page 22

Meet the New Boss

The new president and CEO of the American Gaming Association, Geoff Freeman, may be different in background from his predecessor, Frank Fahrenkopf, Jr., but his mission is the same—to bring together the various sectors of the gaming business for the common goal of moving the industry forward.

By Roger Gros

14 AGA Lessons from G2E Geoff Freeman

16 Fantini’s Finance Land of the Rising Sun Frank Fantini

DEPARTMENTS 4 The Agenda 6 Dateline

COVER PHOTO BY DONAVON LOCKETT

13 Nutshell

FEATURES

GGB iGAMES

18 Heated Competition

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

The launch of a new casino market in Massachusetts is the latest evidence of how competition in the U.S. casino market has increased exponentially over two decades.

By Michael Soll and Derris Newman

26 Youth Serves The Global Gaming Business list of “40 Under 40” highlights the young leaders who will inherit the mantle of a successful and growing industry.

By Frank Legato and Roger Gros

48 Fight Game

This month’s launch of internet gaming in New Jersey will do much to transform not only the industry at large, but Atlantic City in particular.

iGNA Outlook 42 Moving Target/Part 2

59 Cutting Edge 60 New Game Review

FEATURE 38 Internet Savior

By Michael Pritchard

58 Frankly Speaking

62 Goods & Services 65 People 66 Casino Communications With Itai Freiberger, Chief Operating Officer, 888 Holdings Inc.

Kimberly Arnold

44 iGames News Roundup

The traditional relationship between casinos and boxing has made room for a new participant as mixed martial arts take off.

By Dave Bontempo

57 iGaming at G2E

The 2013 edition of Global Gaming Expo was the most successful in years, including a larger exhibit floor, breathtaking new games, and the top conference program in the business.

The fastest-growing portion of the casino industry, the emerging internet gaming market, received special focus at the industry’s central trade event.

By Patrick Roberts

By Marco Valerio

54 Really Big Show

NOVEMBER 2013 www.ggbmagazine.com

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THE AGENDA

All Together Now Roger Gros, Publisher

Vol. 12 • No. 11 • November 2013 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

W

hen I first started going to gaming conventions back in the 1980s, it was a small and quaint industry. The first World Gaming Congress was held at the Showboat in Atlantic City in the late 1980s and it was a tiny affair, barely filling the modest-sized ballroom. It attracted a couple of thousand people, if even that.

But it did represent the first time that the different parts of the industry came together.

But since the industry consisted only of casinos in Atlantic City and Nevada, as well as a scattering of bingo halls on Indian reservations, there weren’t many different parts.

Through the years, as the World Gaming Congress morphed into the Global Gaming Expo, the industry grew larger and more diverse. The exhibit hall at this year’s G2E was one of the largest ever.

On the G2E exhibit floor, you could find every facet of the gaming industry. The slot manufacturers, of course, are always out in force at G2E. And the companies that supply the slot manufacturers—cabinet makers, video monitor providers, bill acceptors, slot bases, chairs, content developers, software providers—were all there, as well.

The table game sector was well-represented, from the small 10x10 booths featuring a new idea for a game to a giant area hundreds of square feet displaying the latest game technology, shufflers, chips, displays, layouts and more.

Food and beverage is always a big hit. Attendees can sample food items from many providers and end up in the wine and spirits area, where sips of everything from wine to schnapps are dispensed. By the way, that’s my favorite stop.

Entertainment is also a huge facet of the tradeshow floor, with a stage offering performances by comedians, bands and magicians.

Architects and designers display their art on huge layouts and remind casino operators that it takes more than just maintenance to keep an old casino looking fresh.

Consultants seem like a dime a dozen in each aisle, but point out the new reality of outsourcing tasks that previously may have been accomplished in-house.

And of course, the new growth area of iGaming was well represented, with companies that provide

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the systems, payment processing, geolocation, online marketing, legal advice and much more.

And when you combine these diverse vendors with an even more varied attendee base—commercial and tribal casino operators, lottery officials, tribal, state and federal regulators, attorneys of all stripes, bingo and VLT operators, racinos, and dozens of other categories—from every corner of the world, G2E is truly a melting pot.

Geoff Freeman, the new American Gaming Association president and CEO, was attending his first G2E, and he gives you his impressions of the show in his column on page 14. He’s calling for us to come together with all these different factions of the industry under one banner. And while he doesn’t specifically say it, I’ll be presumptuous enough to do so.

All these factions of the industry need to coalesce under the American Gaming Association. The AGA isn’t just a few big companies trying to get their way. The AGA is everyone involved in the industry coming together to make it a better place for everyone involved: operators, manufacturers, investors, employees and customers, from the commercial, tribal and online sectors alike.

There’s no reason the AGA can’t effectively represent all these diverse interests. Yes, there are going to be times when one group has a diverging interest from another group. But that happens in every industry and it doesn’t make them mortal enemies. And there is no reason these issues can’t be set aside by the AGA and allow the organization to concentrate on issues that we all agree upon.

Washington, D.C. is a scary place. Decisions are made there that can make or break any industry.

For the last 18 years, the AGA has kept those decisions at bay, with only the big companies involved.

Can you imagine the power the AGA can generate if all the other interested groups have a place at the table? The hundreds of thousands employees and millions of players can be a powerful lobbying force that the AGA can mobilize at a moment’s notice if necessary. And what if we use that power to promote the good the industry does instead of merely defending against outlandish charges?

So let’s capture the spirit that we all felt at this year’s G2E. Come together and work together, and the gaming world will be in a much better place.

Global Gaming Business NOVEMBER 2013

Becky Kingman-Gros, Director of Operations bkingros@ggbmagazine.com Columnists Kimberly Arnold | Frank Fantini Geoff Freeman Contributing Editors Dave Bontempo | Derris Newman Michael Pritchard | Patrick Roberts | Robert Rossiello Michael Soll | Marco Valerio

EDITORIAL ADVISORY BOARD Mark A. Birtha, Vice President and General Manager, Fiesta Henderson Casino Hotel

• Julie Brinkerhoff-Jacobs, President Lifescapes International

• Nicholas Casiello Jr., Shareholder Fox Rothschild

• Jeffrey Compton, Publisher CDC E-Reports

• Dean Macomber, President, Macomber International, Inc.

• Courtney Muller, Group Vice President, Global Gaming Expo Reed Exhibition Companies

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

• Jim Rafferty, President, Rafferty & Associates

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

• Steven M. Rittvo, President, The Innovation Group

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

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 921 American Pacific Dr, Suite 304, Henderson, NV 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor.

Copyright 2013 Global Gaming Business LLC. Las Vegas, Nev. 89118 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: Global Gaming Business, 6625 S. Valley View Blvd., Suite 422, Las Vegas, NV 89118 Official Publication

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DATELINE ASIA november2013

DreAming Big in mAnilA Melco Crown has upped the budget for its resort casino in Manila’s Entertainment City

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elco Crown Entertainment is boosting its investment in a casino resort on Manila Bay by 30 percent Melco Crown above the US$1.3 billion earpartner Henry Sy marked for the massive project.

The increase from $630 million to $680 million for the resort’s first phase came after a regulatory change went through to permit more gaming positions, and coincided with an official announcement of the property’s new

No Chinese, No Matsu Troubles mount for Taiwan offshore islands he prospects for casinos in Taiwan may be undergoing a dramatic shift in the aftermath of a report that the Chinese government will not allow its citizens to visit any gambling venues that might be developed there.

Former Las Vegas The report is based on Sands executive Bill “certain comments made by Weidner has plans multiple mainland Chinese for a casino in Matsu. officials charged with Taiwan-related issues and echoed by Taiwan’s transportation minister,” said Union Gaming Research Macau in a note to investors.

“Given this dynamic, any casino built in Taiwan would therefore largely be dependent on locals, which means that only a casino built near population centers, such as Taipei, would make sense—and only if locals are allowed to gamble,” said the Macau-based investment brokerage, which reports that the minister, Yeh Kuang Shih, has suggested to the national legislature that casino gaming be legalized in an established special economic zone near Taoyuan Airport in the capital city.

Weidner Resorts, headed by U.S. gaming industry veteran William Weidner, a former president of Las Vegas Sands, has proposed an investment of several billions of dollars in a mixed-use resort complex on Matsu that also contemplates an overhaul and expansion of the island’s transportation infrastructure and water-treatment and power plants.

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Global Gaming Business NOVEMBER 2013

name—City of Dreams Manila.

The extra investment will accommodate an increase in the number of table games from 242 to 365 and machine games from 1,450 to 3,360.

“City of Dreams Manila will herald a new era of entertainment in Manila,” said Melco Crown coChairman Lawrence Ho. The resort, slated to open next summer in a specially zoned district in the capital known as Entertainment City, will also include a 260-room luxury

hotel under the Crown Towers brand owned by Ho’s Melco partner and co-chairman, Australian gaming tycoon James Packer. It will be one of three hotels at the property.

For Melco the resort—formerly known as Belle Grande Manila Bay—is its first foray outside Macau, where it owns two casinos and is building a third. Its partner in the project is Philippine property conglomerate Belle Corp., which is controlled by the country’s richest individual, Henry Sy.

JAPAN CASINOS IMMINENT?

Legislators begin drafting comprehensive bill

T

he chairman of the pro-casino caucus in Japan’s Diet says the group plans to submit a legalization bill in the next session of the parliament.

Hiroyuki Hosoda, a senior member of Shinzo Abe’s ruling Liberal Democratic Party and an ally of the prime minister, also says the intention is to get the bill passed in the 2014 session.

With Abe reported to favor casinos as part of his program for reviving Japan’s economy and with Tokyo winning the 2020 Summer Olympics, anticipation has never been higher that resort-scale gambling Hiroyuki Hosoda, a prominent Diet member and ally of Prime may finally become reality in the world’s third-largest economy and Minister Shinzo Abe Asia’s largest untapped casino market.

“A lot of Japanese gamble at casinos overseas, so the ban doesn’t make sense anymore,” Hosoda told Bloomberg. “It just means tax revenues go elsewhere.”

It is believed that the industry is at least five years from becoming operational, but analysts believe a market consisting of two integrated resorts, one each in Tokyo and Osaka, could rake in US$10 billion in revenues a year, possibly surpassing Singapore and catapulting the country to No. 2 in gaming revenue in the world behind only Macau.

Take Two Casinos back on agenda in South Korea

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fter rejecting applications a few months back by Las Vegas-based Caesars Entertainment and Kazuo Okada’s Universal Entertainment, the government of South Korea is taking a fresh look at foreigners-only gaming as a tourism driver, and a framework for regulating Korea’s 8-City project may them in the country’s Free Economic Zones will be unveiled this be revived. month, according to the Ministry of Trade, Industry and Energy.

In July, the administration of President of Park Geun-hye announced a plan to invest a total of 82 trillion won (US$72 billion) to complete the development of eight FEZs by 2022, with a long-term goal of attracting as much as $20 billion in foreign investment.

Destination-scale casinos capable of boosting inbound tourism are viewed as an important part of the strategy, and to attract both foreign and domestic developers, the government is prepared to provide a friendly tax and regulatory environment sweetened with other incentives, according to a report in English-language daily The Korea Times.

As to why Caesars and Tokyo-based Universal failed to make the cut, no reasons were publicly given, but it was the Ministry of Trade that specified “qualified” in a statement on the new plan.

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DATELINE EUROPE november2013

Dutch Downer Government takes over Holland Casino

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Smoke and casino Free

Madrid fears losing EuroVegas

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adrid is pushing Spain’s central government to grant EuroVegas an exemption to the country’s ban on smoking in public, which developer Las Vegas Sands has set as a condition for going ahead with the project.

Madrid desperately needs the jobs and economic development the multibillion-dollar resort complex promises. Slated to be built just outside the city, its plans call for up to six casinos, 12 hotels and an array of entertainment and leisure attractions.

“We must do everything in our power to prevent a deal like EuroVegas slipping through our fingers,” Madrid President Ignacio Gonzalez said.

The central government, however, faces significant popular opposition to waiving the law, which came into force in January 2011 and prevents smoking in all public places, including restaurants, bars and casinos. Health Minister Ana Mato said the government has to protect the health of its citizens, although she added that it was also a government priority to create jobs, since Spain has one of the highest unemployment rates in Europe.

New Casino OK’d in Britain French operator Groupe Partouche will develop a £14 million casino in Bath in England

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£14 million casino in the English city of Bath is expected to open in the summer of 2016 as part of a new entertainment district in the city.

Two new restaurants and a luxury 148-room hotel are part of the project, which will create 116 jobs.

French operator Groupe Partouche has been granted a provisional license to run the property in partnership with Global Gaming Ventures (Bath) Limited. The hotel will be operated by Z Hotels.

Plans for the area around the casino call for a pedestrianized neighborhood with outdoor dining and other attractions. Developing it will involve the demolition of several existing buildings, including a Gala Bingo hall, a pub, a former clinic, public and private parking garages and several other structures.

“The scheme represents important investment in Bath City Centre, rejuvenating a key central space,” said a planning consultant working with lead architect Deeley Freed.

The redevelopment work is scheduled to begin next summer.

he government of the Netherlands has assumed direct supervision of foundering Holland Casino.

The state-owned company, which has a monopoly on running casinos in the Netherlands, has been plagued by declining visitation and spending at its 14 casinos. Turnover has dropped by 30 percent in the last five years while debts have mounted to €60 million and heading toward €100 million, according to local news reports.

Last year, the company announced plans to reorganize and cut 400 of its 3,000 jobs. Since 2008, the company has shed 1,200 jobs and plans to cut another 150 this year.

The introduction of online gaming in Europe has also hurt Holland Casino, as it never was able to parlay its land-based operations into an effective online presence.

ITALIAN INTRANSIGENCE

Court affirms open E.U. gambling market

The European Court of Justice has confirmed in an Italian case that member states of the European Union cannot prohibit the provision of gambling services from other member states.

The court’s preliminary ruling in Biasci et al. reiterates that such restrictions, which effectively favor incumbent operators in one member state while shutting out those licensed in others, are a violation of the free trade guarantees contained in E.U. treaty law.

In addition, the court upheld judgments issued in Placanica and other rulings stating that no sanctions may be applied against those operators on the basis of national laws that are contrary to E.U. law.

The case stems from action taken by Italian authorities back in 2006 to block the official website of Malta’s Lotteries and Gaming Authority after they had prohibited some 684 gaming sites registered in Malta from offering their services in Italy. In a bid to bypass the blockade, the LGA had linked its website to all its licensees using a web anonymizer that disguises IP addresses.

Opponents said Italy was acting to protect its €2 billion domestic market from outside competition.

NOVEMBER 2013 www.ggbmagazine.com

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DATELINE USA november2013

Delaware Dilemma

State officials listen to pleas of casino executives

Northern Exposure Family-owned casino in Nevada sold amily ownership was a hallmark of the original casinos built in Northern Nevada following the legalization of gaming in 1931. Bill Harrah, Harold Smith, Bill Graham, Lincoln Fitzgerald and the Carano family were just a few who got their start in the casinos of the day. Most of them are long gone, and now a casino in Sparks, just down the road from Reno, has gone the same way.

John Ascuaga’s Nugget, the main employer in Sparks, was sold last month to a private investment firm, Global Gaming & Hospitality, featuring partners Carlton Geer and Michael Kim. No price was announced for the sale.

Founded by Dick Graves in 1955 as a coffee shop with slot machines, the Nugget was purchased by John Ascuaga, then the property’s general manager, in 1960. Originally a small casino, Ascuaga reinvested continually in the property. Today, it is a major property in Northern Nevada, with 1,600 hotel rooms in two towers, a 75,000-square-foot casino, 110,000 square feet of meeting space, nine restaurants and a 700-seat showroom.

Geer, a gaming real estate expert, will become the property’s CEO. He has extensive experience in the casino industry in Northern Nevada. The property will retain its name for the time being.

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Dover Downs executives say they have lost money for more than a year.

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he Delaware Lottery and Gaming Study Commission, created by lawmakers to examine possible ways to help the state’s three struggling racino properties, heard testimony from casino executives on the dire situation of the state’s industry in its first public meeting since July, held last month in Dover.

Executives from the state’s three racetrack casinos—Delaware Park, Dover Downs and Harrington Raceway—made presentations before the commission that outlined the losses each has experienced from new competition in Maryland and Pennsylvania, a burden they say has been exacerbated by the state’s high revenue tax and fee structure.

The administration of Delaware Governor Jack Markell provided some relief earlier this year, distributing $80 million in excess funds to the racinos to cover purchase of new gaming equipment. However, the executives say that funding did not address the heart of the problem, which is the drain on profits from a slot revenue tax that is effectively over 60 percent.

“We feel like we’ve flattened out there,” said Patti Key, chief operating officer of Harrington Raceway and Casino.

Denis McGlynn, president and CEO of Dover Downs Gaming & Entertainment, testified that its publicly traded company has operated $320,000 in the red from the last quarter of 2012 through the second quarter of this year.

Delaware Park is forecasting a 17 percent drop in gross revenues this year, with Harrington predicting a 4 percent drop.

Rendering of Downtown Grand

John Ascuaga’s Nugget

DOWNTOWN SHOWDOWN Vegas casino to open November 12

T

he former Lady Luck casino in Downtown Las Vegas will reopen November 12 as the Downtown Grand.

CEO Seth Schorr said the refurbished hotel and casino was accepting room reservations as early as October 27.

The property opened in 1964 and closed in 2006. It has undergone a $100 million renovation of 634 hotel rooms, and will include about 600 slot machines and 30 table games. The property expects to hire 800 people.

“We have been working hard on this project for several years, and we are very excited to invite our neighbors and guests to enjoy the experiences we’ve created,” Schorr said.

The property’s owner, CIM Group, has invested “north of $200 million” in both in the Downtown Grand and the surrounding Downtown neighborhood, Schorr told the Las Vegas Review-Journal.

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Global Gaming Business NOVEMBER 2013

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DATELINE GLOBAL november2013

AT IT AgAIn

Crown, Echo shift Aussie rivalry to Brisbane

Vancouver Vanguard Casino-hotel project revived in British Columbia $535 million casino-hotel project has been revived in downtown Vancouver, British Columbia, through a partnership between Las Vegas-based Paragon Gaming Inc.; Dundee Corporation, a Canadian investment company; and 360 Vox Corporation, a Canadian real estate developer.

Paragon’s chief executive officer is Diana Bennett, daughter of the late Las Vegas gaming pioneer William Bennett. The development first was proposed in 2010 but was rejected by the city in 2011 when Vancouver residents indicated they did not want a large casino downtown.

Developers scaled back their original proposal for 1,500 slots and 150 table games to the 600 slot machines and 75 tables currently at the Edgewater Casino, which will be closed and replaced by the new development. The new facility is expected to be completed in late 2016.

“We listened to the community and understood their concern,” said Paragon President Scott Menke. “We believe that we have brought in the right partners and have designed an urban resort consistent with the desires of the city.”

The 675,000-square-foot development, which will be the largest of its kind in Canada, will have two luxury resort hotels with a total of 550 rooms, operated separately under the JW Marriott and Autograph brands; a 40,000-square-foot conference center; plus restaurants and retail space. It will be attached to BC Palace sports stadium, which offers matches from the Canadian Football League’s British Columbia Lions and Major League Soccer’s Vancouver Whitecaps. A hockey arena is nearby.

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Echo’s Treasury Casino in Brisbane

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he government of Queensland is set to announce whether it will allow a second casino license in Brisbane, a decision that pits incumbent Echo Entertainment against rival James Packer’s Crown Resorts.

Echo’s Treasury casino holds the sole license in the state’s largest city and wants to invest in a new facility in a redevelopment district known as the Government Precinct. Crown likewise has been pitching its case for a competing resort casino there.

Historical preservation in the precinct is a sensitive issue, however, and while the government has identified buildings that will be protected, former Australian Heritage Commission Chairman Ken Wiltshire has said casinos mocked Brisbane’s heritage, and has suggested they be shifted to the “concrete jungle” of the city’s South Bank area.

State Development Minister Jeff Seeney has said Wiltshire’s position ranks “foremost” among the government’s considerations.

“We are very much aware of the heritage issues,” he said. “The stage we are at the minute is seeking input from everybody.”

Pending the license decision, Sydney-based Echo says it is ready to start upgrading and expanding its Jupiters casino in Gold Coast, one of three the company operates in Queensland, including the Treasury in Brisbane. Echo also owns the Star casino on Sydney’s Darling Harbour.

Packer, meanwhile, has urged the Queensland government to open up competition in Brisbane and allow another operator in line with the provisional approval Crown has won from the New South Wales government to develop a resort-scale casino to compete with Echo on Darling Harbour.

Seven Out Australian state to sell betting operation he government of the Australian Capital Territory is looking to sell its ACTAB betting operation rather than invest any more money into it.

State Treasurer Andrew Barr said a recent study by Pricewaterhouse Coopers determined that the state would have to invest “tens of millions of dollars” for ACTAB to remain viable in the face of increased competition.

Chief Minister Katy Gallagher said that finding “makes a very compelling case for pursuing alternatives to government ownership.”

The government hasn’t publicized an asking price yet.

ACTAB generated A$2.1 million in profit in 2011-12, but the PwC study said the local market is “under threat from interstate wagering operators,” and therefore the state should expect a 3.6 percent compound annual decline in pre-tax profits over the next four years.

A final decision on a sale is expected in November.

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Global Gaming Business NOVEMBER 2013

A cruise ship visits Hamilton, Bermuda

GAMBLING ONBOARD Passengers can play in Bermuda ports

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n its latest bid to become the No. 1 port for tourists, particularly those who gamble, Bermuda recently changed its laws to allow casino cruise ships to offer gambling while they are in port.

The Cruise Ship Act, approved by Bermuda’s Parliament, would enable ships to operate onboard casinos between 9 p.m. and 5 a.m. when they are docked, the Royal Gazette reported. Ships that carry more than 2,000 passengers would be charged a license fee to offer 24/7 gambling.

A similar measure was defeated in 2009. But in recent years, the number of cruise ships to Bermuda has been steadily declining. In 2012, 161 ships visited; that number is expected to drop below 125 this year.

“This move makes Bermuda much more attractive to the gamblers who go on cruises for the casinos,” said analyst Richard Weldon. “To not have to leave the boat and to be able to continue to gamble in the casino is a big, big attraction for gamblers.”

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DATELINE TRIBAL november2013 California Governor Jerry Brown

Seeing the Light

Massachusetts House approves tribal compact

California Contest Another vote will control the fate of tribal casino

S Mashpee Wampanoag Tribe’s Project First Light is now closer to fruition.

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fter languishing for months in the Massachusetts House, the compact between the Mashpee Wampanoag Tribe and the Bay State for the proposed Project First Light casino resort in Taunton has been approved by the House. It now goes to the Senate.

The compact passed handily: 116 to 38.

This is the second compact the state and tribe have negotiated. The first was rejected by the Bureau of Indian Affairs over issues of the tribe paying too high of a percentage of its profits to the state, and because the compact addressed some issues that were unconnected with gaming.

If the Senate passes the compact, the BIA would have 45 days to review it and either approve it or reject it.

Under the compact, the tribe will pay 17 percent of its gaming revenue, provided that its “First Light” casino has no competition in the southeastern zone.

This second bite at the apple guarantees the state at least $2.1 billion in revenue over the next two decades, if the casino is built, plus $300 million earmarked for transportation, schools, tourism and mitigation funding in the southeastern region.

The casino resort would cost an estimated $500 million for a casino with 3,000 slot machines, 150 gaming tables, two hotels with a combined 600 rooms, and an events center. It would, the tribe claims, produce 1,000 construction jobs and 2,650 permanent positions.

Not in My State NC governor opposes Catawba casino orth Carolina Governor Pat McCrory said the Catawba Indian Nation, based in South Carolina, is using a loophole to try to open a casino in the state.

