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GGB Global Gaming Business Magazine
SOCIAL NETWORKING DECISION IN CALIFORNIA MOTIVATING EMPLOYEES DAVID CORDISH ON 10 YEARS IN GAMING
August 2022 • Vol. 21 • No. 8 • $10
Wild Horses
How Ainsworth became the leader in the HHR phenomenon
Being
Biloxi 30 Years of gaming in Mississippi and how it started
Cost of
CASHLESS
While there are obvious benefits to financial transfers at games, what is the outlay?
Association of Gaming Equipment Manufacturers
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CONTENTS
Vol. 21 • No. 8
august
Global Gaming Business Magazine
22 COVER STORY
COLUMNS
HHR King
10 AGA Overlooked Threat
Historical horse racing machines constitute one of the fastest-growing sectors of the gaming machine business, and driving that growth has been Ainsworth Game Technology, developer of the system used by most of the top slot manufacturers to get their games to parimutuel buyers.
Alex Costello
12 Fantini’s Finance Silver Lining Frank Fantini
42 Responsible Gaming Media Missteps
By Frank Legato
Arthur B. Paikowsky
DEPARTMENTS 4 The Agenda
FEATURES
6 By the Numbers
30 Replacing Cash As digital payment technology advances on several fronts, more casinos are promoting the reduction or removal of cash from the casino equation.
8 5 Questions
By Jess Marquez
With New Jersey DGE’s Vishal Patel, Fitch Ratings’ Colin Mansfield, and GLI’s Joseph Marchetti
13 AGEM 38 Emerging Leaders
34 Retaining Your Team 16 Mississippi Miracle The gaming market in Biloxi, Mississippi celebrates its 30th anniversary this year, having defied recessions, a pandemic and, most impressively, the wreckage wrought by Hurricane Katrina. By Vincent Creel
26 Golden State Sportsbooks? The ballot proposals for sports betting in California have been whittled down to two, and the state’s tribes are lining up on either side for a contentious campaign.
As the staffing problem persists amid the “Great Resignation” following the Covid-19 pandemic, casinos search for creative ways to retain and motivate employees.
40 New Game Review 44 Frankly Speaking 50 Cutting Edge
By Bill Sokolic
52 Goods &
46 Deploying Social Media The use of social media such as “influencers” in casino marketing is no longer just an innovative trend— it is a necessity. By Dave Bontempo
Services
57 People 58 Casino Communications With David Cordish, Chairman and CEO, The Cordish Companies
By David Ross and Patrick Roberts
AUGUST 2022 www.ggbmagazine.com
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THE AGENDA
Gonna Take a Miracle By Roger Gros, Publisher
Vol. 21 • No. 8 • AUGUST 2022 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Jess Marquez, Managing Editor jmarquez@ggbmagazine.com Monica Cooley, Art Director mcooley@ggbmagazine.com
hen Vincent Creel called me last month to remind me about the 30th anniversary of gaming in Mississippi and volunteered to write about its impact on his town, Biloxi, I gladly accepted. Vincent had been a reporter for the Biloxi newspaper, the Sun Herald, and had followed the legalization process very closely. He later became the public affairs officer for the city of Biloxi, so he had a front-row seat for all those 30 years. You’ll find his story compelling and interesting, even if you weren’t there. But I was there, and I found my memories of Mississippi flooding back while reading it. At that time, I’d only been covering gaming for less than 10 years, and my company was the co-founder of the Southern Gaming Summit, which we held for the first two years in New Orleans in the early ’90s. Then, Beverly Martin, at that time the executive director of the Mississippi Casino Operators Association (now the state Gaming Association), came to me and suggested we bring the show to Biloxi, and the rest is history. SGS was a smashing success, and continues to serve the industry in Mississippi. To be part of that exciting process of introducing a truly game-changing industry into a state that needed a “miracle” was an honor. And to see the devastation wrought by Hurricane Katrina in 2005 was heartbreaking. But the gaming industry created a second miracle on the Gulf Coast by recovering and bringing back jobs and tourism to once again rescue the region. While Vincent rightly focused on Biloxi, the real “miracle” was occurring up north in Tunica County, the area closest to the big city of Memphis. This was what Jesse Jackson called “America’s Third World” at the time, and he wasn’t far wrong. The Mississippi Delta country was beautiful, but life was hardscrabble and its people were dirt poor. On my first trip to Tunica in 1992, I visited the Splash casino in Mhoon Landing. It was nothing more than two barges lashed together floating on the shores of the Mississippi River. The ceilings weren’t more than 7 feet high, and slot machines were crammed into every square inch. The wait to get on board was often as much as three hours, the atmosphere inside was claustrophobic, and then
W
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Global Gaming Business AUGUST 2022