“I don’t agree with the loophole that the Catawbas are using to gain traction on that effort,” McCrory said. “It North Carolina would be a loophole for the whole gaming industry Governor Pat McCrory where they would find islands within our state for casinos, to jump borders and form a new island of gaming.”

McCrory added he’s concerned that a Catawba casino would “take away” economic benefits from the Charlotte region.

The 2,800-member Catawba tribe announced earlier in September it has

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Global Gaming Business NOVEMBER 2013

upporters of a California referendum that would let the voters decide whether the state’s first off-reservation Indian casino can happen in the Central Valley say they have enough signatures to qualify the measure for the 2014 ballot.

About 504,000 signatures are needed to qualify the measure, but proponents had turned in more than 800,000 to the Secretary of State’s office before the September 30 deadline.

Governor Jerry Brown, who signed the compact with the North Fork Rancheria of Mono Indians, which would allow them to build the North Fork Rancheria Resort Hotel & Casino in Madera County, criticized the referendum effort. “It’s unfortunate that tens of millions of dollars will now go to fight over this,” said the governor during a speech at the Capitol in Sacramento before tribal leaders. “I think this is a dispute about money, mostly— money and competition.”

Opponents of the casino say it creates a bad precedent and violates the spirit of the 2000 constitutional amendment Prop. 1A that allowed Indian casinos in the Golden State, and which promised that such casinos would never be built in urban areas. “Voters should have a chance to weigh in to see if this is a good deal or not,” said a spokesman for the group pushing the referendum.

That effort has so far been well-funded, having raised over $1.6 million to help in the collection of signatures. One of the major funders is Table Mountain Rancheria, which operates near the proposed casino site, and which has contributed $660,000 so far to the effort. Brigade Capitol Management, an investor in the Chukchansi Gold Resort & Casino in Coarsegold, contributed another $600,000. A study commissioned by the Chukchansi concluded that the tribe would lose 38 percent of its revenue if the Madera casino opens.

This would be the first time California voters have been asked to decide the fate of an individual casino compact, although in 2008 they approved revised casino compacts for state tribes. But it’s also a first in that this is the first off-reservation casino approved in the state. The site of the proposed 2,000slot and 50-gaming table casino is on 305 acres 35 miles from the tribe’s traditional homeland.

applied to the U. S. Bureau of Indian Affairs for permission to build a $600 million casino in Kings Mountain, Cleveland County. The facility would offer 220,000 square feet of gaming space and 750 rooms in two hotels. Catawba officials said the project would create 5,000 jobs.

In the meantime, the Lumbee Tribe of North Carolina Council in Robeson County would prefer federal recognition over operating a casino. Actually, a bill in Congress precludes the tribe from building a casino. Said Lumbee Tribe member Pearlean Revels, “There are other things we could be looking forward to, instead of a casino, which would make the situation, I think, worse than it is right now.”

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NUTSHELL

“They Statistics contained in the Singapore Casino Regulatory Authority’s latest annual report show that only 7.7 percent of residents made more than one visit to the city-state’s two casinos in the past three years. The CRA did not give a breakdown on the number of times this segment actually visited the casinos. Significantly, though, the agency said that the vast majority of the remaining 92.3 percent of the population did not visit the casinos at all.

Hungary’s Constitutional Court has upheld a law restricting gambling machines in the country to licensed casinos. The court ruled the government had not violated any laws when it terminated the concessions of slot operators. It did not, however, deal specifically with the question of whether operators could seek compensation.

Philadelphia Deputy Mayor Alan Greenberger, in testimony last month before a hearing of the Pennsylvania Gaming Control Board, revealed the city’s preferences among the six applicants for the second Philadelphia casino. Greenberger, speaking for Philadelphia Mayor Michael Nutter’s economic team, expressed support for the two downtown projects, Market8 and the Provence, without explicitly endorsing them or any other project.

Greenberger told the board that Wynn Philadelphia, proposed for the Delaware River waterfront, has a lot of upsides, but that officials are concerned that its proximity to the current SugarHouse casino would harm the business for that casino. The Chinese government has agreed to use Guangdong province to trial a new immigration smart card as a replacement for the passport-style permits currently required of mainland travelers to Macau and Hong Kong under the country’s Individual Visit Scheme. The change will allow travelers to participate in the existing e-channel immigration program, and is expected to speed up border crossings. Officials are looking to implement the program by the end of the year.

The Viejas Band of Kumeyaay Indians in Southern California, one of the founding members of the California Tribal Business Alliance, has rejoined the board after a several years’ hiatus. The CTBA and the tribe had continued to work together on issues of mutual concern even while Viejas focused on imminent tribal business during the gap in membership. According to Viejas Vice Chairman Robert Cita Welch, the tribe is interested in

addressing internet cafés, sacred sites issues and online gaming in conjunction with the CTBA. A new poll indicates that New York voters may be ready to approve Governor Andrew Cuomo’s sweeping expansion of casino gaming in a November referendum. But others are slamming the ballot question for including persuasive language that mentions lower property taxes, more jobs and better education, making it seem that these benefits will inevitably follow the introduction of more casinos in the Empire State. The Siena College Research Institute poll, which surveyed voters statewide, found that people were evenly split on the referendum to change the state constitution, with 46 percent for and 46 percent against the measure. But when they were read the complete ballot question, support rose to 55 percent, and opposition dropped to 42 percent. The poll also asked respondents if they thought the wording was fair; 51 percent said yes and 43 said no, according to the New York Times. The Nevada Gaming Commission has granted final approval for the acquisition of slot manufacturer WMS Industries by lottery industry giant Scientific Games, Inc. Approval of the merger, which is predicted to create a company with combined pre-tax earnings of $600 million in 2013, was granted previously by the Nevada Gaming Control Board. The Nevada approval was one of a dozen regulatory approvals needed before the deal can close, which is expected early next year. The city council of Peoria, Arizona, approved the acceptance of two grants of $60,000 for the police department, and $44,000 for a performing arts center from the Tohono O’odham Nation, which seeks to open a casino in Glendale, near Peoria. The city applied for grants from the Tohonos’ rival tribe, the Gila River Community, but did not get them.

This prompted Peoria Mayor Bob Barrett to say he was “dead solemn certain” that the reason was because Peoria has supported the Tohono tribe’s casino near Glendale, which Gila River opposes. Gila River Governor Gregory Mendoza said there is plenty of competition for the $30 million in grants that the tribe gives away annually, and noted that Peoria has gotten $200,000 in the last 10 years.

CALENDAR

Said It”

“When some casinos say that probing their customers about their activities outside of the casino will drive customers away, I sense that they feel that it is not their responsibility to protect their institutions, and our financial system as a whole, from being used by illicit actors.”

—Shasky Calvery, director of the federal Financial Crimes Enforcement Network (FinCEN), in a speech at the Global Gaming Expo calling for a cultural change in operators’ financial compliance practices

“I think this is going to be a significant revenue stream. It has the potential to make up 20 percent of our revenue.”

—Robert Griffin, CEO of Trump Entertainment Resorts, on the potential of online gaming in New Jersey, which goes live this month

“People just can’t believe the government can be as immature as they seem to be acting right now.

We’re just hoping that adults get into the room and get something done.”

—Jim Murren, CEO, MGM Resorts International, on the government shutdown; he says the impasse hasn’t hurt Las Vegas so far, but it would have if it lasted longer

“A state goes into the gaming business for a couple reasons. One of the primary, primary reasons is to make money.”

—David Cordish, chairman of the Cordish Cos., speaking in favor of his company’s proposal for a slots parlor in Leominster, Massachusetts

“This is the most over-equitized development property in the history of gaming.”

—Dan D’Arrigo, CFO, MGM Resorts, on CityCenter, now restructuring $1.8 billion in debt

November 12-14: South American Gaming Suppliers Expo (SAGSE), Costa Salguero Center, Buenos Aires, Argentina. Produced by Monografie. For more information, visit monografie.com/sagse_bsas.

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

“I’ve lived a life of public service. It’s in my DNA. To transition from a lifetime of service in the military to another opportunity to serve at home, with my family—it doesn‘t get any better than that.”

November 20-21: African Gaming Conference 2013, Federal Palace Hotel, Victoria Island, Lagos, Nigeria.

Produced by Lagos State Lottery Board and Global Gaming Africa. For more information, visit africangamingconference.com.

March 19-20: Caribbean Gaming Show 2014, San Juan de Puerto Rico Convention Center.

Produced by the CGS Group. For more information, visit caribbeangamingshow.com.

—Kevin Brown, newly elected chairman of the Mohegan tribe of Connecticut, owner of the Mohegan Sun casino and resort

December 9-12: The 40th Annual Symposium on Racing & Gaming, La Paloma Resort, Tucson, Arizona. Produced by the University of Arizona’s Race Track Industry Program. For more information, visit ua-rtip.org/symposium_racing_gaming.

March 19-21: iGaming North America 2014, Planet Hollywood Resort & Casino, Las Vegas.

Produced by the Innovation Group, BolaVerde Media, Lewis and Roca LLP and eGamingBrokerage.com. For more information, visit igamingnorthamerica.com.

“Macau is becoming merely a gambling city, and that cannot happen.”

—José Pereira Coutinho, Macau Legislative Assembly member, on the casino industry’s perceived failure to sufficiently diversify the city’s tourism offering

NOVEMBER 2013 www.ggbmagazine.com

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AMERICAN GAMING ASSOCIATION

Lessons from G2E Energy and innovation highlight the world’s largest gaming expo

By Geoff Freeman, President & CEO, American Gaming Association

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his September, I had the pleasure of witnessing the best minds and innovations our industry has to offer at Global Gaming Expo in Las Vegas.

Needless to say, I was blown away by the energy and innovation on display throughout the event. This year’s show had our highest attendance and largest show floor in five years.

The fact that this prime showcase keeps growing proves the strength and creativity of the global gaming industry.

I expect each of you came away from G2E with fresh ideas and new perspectives that you can apply to your business. My refrain throughout the week was that G2E is a reflection of all the great things our industry has to offer. With that in mind—after participating in several conference sessions and many productive meetings throughout the week—I want to talk about what we learned at G2E. Here are my key takeaways: • Modernizing regulation is a top priority. Regulatory reform was a hot topic throughout the halls of G2E. A common theme that emerged is that operators and manufacturers of all types—as well as regulators—can benefit if we use technology in the right ways and increase efficiency in our regulatory systems. More efficient regulation enables the industry to be a more powerful economic engine: creating jobs, purchasing from suppliers and more.

The AGA has taken some positive first steps in starting a conversation about these important issues. In the months ahead, we will lead collaboration between the industry and regulators to maintain the commitment to compliance that is a hallmark of our business while facilitating common-sense reforms that help us all.

• Our industry has a responsibility to help protect the financial system and national security. Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network (FinCEN) in the U.S. Department of the Treasury, spoke at G2E about the need for a cultural shift across the industry on money laundering issues. Some in the media have characterized her remarks as a warning, but I see them as an opportunity—an opportunity to be proactive and to strengthen an already fruitful partnership between our industry and FinCEN. The AGA and its

“

the gaming industry. Clearly, GGW is taking off, and more innovative programs are to come.

• The industry is strongest when we work together. We all share common ground. Finally, G2E is the perfect example of how the gaming industry can find strength through collaboration. Victor Rocha, owner and editor of Pechanga.net, said it best during his acceptance speech for the 2013 Lifetime Achievement Award in Gaming Communications, when I heard him say, “We all speak the same language.” He hoped his award symbolized tribal and commercial gaming industries coming together, and I share the same vision. In fact, I think there are several areas where tribal, commercial, lottery, online and other gaming sectors can unite.

The show brought together suppliers and operators of every stripe with industry regulators, analysts, consultants and the media.

We need to find more ways to come together—to set aside our competitive differences to coalesce around issues important to us all. We won’t agree on everything, but we can work together to pursue strategies to help our entire industry grow. We also need to find more ways to foster connections among various sectors of the industry. In the months ahead, the AGA will work to strengthen the community of gaming and educate, engage and empower industry executives to succeed.

These key takeaways only scratch the surface of what I gleaned from G2E. It points to the robust industry we are—and to what we can become. I look forward to pursuing all of these initiatives and finding new opportunities to lead the industry into its bright future.

More efficient regulation enables the industry to be a more powerful economic engine: creating jobs, purchasing from suppliers and more.

The AGA has taken some positive first steps in starting a conversation about these important issues.

14

members already are pursuing new strategies to address this issue, and I look forward to announcing these plans in the coming months.

• Women in gaming have new tools to lead. The AGA saw tremendous growth of its Global Gaming Women initiative during G2E. The organization has become a powerful tool for connecting and educating women in the industry, and is providing new tools to help women advance their careers. At G2E, GGW launched the Global Gaming Network, an online mentoring network designed to connect women to share their advice, experience and best practices. Women in the industry also raised more than $30,000 for the GGW Charitable Education Fund, which awards scholarships to female professionals in

Global Gaming Business NOVEMBER 2013

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FANTINI’S FINANCE by FRANK FANTINI

Land of The Rising Sun Japan ‘suddenly’ has become the hottest jurisdiction in gaming

A

lmost out of nowhere, Japan has become the buzz.

After years of on-again, off-again efforts to legalize gaming, a growing number of gaming industry observers believe that, this time, it is going to happen, and maybe very soon.

The political conditions needed to legalize casinos came out of the latest Japanese elections. And now, the selection of Tokyo to host the 2020 Summer Olympics has many thinking that the opportunity to provide casinos to Olympic visitors is the clincher.

And some analysts already are saying the prospect is one of the reasons to own Las Vegas Sands stock, as CEO Sheldon Adelson has long courted Japanese policymakers.

That might be premature.

It is generally agreed that if Japan legalizes casinos, it will adopt a model similar to that of Singapore—a limited number of casinos smack in the middle of a giant metropolitan area, an attractive tax rate, and a selection based on which applicant creates not just a casino, but an iconic international tourism destination.

That is why Las Vegas Sands, Wynn and Genting are so prominently mentioned. They’ve done it in Las Vegas, Macau, Singapore and Malaysia.

Certainly, based on that criterion, they have a leg up over other companies.

But Japan also is thought likely to include a requirement not present in Singapore—a large Japanese ownership, maybe 51 percent.

That could be tough to stomach for a Sheldon Adelson or Steve Wynn, driven entrepreneurs accustomed to running the show.

It could be more Japanese-like to find accomodating partners and to reward their own entrepreneurs.

If joint ventures are the spirit of the day, companies like MGM Resorts might be more appealing.

In addition to the big international casino operators who will come a-calling, investors might want to look at which Japanese companies could benefit.

Some of the bigger companies are obvious. Sega 16

Sammy already is in the process of a casino resort deal in South Korea, so it certainly would want to do one at home.

Kazuo Okada and his Universal Entertainment would be a natural candidate.

Konami might be a big consumer entertainment product manufacturer, but its slots company, Konami Gaming, has given KNM a taste of the casino business and the parent company is in the pachinko business.

And then there are smaller companies that many investors outside Japan would not know.

Billy Ng of Bank of America/Merrill Lynch listed several publicly traded pachinko operators as possibile beneficiaries of Japanese legalization— Glory, Tokyotokeiba, Japan Cash Machine and Daikoku Denki.

We also note that small pachinko operator Kinbasha has listed on Nasdaq and is known to have property in metro Tokyo that it thinks would be just right for a mega-resort.

There already is, we suspect, a great deal of jockeying taking place among all the various Japanese interests as the legislative process works its way.

Certainly, the pachinko companies comprise a powerful lobby that will not want to be omitted.

And any of Japan’s industrial giants could decide to jump in.

In that environment, skill and experience working with the Japanese and in their collaborative business culture will be important to any international casino operator that wants to be in Japan.

Ng says Japan could be a $20 billion market, assuming gaming gets the same 0.4 percent of GDP there as it does in the U.S. And Tokyo is almost beyond belief, a metro GDP of $1.4 trillion.

Those numbers can motivate a lot of collaboration.

up the profits, MGM was struggling with debt and the real estate collapse and recession that hit its $9 billion CityCenter with a double whammy.

For the past year or two, MGM has been stabilizing and eagerly awaiting the recovery of Las Vegas.

Now, it appears MGM’s time has come. CityCenter condominiums, once an albatross, are now an asset as the last of them sell. Las Vegas is recovering. MGM is building a mega-resort in the Cotai section of Macau. There is optimism that it will win casino licenses in Massachusetts and Maryland. And the company will soon refinance CityCenter debt, providing considerable relief.

These positives are catching the attention of stock analysts who have been issuing some bullish reports on MGM. Here’s a synopsis of one such report by Wells Fargo analyst Cameron McKnight: A credible upside case exists for MGM to reach $25 to $27 in the next 12 months, McKnight said.

McKnight cited four catalysts that he said can add $5 to $7 to the stock: • Margin expansion in a recovering Las Vegas, $2.50.

• Macau growth and adding in greater value for MGM’s Cotai project, $1.75, which he says could prove conservative.

• CityCenter finance restructuring, 80 cents in lower interest expense.

• Winning Maryland and Massachusetts casino licenses, 75 cents each.

On the bottom line, McKnight sees MGM losing 2 cents a share this year and turning 3 cents positive next year.

McKnight’s target is a long way from MGM’s pre-recession high of $91.61 when it had a smaller share base, but it’s also a lot better than its low of $1.81 in March 2009 when casino stocks reached their nadir.

MGM: HAS ITS TIME COME? For a long time, MGM Resorts has been an underperformer among the big international casino operators.

While Las Vegas Sands and Wynn were piling

Global Gaming Business NOVEMBER 2013

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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P U G N I P RAM { By Michael Soll and Derris Newman }

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Increased gaming competition in the United States and how to respond

he number and types of gaming venues in the United States grew steadily since the emerging-markets boom of the mid 1990s—slowing only briefly during periods of economic uncertainty, then reviving to provide new sources of tax revenues and economic stimuli to support declining state budgets and job growth.

As casino development increased, the types of facilities evolved from modest, local-oriented properties to destination facilities with world-class amenities.

Markets have introduced VLTs and slots at racetracks and ambient forms of gaming, as well as route operations. Internet gaming will soon be available, providing a new delivery channel for the sector.

Along the way, the competitive landscape has become quite complex. The growth witnessed the past few decades yields significant competition, and operators and regulators are responding through various strategies to increase or maintain their market share. The Innovation Group assesses the evolution that brought us to the current competitive U.S. marketplace. The various strategies regulators and operators are utilizing to maintain or increase their market share include: • reducing or eliminating taxes; • expanding slot-only facilities to include table games; • developing attractive non-gaming amenities; • focusing on customer service to enhance the patron’s gaming experience; and/or, • legalizing internet gaming.

tion was where the casinos could be developed. The state required voter approval for sites along the Mississippi River and the Gulf Coast.

A low, graduated state tax of 8 percent is assessed on gross gaming revenue.

Mississippi now hosts over 30 commercial gaming facilities, and allowed the Choctaw Tribe of Mississippi to successfully negotiate a Class II compact, eventually developing the Pearl River Resort, complete with hotels, an entertainment center and a world-class golf course.

These measures are actually the culmination of a competitive atmosphere in the casino industry that began in the early 1990s:

Way Out West

The Riverboat States The riverboat gaming sector emerged when Iowa, Illinois, Louisiana, Indiana and Missouri legalized casinos in response to a declining revenue base due to the 1991 recession. The competitive landscape in these markets unfolded in a “domino effect.”

Gaming legislation initially restricted play primarily to cruising riverboats, which were in most markets. Later, these markets allowed them to become more competitive land-based facilities. Restrictions were placed on volume of licenses, gaming positions and hours of operation. Louisiana, Iowa and Indiana also approved casino gaming at the parimutuel facilities located within the state. The authorization of casino gaming in Louisiana and Iowa led to compacts with area tribes.

Mississippi authorized casino gaming during this timeframe; however, the regulators utilized Nevada’s “laissez-faire” format. This allowed the market to determine the number of casinos operational within the state. The only restric18

Global Gaming Business NOVEMBER 2013

More Midwest Robust tribal and commercial gaming markets also developed throughout the Midwest. Minnesota, Wisconsin and Michigan currently have some of the most successful tribal casinos in the U.S. In 1996, a statewide referendum approved three land-based casinos in Detroit in an effort to revitalize lakefront and surrounding urban neighborhoods through capital developments and infrastructure improvements. The first temporary casino opened in 1999, and by 2007, the three casinos generated a combined total of $365 million in tax revenue to the state.

In 2009, Ohio joined the three Midwest states and passed Issue 3, the casino initiative authorizing the construction of casinos in Cincinnati, Cleveland, Columbus and Toledo. The Horseshoe Casinos in Cleveland and Cincinnati and the Hollywood Casinos in Toledo and Columbus opened shortly thereafter. Within one fiscal year, Ohio’s gross gaming revenue was more than $690 million, with approximately $225 million in tax collections for state.

Meanwhile, small commercial casinos, a massive tribal gaming expansion and competition ensued in the West. South Dakota and Colorado legalized gaming in their states through a statewide referendum during the early 1990s. Casino gaming was used for historic preservation restricted to Western mining towns such as Deadwood in South Dakota, and Central City, Black Hawk and Cripple Creek in Colorado.

Restrictions were placed on betting limits and hours of operation in each state until 2008, when Colorado residents voted to eliminate the betting restrictions, add table games and extend operating to 24 hours.

California’s Proposition 5, also called the Tribal State Gaming Compacts Initiative, was approved in 1998 with 62 percent of voters in favor. Fifteen years later, according to the 2013 Casino City Indian Gaming Report, California now hosts 687 gaming facilities and generated $6.9 billion in annual revenue in one of the most directly competitive markets in the U.S. Nearly every other Western state joined in to enter tribal compacts, including New Mexico, Arizona, Oregon, Washington and the majority of Plains states such as Oklahoma, Kansas and Nebraska.

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First Wave in the Northeast

The Maryland Lottery is reviewing proposals for the sixth license to be located in Prince George’s County— potentially one of the most lucrative markets on the East Coast. The lottery is expected to award the final license by the end of 2013, and is projecting an opening date of 2016 for the new casino resort.

Casinos outside of Atlantic City in the Northeast emerged ahead of many of the markets cited previously, starting with competition in Connecticut.

After originally opening its facility in 1986 as a high-stakes bingo hall, the Mashantucket Pequot Tribal Nation signed a compact with Connecticut in 1993, and would eventually expand to being the largest casino in the world. Mohegan Sun opened in 1996, featuring approximately 2,500 slot machines. The resort expanded, developing more than 1,000 hotel rooms, about 350,000 square feet of gaming space, a host of branded restaurants and retail outlets.

Rhode Island, West Virginia and Delaware also approved gaming following the recession; however, a public-private partnership format was utilized. The state would own VLTs at parimutuel facilities and the operators would receive a portion of revenues through management agreements. A percentage of the revenues was distributed to the horsemen to increase purses and to supplement the operating budgets of the racing industry.

Recessions and the New Northeast Pennsylvania, Maryland and Maine joined New York in authoring casino gaming in the 2000s. Commercial casino gaming in New York was legalized in 2001 at nine racetrack casino venues with publicly run VLTs, and distributions given to the operators and horsemen.

In 2012, statewide revenue totaled $1.8 billion and annual tax revenue was $822 million. The state already obtained several Native American facilities operating Class II casinos on the reservations. Class III compacts were eventually negotiated with the state in 2011, yielding $921 million in annual revenue.

In 2004, Pennsylvania authorized 12 casinos at a combination of land-based and racetrack facilities in an effort to relieve the property tax burden of its citizens, to promote reinvestment in the horse-racing industry, and to increase general economic benefits. Annual statewide revenues totaled $3.2 billion from 11 gaming facilities in 2012, overtaking New Jersey as the second-largest statewide gaming market. The Pennsylvania Gaming Control Board is currently reviewing six applicants for the second casino in Philadelphia, the state’s 12th and final license. (An amendment to the law could provide a 13th casino in 2016.)

Meanwhile, Maine currently hosts a land-based casino and racino featuring slot machines and table games in Bangor and Oxford. Casino gaming was authorized in 2004, allowing for the development of two casinos; however, only one was approved locally. In 2010, the Maine voters approved an expansion of gaming in Maine to allow a casino in Oxford County. Table games were introduced in March 2012, and the state’s second casino, the Oxford Casino, opened in June 2012.

In 2007, Maryland enacted legislation authorizing up to five video lottery licenses for the primary purpose of raising revenue for public education. Approved by a subsequent referendum, up to 15,000 VLTs were allowed statewide with one license to be awarded each in Anne Arundel, Cecil, Worcester and Allegany Counties plus Baltimore city. In November 2012, Maryland voters approved an amendment authorizing 24-hour gaming, dice and card games in addition to a sixth casino license to be developed in Prince George’s County.

Maryland’s first casino opened in 2010, and the state now hosts casinos in Berlin, Perryville, Hanover and Cumberland, Maryland. The first three were operating in 2012 and generated $377 million in annual gaming revenue and $218 million in tax revenue. Rocky Gap Casino Resort, located in Cumberland, opened in 2013 and YTD revenue through August 2013 is $485 million. Construction is under way for the fifth license, a $400 million Horseshoe Casino in

Baltimore expected to open in 2014.

The Maryland Lottery is reviewing proposals for the sixth license to be located in Prince George’s County—potentially one of the most lucrative markets on the East Coast. The lottery is expected to award the final license by the end of 2013, and is projecting an opening date of 2016 for the new casino resort.

In response to the latest recession, New York and Maine explored new options to continue expanding gaming to generate revenue for the declining tax base. New York passed legislation allowing a referendum on a constitutional amendment to legalize up to four commercial casinos upstate, followed by additional casinos in the New York City area after seven years. Voters will decide the fate of expanded New York gaming in November 2013.

The 2012 legislative session in Maine witnessed an explosion of resident-initiated casino proposals. All proposed gaming expansion legislation was put on hold until a special legislative commission comprised of lawmakers, casino owners and representatives from the state’s tribes and veteran groups could develop the framework for a competitive bidding process for future casino and slot machine licenses.

In September, the commission voted 10-8 in favor for recommending an expansion of gambling in Maine. Opportunities included allowing the Passamaquoddy Tribe to operate slot machines and table games in Washington County and veterans’ organizations to put slot machines at their posts. The Veterans and Legal Affairs Committee is expected to consider the legislation in January 2014.

In November 2011, Governor Deval Patrick of Massachusetts signed a bill to legalize three statewide casinos with an $85 million license fee and a minimum of $500 million investment. A license will be awarded to each of the three zones (eastern, western and southern) as defined by the gaming legislation.

Each zone has multiple applicants and must have local support though a referendum to compete for a license. One slot parlor license was approved with a $25 million license fee and a minimum $125 million investment which features up to 1,250 machines. The casino would be taxed at 25 percent of gross gaming revenues while the slot parlor would give 40 percent of gross gaming revenue to the state.

Finally, a New Hampshire legislative committee hired a consultant to draft a gaming bill which will provide the framework for regulating and licensing casinos after several proposed bills from Governor Maggie Hassan and other legislators were rejected. The committee hopes to have the regulatory issues figured out and a new bill for the legislatures to review by December.

How Are States and Operators Now Differentiating Themselves?

As neighboring states began to authorize various forms of gaming, or as natural disasters and economic crisis began to impact revenues generated at their host casinos, regulators began to review the policies that authorized gaming in an effort to maintain and/or grow market share.

Many states initially requiring actual or phantom cruising soon dropped the NOVEMBER 2013 www.ggbmagazine.com

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Northeast Casino Revenue Market Share by State The following table illustrates statewide casino revenue market share by state from the year 2000 through August 2013 for gaming facilities in the northeastern region. The obvious trends illustrate the declining market share of the New Jersey and Connecticut facilities; however, the matrix does show Rhode Island’s slight increase in overall market share during the 2013 reporting period, although table games have been operational for only three of the nine months.

Connecticut’s and New Jersey’s largest drop in gaming revenue occurred between 2006 and 2007 when the Pennsylvania casinos opened. New York’s racinos increased their market share from 11.9 percent to 16.8 percent in 2012 with a full year of revenue from the Resorts World Casino in New York City.

restrictions and allowed dockside and land-based gaming. For example, Louisiana eliminated admission fees at the riverboat casinos, reduced land-based casino tax rates, and authorized upscale F&B and hotel amenities Total NE Casino Year Gaming Revenue NJ CT RI DE NY ME PA MD to help compete with properties in Mississippi.

2000 $6,305,112,917 68.2% 20.7% 3.3% 7.7% Regulators across numerous 2001 $6,485,675,642 66.3% 21.6% 3.9% 8.1% jurisdictions commissioned in2002 $6,766,012,607 64.8% 22.5% 4.4% 8.4% depth statewide analyses for po2003 $6,909,948,788 65.0% 22.9% 4.8% 7.3% tential cannibalization and 2004 $7,581,958,026 63.4% 21.7% 5.1% 7.3% 2.5% optimal revenue production be2005 $7,987,805,878 62.8% 21.1% 5.1% 7.3% 3.7% 0.1% fore authorizing new casino devel2006 $8,468,301,246 61.3% 20.4% 4.8% 7.7% 5.0% 0.4% opments. Tax rates were adjusted 2007 $9,533,019,958 51.4% 17.6% 4.7% 6.4% 8.6% 0.5% 10.9% in several markets so operators could compete with neighboring 2008 $9,742,948,266 46.4% 16.0% 4.9% 6.0% 9.7% 0.5% 16.5% competitive casinos. Promotional 2009 $9,400,732,901 41.7% 15.3% 4.9% 6.0% 10.8% 0.6% 20.8% allowances and free play taxes 2010 $9,600,937,769 37.0% 14.3% 4.9% 5.8% 11.3% 0.6% 25.7% were either eliminated or taxed at 2011 $10,083,535,863 32.5% 13.3% 5.1% 5.2% 11.9% 0.6% 29.8% 1.5% a lower rate.

2012 $10,657,090,806 28.4% 11.4% 4.9% 4.7% 16.8% 0.9% 29.4% 3.5% Some jurisdictions with slot2013 YTD** $7,396,654,891 26.7% 10.6% 5.0% 3.5% 17.8% 1.2% 28.8% 6.6% only products expanded to table games to make their properties Source: The Innovation Group, Various State Gaming Commissions and Boards Websites more competitive. Meanwhile, *Slot Revenue Only casino operators aimed to distin**January through August 2013 guish their properties through non-gaming products such as upscale F&B, luxury hotels, spas, convention and retail, golf courses and multi-use entertainment centers. with states like Massachusetts and New Hampshire coming on line and casinos Foxwoods recently broke ground on a $120 million Tanger outlet mall. The under development in Philadelphia and Baltimore. mall is expected to open in November 2014 or Spring 2015 with brand-name In response to the casino development in the Northeast gaming market, manufacturers offering merchandise at 30 percent to 70 percent off retail prices.

Rhode Island voters were presented with a referendum to allow table games at The stores will only be accessible to those inside the casino. the Twin River Casino. Voters overwhelmingly approved the amendment and Customer service training is resurfacing as an important tool to differentiate Twin River began operating approximately 66 table games in July. YOY gaming casino product from competitors. In today’s gaming market, most of the slots and revenue increased by more than 15 percent from July through August. Twin table games are basically the same from state to state, and the gaming experience River Casino’s CEO, John Taylor, reported that “the success of the table games for the patron is the most significant measure. Operators are conducting more operations led the Rhode Island Lottery to approve another 14 table games at focus groups, mystery shopping and monitoring of social media review websites the facility.” in an effort to understand and better serve their customers and develop brand loyTaylor also stated that the table games expanded the customer base of the alty. casino primarily from a younger demographic; however, companion play has Internet gaming is another potential source of gaming revenue that states will slightly increased attendance at the casino. be using to generate additional tax revenue. Nevada and Delaware gaming regulators already authorized the legalization of online poker; however, the game is reMichael Soll serves as president of the Innovation Group and brings two decades exstricted to the residents of Nevada and Delaware. New Jersey also authorized perience in gaming, entertainment and hospitality. He has offered his leadership, internet gaming, to go live this month. Its legislation allows games played at the planning and analytical skills to senior roles at leading global hospitality companies, city’s 12 casinos to be available online. The legislation restricts the online licenses in investment banking and as an industry adviser. He can be reached at to the 12 casinos currently operating in Atlantic City. The ability to play online msoll@theinnovationgroup.com or 407-702-6648. games will initially be available for New Jersey residents only, and eventually to other states willing to partner with the state.

Derris Newman serves as vice president of research for the Innovation Group, a position that allows him to apply his unique ability to locate, monitor and analyze inNortheast Gaming Market Case Study dustry-wide gaming-related information and statistics. He can be reached at The Northeast U.S. is arguably one of the most competitive gaming markets, dnewman@theinnovationgroup.com or 303-798-7711.

20

Global Gaming Business NOVEMBER 2013

WWW.SPIELO.COM United States Casino Markets 1.800.864.7670 or 702.896.8500 Canada and International 1.800.561.GAME (4263) or 506.878.6000 | casino.gaming@spielo.com Š 2013 Electronic Arts Inc. Zuma and PopCap are trademarks of Electronic Arts Inc. Š 2013 GTECH. All rights reserved. All trademarks and logos noted herein are trademarks owned by, or licensed to GTECH Corporation.

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Young Restless AND

The president and CEO of the American Gaming Association plans to bring organization to next level

BY ROGER GROS

Geoff Freeman President and CEO, American Gaming Association

H

e’s the polar opposite of his predecessor and first leader of the American Gaming Association, Frank Fahrenkopf. Geoff Freeman is young, has little experience with politics and is not a Washington insider. Yet his appointment as the second president and CEO of the AGA seems so right for the time.

Like Fahrenkopf’s high profile was appropriate when the AGA was formed in 1994, Freeman’s low profile and work ethic seem to be perfectly suited for 2013.

Freeman’s background reflects what the gaming industry needs to be in the future. Travel, tourism, leisure time and industry growth are just a few of the skills Freeman brings to the job. As COO of the U.S. Travel Association, Freeman grew that organization into the single most important group advocating for easier access to transportation and wide-ranging destination marketing throughout the country.

The travel industry is at least as diverse as gaming. There are many issues that pit member against member, but Freeman was able to help unify the sector under one cause and give politicians reasons to support the goals of the organization.

Gaming, says Freeman, isn’t that much different.

“The gaming industry—we can’t forget—is still a very young industry,” he says, “and right now it isn’t yet sure what it wants.”

Freeman says he’s spent the first three months in office researching the AGA’s strengths and weaknesses.

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Global Gaming Business NOVEMBER 2013

“The AGA is a strong organization with a quality team in place, but it’s time to write that next chapter,” he says. “That’s my biggest focus right now: trying to take my time, be methodical, figure out what the objectives of the industry are, and then structure the AGA in such a way where we can move forward and accomplish those things. I’ve spent the first few months traveling the country, listening to the industry. It’s been tremendously insightful, and I think we’re going to be able to take what Frank built and the incredible foundation he put in place, and build something quite fantastic on top of that.”

Common Cause As in the travel industry, the interests of the gaming industry are many and varied. Freeman says he hopes to bring together AGA members to unify under the items with which they agree.

“An association can’t thrive unless it forces its members to find common cause,” he says. “The alternative is that we are an organization that helps each member go achieve a parochial goal here, there, and everywhere else, and in doing so, you don’t satisfy anybody. We have to force common cause; we have to figure out what it is that brings this industry together, operators and manufacturers alike.”

Some of his research has shown that various segments of the industry are

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“What the AGA is extraordinarily well known for is preventing bad things from happening. And none of us should mistake how important that is. But how do we supplement that with the ability to go and help the industry achieve additional things that it might want?

That’s the focus there.”

unsure of what the AGA is, or more disturbingly, have an idea of what it isn’t.

Freeman wants to dispel those notions and bring some excitement to the organization.

“Let’s figure out the one thing the industry wants and go get it done,” he says.

“Create some enthusiasm, some confidence in the organization, that we can do that.

What the AGA is extraordinarily well known for is preventing bad things from happening. And none of us should mistake how important that is. But how do we supplement that with the ability to go and help the industry achieve additional things that it might want? That’s the focus there.”

Freeman says the idea that the AGA is just the tool of one or two of the large companies is inaccurate, but dismissing that notion isn’t so simple.

“It is a debate that needs to happen,” he admits. “Within the walls of the AGA, we’ll do that together and then we’ll branch out from there. But we have to figure out who we are. Are we simply the bricks-and-mortar casinos? Are we bricks-and-mortar casinos plus manufacturers? Are we only commercial casinos, or are there consistencies, commonalities and common concerns with the tribes?

Make no mistake—and I’m being candid about this—I’d like to see the industry embrace what brings all of us together rather than protect the turf we have. What are those three, four things where we can all agree and grow this industry in the process? That’s what I’m hopeful we can get to; time will tell.”

Creating common cause in the travel industry had similar bumps in the road, explains Freeman.

“Disney, Universal, Marriott, Hilton, Expedia, Travelocity, Enterprise, Hertz: what the heck do all these guys agree on? Because there isn’t much that they agree on! But the one thing they all did agree on was, ‘We want more people traveling.’ They were all going to fight it out over market share and figure out who gets whom, but if we can get more people traveling, they all benefit. I think finding that same common cause here on the gaming side is critical. We were able to do it there; we need to do it here.”

Big Personalities One of the challenges that was daunting for even a master diplomat like Fahrenkopf was addressing the concerns of the corporate leaders, many of whom are household names—Steve Wynn, Sheldon Adelson, Kirk Kerkorian, Gary Loveman and others. Freeman admits that time may come, but he’s encouraged by his initial contacts.

“There’s certainly a handful that stand out,” he says, “and I’ve had the opportunity to meet with most of them. I’ve been pleasantly surprised by the openness, the interest in seeing the AGA write that next chapter. The understanding that we are a young industry now but we have this opportunity to come together and accomplish something more. I’ve been very pleased with that.”

The big companies have expressed support, according to Freeman, and, more importantly, the desire to fully participate. He says there isn’t any indication that any company expects to have control over the process.

“The idea that the AGA benefits one company here, one company there is not the impression I’ve received internally,” he states.

“There’s certainly companies that are active within the association, more active than others, but that’s what we want. We want active members. At least at this early stage, there’s no one that’s been trying to push me to really promote their parochial interest. That will happen. But the job of the AGA is not to benefit one company; it’s to benefit the industry, and I’ve been pleased to see that’s the understanding that the leaders in the industry have.”

It’s that spirit of inclusion that surrounds the debate about internet gambling and the AGA’s preference for a federal law legalizing and controlling the activity.

“There are three reasons why we believe a federal law would be best,” he explains. “One, we need minimum standards put in place when it comes to consumer protection, age verification, responsible gambling. These are all areas that need a minimum standard to create some predictability in the marketplace for operators. We don’t have that today. Two, Native American tribes need a framework for operating in this new environment. We can’t pretend that the tribes don’t exist, that they’re not also going to be interested in going online. They would respond to the federal government far more favorably than they will to state governments, and we need that. And the final point here is that we need law enforcement to have the tools they need to enforce the laws, to keep bad actors out, to make sure that everything is being done on the up and up. That’s why we’ve always supported a federal policy.”

Expanding Influence Freeman has not only been meeting with the leaders of the gaming companies, but he’s also been reaching out to mid-level managers, people who influence the industry and even those who may not consider themselves part of the industry.

“We need to extend the benefits of the association far beyond the CEO’s office, to really go across the industry,” he says. “At USTA, whether it was people in sales and marketing, people on the convention and visitor’s bureau side… throughout the industry there were people that identified with our goals, so our tentacles run deep. And we need to do the same within the AGA. I think this is very important.”

Freeman says he wants to reach below the CEO level to bring its benefits to the people who work for the CEO. “We’ve been a very CEO-centric organization, and that’s what happens when your organization is built out of the need to prevent harm,” he says. “That threat is what galvanizes CEOs, that’s what brings them together. We need to maintain the interest of the CEOs. “But we also need to supplement that with providing value to executives across the industry. Just last week, I had a meeting out here with about a dozen executives representing property management, sales and marketing, compliance, NOVEMBER 2013 www.ggbmagazine.com

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“Cutting-edge associations now are really asking the question, ‘How can we help facilitate growth?’ The environment of the old Washington, where things got done in the dark of night in smoke-filled rooms, is largely gone.” other aspects of the business, to figure out their needs and how the AGA can serve them. I look at it this way: Even if you’re targeting the CEO, and you want to satisfy that CEO, you need to create the echo chamber of the folks around the CEO, telling them the value they get from the AGA. We’re not quite where we need to be on that front now. We’re going to get there.”

Even line-level employees deserve to benefit from AGA efforts, says Freeman.

“There’s a great pride among people that work in this industry,” he explains, “in part because this industry takes very good care of its employees. Figuring out a way to motivate and mobilize those employees, turn them into our champions, I think is a critical component of our next steps.

“I want our employees to be able to understand and articulate who the AGA is and what it does for them. I recently was with a major property manager who told me that quite frankly, he wasn’t aware of what the AGA does. And my response to him was, if you say that two to three years from now, I failed. We should have employees at the executive level and down through the ranks being able to articulate who this association is, and what it does for them.”

Youth Be Served To some long-serving members of the industry, Freeman’s enthusiasm could be seen as ingenuousness. But he believes it is simply a desire to get things accomplished to benefit the industry.

“With my youth comes some naivety and some ignorance, but I also think those are healthy attributes,” he says. “One thing that I’m going to bring here is a courage to try new things. I’m not afraid to stub my toe. It will happen. I’ve already asked for the board’s patience when it does happen; perhaps it’s already happened, and I don’t know it. But I think that I come with a lot of energy, with a different sense of what an association is. And associations are evolving animals in Washington.”

While one of the principal goals of a nascent AGA was to prevent bad things from happening, Freeman believes it’s time to move forward and grow the association.

“Cutting-edge associations now are really asking the question, ‘How can we help facilitate growth?’ The environment of the old Washington, where things got done in the dark of night in smoke-filled rooms, is largely gone,” he points out. “It’s really an environment of, how do we—for lack of a better word—manipulate the environment in Washington to help our industry grow, to accomplish our goals? That’s the energy I bring here. I see associations as having extraordinary potential to be beneficial to people throughout the industry. I’ve got the energy and the desire to grow that, to build that within the AGA. Frank built the foundation that makes this possible, and fortunately the foundation he built was much like a trampoline, because it’s something that really has enabled us and will enable us to springboard to that next level. The AGA has extraordinary potential. We are a young, vibrant, innovative industry that really does seem excited about writing that next chapter.”

Massaging the Message As a registered lobbyist with the USTA for four years, Freeman believes that the state of the gaming industry in the Capitol is good, but he will continue the goal of preventing harm to the industry.

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Global Gaming Business NOVEMBER 2013

“The challenge the gaming industry has is not different than the challenge that many industries have, and that is to understand that you need to more aggressively get out there and define for policymakers how you help them,” he says. “There’s no shortage of industries coming to Washington and asking for this or saying they need that. The question is, how do we position ourselves as a solution for members of Congress? How do we create a forum where members of Congress can stand on a stage back home and tell their community that these jobs are something that they made happen, that this community development is something that they made happen?

“We want members of Congress, frankly, to use us to look good; tell the story back home of how they’re helping drive economic development, and they’re doing it in partnership with the gaming industry. I think there’s a tremendous opportunity to position ourselves as a solution. We’re not in an economic place that we want to be. The gaming industry is part of the solution. So how do we confidently and proactively position ourselves as such?

That is our challenge with Congress.”

For years, the industry has been clamoring to be treated like any other industry that offers economic development. Freeman says there should be a renewed effort to make that happen.

“I recently spent time watching a Massachusetts Gaming Commission hearing online,” he said. “I was amazed by the types of questions, the accusatory nature, the depth that people were going with people who are simply saying, ‘Let me come to your community and create thousands of new jobs.’ I was very surprised by the tone of that. Perhaps I shouldn’t have been.

“In my brief time here, what I’ve seen is the industry seems to fall into one of three categories. We either fall under the category of economic engine, which is what Nevada and New Jersey, Mississippi, perhaps even Iowa, see of the industry; they see an economic engine, and they create an environment in which the industry can be efficient and drive development. We have other communities where we’re simply evil, maybe Utah, Hawaii and others that don’t want to touch the gaming industry. And then we have the vast middle, where we’re seen, to some degree, as a necessary evil. And when we’re seen as a necessary evil, the policies that come with that are anti-growth, generally. The policies that come with that are anti-efficiency. They’re not policies that enable our industry to thrive.”

Freeman believes those opinions can change.

“Our challenge, and perhaps the job of the AGA, is to do everything we can to move as many of these communities in that necessary evil category to the economic engine category. When we get into that category, the right policies follow. If we can get there, we’ll find a much better regulatory environment. We’ll find investors who think that they can go here because of the transparency and the friendliness to that investment. We’re not there yet.

That’s the big challenge going forward.”

Geoff Freeman may not be Frank Fahrenkopf, but in short order, the gaming industry will not resemble the industry led by Fahrenkopf, either. A new leader is in place, poised to bring gaming to a new level, with new leaders and a new purpose.

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LEADERS

IN WAITING

G2E’s Emerging Leaders program translates into a monthly department in GGB

By Frank Legato and Roger Gros

O

ne of the things the gaming industry isn’t so good at doing is succession planning. Just look at some of the major companies where investors are uncertain who is going to succeed the current chairman, CEO or president.

Las Vegas Sands’ Sheldon Adelson is over 80 years old and has given no indication who might succeed him. Wynn Resorts’ Steve Wynn is well into his 70s with few possible successors who have ever been mentioned. At MGM, where a young and vibrant Jim Murren is in charge, the company’s major investor and influencer, Kirk Kerkorian, is well into his 90s, yet his control over the company is undiminished.

Corporate cultures are peculiar things. It’s hard for someone to come in from the outside as a result of a worldwide search and become effective immediately. It can happen, but it’s unusual.

It’s much more effective to groom possible replacements within the organization to take over when the time comes, with no interruption of culture or productivity.

Now, every new leader is going to want to put his or her stamp on a company, but if that person has a long line of experience within the company, the disruption will be kept to a minimum, and in most cases any changes will be successful because of the new CEO’s knowledge of the company.

At this year’s G2E, Global Gaming Business and the Innovation Group joined with G2E and AGA leaders to kick off what will become an annual program, “Emerging Leaders.” The program identifies young workers and executives in the gaming industry that have made a mark during their early careers and rewards them with scholarships and recognition for their accomplishments. The goal of this program is to get the industry to begin considering in earnest who might succeed the established leaders.

The gaming industry is still a young business. The leaders are often still first-generation individuals who have established the leading companies in the gaming industry. And to ensure that the industry survives and thrives, succession planning is essential.

“Emerging Leaders” will be both an ongoing program at G2E every year, and will have presence in the pages of Global Gaming Business each month.

In our “40 Under 40” feature, GGB identifies the young leaders, and this month, we provide the first 11 profiles of these individuals. Then, each month going forward, we’ll run profiles of two or three of those remaining from the “40 Under 40” list you’ll find on page 37. With an assist from the Innovation Group, the mission of Emerging Leaders will be present in every issue of Global Gaming Business magazine from now on.

Congratulations to the first class of Emerging Leaders, and we expect that competition to join subsequent lists of nominees will be fierce.