they charged you a $10 admission fee. (I had some explaining to do to our CFO when I turned in my expense report.) The casino was mostly owned by two brothers, Rick and Ron Schilling. I met them and a few other casino partners at the local John Deere dealership intent on finding out how they put this enterprise together and what their plans were for the future. Well, I barely got my first question out before they started peppering me with their own questions. What should we do next? Should we open a restaurant on the property? How about a hotel? Maybe a theme park? By the time I got out of there my head was spinning and my story had completely changed. Instead of “what a great opportunity this is,” it became, “How can they sustain this success?” And it turned out that there was good reason for skepticism. Although within a year, three more casinos had opened at Mhoon Landing—Lady Luck, President and Bally’s—a reinterpretation of the “dockside” regulation opened up a can of worms. It was determined that casinos could be floating on a “tributary” of the river, even if it was just a trickle. Companies built large cofferdams connected to the river only by a stream to float their barges, opening up property north of Robinsonville, much closer to Memphis—the casino equivalent of the real estate adage, location, location, location. Mhoon Landing dried up. The Tunica resorts area at one time offered as many as 11 casinos, but today, only six remain. Unlike the Gulf Coast casinos, which were able to successfully compete against casinos in Alabama and Louisiana, competition from Arkansas and destinations further north made the Tunica casinos less attractive. The gaming miracle has worked almost everywhere it has been introduced in one fashion or another. The best example is the tribal casino business, which lifted many Native American tribes out of poverty and into positions of wealth and power. People may disagree, but casinos in Atlantic City saved that resort town. Other cities and jurisdictions didn’t have such lofty goals, but in most cases, casinos met or surpassed those goals. So while casinos are not miracle workers, they can transform a community for the good.
Terri Brady, Sales & Marketing Director tbrady@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Alex Costello | Frank Fantini | Arthur P. Paikowsky Contributing Editors Dave Bontempo twitter: @bontempomedia Vincent Creel | Patrick Roberts | David Ross Bill Sokolic twitter: @downbeachfilm Michael Zhu __________________
EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises
•
Mark A. Birtha, Senior Vice President & General Manager, Hard Rock International
•
Julie Brinkerhoff-Jacobs, President, Lifescapes International
•
Nicholas Casiello Jr., Shareholder, Fox Rothschild
•
Jeffrey Compton, Publisher, CDC E-Reports twitter: @CDCNewswire
•
Dean Macomber, President, Macomber International, Inc.
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Stephen Martino, Vice President & Chief Compliance Officer, MGM Resorts International, twitter: @stephenmartino
•
Jim Rafferty, President, Rafferty & Associates
•
Thomas Reilly, Vice President Systems Sales, Scientific Games
•
Michael Soll, President, The Innovation Group
•
Katherine Spilde, Executive Director, Sycuan Gaming Institute, San Diego State University, twitter: @kspilde
•
Ernie Stevens, Jr., Chairman, National Indian Gaming Association twitter: @NIGA1985
•
Roy Student, President, Applied Management Strategies
•
David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 1000 Nevada Way • Suite 204 • Boulder City, NV 89005 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 2022 Global Gaming Business LLC. Boulder City, NV 89005 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 1000 Nevada Way, Suite 204, Boulder City, NV 89005 Official Publication
GGB
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BY THE
NUMBERS
WhErE ThErE’S SmokE… I
n June, C3 Gaming (Casino Consultants Consortium) issued a followup to a survey they did on the impact of smoking bans on casinos, and again came up with some quite interesting data. As the New Jersey legislature considers a bill that would ban smoking in Atlantic City casinos, the industry’s lobbying group, the Casino Association of New Jersey, commissioned a report from Spectrum Gaming that detailed lots of dire consequences should a ban go into effect that included the closing of at least two casinos and the loss of thousands of jobs. In the new report, C3 points out that the data used by Spectrum is in most cases at least 10 years old, and presents updated revenue numbers that suggest that a smoking ban doesn’t harm gaming revenue, and in fact, can actually increase it, along with cost savings on cleaning, repairs and air handling. The report points out that 157 tribal casinos have banned smoking since the pandemic, and even some casinos in Pennsylvania, where smoking is allowed, have voluntarily banned smoking with no ill effects on gaming revenue. In New Jersey, a majority of members in the state Assembly have signed on as sponsors of the smoking ban bill and Governor Phil Murphy has said he would sign any bill that arrived on his desk. Thus far, no hearings have been scheduled on the bill. New Jersey and Pennsylvania are the last holdouts in the northeastern U.S. to continue to allow smoking in casinos. The tribal casinos, Foxwoods and Mohegan Sun in Connecticut, have voluntarily imposed a smoking ban. To access the study, visit C3gaminggroup.com.