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Global Gaming Business NOVEMBER 2013

LEARNING ABILITY Nehme Abouzied

Executive Director, Brand Marketing and

Advertising • Wynn Las Vegas

A chance meeting with then-president of the Venetian Las Vegas, Rob Goldstein, launched the casino career of Nehme Abouzied. Goldstein invited Abouzied, a recent MBA recipient, to join the company’s management team, and Abouzied jumped at the chance.

“He wanted to bring on some outside experience—an outside lens—to bring a new outlook on things,” says Abouzied.

He was soon working on organizing the company’s IT functions, particularly focused on getting systems up and running at the Macau properties of Las Vegas Sands.

“This gave me a unique ability to interact with many departments that a new hire would not ordinarily have contact with,” says Abouzied. “So I quickly got a sense of how departments within the company worked together, and it was a great way to learn the business.”

Abouzied also worked with the human resources department to develop an executive management-training program at the company.

“I worked with Bob Gerst, who was the vice president of HR at the time,” says Abouzied, “to set up this training program. We wanted high-potential, young employees to take part. We benchmarked the competition, and I was the first to graduate from the program.”

Abouzied says getting involved in projects that revamped the company’s IT and business systems was a crucial element of his success.

“That really put me on the map internally as someone who could deal with finance as well as operations and strategy, and put them all together in a practical way,” he says.

In 2008, Abouzied moved to the entertainment department of Las Vegas Sands. The company, he says, had never

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actively engaged in entertainment, preferring “four-wall” showrooms, which required little capital outlay or planning. Things changed at that time.

“I was put in charge of entertainment development and given responsibility for booking acts,” he says. “We booked everything from music to comedy to Broadway plays. I learned about the ins and outs of contracts, intellectual property rights and lots more. That was a great education for me.”

Moving to Wynn Las Vegas within the last year, Abouzied is excited because it gives him a chance to return to his roots: journalism and media.

“I spent the first five years after college writing,” he says. “This job gets me back into writing and thinking about how we portray ourselves in the market. I’m working on the advertising spend we make and all the communication we convey on and off the property.

“We’re building the brand, but guarding it at the same time, by being careful about who we partner with and what we convey to the marketplace.”

EYES ON THE INDUSTRY Todd Eilers

Director of Research • Eilers

Research, LLC

The name of Todd Eilers is familiar to most professionals in the gaming industry, particularly as a partner in the Eilers-Fantini Quarterly Report, a comprehensive snapshot of the industry’s slot sector.

But Eilers’ prominence among financial analysts of the gaming industry goes well beyond the popular quarterly slot report. Eilers earned his stripes as the head gaming analyst for Roth Capital, a boutique investment bank based in California—a role he developed for himself after coming upon gaming by pure chance.

After Eilers graduated from the Air Force Academy in 1997, he earned his MBA from Loyola Marymount, completing his education as his military commitment ended in 2003. With investment banking as his goal, he perused entry-level positions before being hired by Roth as an associate to the head gaming analyst. Within three years, he took over the head gaming analyst post at Roth.

But the key turning point in his career came when he met gaming analyst and journalist Frank Fantini. “I decided to conduct a slot survey in 2009,” Eilers recalls, “to better understand the purchasing habits of casino operators and to see if I could uncover some emerging technology trends in the marketplace. After getting the project off the ground, I decided to partner with Fantini Research to improve the distribution and participation levels.”

Partnering with Fantini, whom Eilers says is one of the most influential people in his career, would catapult the survey into the industry’s largest quarterly slot survey, covering around 250,000 machines or approximately a quarter of the North American market. The report has garnered an impressive reputation in the short time it has been published, and is now one of the principal sources of information of investors and operators alike.

The popularity of the Eilers-Fantini Quarterly Report gave Eilers the juice he needed to break from Roth and form his own firm, which he did last December, founding Eilers Research as a boutique gaming technology research firm.

“Our primary goal at Eilers Research in the short and long term is to be the leading provider of both market and equity research for the gaming technology sector,” Eilers says. “There is a large number of investment banks and consulting and advisory firms that are primarily focused on the casino operators within the gaming industry. That is not our focus. We are focused strictly on gaming equipment, technology, and interactive gaming. We believe this focus allows us to better understand the marketplace and to better serve our corporate and investor clients.”

With the emergence of iGaming, and the moves by slot manufacturers into a multichannel environment, it’s a good bet the growth of Eilers Research is only beginning.

THAT’S ENTERTAINMENT Jason Gastwirth Senior Vice President, Entertainment • Caesars Entertainment

Getting a chance to work with some of the titans of the industry has paid off for Jason Gastwirth.

After working as a management consultant for several years based in San Francisco, his cardiologist wife accepted a position in Arizona, causing Gastwirth to re-evaluate his own goals.

“I got a call from a recruiter telling me that the Venetian was looking for a head of entertainment,” he says. “I was intrigued. But while I had done some consulting for media clients, I didn’t have the traditional background for a job like this. They were looking for someone, however, who would bring a fresh perspective to this position, so I got it.”

With the Blue Man Group already signed and Phantom of the Opera about to launch, it was a turning point for the company.

“With the arena in Macau about to open and Singapore well on its way, there was a lot of growth in entertainment and no one was focused on it,” says Gastwirth.

Jersey Boys, the Venetian showroom with acts like David Spade, Joan Rivers and others, the Cirque show in Macau and the The Lion King in Singapore were just a few of the initiatives begun by Gastwirth (and ironically, with Wynn Resort’s Nehme Abouzied; see page 26).

Later, casino marketing was added to his portfolio.

“It gave me my first taste of the gaming side—the high-end players, the importance of the hosts, and how it all ties together with the entire offerings of the hotel,” he says.

Gastwirth was next recruited by the Palms to be the chief marketing officer, an offer he could not refuse.

“My boss at the Venetian, Rob Goldstein, said it was a great opportunity to learn that side of the business. And working for George Maloof allowed me to expand my role into advertising and PR, revenue management, hotel sales and more.”

A year later, Caesars Entertainment Chairman and CEO Gary Loveman hired Gastwirth as chief of staff, which he did for a year before being appointed to head up entertainment, where he is not only responsible for the Vegas entertainment spectaculars, but also regional entertainment.

“The Colosseum is now one of the storied entertainment venues in Las Vegas,” he says. “From Celine to Cher to Bette to Elton and others, it’s the place to play on the Strip. We also get to experiment with shows like Absinthe, which challenges the audience about what entertainment can be in Las Vegas. And we’re very excited to bring in Brittney Spears for a residency at Planet Hollywood. When you can get someone at the top of her game, it’s very exciting.”

Gastwirth says evaluating the entertainment and its impact on the properties is important.

“It all starts with the brand fit,” he says. “It has to be in line with what the specific property promises to deliver. We’ll do analysis on the demographics they typically attract and finally how the show performs financially.”

It’s only just started for Caesars, says Gastwirth, who hopes to direct entertainment and add new roles in the future when the time is right.

“Even with all the development we’ve done at Caesars, we’re really just at the beginning of the growth of this business,” he says. “We’re constantly reinventing entertainment, and now there’s a number of new properties that we’re looking forward to in Baltimore and hopefully in Boston. I’m fortunate to be here and really enjoy what I’m doing.”

NOVEMBER 2013 www.ggbmagazine.com

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40 UNDER 40

FOOD FANATIC Corey Nyman

President • The Nyman Group

Growing up in a family business can impart experience and expertise to an individual, but when you begin cooking at 6 years old, start designing menus at 12 and move to Vegas to work for Wolfgang Puck at 18, your career gets a real jump start.

At least that’s what happened to Corey Nyman, now the president of his family business, the Nyman Group.

“I was born and bred in the restaurant business,” he laughs. “If you’re going to be great manager or developer, you have to understand the basics, so I started out cooking.”

Nyman’s move to Vegas wasn’t his first contact with the gaming industry, however.

“We put together the master plan for the restaurants at Trump Taj Mahal in the 1980s,” he says. “That gave me and my father a taste of the intersection between gaming and food and beverage. And after I came out to Vegas to cook for Wolf, our company developed the first iteration of food and beverage for the Venetian. That’s where we began to understand the idea of developing restaurants for gamers, conventioneers, hotel guests and visitors all at the same time. It’s all about the intrinsic value and how much we build into the offerings.”

Nyman says the non-gaming amenities are becoming the major features at casino resorts.

“In some cases, gaming is an amenity,” insists Nyman. “But the executives we’ve been contacting are more concerned about the restaurants, the shopping, the spa, the hotel rooms and all the things that make a stay at a great hotel special.

If you want to increase visitation, you’ve got to have the amenities that keep the attention of the customers moving forward.

“These places are much more than just gaming now. It’s all about tourism, travel, entertainment and great times. It’s not just about what’s going on at the tables anymore.”

And it’s not just in Vegas anymore.

“We’ve got an office in Vegas,” he says, “but frankly, we’re doing more work with tribes and with casinos in secondary markets than we’re doing on the Strip.

It’s the hub-and-spoke theory. If I can go an hour down the road and get a taste of everything Vegas has to offer rather than fly there with all the associated costs, I’m going to go there instead and have a great time for 24 hours.”

The Nyman Group is expanding beyond just food and beverage. They’re designing nightclubs, theaters and venues that aren’t traditionally included in the food-and-beverage category.

“It’s the economy of scale,” he explains. “If you can use a space for two different things, we can appeal to different kinds of customers at different times of the day. We’re applying data to make these decisions, down to such simple things like what time a show starts. It can make a huge difference.”

Nyman’s company continues to be engaged in the development of all nongaming amenities in a casino resort, not just the food and beverage options.

“We believe that we truly understand how casino resorts will perform in the future,” he says. “With added competition coming on and online gaming allowing players to wager from home, it’s going to be crucial that casino resorts give their customers reasons to come again and again.”

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Global Gaming Business NOVEMBER 2013

GIVING BACK Treena Parvello Director of Public Relations and Communications • Tohono O’odham Gaming Enterprise Treena Parvello views her job as an opportunity to give back—not only to the members of the Tohono O’odham Nation who have mentored her throughout her career, but as a mentor herself to women in tribal gaming across the U.S. It’s a pattern that began when the Tohono O’odham Nation helped Parvello as a young professional fresh out of the University of Arizona. Her first job, as a marketing coordinator for the tribe’s Desert Diamond Casino in Tucson, was an hour commute from her home, which was a barrier to her goal of achieving a graduate degree. “The CEO approached me about my interest in graduate school and informed me that if I was interested in an MBA, the casino would consider paying for it,” Parvello recalls. “I jumped at the opportunity, got my MBA and now am happily ‘paying my dues,’ giving back to the enterprise.

Parvello gives back to the Tohono O’odham Gaming Enterprise as its director of public relations and communications, a job which, nowadays, involves a merger of the traditional communications skills with the new world of social media. “I believe that learning is an entire life process, and I love to learn,” she says. “I am fortunate that I get to be included in some new channels at the enterprise, and I like figuring out new methods to better promote our brand. I feel that I’ve been lucky to be able to meld oldschool or traditional methods with new technology and ideas.”

Along with that learning process is a drive to help others in their development, as an “official and unofficial mentor,” as she says. “On a broader scale, I serve as the co-chair of the Global Gaming Women tribal committee, and am excited about being able to impact women in the tribal gaming community nationwide. Any small part I can play in helping empower other women helps me to grow too.”

Parvello says she continues to appreciate her own mentors, the most important being tribal Chairman Ned Norris, who hired her for the Desert Diamond post in 1998. “He is an exceptional man who has imparted his own experiences, lessons learned, broader perspective and genuine encouragement,” she says. “Even after serving here for over 15 years, he is still my mentor, even though he is now chairman of the Nation.”

In addition to the mentor/mentee relationships, Parvello gives back through charity events—most prominently, the tribe’s charity golf tournament, which raises more than $100,000 a year.

“My path in life is one of blessings, struggle and determination,” says Parvello. “In all of the ups and downs, I appreciate the lessons learned even though they stung, and I delight in the highs, and the most memorable are those that make me proud to be a tribal member of a successful enterprise.”

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RESPONSIBLE APPROACH Anna Polatschek Penido Manager Social Responsibility • Nova Scotia Provincial Lotteries and Casino Corporation

Anna Polatschek Penido has always had a keen interest not only in casino gambling, but what our industry’s activity can do if not managed responsibly.

Penido, who is manager of social responsibility for the Nova Scotia Provincial Lotteries and Casino Corporation, says she was drawn to the gaming industry after earning a double degree in political science and sociology with a focus on corporate social responsibility, or CSR. “Gambling has always fascinated me for its existence in all cultures since the beginning of time,” says Penido. “And since it is conducted and managed by government organizations in Canada with a mandate to balance social costs with economic benefits—the underlying purpose of CSR—it was the perfect fit.”

It was arguably the perfect location as well: Nova Scotia has been a model for the world when it comes to responsible gaming—its programs, research and technologies designed to add responsible-gaming features to the VLTs themselves making the province a leader in the field.

“Social responsibility has always been at the core of NSPLCC’s business objectives,” says Penido, “and I had big shoes to fill when I joined the corporation, which is among the world leaders in responsible gambling. My role is to manage over a dozen responsible gaming programs and initiatives, conduct risk assessments and identify harm reduction strategies to all our offerings, based on our Social Responsibility Charter to ensure we remain accountable to our shareholders, the people of Nova Scotia.

“My goal is to continue to strengthen this commitment and maintain our reputation as an important player in the social responsibility of gaming.”

Penido has already made a mark in the highly regarded program, thanks to the mentoring of the senior executives in the NSPLCC program. “Some special moments were my first meeting representing the province at the Interprovincial Lottery Corporation’s Responsible Gambling Sub-Committee,” she recalls, “and the group of senior executives’ utmost openness and welcoming reception during my onboarding process. As a rookie with under a year in the industry, it was definitely a great moment.

“In addition, being invited to be an editorial board member for the Responsible Gambling Review Journal (being launched in January 2014), and selected as one of seven recipients of the inaugural G2E Emerging Leaders Scholarship Award, were also very important moments in my career.”

For the future, Penido says she hopes to maintain her high standards when it comes to CSR and responsible gaming.

“My ultimate career goal,” she says, “is to be recognized as a corporate social responsibility expert in gaming, to continue to work towards a sustainable industry, to minimize the harm potential and to help to ensure that gambling remains an entertainment activity with great economic benefits to communities by increasing awareness of responsible gambling as a win-win solution for both players and operators.”

LEARNING THE GAME David Schwartz Director • Center for Gaming Research, UNLV

David Schwartz has gaming in his blood.

His first job was at the ice cream parlor at Bally’s in Atlantic City when he was in high school. He later went on to work in security and surveillance and other departments at several Boardwalk casinos.

But education was Schwartz’s first love, and after graduating college, he applied to become director of the Center for Gaming Research at the University of Nevada, Las Vegas, and never looked back.

Unlike most academics, Schwartz’s experience in gaming brings a realistic view of the world not always shared in the ivy-covered towers. Schwartz’s mentors include the late Shannon Bybee, a former casino executive and founder of the International Gaming Institute at UNLV, and the late Bill Eadington, the founder of the Center for the Study of Commercial Gaming at the University of Nevada, Reno. Schwartz combines Bybee’s real-life approach to education with Eadington’s love of research, and is truly the spiritual academic heir to their gaming education tradition.

“As an academic studying gambling, it is very important to me to have worked in the industry first,” he explains. “I think it gives me a base of knowledge that helps me understand the industry in its own terms. Coming from Atlantic City, I’ve seen firsthand the power of the industry to change lives, and I don’t forget about that when I’m researching or writing about it. This isn’t just numbers on a spreadsheet; it’s real people we’re talking about.”

Schwartz has parlayed his experience and knowledge into several books, along with his teaching assignments at UNLV. His Suburban Xanadu is the most important and comprehensive book on casino design in Las Vegas, while his Cutting the Wire: Gaming Prohibition and the Internet is considered to be the most authoritative book on the infamous Wire Act and its application to internet gaming. But his Roll the Bones: The History of Gambling is the most comprehensive look at how gambling has ebbed and flowed from the Stone Age to the 21st century.

Most recently, Schwartz has published Grandissimo: The First Emperor of Las Vegas, a biography of the creator of modern Las Vegas, Jay Sarno, who built the first themed properties, Caesars Palace and Circus Circus.

But it’s spreading the facts about gaming that really interests Schwartz. A frequent source for the mainstream media, he’s not happy when a reporter comes to him armed with an angle that bears no relation to reality.

“I want to continue to improve what we do at the Center, including strengthening the data we provide on our website, gaming.unlv.edu. This is a resource that many in the industry use, and I’d like to see that increase. I’d like to continue to bring top-flight researchers to UNLV through the Eadington Fellows Program and in general do more to get accurate information about gambling in the public domain.”

While he’s a sought-after consultant to many gaming companies, books will remain a passion, as well, for Schwartz. “I have eight ideas for my next one,” he laughs.

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Games have always been the business of Jared Steffes. The Chicago-area native was not content, though, to simply create video games. Beginning with his time at DePaul University—where he co-founded the DeFRAG student video-game development organization and helped develop a degree in the same discipline—he has been what TechWeek once described as a “serial entrepreneur.”

By his early 30s, Steffes had founded or cofounded NASCAR venues Rt. 66 Speedway and Chicagoland Speedway, video game developer Yellow Car Studios, and Tap.Me, a pioneer of in-game advertising, among other ventures.

As with others in the video game business, though, it was inevitable that Steffes would eventually be part of the gaming industry. That has happened with his latest startup company, Furywing Inc.—a content company dedicated to injecting the fun of the video game into casino games, iGaming and social gaming sites.

“I began getting interested in gambling games when my best friend began designing them,” Steffes recalls. “Luckily, during that time I founded a company that contextually changed advertising in mobile games called Tap.Me, and I saw a natural way to put them into slot machines on casino floors. That is when I began designing interactive casino games that I would want to play.”

Steffes’ latest venture is not your typical slot content company. “Furywing is primarily a bunch of younger people that slots do not appeal to,” says Steffes. “I came up to an ex-director from WMS (Tim Gronkowski), who is now our CTO, and said I want to make casinos look like arcades. I want them to consist of games of skill that also include a game of chance. He said it couldn’t be done. Three months later, with a prototype I proved him wrong, and have been changing the minds of his peers since then.”

Steffes’ Furywing is poised to capitalize on a trend that has been common in the slot sector of the casino industry for years—the tapping of video game expertise in the creation of interesting slot machines.

It has been a common denominator in some of the most successful slot development of recent years,

from IGT’s games developed by former Sega game-master Joe Kaminkow to the most recent offerings of Konami Gaming, which is a subsidiary of a legendary video game producer.

Steffes, though, intends to take the trend to new levels. “‘You can’t play a game like Halo and apply slot machine outcomes to it’ is something I continue to hear,” he says. “At least, that is, until they spend 30 minutes with me.”

Steffes states his biggest short-term goal as to “build Furywing to be the next powerhouse of gambling.”

Long-term? “To move to Maui and become a philanthropist in regards to other niche startups.”

If the past is any indication, both goals are in the bag.

TRIBAL TRIBULATIONS Jamie Stuck Vice Chairman • Nottawaseppi Huron Band of the Potawatomi

Anyone who is truly passionate about their work, loves their job. And if you love your job, you really live your job. Jamie Stuck has been living his job his entire life.

“Our tribe has been struggling for decades, first to achieve federal recognition, and then to embark in the gaming industry, which provides us with self-sufficiency,” says Stuck, now the vice chairman of the tribal council for the Nottawaseppi Huron Band of the Potawatomi. “I remember as a little boy, my grandfather having small meetings in his house with two or three people discussing these issues.”

Throughout high school and college, Stuck says he always thought at the back of his mind that he’d work for the tribe, but nothing in particular. It wasn’t until the then-chairwoman, the late Laura Spurr, urged him to run for tribal council that things began to come together.

“I knew I wanted to work for the betterment of my people,” he says, “but I didn’t know what I wanted to do. But when Laura told me she had big plans for me and suggested I run for council, that made sense. I was lucky enough to win and be re-elected ever since.”

Stuck says he was a bit idealistic when he first started in tribal council.

“As you get older, you get a little more realistic,” he says. “Shortly after I joined the council, it wasn’t a very hopeful time for our tribe. We didn’t have a state compact, the management contract had not been approved by the council, the land hadn’t yet been put into trust, we didn’t have financing and we were locked in a Supreme Court battle with opposition groups. The future looked bleak. That

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shook my idealism, and I got down to work to help us get over all those challenges.”

The tribe’s FireKeepers casino was the result of the struggles, and it was an immediate success. Located in Battle Creek, it had the advantage of being located in a part of Michigan that was underserved by gaming. Stuck says he was lucky to be a part of the process at that time.

“I was involved in everything,” he says. “The Supreme Court case, the management agreement, the approval process from the National Indian Gaming Commission, negotiations for the state compact, and I even got to participate in the road show to line up the financing. And that wasn’t a slam-dunk. Remember, the downturn began to hit in 2008, exactly the time we were looking for financing. But we had the right product in the right place, so we got offers for almost $1 billion of financing when we were only seeking $340 million.”

Although things aren’t as complicated as they were in those days, Stuck says there’s still plenty to keep him busy as vice chairman of the council.

“I plan to continue to work for the tribe, as long as they’ll have me,” he says.

iGAMING EFFORT Dana Takrudtong Vice President of Sales • GameAccount Network North America

The newest branch of the gaming industry understandably has some of the youngest executives in the business, but few of them have the diverse background of Dana Takrudtong. As the vice president of sales for GameAccount Network North America, Takrudtong started with a company that couldn’t get less digital when it started, Yellow Book. She was in sales and management, along with financial for the company’s online publication. She was chosen as one of 44 from around 5,000 Yellow Book sales reps to participate in a partnership with Google, one of the first partnerships Google formed outside the walls of the company. But the economic downturn doomed what was once a bright future for the company, and Takrudtong moved on.

It was then that Takrudtong discovered the gaming industry. She joined WMS, the giant slot-maker, just as it was beginning to explore the online space in 2011. She describes a corporate meeting at that time when the company’s Jackpot Party casino was debuting in the U.K. “It was only given a short amount of time at that meeting,” she says, “but it was very interesting. After the meeting, I approached the VP of sales at the time and said if this product was coming to the United States, I wanted to be a part of it.”

Takrudtong was again pulled out of the core sales force when the company formed Williams Interactive, selling the company’s “Play4Fun” network to casinos across the U.S. as the Jackpot Party casino.

“It was skinned as the purchasing casino,” she says, “but it would contain all WMS titles.”

During the sale of WMS to Scientific Games, Takrudtong was approached by Foxwoods Interactive, where she had built a great working relationship. Since Foxwoods has a relationship with GameAccount, she’s working for both companies.

“It’s really a hybrid role representing both Foxwoods Interactive when we call upon the tribal customers, and GameAccount Network when we’re working with commercial operators across the country and internationally,” she says.

Takrudtong believes there are many questions about how online gaming will impact land-based casinos.

“It’s unfortunate at the moment that there are very few live case studies in the market where operators are willing to share the data,” she says. “However, the few case studies we’ve seen indicate that there isn’t much of an impact. A study by the British Columbia Lottery Commission showed that its online product and live casino product have continued to grow since the launch of online gaming several years ago. The Mary34

Global Gaming Business NOVEMBER 2013

land Live! experience of play-for-free players migrating to the land-based casino is also encouraging. But there’s just too little data to tell for sure at this time.”

She does agree, however, that the experience in New Jersey will be telling.

“We expect several other states to begin the legalization process very soon,” she says. “They don’t want to get left behind, and they also see that revenue on the table, and after all, that’s a powerful inducement to allow iGaming to occur.”

FAST TRACK David Vatthanavong

Pit Manager •

SugarHouse Casino

To say the casino business—and the pit in particular— is in David Vatthanavong’s blood is not hyperbole; it’s fact.

Vatthanavong, who is a pit manager at Philadelphia’s SugarHouse Casino, got into the casino business through his mother, who was a baccarat dealer at the old Sands in Atlantic City. In 1997, she encouraged her son, a valet parker at the Tropicana at the time, to get into table game operations.