Fewer Touch Points
E
very industry was impacted by the pandemic and the accompanying restrictions. The hospitality industry, which plays a big role in the gaming industry, was particularly hard hit, as guests became accustomed to the changes that were required. In a new study by Skift and Oracle Hospitality, “Hospitality in 2025: Automated, Intelligent... And More Personal,” guests and operators were asked a variety of questions about what changes caused by the pandemic they liked and wanted to become permanent. Respondents overwhelmingly liked contactless check-in and check-out, as well as contactless payments. And when operators were asked whether they were investing in these technologies, the response was clear. Those who have already invested or plan to invest within one or two years were more than 85 percent of the respondents. To obtain a copy of the report, visit Skift.com. 6
Global Gaming Business AUGUST 2022
Casino Smoking Bans in NE USA
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OCT. 11-13
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NUTSHELL
5
“They
Questions Derik Mooberry CEO, Zitro USA
erik Mooberry spent most of his career with Bally/Scientific Games/Light & Wonder, eventually D leading the gaming division of Scientific Games. Six months ago, he was named president of Zitro USA, a company founded by Johnny Ortiz and led by corporate CEO Sebastian Salat. Mooberry is charged with spreading the word about the Zitro games in the United States. He spoke with GGB Publisher Roger Gros at the GGB offices in Boulder City, Nevada in June. To hear and view a full version of this podcast, visit GGBMagazine.com. GGB: Those of us who cover gaming know what great games Zitro makes, but there are quite a few operators who didn’t get the memo. How are you going to change that? Mooberry: Yes, there are a lot of people who don’t know who we are. And now that we’re just entering
1 2 3 4 5
the U.S. market, we need to emphasize that we’re a very well established international company with over 1,000 employees around the world. The company started back in 2007, and Johnny Ortiz has a tremendous passion for games and content and making great products that make customers happy. We have bingo roots where we had tremendous success throughout countries in Latin America, primarily in Mexico, and there are still some people who see us as a bingo company.
So when did Zitro begin making Class III games?
A lot of our recent success and expansion are in the Class III video slot area. It was probably about 2016 that the company started making the transition to doing video slots in addition to bingo games, and that’s really taken off. Our goal now is to get customers in the U.S. market familiar with who we are and what our products are.
“Operators must take account of this guidance ahead of the stronger requirements coming into effect. We are giving the industry time to prepare for the changes and expect full compliance by September. Every gambling business has a role to play to prevent gambling harm, and this guidance makes clear what we expect to see, which will be supported with enforcement action should we need it.” —U.K. Gambling Commission Chief Executive Andrew Rhodes on new requirements that include expanded know-your-customer stipulations
CALENDAR August 9-11: OIGA Conference and Tradeshow, Cox Business Convention Center, Tulsa, Oklahoma. Produced by Oklahoma Indian Gaming Association. For more information, visit OIGA.org. August 24-26: G2E Asia Special Edition: Singapore, Marina Bay Sands, Singapore. Produced by Reed Exhibitions and the American Gaming Association. For more information, visit G2EAsia.com. September 6-9: 13th European Conference on Gambling Studies and Policy Issues, Thon Ullevaal Stadion Hotel, Oslo, Norway. Produced by the European Association for the Study of Gambling. For more information, visit easg2022.org.
Why do you think the time is right now?
September 20-22: SBC Summit Barcelona, Fira Barcelona Montjuïc, Barcelona, Spain. Produced by SBC. For more information, visit SBCEvents.com.
It’s what we’ve seen in other markets around the world. In places like Mexico and Argentina and other key markets, we go head to head with the biggest and best—the Aristocrats, the Light & Wonders and IGTs of the world. And we saw that our products could perform and then in some cases outperform those competitors’ products. So that gave us the confidence. I think that our content, our games and our cabinet strategy are ready for the U.S. market.
September 21-23: East Coast Gaming Congress and NexGen Gaming Forum, Hard Rock Hotel & Casino, Atlantic City, New Jersey. Produced by Spectrum Gaming and Cooper Levenson. For more information, visit eastcoastgamingcongress.com.
Tell us about the Zitro R&D department, which is often the heart and soul of any slot company.
Yes, you’re right. R&D is the foundation of everything for every slot company. We have over 300 people working in the R&D department primarily based in Spain today. Our products are developed over there, but they’re developed in such a way that we have global aspirations when developing the products. So we’re looking at what the market requirements are in the different regions of the world that we operate in. And then even here within the United States, within the different states. You can see dramatic differences in how a product needs to get set up within something that might go in Oklahoma versus what might go in a casino in Southern California. So it’s a growing R&D team with a number of resources behind it, focusing on all the normal elements you would expect to build the great slot content. Tell us about your cabinets. We saw them at the Indian Gaming tradeshow in April, and they really popped.
Our new Glare product line features four unique cabinets, all different form factors, four different content streams to go on each of those cabinets. The Glare line has enhanced side lighting so you see 4K resolution on the monitors, which really bring the characters to life. I think maybe the ultimate compliment for us was the number of competitors that came to the booth to look at some of our products.
8
Said It”
Global Gaming Business AUGUST 2022
October 10-13: Global Gaming Expo (G2E) 2022, Venetian Expo Center, Las Vegas, Nevada. Produced by Reed Exhibitions and the American Gaming Association. For more information, visit GlobalGamingExpo.com. October 16-20: World Lottery Summit 2022, Vancouver, British Columbia, Canada. Produced by the World Lottery Association. For more information, visit WorldLotterySummit.org. November 1-3: SBC Summit Latinoamerica 2022, Seminole Hard Rock Casino Hotel, Hollywood, Florida. Produced by SBC Events. For more information, visit SBCEvents.com. November 2-3: The Scandinavian Gaming Show, Copenhagen, Denmark. Produced by Eventus International. For more information, visit eventus-international.com/sgs. December 5-7: Global Symposium on Racing, Loews Ventana Canyon Resort, Tucson, Arizona. Produced by the Race Track Industry Program, University of Arizona. For more information, visit rtip.arizona.edu/symposium.
The New Size of Ainsworth
agtslots.com
GGB_A-STAR Curve XL Full Page Ad.indd 1
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AMERICAN GAMING ASSOCIATION
Overlooked Threat The fight to end human trafficking is the gaming industry’s business
B
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Global Gaming Business AUGUST 2022
By Alex Costello
etween supporting local charities and nonprofits, acting as economic engines and job creators, and leading on corporate responsibility, the gaming industry’s commitment to being a force for good in its communities is clear. However, there is at least one industry cause that often goes overlooked by industry observers: our fight to end human trafficking. Human trafficking persists around the world today, impacting an estimated 25 million victims on an annual basis. Perpetrators of this form of modern-day slavery are known to exploit legitimate businesses—including travel and tourism properties—to conduct their criminal activity. This is especially true of industries like gaming that conduct a significant share of business via cash payments. As pillars in our communities, the gaming industry is committed to stamping out this evil human rights abuse, which is why the American Gaming Association recently formed the AGA Anti-Human Trafficking Task Force. The task force—made up of AGA member executives with expertise in security, hospitality, compliance, legal and other specialized sectors of the gaming industry—works to develop robust casino-specific tools and guidance, participate in industry events, and facilitate AGA membership participation to bolster antihuman trafficking work. As a first action, the AGA task force recently released a guide to aid the gaming industry’s anti-human trafficking efforts. Building on work by hospitality and nonprofit partners and the U.S. Departments of Homeland Security, Justice and Treasury, the resource lays out several key findings that operators can begin implementing now if they are not already, including:
• Developing a plan for responding to and reporting suspected human trafficking incidents • Providing department-specific training to employees on behavioral indicators and reporting channels • Updating anti-money laundering training to consider indicators of human trafficking • Always verifying age and ID • Using signage to raise awareness and support victims • Working with nonprofits and state and local agencies
• Adopting an organization-wide anti-trafficking policy
Alex Costello is vice president, government relations for the American Gaming Association.