“She wanted me to become a blackjack dealer, because the money was good,” Vatthanavong recalls. “So, around September 1998, the Sands Casino offered an eight-week blackjack training course, and everyone who completed the course was granted a part-time, weekends-only job. I applied and was picked for the training, and eight weeks later, I was a blackjack dealer.”

Vatthanavong was all of 18, fresh out of Atlantic City High School at the time. And his career would be on a fast track from that point forward. After moving to the Tropicana when the Sands was bought by Carl Icahn in 2002 and a year at the Trop, Vatthanavong moved to the Borgata as a dual-rate dealer, and quickly got attention from the pit staff at the then-new casino. “Due to the high volume and big play, I learned quickly and efficiently how to handle myself and rise above the pack,” he recalls.

That ability landed him a job as the youngest full-time supervisor in the Borgata’s pit.

But Vatthanavong’s fortunes would continue to rise at another new casino, this time in the city of Philadelphia. SugarHouse Casino opened as a slots-only casino, but Vatthanavong’s opportunity would come shortly after Pennsylvania casinos added table games in July 2010. Rosemarie Cook, the new VP of table games at the SugarHouse, offered him a job as a full-time pit manager. “She saw something in me and believed in me,” Vatthanavong says.

At age 30, Vatthanavong became the youngest pit manager in Pennsylvania, a distinction he retains today at 33. He attributes his fast-track career to mentoring and opportunities that came from people like him: “They were new to their position and hungry for success, and it showed,” he says. As far as Cook, Vatthanavong says, “The thing that impressed me most about Rose is that she is willing to share her knowledge with me to make me a better manager.”

Vatthanavong adds Mario Palladinetti, executive director of relationship marketing at the Borgata, to his list of influences. “His professionalism and overall demeanor with guest interactions was always impressive to watch,” says Vatthanavong. “Mario was my mentor throughout my time at the Borgata, and is still my mentor now.”

Vatthanavong is looking forward to an expansion of the table game operation at SugarHouse that is now under way, and to being a mentor himself. “I want to learn, and teach others whatever I can,” he says. “Long-term, I will work on my education so I can further my career and climb the corporate ladder.”

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40 UNDER 40 FOR 2013 The Global Gaming Business List of Emerging Leaders

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Michael Bond Boyd Gaming Corp • Vice President, Corporate Finance Tifani Chung GTECH • Senior Content Manager Carolyn Conrady Pechanga Resort & Casino • Social Media Strategist Brian Decorah Ho Chunk Nation • Director of Business Development Todd Eilers Eilers Research, LLC • Director of Research Justin Findlay TCS JohnHuxley America Inc. • CFO JT Foley Las Vegas Sands • Director Of Government Relations and Community Development

12. Jason Gastwirth Caesars Entertainment • Senior Vice President of Marketing and Entertainment

13. Marcus Glover Horseshoe Casino Cleveland • President & General Manager

14. Aaron Gomes Echo Entertainment • Managing Director 15. Aaron Harkins Faegre Baker Daniels LLP • Partner 16. Dawson Her Many Horses Bank of America/Merrill Lynch • Vice 17.

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President, Native American Division Andrea Jannsen Masterminds Advertising • Director of Social Marketing Suzanne Leckert TMG Consulting • Director, Gaming & lndustry Analysis Jordan Levin Williams Interactive • Vice President & COO Michael Johnson Reed Exhibitions • Industry Vice President, G2E David Lopez Global Cash Access Inc. • CEO & President Corey Nyman The Nyman Group • President Treena Parvello Desert Diamond Casinos • Director of Communications Ameesh Patel Miura Holdings • Managing Director Nathan Peak Hnedak Bobo Group • Architect - Designer Clayton Piester Crown Casino • Vice President Anna Polatschek Penido Nova Scotia Provincial Lotteries & Casino Corp. • Manager, Social Responsibility Robert Russell Regulatory Management Counselors, PC • Senior Gaming Analyst Karl Rutledge Lewis And Roca • Attorney Seth Schorr Fifth Street Gaming • CEO David Schwartz UNLV • Director of Gaming Research Mark Schwartz Och-Ziff Capital Management • Vice President, Finance & Administration Melissa Shilling Floss Barber Inc. • Senior Interior Architect Jared Steffens Furywing Games • President Jamie Stuck Nottawaseppi Huron • Band of the Potawatomi Vice Chairman Dana Takrudtong GameAccount Network • Vice President of Sales Clayton Vanderpool PNC Bank • Vice President, Native American Division David Vatthanavong SugarHouse Casino • Table Games Pit Manager Joe Versaci Ultimate Gaming/Fertitta Entertainment • CMO

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by michael pritchard

Can online gaming save Atlantic City?

turning the tide

A

tlantic City has been in the business of looking for saviors, both big and small, for better than 35 years.

The first savior was the big one, coming in the late 1970s, when casino gambling was seen as the only way to save a crumbling and nearly forgotten seaside resort decades removed from its glory days. When Resorts International opened on May 26, 1978, the hope in casino gambling seemed wellplaced, as lines of gamblers snaked along its once-again-famous Boardwalk just trying to get in.

But since then, Atlantic City has always seemed to need more, smaller saviors—something to save the neighborhoods, something to get the players, bussed in daily, to stay for more than a few hours, something to change the city’s public image as dirty and unsafe.

Some of these saviors appeared, even if their success was limited. A new glossy mega-resort would open. A new agency to funnel casino money into the neighborhoods was created. The public image? Well, that’s been a tough one.

The Perfect Storm Then, after a 29-year winning streak, something happened to the original savior.

Casino gaming started to falter as Atlantic City lost its East Coast monopoly on roulette and blackjack. Timed perfectly with the rise of casinos in Pennsylvania and Maryland, a severe recession hit the country. The city’s casinos have been losing revenue and market share ever since, and are approaching lows not seen since the first casinos came online. The 29-year winning streak has been replaced by a five-year losing streak.

Atlantic City needs a big savior again.

For many, it arrives November 26 when New Jersey is scheduled to begin online gambling.

It’s the same old savior, of course—casino gaming—but now it’s a more evolved creature steeped in new technology, social media and mobile apps.

The sky could be the limit. Estimates vary greatly, but analysts feel online gambling revenue for New Jersey could be anywhere from $200 million to $1 billion. The state estimates (very optimistically) it will make $180 million in taxes— 38

Global Gaming Business NOVEMBER 2013

New Jersey, through its 12 AtlANtic city cAsiNos, is prepAriNg to go live with full oNliNe cAsiNo gAmiNg oN November 26.

Nobody is cleAr oN where the iNitiAtive will tAke AmericA’s secoNd cAsiNo city, but oNe bet hAs beeN mAde. oNliNe gAmbliNg is beiNg Asked to stop A five-yeAr losiNg streAk iN the resort.

taxing online revenue at 15 percent—which means the casinos would have to win about $1.2 billion.

Atlantic City’s total yearly casino revenue is currently about $3 billion.

It’s a lot to ask of internet betting. But if it does nothing else, online gaming has already done just what casino gambling first did in 1978. It’s injected some hope into a fading town, and people are once again lining up to get in.

“I think online gaming has brought a real excitement to the city,” says Joe Lupo, senior vice president of operations for Borgata Hotel Casino & Spa. “This market has been depressed. So to now be at the forefront of new technology and new gaming is a tremendous boost.”

Still, there is an air of uncertainty to the whole thing. Lupo, for example, was the only casino executive contacted for this story willing to speculate on what is coming.

It’s really not clear how the whole thing will work, but the most important unknown—when will it all start—was answered early in October when the New Jersey Division of Gaming Enforcement announced that the state will meet its target date of November 26. Casinos must complete a five-day “softplay” or test period before launching.

The next step is the publication of 106 pages of online regulations, due October 21 (too late for this issue). Their adoption was scheduled for October 28.

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Quick Like a Fox

“We’re going to be advertising and offering rewards and other exciting offers to drive people to our brick-and-mortar casino. We’re the leading brand in this market, and it’s very exciting to be able to reach new people and to bring them to the city.”

The DGE’s announcement was a surprise to some, especially those watching New Jersey’s actions from other states who have questioned how quickly New Jersey has been moving to implement online gaming. New Jersey is trying to do in about nine months what Nevada— which has already gone live with online poker—took a few years to implement.

DGE officials say they are not ready to discuss the —Joe Lupo, Senior VP of Operations, Borgata Hotel Casino & Spa state’s plan before the regulations are released, but David Rebuck, director of the DGE, has told reporters in the past that New Jersey began studying online gaming right after the U.S. Department of Justice issued an opinion in 2011 that federal law does not block online gaming if it is limited to within a state’s borders. home. Atlantic City’s drive-in market has been shrinking.

But the reach of the internet could change that.

The opinion was released even as the DOJ was continuing to shut down ille“It allows us to extend our brand,” says Borgata’s Lupo. “It allows us to reach gal online gambling sites operating in the U.S. from international companies opout to new players, say in North Jersey, that maybe don’t know us all that well, erating outside the country’s borders. and bring a little of Atlantic City to them whether they’re in a coffee shop, or on And it was music to New Jersey’s ears. Legislators from both southern and a train or at home. northern New Jersey have been trying to change federal law to increase gambling “We’re going to be advertising and offering rewards and other exciting offers in Atlantic City (and other parts of the state, but that’s another story) and turn to drive people to our brick-and-mortar casino,” Lupo says. “We’re the leading around its falling revenue stream. brand in this market, and it’s very exciting to be able to reach new people and to One plan is to move for legal sports betting in the state, even though it is not bring them to the city.” allowed under federal law. New Jersey voters have even approved a referendum alNew Jersey’s demographics also play an important role. New Jersey has a lowing sports betting should federal law change. But New Jersey’s challenge to population of just under 9 million, compared to Nevada’s 2.75 million. federal law that limits sports betting to four states where it was grandfathered— Delaware, the third state planning to introduce online gaming, has a population Nevada having the only true sports books—has failed so far in the courts. An apof just under 1 million. peal to the U.S. Supreme Court is now planned.

Like Nevada, New Jersey also sees a significant tourist trade, especially in the But that’s sports betting. Online gambling won quick approval in the state summer when tens of thousands flock to the Jersey shore. Many of those tourists legislature after the DOJ opinion and a plan was launched to offer online gamrent or own summer homes. bling through Atlantic City’s 12 casinos. The law requires all computer servers New Jersey is also in the center of the East Coast megalopolis, with New York and software to be housed in Atlantic City, and gamblers must be within New City and Philadelphia on its borders. Under New Jersey law, players simply have Jersey’s borders to play. to be in New Jersey to play (GPS systems will verify their location) and don’t Ten of the city’s casinos have already announced partnerships with online have to be official residents. gaming providers running well-known poker sites such as PokerStars, PartyPoker That conjures up images of parking lots in New Jersey towns such as Hoboand Caesars Entertainment’s World Series of Poker. ken filled with cars with New York license plates and players on their iPads.

But New Jersey’s law is much more than poker. All casino games will be ofBut few analysts see that happening. fered, including slots—an equally popular online game as poker. Lupo says he “I don’t think the number of players who just pop over the border is going to thinks the regular casino games will have the same popularity as online poker. be gigantic,” Morowitz says. “I mean, you’d have to find some sort of venue.

So what’s it all mean? Nobody’s sure, but it is clear Atlantic City is heading Maybe a bar or a restaurant, but I don’t really see that happening too much. Uninto new territory. derstand, New Jersey’s base is huge to begin with, and then consider the people “I think one of the ways to look at this is to consider the big-box retail who commute to New Jersey for work. And another area is the summer visitors stores,” says Cory Morowitz, managing member and CEO of Morowitz Gaming who rent and own at the shore. It’s already a very large base.”

Advisors LLC, a gaming analysis firm in Atlantic City. “A store like Macy’s has multiple outlets that they use for distribution. They have an online component.

Market Forces They have their actual stores and they have their catalog sales. This legislation So the new market for Atlantic City is—New Jersey. gives Atlantic City casinos some of that—a new outlet and another distribution “In eastern Pennsylvania and now into New York, gamblers already live channel. That’s a factor that makes an Atlantic City casino more attractive to opwithin driving distance of other casinos,” says Israel Posner, executive director of erate.” the Lloyd D. Levenson Institute of Gaming Hospitality & Tourism at the For Atlantic City, in a single swoop one of its most intractable problems Richard Stockton College of New Jersey. “It wouldn’t make much sense for them seems to have been answered, or at least mitigated. City leaders have longed to to drive to play online.

The real market is the convenience gambler in northern make Atlantic City a destination resort and more than a simple drive-in market.

New Jersey and parts of central New Jersey.

And though the city has made great strides in recent years bringing in entertain“That’s who this will serve best—people who are just looking to gamble and ment, dining and attractions, the city’s visitors still mostly live in driving distance. are less interested in the amenities,” Posner says. “It’s much easier to just play in With the advent of casinos in New York, Connecticut and Pennsylvania, the comfort of your home than to drive to the Poconos. Online gaming is about however, more and more gamblers have chosen to frequent casinos much closer to comfort, and I think this will siphon off players from those markets.”

NOVEMBER 2013 www.ggbmagazine.com

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IT’S alSo ImPorTanT To noTE ThaT EaCh CaSIno ComPany In nEW JErSEy Can oPEraTE uP To fIvE “SkInS”—SEParaTE brandS—undEr EaCh lICEnSE. ThIS gIvES EaCh CaSIno ThE oPPorTunITy To dIvErSIfy ITS aPPEal and broadEn ITS rEvEnuE STrEam.

Ten of the city’s casinos have already announced partnerships with online gaming providers running well-known poker sites such as PokerStars, PartyPoker and Caesars Entertainment’s World Series of Poker.

In other words, Atlantic City has a chance to win back some of the players the city has lost to new competition. And once in the online door, Atlantic City casinos will work to get them in the real door down the Garden State Parkway. But it’s not clear if all Atlantic City casinos will use their customer databases—at least their current customers. One casino executive told GGB that only players who hadn’t visited in at least two years would be included in online gaming marketing efforts.

“We don’t want to risk our existing players staying home instead of coming to the casino,” said the executive, who commented privately.

Still, most casinos will do what is necessary to make it a success.

“The key to all this is the databases,” says Posner. “The casinos that thrive will be the ones with the best databases of players. That’s who you offer loyalty and promotions, too. The casinos through online gaming are going to be able to significantly grow those databases.”

Lupo sees the casino brand Borgata has already built as a major factor.

“This is a brick-and-mortar casino market,” Lupo says. “Players in this area— and that includes other markets like Delaware and Maryland—are very familiar with all casino games and the rewards programs. We have the strongest brick-andmortar brand in this market, and that will be a big factor.”

room at the casino as soon as it is licensed for online gaming. Resorts currently does not have a live poker room.

It should be noted, however, that PokerStars being licensed is no sure thing, as the company has had troubles with the U.S. Department of Justice in the past. PokerStars agreed to pay $731 million last year to settle a U.S. Department of Justice lawsuit stemming from its online operations. The company admitted no guilt or wrongdoing in the settlement, allowing it to seek a license in legal U.S. markets that lacked a “bad actor” clause, as New Jersey does. PokerStars is barred by such a clause in Nevada, however.

While partnerships have been announced, the real online players won’t be known until the DGE begins approving licenses. Golden Nugget, one of Atlantic City’s newest casino operators, runs its own online brand currently offering free poker play in New Jersey, and has signed with Bally Technologies to provide services. The Tropicana has aligned itself with Gamesys. Trump Taj Mahal has an agreement with Nevada’s Ultimate Gaming, a subsidiary of Station Casinos, which operates one of the two legal online poker sites in Nevada.

And Trump Plaza has reportedly signed with Betfair, a company also involved in online horse-race betting in New Jersey, which may speed the licensing process.

It’s also important to note that each casino company in New Jersey can operate up to five “skins”—separate brands—under each license. This gives each casino the opportunity to diversify its appeal and broaden its revenue stream.

Brand Awareness

City Scape

One of the more intriguing aspects of the New Jersey plan is the combinations of brands that will be seen.

Borgata, for example, has partnered with bwin.party entertainment to run both bwin’s PartyPoker brand and the new brand Borgata.com. Borgata, which runs far and away the most successful live poker room in Atlantic City, has already moved to further its alliance with bwin.party’s World Poker Tour. The casino hosts the Borgata Poker Open in September. The championship event of the Open is the most well-attended poker event on the WPT. Lupo says the casino will cross-promote its live poker events with online poker.

Other partnerships are also becoming clearer.

Caesars Entertainment, for example, owns four Atlantic City casinos—Caesars Atlantic City, Harrah’s Resort, Showboat and Bally’s casino hotels—and runs the popular World Series of Poker brand online in Nevada. The company has partnered with 888 Holdings to operate its Nevada and New Jersey online operations.

In addition to the WSOP and Caesars brands, 888 will operate its All-American Poker Network, as well as an internet casino branded as a Wynn site. Because all brands under one license will pool players, it makes sense to have as many powerful brands as possible.

A spokesman for PokerStars, which has partnered with Resorts, recently told local Atlantic City media that the company wants to build a $10 million live poker

But what does online gaming mean for Atlantic City’s struggling casinos? So far, some other things are becoming apparent. Online poker does seem to be bringing jobs to the city. There are already some reports of tech jobs being staffed, and analysts say marketing and clerical jobs may also open up.

And for the first time in five years, people are talking about investing in the city, not getting out. Some Atlantic City casinos are clearly up for sale, and any number of internet operators have been rumored to be interested in buying.

Still, the field will be crowded.

“The amount of casinos planning to go online will certainly fragment the market,” says Morowitz. “There are going to be winners and losers in this. The casinos are partnering with providers, but they bring their own brands to this, and I think those properties that have the best brands and already have a strong player base will thrive.”

Most importantly, though it is just a promise of success, online gambling has created a positive buzz in the city.

“It’s very exciting to come in on the ground floor of a whole new industry,” says Stockton’s Posner. “Yes, people have been gambling online since the ’90s, but this is legal online gaming in the U.S., and this is really the first batter.

We’re not even into the first inning. The first batter is on deck. And that creates a real excitement.”

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Global Gaming Business NOVEMBER 2013

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iGaming North America

Moving Target When is the right time to engage in online gaming?

Part II

By Kimberly Arnold

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ast month, we began this series by describing the reasons companies need to consider free play and social gaming in preparation for real-money online gaming. This month, we’ll outline some of the ways this can be accomplished.

UNDERSTANDING THE END GAME The majority of providers seem quick to recognize the benefits this can have for their organizations and the industry at large.

Aristocrat Technologies is one such provider that has significantly modified its offerings over the past year, and predicts that its realmoney product will bring value back to free-play and social-gaming-only clients.

Earlier this year, Aristocrat obtained the rights to the platform of GameAccount Network, the former partner who helped develop the free-play site for Maryland Live!, and notably, the acquisition of Product Madness gave Aristocrat instant leverage in the social gaming space, rounding out the cmpany’s capabilities across all three tiers of online—free play, social and real money.

Jeff Connors, a senior director with Aristocrat, states, “The iGaming space in the U.S. has evolved dramatically over the last few years, and so has Aristocrat Interactive. Our pending social B2B white-label solution is set to launch, and will provide our customers an alternative platform to take advantage of the social gaming space. Sites for Island Resort in Michigan and Maryland Live! will both soon be branded social casinos. The new site includes unique gamification features across a range of super-fun slots and table games. This is what our clients have told us they want.

“Additional focus areas for Aristocrat are growth of the online library and driving content across multiple channels to include mobile and

tablets,” Connors continues. “We believe mobile will be the primary access point for iGaming in the future.”

GameAccount Network, Aristocrat’s former partner who is now aligned with Foxwoods Casino, is hoping to leverage its U.K.-based expertise within the New Jersey jurisdiction. Dana Takrudtong, VP of sales for GameAccount, believes her firm is well-positioned to take advantage of the multi-tiered free play, social and real-money progression in the U.S., particularly because of the

‘‘

Look no further than the disparity of market forecasts for that state— ranging from approximately $30 million in tax revenue to over $250 million—and it is easy to understand the questions being raised by operators, government officials, communities and providers. How can a state like New Jersey plan and budget for online without a reliable forecast to look to?

‘‘

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product’s back-office and consumer-protection integrations—components many operators are surprised to learn are not typically included in some providers’ free play and social solutions.

This point is worth further mention, since operators whose primary purpose in launching a free-play site is to expand the player database of potential casino visitors, ensuring that even freeplay participants are of legal gambling age.

“GameAccount Network’s Simulated Gaming is a unique freemium B2B option for casino operators,” Takrudtong explains. “We deploy the playfor-fun experience from a wagered platform, giving the licensed operator a back office which enables them to control content deployment, analytics, promotions, bonusing, monetization, and most importantly, age verification in the for-fun login process. CMS integration paired with age verification enables operators to use desktop and

Global Gaming Business NOVEMBER 2013

mobile gaming experiences to collect a wholly marketable database both online and off.”

IGT has been both the envy and target of its industry peers in the online space. IGT’s DoubleDown Casino, implemented through both the Facebook platform and individual client websites, offers an ease of implementation and limited fee structure which has allowed IGT to enroll more than 40 operators to date—an overtly notable number given most of the other major providers are counting their client volume for free play and/or social gaming on one or two hands.

Some competing providers continue to criticize DoubleDown Casino as a B2C model, although many are now following IGT’s footsteps with their own successful Facebook-based offerings. In either case, no one can claim that any other provider has found greater success than IGT in executing contracts and rolling out the offering to operators.

DoubleDown Casino, from the outset, allowed casino operator partners to earn revenue share based on virtual chip purchases. What has changed the past few months has been IGT’s investment to step up its marketing programs to support operators, aiming to help bring players back to the casino. Additionally, while IGT is known in the industry for not partnering with other manufacturers for content with respect to DoubleDown Casino in North America, they actively do so for real-money gaming in Europe, and are following that path when it comes to regulated markets in the U.S. Bally Technologies should find itself in the unique position of providing both platform (Golden Nugget) and game content in the soonto-launch New Jersey market. Bally is the unquestionable industry leader with its mobile app, but has yet to announce a formal social gaming solution. Bally also has the benefit of added momentum behind it from its recent announcement regarding the acquisition of Shuffle entertainment. Advancements in its poker solution can’t be far behind.

Williams Interactive has also dramatically modified its solution throughout the past six months, launching its Play4Fun offering this past

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summer, with its first client, Snoqualmie Casino in Washington, incorporating its social site into its property web page. Perhaps of equal note is the success that Williams has found with its own Facebook offering, JackpotParty.com, which has shifted the social components being offered to its clients. The industry is also watching to see if the pending acquisition by SciGames will modify any other strategies for Williams.

WHAT ELSE CAN THE REALMONEY STATES TELL US? New Jersey has also demonstrated that there is an unquestionable need for a more accepted methodology when it comes to online gaming forecasting and revenue projections. Look no further than the disparity of market forecasts for that state—ranging from approximately $30 million in tax revenue to over $250 million—and it is easy to understand the questions being raised by operators, government officials, communities and providers. How can a state like New Jersey plan and budget for online without a reliable forecast to look to?

The Innovation Group and its consultants have been approaching our market assessments

with varied methodologies, applying trends from existing online markets and layering in feedback from surveys down to the operator’s player database to more truly assess the potential. Time will tell whose estimates will ring true as the states go live.

These concerns also apply to operators in unregulated markets. At the end of the day, who could blame them for questioning the initial price points the providers presented for free play and social gaming-only options, since they have more indirect monetization requirements? The initial offerings simply didn’t pencil out for many operators, but with the shift in products we have seen as of late, more operators are taking a second look. Why? Because they are now less expensive, easier to install, interface more easily with existing player development software, and offer some element of monetization.

EXPECT MORE CHANGE When legalization will happen for remaining states or at a federal level remains to be seen, but one thing we do know is that technical evolution and advancement will never end. Revolution is inherent to the industry, the process and

online environment, and change is something that operators have to embrace if they are going to be in the space. The key, we tell our clients, is to find the right partner who is dedicated to advancement and has a solution that is flexible and open to dynamic change—and the player’s insatiable need for diverse content.

We share the feedback received from our clients that the providers have come a long way over the past year in refining their offerings, and with any hope, the outcomes of these first few regulated markets will advance this further. If an operator is on the sidelines waiting for the fast-advancing trends inherent to the industry to slow down, and the perfect final solution to appear, by definition they will never be able to join.

Is it time for your operation to engage?

Kimberly Arnold is chief operating officer of the Innovation Group and co-manages the firm’s Innovation Interactive practice. She has worked as a strategic adviser and research specialist to tribes, providers and lotteries specific to online gaming throughout the past several years. Arnold can be reached via 303-798-7711 or karnold@theinnovationgroup.com.

NOVEMBER 2013 www.ggbmagazine.com

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Borgata Gets First N.J. iGaming License

B Gibraltar Incensed Over U.K. Online Tax

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he U.K.’s plans to impose a 15 percent pointof-consumption tax on its citizens who gamble online has raised the ire of officials in Gibraltar.

The gambling commissioner for the British territory, one of the web gambling industry’s preferred licensing jurisdictions and tax havens, criticized the plan as “clearly against the common-sense logic of electronic commerce.”

Steve Buchanan, the head of British bookmaking giant Ladbrokes in Gibraltar, chimed in that the tax would put “a huge and unwanted cost on our business.”

The effect of the tax would be to treat offshore operators the same as those in Britain, whereas operators licensed in Gibraltar pay only a 1 percent tax on revenues capped at US$682,529 a year.

A recent report commissioned by the Remote Gambling Association, an industry trade group, and conducted by KPMG, concluded that any tax above 10 percent would likely fail to achieve its revenue aims, especially if companies are not given leeway to offset costs associated with bonuses and incentives.

It could also drive “a very large number of U.K. customers” to the offshore gray market, which conceivably would offer lower-priced products.

Nevada Casinos Request Online Poker Delay

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hree Nevada casino operators—MGM, Boyd and Golden Nugget—are not ready to offer internet poker in the Silver The Golden Nugget State, and have filed for exin Las Vegas tensions with state regulators.

According to Nevada law, firms must launch new business plans within six months of being approved by regulators. According to Cardplayer.com, the compa44

nies say they need more time to test digital gaming equipment and technologies.

To date, Station Casinos’ Ultimate Poker and Caesars Entertainment’s World Series of Poker are the only companies offering online poker in the state. And they have managed to accumulate just 500 players collectively, which begs the question of how big the pool of participants will be.

According to the Poker News Report, if the Nevada Gaming Control Board agrees to a six-month extension, the operators will finish testing after the launch of online poker in New Jersey and Delaware, and could theoretically share a larger gaming pool, assuming intrastate compacts can be worked out.

Boyd and MGM are expected to share a player database with the Borgata in Atlantic City, which also has bwin.party software, while the Golden Nugget, which is working with Bally Technologies, will partner with its sister casino in Atlantic City.

Portugal to Legalize Online Gambling

P

ortugal has announced it plans to start online gaming, but released virtually no information on what its plan will look like. The county will spend the next three months forming a commission to study possible legislation.

The government of Portugal is looking to start online gambling as a way of generating greater tax revenue.

And that’s about all we know.

The government has allocated three months to create a working group to discuss online gaming in the country and the European Union. The study will propose online gambling regulations.

Official terms and the extent of the study and legalization process were not disclosed.

Global Gaming Business NOVEMBER 2013

orgata Casino Hotel & Spa, the No. 1 Atlantic City casino in in gaming revenue and the site of the city’s most successful live poker room, has just set itself apart again by receiving the first online gaming license in New Jersey.

The New Jersey Division of Gaming Enforcement confirmed the announcement made by Borgata of the license, saying the casino was the first to complete the application.

Borgata now must wait to use the license until November 21, when it can start a five-day “soft opening,” or test of its online system. Live realmoney online gambling can begin November 26.

Borgata has partnered with online provider bwin.party to run both bwin’s PartyPoker brand and the new brand Borgata.com. While poker has been the main driver of internet play in the U.S., New Jersey will permit all online casino games including slots, roulette and blackjack.

A supplier license for bwin.party is still to be granted. The DGE has cited “transactional waivers” as temporary licenses that will allow suppliers to operate the online casinos of the Atlantic City properties prior to their full licensure.

Borgata officials have said they expect all casino games—especially slots—to be as popular as poker.

Next Year for California Internet Poker?

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lthough the California legislature adjourned on September 13 without an internet poker bill advancing California State very far, some observers see Senator Roderick Wright the logjam possibly breaking next year.

Such a bill has been introduced three times now, but despite the 38 million residents who could make internet poker very profitable to the state and participants, tribal rivalry has killed the idea.

When the legislature adjourned, there were two rival bills left with no movement. Senator Roderick Wright, chairman of the Senate Government Organization Committee, introduced one. Senator Lou

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Correa authored another, and mirrored issues that about 15 gaming tribes, led by the San Manuel Band, wanted included. A third bill, championed by the Pechanga Band, joined the fray in May. Where the bills differ are in the licensing fees, ranging from $5 million to $15 million; and who would be allowed to apply for a fee, with two proposals limiting that ability to tribes and card rooms, while shutting out racetracks, but agreeing that any entities that accepted unlawful internet wagers after December 31, 2006 would be shut out.

The bills also differ somewhat in how much tribal regulatory bodies would be able to participate in the state regulatory structure.

While the wrangling continues, the level of opposition to any kind of internet gaming bill has decreased over the past three years. Some observers see the barriers to such a bill looking increasingly flimsy next year. For example, the differences in the fees proposed in the three bills have been moving towards a compromise figure. All these factors indicate that horse-trading is going on behind closed doors.

Zynga Backs Out of Nevada Online Gambling

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ynga, one of the world’s largest social gaming companies, appears to have decided to stick to what it knows best and delay entering the realmoney online gaming industry.

The proof: Zynga has withdrawn its initial application for an online poker license in Nevada.

Zynga was one of the earliest winners in the social games business with the launch of its successful Farmville game on Facebook. But as other social games were developed, Zynga began to lose both ground and revenue.

The company later entered the social-money gaming industry, and intended to follow through with real-money versions of the games. Zynga reached an agreement with Facebook to begin rolling out real-money games in the U.K., which later would expand to Canada and other popular gaming destinations.

Earlier this year, however, Don Mattrick, a former Xbox executive, took over as CEO of Zynga and has moved the company to shore up Zynga’s social gaming business before expanding into realmoney gambling applications.

Zynga then announced its pullout from Nevada, and has also made the decision not to apply for gambling licenses in New Jersey or Delaware, where online gambling sites will go live in the next few months.

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Global Cash Access, GameAccount Form Alliance

U.S. Virgin Islands Approves Online Gambling Amendments

A

T

TM and cash services provider Global Cash Access Inc. announced a partnership with internet gaming system supplier GameAccount Network, under which GCA will provide payment service products to GameAccount for its online gaming systems.

Terms of the deal were not disclosed. Global Cash Access products will be included in the GameAccount Network GameSTACK iGaming platform that is being marketed to the nascent U.S. online gaming market.

“We are excited to embark on this strategic alliance in order to give our common customers and players peace of mind throughout their entire interactive gaming experience,” said Tim Richards, general manager and senior vice president of interactive solutions at Global Cash Access.

Dermot Smurfit, CEO of GameAccount Network, described Global Cash Access as a “trusted” payments processing provider for the gaming industry.

Tachi Palace Picks Aristocrat nLive

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lot and system manufacturer Aristocrat Technologies announced that California’s Tachi Palace Hotel & Casino will use Aristocrat’s nLive platform to create a free-play virtual casino in connection with its website.

Tachi Palace will be the first California casino to employ Aristocrat’s nLive technology for an online free-play site.

The Tachi Palace nLive free-play virtual casino will be designed to match the individual branding of the land-based casino. The site will be connected to the property’s brick-and-mortar casino through Aristocrat’s nLiveLink technology, which will empower Tachi Palace to reward its players for their play both in-casino and online.

“Our players have been telling us they want to continue their fun online when they are away from our casino, and we found the perfect solution with Aristocrat’s nLive,” said Tachi Palace General Manager Willie Barrios. “Now our players can both enjoy our casino online and get rewarded for their play online and in-casino. This will be a win-win for everyone, and we are very excited!” nLive is a custom B2B online gaming solution with an online wager-ready platform, social gaming and managed services. Aristocrat’s nLive virtual casinos feature a mix of the best slot and table games, including an extensive Aristocrat content library as well as poker.

Global Gaming Business NOVEMBER 2013

he U.S. Virgin Islands’ legislature has approved changes to the territory’s Internet Gaming and Internet Gambling Act. The amendments were signed

by Governor John de Jongh.

The amendments set out provisions for the framework for expanding and regulating internet gambling in the territory, according to a report in the Virgin Islands Daily News.

Senator Craig Barshinger told the paper that the amendments would also repeal sections in the law that grant a master service provider franchise to two named entities. They also contain measures for licensing new providers.

Master service providers have exclusive rights to provide services and license approved applicants to conduct approved internet gambling in the territory.

Bulgaria Licenses One of its Own

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ulgaria has issued its first online sports betting license, and it’s to a prominent Bulgarian, a move that is exacerbating the frustrations of European operators trying to access the market.

The recipient, vBulletin, is a well-established landbased bookmaker that owns online betting brands Eurobet.bg and Eurofootball.bg through a license issued by the Malta Lotteries and Gaming Authority.

Sofia-based Eurofootball, which is 49 percentowned by Greek lottery giant Intralot, has been prominent in the Bulgarian market since 2009, when it signed a three-year agreement with the Bulgarian Football Union to sponsor the nation’s male, female and youth national soccer teams.

The Bulgarian State Gambling Commission, meanwhile, has added 10 more websites to its blacklist of unlicensed operators, bringing the total to 142. The ban means that ISP access and financial transactions could be blocked. The additions emphasize the problem operators face in trying to do business in the Eastern European nation, which has not yet issued them the licenses they seek despite being empowered to do so.

The commission launched the blacklist in June.

Income Access Looks to Join Social Gaming with Online Gambling

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s states such as Nevada and New Jersey increase online gambling in the U.S., one of the most intriguing aspects of the new industry is possible part-

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nerships between social game sites—which already offer games such as slots—and realmoney gambling sites.

One of the first forays comes from Income Access, which has launched a new Social Gaming Network. Social Income Access CEO gaming brands would be able Nicky Senyard to connect with other partners, using Income Access’ tracking and reporting software. The goal is to grow user bases and bring in more real-money players.

“There are no networks of this kind focused solely on social gaming,” said Income Access CEO Nicky Senyard. “We have been running the leading real-money gaming network for more than a decade, but the industry is rapidly evolving, and it is time to try something new. With the new network we have created a space where marketing partners are able to send previously idle U.S. traffic to the best and biggest social gaming brands not only in the U.S., but also in the world.”

Senyard said as many as 100,000 social game players visit sites every day in the U.S., but due to U.S. regulations, don’t play for real money—it’s called idle traffic.

That should change as online gaming advances in the U.S. “We are very interested to see what crossover there is going to be between regulated real-money and social gaming traffic, and where real-money traffic will exhibit higher conversion rates in social,” she said in a press release. “This is for the long term, and we feel that if social brands invest their resources into this now, it could well pay off in the future as regulation spreads across the rest of the United States.”

Intralot Launches Universal Mobile

I

ntralot Interactive last month introduced a new mobile technology for gaming. Called Universal Mobile, it is part of the company’s flagship Universal Gaming Experience, “addressing a new era that emerges with the power of mobile technology in gaming,” according to the company.

Universal Mobile features an innovative multiplatform approach, based on the latest HTML5 technology, adapted to seamlessly scale from the mobile phones and tablets up to the latest Intralot Gablet stations. It embraces modern user experience design, introducing new concepts of interactivity with the player that combine text, data, game logic, graphic animation and streaming video, while elevating the responsive architecture to its true purpose of designing user-centric games.

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FIGHTING

Words

Boxing and MMA coexist in the gaming industry

By Dave Bontempo

B

oxing and mixed martial arts have waged a verbal civil war the last few years.

Their edgy sound bites, chestthumping proclamations and flawed forecasts of one another’s demise produce interesting theater.

A new act emerges once each enjoys a resounding success, like boxing’s Floyd Mayweather-Canelo Alvarez blockbuster at the MGM in Las Vegas in mid-September. It shattered existing records by commanding a $20 million live-gate sale—in one day. The event also notched a record of nearly $150 million in pay-per-view sales and signaled the second-highest all-time buy of approximately 2.2 million. It was the richest fight ever, appropriate for Mayweather’s moniker of “Money.”

A-ha, cried the boxing contingent. Take that, MMA. It was only the latest sentiment expressed in this sibling rivalry, which, while heated, simply ranks as debate.

It may prompt a chuckle to the public that Mayweather says MMA fighters only work for 12 minutes and wear tattoos on their heads. Or that UFC President Dana White says Mayweather should be happy Las Vegas favors money over justice, referring to perceived leniency over domestic assault charges Mayweather once faced. It did raise an eyebrow when MMA commentator Joe Rogan told boxing promoter Lou DiBella that the “Sweet Science” would be swallowed up by his sport about five years ago. Or that DiBella, like customs officials in areas where MMA once had been banned, labeled it as cockfighting.

On it has gone. Several websites joined the discussion, forecasting MMA’s overtaking of boxing. And they were wrong.

The rivalry is misplaced, outdated and perhaps heading for a new realm. The heads of both factions may eventually realize their need to cooperate. Even Mayweather has hinted at promoting MMA fighters.

Big picture: It’s s not boxing versus MMA. It’s boxing and MMA, as combat 48

Global Gaming Business NOVEMBER 2013

sports, battling the likes of football, baseball, NASCAR and soccer on the world entertainment stage. Boxing and MMA can leverage the strength of each other to coax fans under the combat-sport umbrella, for their mutual benefit.

Similar Yet Different MMA is one of the world’s fastest-growing sports, as the UFC (Ultimate Fighting Championship) swallowed its competitors and pockets around $100 million a year from the Fox Sports Network. The 20-year-old company has made remarkable strides, and offers innovations like female superstars, a regular network show and successful regular pay-perview events.

The UFC made history when Ronda Rousey became its first-ever female headliner in a pay-per-view event this year. Fellow stars Miesha Tate and Gina Carano also bolster the organization. Tate and Rousey even have a reality series on Fox, leading to their own showdown in December at UFC 168.

Brock Lesnar and Georges St. Pierre, meanwhile, remain two of UFC’s biggest draws.

MMA is young, quick and hip. Merging varied disciplines like Muy Thai, kickboxing, karate, Brazilian jiu-jitsu and judo, it is the perfect mixed bag. A competitor must play to the strengths of his/her discipline. This fast-paced event, featuring short fights, appeals to an internetsavvy, instant-gratification audience.

On the flip side, MMA unfolds primarily on the ground. Its subtleties, even decisive moves, can be visually obscured.

UFC is young compared to boxing, which has centuries of tradition. Boxing’s modern evolution dates to the 16th century (although the Greeks allowed it as an Olympic sport as early as 687 BC) and the Marquess of Queensberry rules governing its conduct were created in London in 1867.

Boxing is the haven of the bare-knuckled John L. Sullivan, Joe Louis, Joe Frazier, Muhammad Ali, George Foreman (before the grill), Sugar Ray Robin-

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son, Mayweather and Oscar DeLaHoya. It graces the world stage, has competitors from over 100 countries and creates its own brand of electricity. Yes, its demographic is older and the sport does not market itself collectively—the promoters resemble sharks swimming in unpatrolled waters—but boxing is the original combat king.

The Mayweather-Alvarez bout also showed that boxing is not a dinosaur. There was an all-access show involving the lives of both fighters, a press tour and free previews on networks like CBS and Showtime. The event also had the ideal backdrop of a veteran American superstar facing a young, wildly popular Mexican opponent.

Bag the boxing-MMA rift. The world can embrace both the stick-and-move and the ground-and-pound, body shots and knee strikes. It can remember the UFC and the WBC, the Sweet Science and the Rage in the Cage. One thing that will not happen in the boxing-MMA discussion? A submission.

Crossover Effect Both sports are remarkably intertwined.

• UFC Chairman and CEO, and Station Casinos co-founder, Lorenzo Fertitta was… drum roll please… a Nevada boxing commissioner. So was UFC administrator Marc Ratner. As boxing officials, they implemented safety measures to sanitize and save mixed martial arts from being banned by groups opposing its brutality.

Commission rules became standard, opposition died and Fertitta saw enough potential to buy the UFC for $2 million. He took Ratner and childhood friend Dana White with him. That turn-of-the-millennium buy now resembles a steal.

• One of MMA’s most notable broadcast voices was that of Mauro Ranallo, now the fine blow-by-blow announcer for Showtime boxing.

• The same CompuBox company that provides punch numbers for boxing produces CompuStrike stats for MMA. • Boxing’s most well-known ring announcer is Michael Buffer, whose brother and agent Bruce Buffer calls MMA cards.

And the Showtime network, enjoying the roll of its life by wresting Mayweather and Canelo from HBO, also had a regular MMA package until recently.

Stephen Espinoza, its executive vice president and general manager of sports and event programming, even defines the boxing-MMA crossover.

He orchestrated Mayweather’s historic six-fight package of approximately $200 million and once structured deals for none other than MMA superstar Carano.

“I have never seen boxing and MMA as direct competition,” Espinzoa says. “I don’t think the growth of one cannibalizes the other. Those who disagree and who may think, for example, that MMA will overtake boxing are using an argument that is mainly a remnant of the UFC’s initial marketing plan. That plan was clearly to criticize boxing and spread the message that boxing was on the way down and MMA on the way up. The marketing message had no grounding in reality. The success of Mayweather-Alvarez was a clear reminder to pundits who had not been paying attention that boxing isn’t going anywhere.”

Showtime is on hiatus from MMA after airing its last Strikeforce event this year. Espinoza considers Showtime a future MMA player, but believes there is no shortage of it on television, and is in no rush to participate.

Fox made MMA a franchise property, investing approximately $150 million to be the home of both UFC and Bellator, the distant second-place outfit of MMA. Bellator just closed a deal with Fox Latin America.

While that scenario unfolds, Showtime runs on “Money.” Mayweather has waged two events in his eye-opening deal, which should run through 2015.

Ultimate Fighting Championship Founder Lorenzo Fertitta (left) and UFC President Dana White

Breaking Bad This becomes an area in which boxing and MMA diverge. UFC, the dominant company inside MMA, absorbed its competitors like WEC, Pride, Strikeforce and WFA. It promotes the UFC brand rather than the fighters, making them relatively interchangeable. This keeps the power base in their lap and causes some resentment among the athletes.

Boxing is different. Fighters in big events have their own promotion companies. They command a substantial slice of the revenue they generate. Showtime thus accepted risk with the Mayweather deal. It boldly dangled six extraordinarily high-level paydays to him in advance—requiring well more than a million pay-per-view buys to break even in most of the events—but “Money” has helped them prosper thus far.

“What’s become clear now, even to the skeptics and naysayers, is that Floyd is that singular, once-in-a-generation athlete,” Espinoza asserts. “We have a Tiger Woods, a Wayne Gretzky, or a Michael Jordan, someone so highly regarded that every time he performs, it automatically becomes an event. The show is Mayweather and his skill level and his dominance.

“Mayweather is one of the greatest boxers of all time. There was a vocal minority that disputed that before the Canelo fight, but that isn’t true now. The numbers bear out that he is still growing in popularity.

“We did the sport proud with that event (Alvarez) and attracted so many casual fans who might only watch one or two events a year. It far exceeded our expectations.”

Casual and serious fans take note: Mayweather says he wants to fight again May 3.

While Mayweather and Showtime soar, Espinoza believes boxing and MMA can help one another. He thinks MMA can teach boxing a lesson about in-arena entertainment. MMA’s loud, pulsating music and dancing girls have found their way to more boxing venues.

Espinoza also credits Ranallo with bringing MMA fans into boxing. Ranallo, who recently celebrated one year at the helm, spent the previous decade calling MMA showcases throughout the world, particularly in Japan. Ranallo considers the sports similar only in their combat vein. They are different, he maintains, and need not be fighting for the same entertainment pie slice.

“I have always been a big fan of all combat sports,” he says. “Boxing was a big part of my life. As it turned out, MMA gave me my first break. When UFC took off, I was blown away by the negativity of both sides.

“What people don’t seem to understand is that there is a big enough demoNOVEMBER 2013 www.ggbmagazine.com

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“What people don’t seem to understand is that there is a big enough demographic for both sports. And if you are a fan of one, I really think you should go out of your way to understand the other. You will really enjoy it.”

—Mauro Ranallo, Announcer for Showtime boxing graphic for both sports. And if you are a fan of one, I really think you should go out of your way to understand the other. You will really enjoy it.”

Ranallo truly does enjoy both. Although boxing now consumes much of his schedule, Ranallo narrates the audio book Caged: Memoirs of a Caged Fighting Poet, written by his friend Cameron Conaway, on his website, mauroranallo.com.

“Both sports really can learn much from each other,” he says. “What MMA can take from boxing is the idea that you have a history with it. You have to build stars and you have your rules and regulations, etc. Boxing set the blueprint for MMA.”

Fighting Fragmentation Although Mayweather glitters, the rest of boxing does not reap gold. Boxing’s leaders historically have carved their own niche rather than promote the overall sport. The financial model involves building and protecting fighters until they can obtain their payoff on pay-per-view. This affects the quality of many lowlevel network fights. A good number are perceived in advance as one-sided. Anything less than a major-network showcase is not easy to draw fans to. The matchmaking for MMA outshines boxing at this level.

Some of boxing’s biggest supporters acknowledge its problems. One of them is Bernie Dillon, a three-decade veteran of major Atlantic City attractions. He was prominently involved in Mike Tyson-Michael Spinks, the 1988 blockbuster that set a record for site fees—$12 million—paid by Donald Trump. A quarter of a century later, Dillon has brought boxing and MMA into his new property, the Revel. With mixed results.

“From a business standpoint, boxing is in a bad way right now,” he says. “It has become very difficult to sell tickets for many fights. It is also difficult to get publicity for your shows. There isn’t the same interest in the shows, from a fan standpoint but also from the writers. There is a lack of journalists reporting on the sport.”

“Boxing is so fragmented,” he adds. “The sport is not giving you a centralized focus on the fighter and the big events. In my opinion, UFC has not pushed boxing out of the way. Boxing has hurt itself.”

Dillon believes boxing can employ one successful MMA technique—address the younger market.

“UFC has gone heavily after its audience online,” Dillon says. “I give Dana White a lot of credit for that. Early on, he was a big proponent of communicating with his fan base through the internet. That has helped build a strong base for the UFC. Boxing should be looking heavily in that direction.”

Some evidence points to this scenario evolving. Promoters are making more 50

Global Gaming Business NOVEMBER 2013

MMA’s Canadian Connection

T

he best place to measure the evolution of mixed martial arts is Montreal.

Start in 1996. Extreme Fighting occurred on the Kahnawake Indian reservation much to the chagrin of local authorities.

Canadian fighter George St. Pierre is Customs agents halted a fan favorite. and harassed incoming fighters, announcers and producers, threatening them with jail time if they participated in the event. Authorities cited a law more than 100 years old associating mixed martial arts with cockfighting and tried to have the competition banned. They would have, except for the fact they could not rule the events of a sovereign land.

Once it unfolded, authorities blocked the television signal wherever possible. One day later, as promised, they jailed several participants, who stayed in the city but outside of the reservation.

This was not the first time MMA had battled with local jurisdictions. A 1995 event had been thrown out of New York mere days before it was scheduled to unfold. The event finally happened in North Carolina, with organizers looking over their shoulders for police.

During this time, family organizations blasted the brutality of the sport. Several states had banned it as well.

The turnaround occurred when some of its participants gave a demonstration to the Nevada State Athletic Commission. Two things occurred. One, the commission installed safety rules regarding the size of gloves, elimination of downward elbow strikes to the head and banning of eye-gouging. This helped maintain the physical nature of the sport without the distasteful antics.

Two, the commission enabled UFC, literally. Commissioner Lorenzo Fertitta loved it so much that he purchased it.

Now, UFC will have completed 168 cards before the year ends. Its highest-grossing card occurred in 2009 with Brock Lesnar and Frank Mir in Las Vegas, according to MMA Manifesto.com. The event had 1.6 million buys.

What was No. 3? A battle between Montreal favorite Georges St. Pierre and Nick Diaz in March 2013. It took place before more than 20,000 people, one of the highest attendances ever for the UFC. The event also had more than 1.1 million pay-per buys. When new seats became available to the public, they were gone in minutes.

And where did this happen? At the Bell Centre, just a few miles from where the sport had once been outlawed. What a delightful twist for MMA. Think any customs officials went to the show?

—Dave Bontempo

Congratulations to the Global Gaming i Business Magazine’s

40 Under 40 The Innovation Group is proud of our leadership in founding the Emerging Leaders of Gaming and looks forward to our expanded relationship with the promising young professionals of our industry.

Special thanks to the American Gaming Association and Reed Exhibitions for their support co-producing and coordinating the recent Emerging Leaders event at G2E, and to GGB Magazine for recognizing this year’s 40 Under 40.

For more information contact: David Rittvo 504.569.3959 or email leaders@theinnovationgroup.com

GGB Emerging Leaders Top 40 Under 40 October 2013.indd 1

10/10/2013 4:11:38 PM

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Ken Condon, former President, Bally’s Atlantic City

phone conference quotes available online. And Main Events has a multi-year package with NBC to televise fights that have generally been more competitive than its counterparts. Boxing on free TV was mainly absent during the sport’s decline.

The sport suffers two other growth problems—the lack of an Olympic superstar for 20 years and no viable heavyweight since Mike Tyson for the last 10. As other sports became more lucrative, they have lured potential boxers away.

A Vote For Both What about the future linkage of boxing and MMA? From a gaming perspective, that’s possible, according to Ken Condon, who brought both sports to Atlantic City properties.

As president of Bally’s Atlantic City, he obtained two-thirds of the lucrative Arturo Gatti-Mickey Ward trilogy for Boardwalk Hall several years ago. A string of Gatti fights made the Hall the largest grossing venue of its kind in the world during that heyday.

Condon, now a consultant, also has delivered Bellator to Atlantic City. He sees a logical progression for customers of both sports.

“The MMA demographic tends to be younger than boxing, and the purchasing power of these fans is somewhat limited because of that,” Condon says. “Yet, if you look at it from the standpoint of interest in a sport, they are passionate about the

MMA. From here, as they get older, they can grow within MMA. As they get older, their purchasing power can improve and now they can become high rollers. They can gravitate both to MMA and boxing. There really is no reason why someone cannot like both. They are different, yes, but they are also exciting.”

Condon witnessed one important nuance of the MMA gaming dynamic. An MMA event features prominent ground-fighting, which produces poor sight lines for people sitting a few rows back. They end up watching most of the action on the screen. This logistic could push MMA out of ballrooms and into larger venues with elevated seating.

Condon says the MMA leadership saw no conflict between itself and boxing.

“They knew we were large supporters of boxing and that was never any kind of problem,” he says. “We never got any vibes from the promoters that there was any kind of rivalry between themselves and boxing.”

It remains to be seen whether boxing and MMA will ever join forces, but one thing is clear.

Each has sufficient operating room.

Dave Bontempo, an award-winning commentator, calls some of the world’s biggest fights via the international networks of HBO and Showtime, including September’s Mayweather-Alvarez brawl. He has also called MMA events.

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by Patrick Roberts

Showtime!

AGA President and CEO Geoff Freeman is joined by SHFL entertainment CEO Gavin Isaacs and other supplier executives in cutting the ribbon to open G2E 2013.

G2E concludes its most successful show since 2007

e

ach year, the annual Global Gaming Expo takes the pulse of the worldwide gaming industry. From the operators who attend to the suppliers who exhibit and the thousands of affiliated attendees, G2E is the one trade show that represents all facets of the gaming world.

And if G2E 2013 is any indication, the pulse is strong, healthy and growing. With at least 25,000 people in attendance (G2E officials say official audited results will be released in a few months), and an exhibit floor more than 10 percent larger than last year, G2E was an active and busy place at the Sands Expo Center in Las Vegas last month. More importantly, a strong selection of exhibitors testified that the quality of attendance, the ongoing traffic and the deals signed on the floor meant this year’s G2E was the best in years.

This year’s G2E was also the first for American Gaming Association President Geoff Freeman. With former AGA CEO Frank Fahrenkopf also attending the show in his consultant role following his retirement, Freeman addressed the media in a briefing on the morning the show opened. He declared himself impressed with the size and scope of G2E and went on to address many of the issues that currently confront the casino industry.

After an opening keynote performance by the comedy troupe Second City, G2E covered smaller gaming companies with a panel that included Holly Gagnon, president and CEO of the Mississippi Choctaw’s Pearl River Resort; Virginia McDowell, president and CEO of St. Louis-based Isle of Capri Casinos, Inc.; Tobin Prior, CEO of Ultimate Gaming; Anthony Sanfilippo, president 54

and CEO of Pinnacle Entertainment; and Timothy J. Wilmott, president and COO of Penn National Gaming.

On Thursday, futurist Robert Tercel described the digital revolution and what it will mean to the gaming industry, outlining challenges that social media, social games and constant connectivity bring. Following Tercel, a panel that included Ramesh Srinivasan, president and CEO of Bally Technologies; Peter Yesawich, vice chairman of MMGY Global; and Tom Brosig, former CEO of Grand Casinos, applied those predictions to reallife casino experience.

On the exhibit floor, as always, the focus was on the games.

All of the top manufacturers launched compelling games—many in spectacular fashion—but one of the surprise hits of the trade show carried no movieland brand or celebrity endorser. What many attendees called the hit of the show was “Sphinx 3D,” from the newly rebranded GTECH. While Sphinx 3D was the talk of the show in some circles, in others, the talk centered on Batman. That’s the classic Batman TV series and its star, Adam West, who was on hand at the Aristocrat Technologies booth to sign autographs.

Aristocrat’s booth featured the first games designed for the manufacturer by new Senior VP of Game Development Joe Kaminkow, and among the first is “Batman: Classic TV Series,” based on the campy 1960s TV

Global Gaming Business NOVEMBER 2013

American Gaming Association President Geoff Freeman

IGT booth

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Suppliers on the exhibit floor: (clockwise from top) WMS Gaming, Aristocrat, Konami Gaming, DEQ, and SHFL entertainment

series starring West as the Caped Crusader. The game mines the TV show for its most memorable moments, including celebration clips of Batman doing the hilarious “Batusi” dance created for the show.

Entertainment also was at the center of the lineup of new games displayed by Bally Technologies, highlighted by the world’s most famous magician and two icons of the rock music world, Michael Jackson and ZZ Top. World-renowned illusionist David Copperfield appeared at the Bally booth to promote “The Magic of David Copperfield,” a game using the king-sized V22/42 cabinet to recreate some of Copperfield’s most famous illusions in high-definition video, in several bonus events.

The big news of the show for Konami Gaming was the launch of several new game styles, with the new “Titan 360” amusement-style slot bank dominating one side of the slot-maker’s booth. Placed at Harrah’s Resort in Atlantic City earlier this year as a “limited-release” product, Titan 360 incorporates a circular bank of slot games surrounding a giant amusement-style, moving bonus display encased in Plexiglas.

IGT’s booth featured the new “James Cameron’s Avatar,” an intricate reproduction of the Avatar movie that film producer Jon Landau said was the result of a collaboration between IGT, Twentieth Century Fox Consumer Products and Lightstorm Entertainment to utilize IGT’s Multi Layer Display and Advanced Video Platform technology to the fullest.

IGT recreated a hit film from another era in “Back to the Future,” based on the popular 1980s time-travel trilogy. The movie’s stars, Michael J. Fox, Christopher Lloyd and Thomas F. Wilson, all contributed voice-overs for bonus rounds covering all three “eras” depicted in the film.

WMS Gaming’s G2E lineup was highlighted 56

by “Ferris Beuller’s Day Off,” a spoton reproduction of the best moments of the iconic 1980s film; and “Beetlejuice,” based on another memorable ’80s movie.

Other WMS game standouts included “Iron Man,” in which footage from the main scenes of that film, starring Robert Downey Jr., are woven into bonus rounds; and “Clue,” the second WMS game based on the famous whodunnit board game, on the Gamefield xD cabinet.

Other G2E slot highlights abound: • Bulgarian slot-maker Casino Technology demonstrated its innovative Server Games Technology solution, which links the bricks-and-mortar world to online channels to allow players to continue games begun in a casino on online or mobile channels, using different devices and the same player wallet account.

• Cadillac Jack featured “Dragon’s Lair,” based on the famous video arcade game of the same name, launched on the occasion of the arcade game’s 30th anniversary.

• Incredible Technologies launched “King of Bling Iced Out,” the follow-up to one of its most successful slot games; and “Car Nation,” an innova-

Global Gaming Business NOVEMBER 2013

tive game design with horizontally spinning reels cleverly creating a journey through different towns.

• Multimedia Games introduced a host of new video slots, highlighted by “Zombie Outbreak” and its clever “first-person shooter” bonus event. Multimedia also hosted the finals of its first “National TournEvent of Champions,” the signature event for its instant tournament system, at the Palazzo’s Lagasse Stadium.

• Aruze Gaming America celebrated its 30th anniversary year (dating back to its days as Universal) with games like the interactive “Sinbad” two-player game, and the “500 Series” of video slots featuring up to 500 free games.

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The Game is Changing

The iGaming sessions at G2E were some of the most popular parts of the program.

iGaming plays an increasingly larger role at G2E

By Marco Valerio

J

ust about a week before the start of this year’s Global Gaming Expo, an interesting quarrel occurred between two industry friends over whether the event was worth going to for iGaming folk like ourselves.

“G2E has never been much of an iGaming conference,” argued one of them. “It’s mainly all brickand-mortar.”

“That may be true,” replied the other, who had never been to G2E before. “But isn’t the U.S. brickand-mortar industry starting to want to learn more about iGaming?”

Indeed, the latter person had it right, and though he ultimately couldn’t go, he would have been disappointed. Even a brief glance at the G2E conference program this year would have made it very clear that the event was teeming with iGaming coverage.

Sure, the iGaming track has been a fixture for a while. But what stood out about this year’s program is how online considerations routinely popped up in so many other tracks, an observation backed up by iGaming Capital founder Melissa Blau, who this year alone participated in no fewer than four panels.

“The iGaming pre-day on the Monday prior to the main conference used to be critical for the iGaming sector to get its proper level of attention,” said Blau, who has been attending G2E intermittently since 2006. “This year, however, it almost became irrelevant as the topic of iGaming has now woven itself to become a core component of the remainder of the panels throughout the rest of the week. I look forward to this trend continuing.”

WHAT DID IT USED TO BE LIKE? The iGaming crowd in America—and the world, most likely—has been looking forward to this kind of industry acceptance for years, and indeed, many are relieved to see that the U.S. casino industry’s embrace of iGaming is starting to be reflected at G2E, one of the biggest gaming conferences in the world. But how was this year’s attitude toward iGaming different from years past?

Sue Schneider, principal of Egaming Brokerage, recalls the way iGaming was once handled at G2E. “I’ve been going to G2E since its inception (in 2001),” Schneider told GGB. “The conference’s view toward iGaming has historically mirrored that

of the American Gaming Association’s positions.”

Because the AGA produces the event, this is logical. Until relatively recently, the AGA’s position on online gambling was one of marked opposition. Only in recent years did AGA begin supporting a federal bill which would allow for the regulation of online poker while banning other forms of online gaming, including online casinos.

But if the G2E conference program was ever meant to be a faithful illustration of the AGA’s recommended policies, it’s safe to say that this year’s event disregarded the party line entirely. Talks of state-by-state iGaming expansion were rampant.

Entire sessions were dedicated to how to survive in the kind of environment that the AGA would rather never see materialize.

And the chief proponents of federal legislation, including many members of the AGA, have had to “move on” with the reality of intrastate iGaming.

Local regulators such as A.G. Burnett of Nevada and David Rebuck of New Jersey, who have either pioneered or overseen the arrival of intrastate online gaming in the U.S., headlined some of the most important and widely attended G2E sessions this year.

To be sure, plenty of space was rightly allowed to promote the AGA’s own vision—newly minted president Geoff Freeman gave an important talk regarding the lasting need for federal online poker regulation—but it can no longer be said that G2E mirrors any one platform. It is quite healthily the representation of what the gaming industry at large wants to know and what it aspires to be.

FOCUS ON THE STATES—OR STATE, RATHER (NEW JERSEY) G2E speakers and attendees alike this year seldom hesitated to speculate rampantly on the current state, and imminent future, of iGaming. Even though Nevada remained, at the time of the conference, the only U.S. state that had actually gone live with legal, regulated internet poker, it was New Jersey that stole the show. It was nearly impossible to run into a single iGaming person who did not have a strongly worded opinion over whether or not the Garden State would be able to go live with its iGaming offerings by its self-ap-

pointed deadline of November 26.

It wasn’t just East Coast people who had a dog in New Jersey’s fight. With its much larger consumer base and proximity to a number of neighboring states that might one day go live with iGaming as well—Pennsylvania, Illinois and of course, Delaware come to mind—it was generally acknowledged that the success—or failure—of New Jersey’s iGaming launch would leave a lasting impression on the broader iGaming industry as whole.

That isn’t to say that Nevada didn’t play a role in many discussions. Nevada’s small market may not generate as much revenue, but its influence is still felt. Lessons learned and examples shown during the last few months of Nevada’s online poker operations—first with Ultimate Poker and then with WSOP.com—are not to be discarded. Tobin Prior, the CEO of Ultimate Poker, was largely counted on to provide the iGaming viewpoint during the conference’s “State of the Industry” keynote, a panel discussion which featured mainly veterans of the brick-and-mortar space.

“There was clearly heightened interest in the topic, now that regulated iGaming is a reality in the U.S. for the first time,” Prior told GGB. “There is a growing realization that companies like Ultimate Gaming are proving that you can now use technology to create solutions that allow well-regulated internet gaming. People are seeing that the technology can work.”

SOCIAL SETTINGS If iGaming’s profile was increased at G2E this year, then by consequence, so was the attention given to iGaming’s pretty sister, social gaming. Indeed, as soon as the opening session of the iGaming Congress wrapped up, immediately next in line was a very well-attended one about whether or not to “regulate” social gaming—a conversation that remains incredibly divisive, with various entities in the industry having differing, self-interested motives for either wanting or not wanting such new regulatory attention.

Rich Roberts, the CEO of Slingo, knows the social world very well. He has been going to G2E every year for the last five years and witnessed the social casino explosion firsthand. “Until last year, there were no social game companies at G2E, and iGaming talk was minimal,” Roberts said. “This year, social was a very big piece of the discussion.”

NOVEMBER 2013 www.ggbmagazine.com

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FRANKLY SPEAKING

by Frank Legato

Crapping Out

O

nce upon a time, in a column long, long ago, I told you of my relative ignorance concerning the fine points of table games.

Sure, I can disassemble a slot machine and reassemble it in 15 minutes. (Of course, it would then look like a Salvador Dali painting.) I know all about those confounded one-armed bandits, but, as I said in that long-ago column (I think it was in 1926), when it comes to table games, I’m pretty much a nincompoop.

This has particularly been the case with the game of craps. I never really gave this game a shot, even though experts like Henry Tamburin had tried in the past to teach me the “controlled roll” that can give the player an edge. Every time I tried it, the dice would end up in the next county.

I could always manage to play blackjack with relative ease, at least until I realized that my very presence at the table seemed to make the dealer draw a 21. But the very layout of a craps table was a formidable obstacle. Every spot on that layout indicates a special bet, but to me, the complete layout always looked like a blueprint for a new power plant, or a Twister game board gone horribly awry.

That was until my most recent trip to Vegas, when my nephew convinced me to play craps with him. If I concentrated on just the Pass Line bet, he advised, placing at least a double-odds bet behind it after each point, I could basically ignore the rest of the Twister board. I did that, I won money, and I had a blast. Aside from the money, the camaraderie and high-fiving that go along with making a point were contagious.

Of course, there’s always the stray idiot interrupting the flow of any table game. I remember one guy thought his injection of a line from a TV commercial into the cheering was as hilarious to others as it obviously was to him. With every point, he would shout, “Hump daaaaay…

Hump DAAAY!” It was sort of funny, in an annoying kind of way, the first time he did it. But by the guy’s 3,445th imitation of the camel from the GEICO commercial, we were all ready to stomp him to death (or alternatively, to stop playing craps so we could spend 15 58

Global Gaming Business NOVEMBER 2013

minutes to save 15 percent on our car insurance).

Anyway, as I continued my first real session at a craps table, I noticed that many players lay all those side bets on areas of the Twister board that remain a mystery to me. Some of them are easy enough to understand, like hard-way bets that pay big because they rarely happen, or “field” bets that let you benefit from one of several outcomes of the dice. Others, I’m still learning.

But what was intriguing was the variety of ways players call out those bets as they throw chips across the table in quite chaotic fashion. “Field, yo and hard eight!’ “Horn high and yo!”

“Eighter from Decatur!” “Two-way skeezits, with a frap up the back!”

OK, I made the last one up, but for all I know, someone said it during the pre-roll chaos. I have new respect for the boxman, the stickman, the gingerbread man, or whoever it is that is responsible for keeping track of all these cleverly shouted bets.

One bit of lingo I kept hearing was “Hi, lo, yo!” You craps aficionados know that this is a wager that the dice will land on a 12 (high), a 2 (low) or an 11 (yo). But it just wouldn’t be the same if players shouted, “I’ll bet $5 that the dice will return a 2, 11 or 12. There’s a good fellow.”

No, it was “Hi, lo, yo! Hi, lo, yo!” I had been standing there making Pass Line bets so long that I decided to throw that same bet. “Hi, lo, yo!” I shouted. At the time, I had no idea what it meant, but I thought it made me sound cool, like I was Sinatra or something. I looked at the spot on the Twister board where the chips landed, and it said 16-to-1. And it hit! And they gave me a bunch of chips. I even “colored up” when I cashed out. Yeah, just like Sinatra.

Of course, my brain realized that the adrenaline rush of hitting one of those long-odds bets is the reason craps tables make money, even after paying all the stickmen, boxmen and gingerbread men. Hit it once, you want to do it again, and you probably will lose.

Still… Hi, lo, yo!

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CUTTING EDGE

by Frank Legato

Easy Money Product: Transaction Rewards Manufacturer: DiTronics Financial Services

iTronics Financial Services has launched a unique product that allows operators to extend loyalty awards to the ATM by applying player’s club points to transaction fees when withdrawing cash.

The Transaction Rewards Personalized Funds Access application links directly to the casino management system and the tier rankings for each player. The patent-pending solution is designed to drive player loyalty, empowering the operator to provide specific tiers of players a discount on funds access transactions, allowing for points and/or comps to be used to pay for surcharges, and to provide a systematic method by which an operator can comp or discount specific player tiers for funds access charges, complete with reporting.

The Transaction Rewards solution is available as an add-on to any current funds access services customer who is utilizing the DiTronics ATM,

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“All N 1” ATMs, DFS kiosks, credit card cash advance, debit point-of-sale and check cashing services. The solution is designed to provide an exceptional ROI, and addresses the casino’s need to add value to the player’s club card and to retain the best players.

Where units have already been deployed, casinos are reporting increases of upwards of 20 percent in cash to the floor.

For more information, call 702-222-3318 or visit ditronics.com.

Playing the Field Product: Live Multi Game terminal Manufacturer: LT Game

T Game’s Live Multi Game (LMG) gaming machine, patented in Macau, Asia-Pacific, the United States, and PCT (Patent Cooperation Treaties) regions and installed in all of the major casinos in Macau plus the Crown Melbourne, is unique in that it allows the player to wager and play multiple table games at a single terminal.

Using the LMG terminal, the player can wager on two simultaneous baccarat games, or play baccarat, sic bo and roulette at the same time. Instead of using a virtual dealer as many automated table games do, the LMG links the terminal to a video feed of a live dealer at each of the table games.

While he or she deals the results in the table games, the dealer’s hands are filmed by a live feed which is viewable to all of the player terminals within the casino area. Thus, the LMG terminal preserves the essential element of table gaming while handling dealer-player human interaction, through a high-tech platform.

From the players’ perspective, LMG provides privacy, lowers the minimum wager and reduces the intimidation that they may feel when playing a table game with a large crowd. On the other hand, from the casino operators’ perspective, they benefit from a reduction in labor costs, increased average player wager, and improved game productivity, security and reliability.

For more information, visit the company’s website at ltgame.com.

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NEW GAME REVIEW

by Frank Legato

Back to the Future

International Game Technology

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GT has used the blockbuster 1980s trilogy of Back to the Future films starring Michael J. Fox and Christopher Lloyd as the basis for a feature-rich video slot series drawing on all three installments of the film series, about a teenager and his scientist friend who invents a time machine—traveling back to 1955, ahead to a very futuristic vision of 2015, and back the Old West.

In a talent coup for IGT, stars Fox (“Marty”), Lloyd (“Dr. Emmitt Brown”), and Thomas F. Wilson (“Biff”) all revised their roles in voiceovers for various bonus rounds of the slot machine. Features such as mystery wilds, picking bonuses and free spins all switch among the three time-travel destinations in the films. This version of the slot series, called “Marty’s Game,” is the first of three installments based on the three main characters of the films. (“Biff’s Game” is next, according to the company.)

The bonus events recreate images and action sequences that will satisfy all fans of the three films. In a free-games bonus called “Time Flies,” the player spins the dial of the familiar Hill Valley clock tower from the films to award a multiplier for five free spins, with the possibility of re-triggers.

In the “Wild West Train Bonus,” players select familiar icons from the film to find “fuel logs” to speed up the locomotive which, in the film, got the time machine up to the required speed to activate the “time circuits.” Every fuel log causes a dial in the corner of the screen to move up in multiplier levels, through green, yellow and red zones—it is, of course, a replica of the gauge scientist Em-

mitt Brown used to mark the changes in speed of the locomotive.

In “Time Circuit Scramble,” the time circuit from the DeLorean that was the film’s time machine appears, and players enter a date. Matching the numbers of the date that subsequently appears on the machine results in a higher bonus.

Other reminders of the films appear in mystery events including the interactive “Marty’s Feature Wheel,” and in the music, which features the Huey Lewis and the News song “The Power of Love.”

Manufacturer: International Game Technology Platform: AVP Format: Five-reel, 30-line video slot Denomination: Operator-selectable Max Bet: 300 Top Award: 30,000 Hit Frequency: Approximately 39% Theoretical Hold: 6.5%—14.1%

Ocean’s Glory Bally Technologies

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ith this video slot, Bally introduces a novel six-by-four reel setup and a new presentation of stacked symbols called “Super Symbols.”

The underwater theme uses intricate graphics and artwork to recreate the habitat of the game’s central dolphin character.

Ocean’s Glory is a six-reel video slot. The six reels have four symbols each instead of the normal three. The wider play area means there is plenty of room to execute the primary game’s Super Symbols feature.

Super Symbols are giant symbols that cover four, nine or even 24 reel spots at once, forming large blocks of stacked symbols for increased chances of winning.

Super Symbols cover a two-by-two, three-by-three or four-by-four grid of symbols on the screen. The four-by-four Super Symbol, of course, covers the entire play screen with one symbol, for the largest award.

The Super Symbols greatly increase the value of the main free-spin bonus round. Three or four scattered Free Games symbols trigger seven or 15 free games, respectively. According to the manufacturer, the average win on this bonus is 21 times the total bet. It may not occur as frequently as a typical freespin bonus (about half as frequently, in fact), but the potential for huge credit awards compensates for the lower frequency.

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Global Gaming Business NOVEMBER 2013

The top award of 1,000 times the line bet is triggered by six dolphins on any payline, in either the base game or on a free spin.

Manufacturer: Bally Technologies Platform: Alpha 2 Format: Six-reel, 10-line or 50-line video slot Denomination: .01—1,000.00 Max Bet: 500 Top Award: 1,000 times line bet Hit Frequency: 10-line, 18.63%; 50-line, 26.25% Theoretical Hold: 3.96%— 14.8%

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Caribbean Pearls American Gaming Systems

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his game is part of the AGS “Pachinko Action” series, and as such, features a main bonus event that is essentially a pachinko game—the amusement-style game that involves pinballs falling through a pegboard to land in one of several pockets at the bottom of the display, in this case the tall top box of the slot.

As with all new games from AGS, the pachinko bonus offers the player a fair deal, in that nothing is predetermined. Special bonus events alter the amounts of the awards at the bottom of the display, but once the ball is launched, gravity is the determining factor for the award—there is as much a chance of the ball dropping into the highest award as the lowest.

Also like most new AGS games, Caribbean Pearls weaves multiple bonus features into its island theme. Mystery features in the base game include “Wilds Dropping.” A Mystery Wilds symbol on the third reel triggers a random number of wild symbols, which travel to spots across the reels for an enhanced wild win.

Second-screen features include the “Hyper Wild Super Spin,” in which 11 shells appear on the screen and the player is prompted to pick two. The symbols revealed are added to a special set of reels as stacking symbols for one “Super Spin,” in

which wild symbols combine with stacked symbols for big wins. There also is a “Spinning Pearls Free Spin,” in which the player is prompted to choose one of three or more shell symbols on the reels. The symbols reveal either credit amounts or entry into the free-spin round, which begins with nine free games and can be retriggered.

There are two different bonuses using the big pachinko board. In “Shells on the Beach,” the player picks shells to reveal the prizes that are transferred to each pocket at the bottom of the display. One pocket on the display awards all of the numeric bonuses. The pachinko ball then drops—it is called “Free Fall Pachinko,” to indicate that gravity determines the prize.

The “Jackpot Drop” bonus, available at maximum bet only, is triggered with three or more pearl symbols on the reels. The pachinko ball then drops to award one of five levels of progressive jackpot.

Manufacturer: American Gaming Systems Platform: Roadrunner Format: Five-reel, 27-line or 30-line video slot Denomination: .01, .02, .05 Max Bet: 200, 250 Top Award: Progressive; $1,000 or $2,000 reset Hit Frequency: 27-line, 55%; 30-line, 56% Theoretical Hold: 5.45%—14.48%

Quick Strike Triple Konami Gaming

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onami’s Quick Strike Triple is a three-level, stand-alone mystery progressive that is compatible with all of the newest Konami video slots.

One of the first base games to be marketed on the Quick Strike Triple progressive is “Jumpin’ Jalapenos” (pictured), a 100-line video slot designed in a 3-4-4-4-3 configuration (three symbols on each of the outer reels and four symbols on each of the three inner reels). Primary game features—in this case, free spins and “Action Stacked Symbols,” which are clusters of the same jackpot symbol—are available as specified in each base game.

The Quick Strike Triple feature game is randomly triggered. The more a player bets, the higher the chance of hitting a Quick Strike Triple reward.

The chance of hitting the progressive is proportional to the amount wagered. Quick Strike Triple creates an added element of anticipation—each of the three jackpots is marked on the top display with the award range in which the top prize must hit. While those levels ultimately are up to the operator, Konami’s recommended ranges in the most common penny denomination for this game are $25 to $50 for the “Mini” jackpot, $100 to $200 for the “Major,” and $250 to $500 for the “Maxi.”

The idea is to create a sort of “jackpot fever” as the progressive level passes the minimum range. Players can watch the meter amount increasing, and the displays combine with the fact that higher wagers increase jackpot frequency to maximize coin-in levels.

Manufacturer: Konami Gaming Platform: KP3 Format: Stand-alone progressive for video slots Denomination: .01, .02, .05, .10, .25, .50, 1.00, 2.00, 5.00 Max Bet: Varies depending on base game Top Award: Various Hit Frequency: Various Theoretical Hold: Various

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GOODS&SERVICES

Gaming & Technology Awards Winners Revealed at G2E Global Gaming Business magazine last month announced the winners of the 12th Annual Gaming & Technology Awards. The 2014 Gaming & Technology Awards are the industry’s standard in this field, recognizing excellence in innovation and practical application in all gaming disciplines. The awards were given to the winners at September’s Global Gaming Expo in Las Vegas.

The winners of the 12th Annual Global Gaming Business Gaming and Technology Awards 2004 are:

IGT REVEALS NEW CORPORATE BRAND, ANNOUNCES HUGE VIDEO POKER DEAL eading slot manufacturer International Game Lber’sTechnology used its massive booth at SeptemGlobal Gaming Expo to reveal its new corporate branding and new marketing look for both the company and its DoubleDown Interactive social-gaming subsidiary. IGT also announced a massive deal to provide video poker machines to Caesars Entertainment.

The new branding includes new logos and an updated modern look, which, according to the company, aligns IGT’s business and communications strategy, complementing the company’s vision.

The new brand reflects IGT’s strategy focused on creating cross-platform content that players can access anywhere, any time, with advanced technology in all game areas.

“This is so much more than a logo change,” said IGT CEO Patti Hart. “IGT’s new communications strategy, brand look, voice and feel are perfectly aligned with our proven business strategy to create best-in-class content and to distribute it anywhere, anytime.”

Hart said the new branding and new look reflect all the elements that made the company successful. “We are not changing who we are,” she said. “Our brand’s next chapter is built upon what has made us great. The spirit of innovation shines through our new games on the G2E floor, as we roll out new technologies and products proudly sporting our new global visual identity.

The company also announced a contract to replace 7,000 video poker machines at casinos nationwide operated by Caesars Entertainment.

Financial terms were not disclosed, but IGT officials said the deal is part of the largest gaming reinvestment Caesars has made in 10 years.

The announcement was made on the opening morning of the Global Gaming Expo in Las Vegas.

In a note to investors, Union Gaming Group Managing Director Bill Lerner said the deal could be worth as much 6 cents to 7 cents in annual earnings per share to IGT.

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Best Consumer Service Technology: ❶ Bally Technologies — DM Tournaments Bonus Tournament ❷ WMS — Blade Cabinet ❸ Williams Interactive — Play4Fun Network iGaming & Marketing Platform Best Productivity-Enhancement Technology: ❶ Sightline Payments — SPAN/Vantiv ❷ Novomatic — Novomatic App ❸ Bally Technologies — Service Tracking Manager Machine Entry Authorization Log Best Slot Product (3-way tie): ❶ Bally Technologies — Pro Series Wave Cabinet ❶ International Game Technology — James Cameron’s Avatar Video Slots ❶ GTECH (Spielo International) — Sphinx 3D

Bally Technologies marketing team members (l. to r.) April Augustine, Laura Olson-Reyes and Riley Meredith display the three awards the company received in the 12th Annual GGB Gaming & Technology Awards

“The rapid development of technology in the gaming industry, along with quicker response of regulators to approve these products, have made these awards much more competitive and dynamic,” said Roger Gros, publisher of Global Gaming Business magazine, which administers the awards program.

“For the first time in the history of the Gaming &Technology Awards, we had a threeway tie for first place for Best Slot Product.

It shows how equal and compelling the products are in all the categories.”

Judges for the awards are: Claudia Winkler, president, GHI Solutions; Rob Russell, gaming analyst, Regulatory Management Counselors, P.C.; Frank Neborsky, vice president of slot operations, Mohegan Sun; and Gerhard Burda, president and CEO, ESCAPES Advisory Services.

Best Table Game Product or Innovation: ❶ TCS JohnHuxley — Supernova ❷ Gaming Partners International — Total Money Management ❸ Interblock — Big3Six

LEAP FORWARD, SPIN GAMES PARTNER eap Forward Gaming, supplier of the SaffariNet Lsupplier multimedia ecosystem, and Spin Games, the content created by veteran slot marketer Kent Young, announced a joint development effort to utilize LFG’s Thin Client Gaming (TCG) platform, an extension of the SaffariNet ecosystem, to create end-to-end thinclient content delivery of games.

Global Gaming Business NOVEMBER 2013

The system combines the SaffariNet TCG and Spin Games’ extensive game library to offer operators access to a comprehensive library of game titles. The collaboration between LFG and Spin Games is designed to provide operators with configurable real-time client-server game delivery and on-demand game activation, according to Spin Games CEO Young.

“We are extremely pleased with the SaffariNet TCG technology that provides true thin

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client capability,” said Young. “Clearly, LFG listens to its customers, as TCG was developed based on industry feedback to allow for an economical game delivery technology.

TCG enables SG to proLeap Forward vide enhanced premium CEO Ali Saffari game content to the gaming industry in real time on all platforms. No other system today offers the capability of the SaffariNet ecosystem and the value it brings to legacy, as well as new slot machine platforms. We are honored to partner with such a progressive and innovative company as LFG.” Ali Saffari, LFG CEO, added, “It is a privilege to work with Kent Young, such an esteemed industry leader, who with his vast gaming experience and successful career has been the creative force behind Spin Games. Under Kent’s leadership, SG has created exceptional games and bonusing content. TCG’s platform-agnostic capability will make SG’s great games available on all slot machine platforms, enabling operators to readily offer a plethora of games to their players, and thus increase revenue.”

GLOBAL GAMING WOMEN LAUNCHES ONLINE MENTORING lobal Gaming Women (GGW) last month G announced the official launch of Global Gaming Network (GGN)—a first-of-its-kind online mentoring network designed to connect women professionals in the international gaming industry. This latest resource provided by GGW can be accessed at GlobalGamingNetwork.org. It was developed in conjunction with SHFL entertainment, Inc., a leading manufacturer in the gaming industry.

“On behalf of the GGW board, we are extremely excited to announce the launch of Global Gaming Network,” said Patti Hart, GGW co-chair and CEO of International Game Technology.

“Now all women in our industry—regardless of where in the world they live or work—can enhance their careers through an innovative use of technology that will connect them to other professionals.”

GGN allows women from all levels of the gaming entertainment industry to identify and connect with potential mentors to share their advice, experience and best practices. From up-andcoming gaming professionals to seasoned executives, GGN members can create a personal profile and individualize their search criteria— much like popular online dating websites—to connect with potential “mentor matches” from throughout the international gaming entertain-

ment industry. The resource is free to use and open to all women with more than one year of work experience in the gaming industry. Five years of experience, in either gaming or general business, are required in order to become a mentor.

AMERISTAR INSTALLS ACRES ‘KAI’ supplier Acres 4.0 anSHotelystem nounced that Ameristar Casino Council Bluffs will permanently install the Acres workflow solution “Kai” after an extensive field trial.

Kai automatically directs employees to casino customers with service issues, often before the customer even realizes the machine has an issue. Managers can view employee performance and customer services levels in real time and historically, allowing for better floor management and more accurate performance reviews.

Kai also replaces costly traditional radios with wrist-mounted consumer-grade mobile devices. Employees receive tasks directly from Kai and communicate with each other through voice and text messages.

“Since we began our trial with Kai, we’ve significantly improved customer service and reduced our cost of operations,” said Ameristar Council Bluffs VP and General Manager Monty Terhune. “I can’t imagine running a modern casino floor without Kai, and that’s why we’ve made the decision to permanently install it.”

John Acres, founder and CEO of Acres 4.0, notes his history developing casino solutions that change the way we interact with and treat our guests: “In my career I’ve been fortunate to help develop many of the mainstay products used by casinos today, including player tracking, progressive jackpots and bonusing technologies. I am convinced that Kai will prove to be our most impactful product yet.”

For more information, visit ilovekai.acres4.com.

LT GAME INKS REGIONAL SUPPLY DEAL ntertainment Gaming Asia and Macau-based LT ELTGame have concluded an agreement calling for to supply its popular electronic table games to Entertainment Gaming’s Dreamworld Pailin casino in Cambodia.

The deal also gives Entertainment Gaming exclusive rights to market and sell LT products to certain casinos and machine gaming venues for a limited time in EGA’s core markets of Cambodia, Vietnam and the Philippines—six months initially in Cambodia and Vietnam, one year in the Philippines—and renewable subject to the achievement of sales targets.

LT Game is the principal subsidiary of a Hong Kong-listed entity called Paradise Entertainment.

http : //www.ltgame.com Email : sales@hk1180.com

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iGamesAd_Final.2013

9/22/13

12:44 PM

An electronic publication that examines the convergence of land-based and online gaming

Page 1

GBB iGames is a weekly online magazine reporting on the growth and development of iGaming, particularly in North America. In addition to breaking news and analysis of iGaming issues, GGB iGames educates and informs land-based gaming executives on how online gambling works—the basics of the systems, payment processing, affiliate programs, loyalty programs and more. GGB iGames also examines the legislative, legal and regulatory aspects of online gaming.

GGB iGames is published by Global Gaming Business magazine, the leading international trade publication of the casino industry.

GGB iGames is distributed to more than 15,000 landbased, tribal and government-owned gaming contacts who are decision-makers when it comes to choosing partners in the online gaming sector. Another 5,000 online gaming executives also receive GGB iGames.

ADVERTISE ON GGB iGAMES TO: • Connect with land-based casino operators who trust Global Gaming Business magazine to deliver accurate, up-to-date information • Become a player in intra-state online gaming, which will produce different and diverse businesses opportunities in each state • Understand how your role can be established and expanded in a legal U.S. online gaming industry

For more information, contact NANCY BISHOP at nancy@ggbmagazine.com or 314.566.1350

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PEOPLE DAN LEE JOINS THE PALMS

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eteran gaming executive Dan Lee was named president of the Palms Casino Hotel in Las Vegas, replacing Joseph Magliarditi.

Dan Lee Lee was president and CEO of Pinnacle Entertainment from 2002 to 2009. He resigned after a heated dispute with a St. Louis County, Missouri official after the council voted to rezone a parcel of land for casinos, potentially competing with Pinnacle’s developments in the region.

Lee will operate a revamped property that has seen many upgrades under Magliarditi’s tenure.

Magliarditi resigned just a week after the highly touted sports bar Heraea closed just seven months after opening. The venue, a partnership between the Palms and the One Group, was heavily marketed, but failed to garner a following.

Lee began his career as a Wall Street analyst but was lured away to become the CFO of Steve Wynn’s Mirage Resorts. His departure from Pinnacle was messy, and he later led a group that purchased a former Pinnacle development, Mojito Point adjacent to the L’Auberge casino, that he developed during his tenure. He was able to obtain one of the final gaming licenses in Louisiana for the property and later sold it to Ameristar Casinos prior to development.

ODDEN JOINS GASSER CHAIR

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hio-based Gasser Chair Company announced that Steve Odden will be the exclusive consultant for the company to the Native American gaming market.

Odden will coordinate his efforts with the Gasser sales Steve Odden and marketing teams, concentrating on increasing the awareness of Gasser products and service to this specific gaming market. His focus on this market will make it convenient for Native American casinos to select Gasser for seating equipment.

Odden has more than 35 years sales and marketing experience with commercial furniture in the office, hospitality and gaming markets, the last 10 years focused on the Native American market.

“Working in this market has allowed Steve to gain an in-depth understanding of the unique challenges and opportunities that the Native American casino operators face,” said a statement from Gasser Chair. “Steve is excited to offer the Native American

gaming market the wide selection of both hospitality and casino seating products manufactured

by Gasser in northeast Ohio.”

KREEGER NAMED REVEL PRESIDENT AND COO

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evel Entertainment Group has appointed Scott Kreeger president and chief operating officer of Revel Casino Hotel.

Kreeger was named interim chief operating officer in July.

Scott Kreeger Kreeger previously served in various operational and senior leadership roles within Station Casinos and Fertitta Entertainment, most recently as corporate senior vice president, chief marketing officer and chief information officer. Earlier, Kreeger had a long tenure as a gaming executive within the MGM Mirage organization.

Jeff Hartmann, Revel’s interim CEO since March 2013, will resume running his hospitality and gaming consulting firm, The Hartmann Group, located in Old Saybrook, Connecticut.

The board expressed its appreciation, saying, “We’d like to thank Jeff for his leadership over the past six months and wish him all the best in his future endeavors.”

PUSATERI IS NEW COO OF BAHAMAS’ BAHA MAR

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aha Mar Ltd. has announced the appointPaul Pusateri ment of Paul V. Pusateri as chief operating officer of the Nassau resort. In his new role, Pusateri will be responsible for all day-to-day operations at the $3.5 billion destination resort in the Caribbean.

Baha Mar, which covers 1,000 acres on 3,000 feet of beachfront, will also be home to Rosewood at Baha Mar, Mondrian at Baha Mar and Grand Hyatt at Baha Mar, and offer 2,200 luxury rooms, suites and residences. It will also have an 18-hole Jack Nicklaus Signature Golf Course, 200,000 square feet of convention and meeting space and a 2,000-seat performing arts center.

Pusateri also will serve as general manager of the Baha Mar Casino & Hotel, which is scheduled to open in December 2014.

Previously, Pusateri served as chief operating

officer of the Hard Rock Hotel & Casino Las Vegas, president of the Palms Casino Resort and Palms Place, and senior vice president of the Venetian and Palazzo resorts on the Las Vegas Strip.

MOYER NAMED GM OF HARD ROCK SIOUX CITY

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he Hard Rock Hotel & Casino in Sioux City, Iowa, has named veteran casino executive Todd Moyer as its new general manager.

Moyer has held top executive posts at two casinos, most recently as general manager of Iowa’s Diamond Jo Casino. Prior to that, he was general manager of Rivers Casino in Pittsburgh.

Moyer made his name in marketing in Atlantic City. As senior vice president of marketing for Trump Marina Hotel Casino, he was known for creative promotions such as “Win Your Weight in Quarters” and the “$1 Million Roll of a Lifetime.”

Prior to Trump Marina, Moyer was vice president of marketing at Palace Station and Hard Rock in Las Vegas, and held executive marketing posts at Tropicana and Trump Taj Mahal in Atlantic City.

November 2013 Index of Advertisers AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Acres 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Bally Technologies . . . . . . . . . . . . . . . . . . . . . .2 BMM Test Labs . . . . . . . . . . . . . . . . . . . . . . . .35 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Gasser Chair . . . . . . . . . . . . . . . . . . . . . . . . . .55 GCA Interactive . . . . . . . . . . . . . . . . . . . . . . .41 GGB iGames . . . . . . . . . . . . . . . . . . . . . . . . . .64 GTECH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 iGNA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Innovation Group . . . . . . . . . . . . . . . . . . . . . .51 JBA Consulting Engineers . . .Inside Back Cover JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Konami Gaming . . . . . . . . . . . . . .9, Back Cover LT Game . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Macquarie . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Multimedia Games . . . . . . . . . . . . . . . . . . . . .29 NEWave . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Novomatic . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Ortiz Gaming . . . . . . . . . . . . . . . . . . . . . . . . .45 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . .32 Kaleidoscope . . . . . . . . . . . . . . . . . . . . . . . . .57 TCS JohnHuxley . . . . . . . . . . . . . . . . . . . . . . .37 Vantiv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

NOVEMBER 2013 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Q

&A

Itai Freiberger Chief Operating Officer, 888 Holdings Inc.

O

ne of the companies that withdrew from the U.S. after the passage of the Unlawful Internet Gambling Enforcement Act of 2006 was 888 Holdings. The operator of one of the more popular poker rooms on the internet, 888 sacrificed short-term gain for long-term integrity. When 888 Holdings signed a deal to become the internet gaming service provider to Caesars Entertainment in the U.K., it was the beginning of a great relationship. The deal was later extended to the U.S., and is now in place in the legal online gaming venues of Nevada and New Jersey. Itai Freiberger, 888’s chief operating officer, explains how the deal works and how the two companies expect to cooperate in both states. He also explains how 888 will use its own brands, including the All American Poker Network in the U.S., and broke the news about Wynn Resorts becoming involved with Caesars in New Jersey. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in September.

GGB: Give us a thumbnail background of 888

and how you got where you are today.

Freiberger: The company was founded in

1986, one of the first online gaming companies in the world. At that time, there was no online gaming industry, so we had to develop everything in-house, from platforms to content. Because of that, our entire platform is proprietary. We’ve spent a lot of money building our platform from the front to the back end, which is important in our business success. In 2005, we went public on the London Stock Exchange, and a year later had to pull out of America after UIGEA was passed.

What is your strategy?

We have a dual strategy of B2B and B2C. Today we offer casino games and poker, as well as bingo and sports betting. We have the

66

largest B2B bingo offering in the U.K. We are No. 3 in the global liquidity pool for poker. We run the company more as a technology company than a gaming company. We build the tools and technology to ensure a quality customer experience and to ensure that business goals are met.

Why has 888 always stayed on the white list?

We see regulation as the future of online gaming. I don’t believe the markets that are unregulated today will stay open in the near future. So we decided to invest in regulated markets only. We are active today in most of the regulated markets in Europe. And we look at the U.S. as the single biggest opportunity for a company like ours, and we’ve invested a lot of effort and money in this country. We believe it will be one of the largest, if not the largest, online gaming market in the world.

Your arrangement with Caesars has worked well.

Explain how that came about.

We started with a proposition in Europe. For Caesars, I believe they were testing the waters, and developing a relationship more than the business itself. And because we worked together with them and showed them they could trust us, that led to our relationship in America.

How much will your experience in Europe help your U.S. operations?

I believe it is critical. We’ve been doing this for 17 years now. There are 1,700 people working for 888 in Europe. These people really know how to operate, and I’m not just talking about the marketing side but also the operational side—detecting fraud on the gaming or financial side, running the all-important algorithms, predicting and increasing lifetime value and many other items.

These are all crucial issues that you only learn after doing it for years.

It’s early, but the Caesars WSOP.com just rolled out in Nevada. How has it been performing so far?

Global Gaming Business NOVEMBER 2013

We’re quite surprised at the level of business; we didn’t expect this much. Caesars, which is responsible for all the marketing, is doing a great job in pushing the brand. We’re the technology partner and provider, so I have to say that they are really doing well in the marketing.

We’re learning about how to make changes and make our sites in Nevada even better.

New Jersey will come on in late November with full online gaming instead of just poker. Do you expect to go live on that date?

The regulators have set a very aggressive timeline, which means that we have to be live by the end of October. This is a major market, with a lot of people with a lot of money. Because we can acquire people for a poker offering and cross them over to a casino, it makes the entire proposition more attractive. We will be ready.

What brands are you expecting to use under the Caesars license?

We actually have two deals in New Jersey with Caesars. The first is exactly like in Nevada, where we are the technology provider. The other is through 888 and All American Poker Network, that allows us to operate under the Caesars license. It’s a straightforward licensing brand. This will happen in Nevada, too, by the way. Caesars was there first, so it was only fair for them to launch first, but we will use our brand in Nevada as well.

Caesars is deciding which brands they will use in New Jersey. Wynn is also a partner as another brand under the Caesars license.

We come into this market very prepared.

Our platform is very capable and very competitive. We have a full understanding of what it takes to run an online gaming business. And the brands we are delivering will have a significant impact on the market.

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