By taking these steps, we can follow through on our moral and legal obligation to protect our communities and provide guests and employees with a safe environment when they are at our properties. Many gaming companies already have versions of these policies, and it’s the task force’s goal for this guide to continue to normalize these protocols across our industry. This is just the beginning of the task force’s work, which will include co-hosting regional events, participating in educational sessions at Global Gaming Expo 2022 (October 10-13), and activities during National Human Trafficking Prevention Month this coming January. Whether gaming industry executives, employees on the casino floor or casino patrons, we can all make a difference in preventing human trafficking by educating ourselves on how to guard against, identify and respond to the issue. Let’s all join the fight to end this human rights violation that has no place in our industry or anywhere else. Updates on AGA Anti-Human Trafficking Task Force events and initiatives can be found at americangaming.org/responsibility-old/preventing-and-combating-human-trafficking-in-gaming.
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ADVERTORIAL
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FANTINI’S FINANCE
Silver Lining Gaming stocks have taken a beating, but that indicates potential value
I
By Frank Fantini
t’s no secret that gaming stocks have taken their fair share of punishment across the board, but that also unearths loads of potential value. Multiple financial analysts have highlighted reasons why the sector might be oversold—the biggest question that remains, then, is whether you prefer traditional, assetheavy companies or ultra-light, digitally focused ones. The financial structure of many casino companies has changed dramatically in recent years. Where most were 100 percent property owners before, many now are rent-paying tenants. Where their businesses were purely brick-and-mortar, many now include digital components offering online casino and sports betting. These changes have prompted sell-side analyst Carlo Santarelli of Deutsche Bank to suggest that the conventional method of valuing companies by multiples of EBITDA (or EBITDAR for the rent payers) might not work as well today. Valuing companies based on free cash flow may be better, he says. In a special research note on the topic, Santarelli did a detailed analysis based on a number of historical statistical assumptions and norms to arrive at that conclusion. Based on his analysis, companies that own their real estate and are not involved in digital gaming appear undervalued by the market—Red Rock Resorts with potential 56.8 percent upside and Golden Entertainment with 52.6 percent. Boyd Gaming, which is primarily its own landowner, had a 72.9 percent appreciation potential to reach its implied value as of the time of his analysis in June. Interestingly, Wynn Resorts and Las Vegas Sands are around normal historical valuations. On the other side, Penn National and MGM Resorts, which have gone farthest along the assetlight model and into digital, he calculated as trading well above historical norms. Looked at another way, Santarelli calculates that those on the so-called OpCo model convert 25 percent of adjusted property EBITDAR into free cash flow, while those he calls WholeCo convert 45 percent. 12
Global Gaming Business AUGUST 2022
Obviously, there are a lot of factors that go into how companies will grow value over time, but Santarelli offers an interesting analysis for investors to consider when trying to value today’s mixed model companies.
Down, but Not Out Meanwhile, gamers have sold off along with other consumer discretionary stocks as investors worry about the erosive effects of inflation and a possible looming recession. Yet, the question must be asked whether gaming stocks have sold off enough; maybe it’s time to start looking past a recession to more normalized times, thus higher earnings and stock prices. That brings us to two recent analyst reports in which Dave Bain of B. Riley and Chad Beynon of Macquarie lowered their targets on gaming stocks but largely maintained their positive ratings. Bain and Beynon are interesting analysts—they are not conformists and frequently step out in highprofile calls, being unafraid to stand out from the crowd. They also have proven track records of frequently being right. In lowering his targets, Bain cited current market conditions and risks. But he argued that stocks are way oversold, with almost every name he covers selling well below historical enterprise value-to-EBITDA and well above what might be expected, even in recession. To take the most extreme examples, Bain says current valuations imply EBITDA reductions next year of 55 percent for Light & Wonder, 49 percent for NeoGames, 47 percent for Century Casinos, 46 percent for AGS and 31 percent for Golden Entertainment. Only one company, Penn National, is selling at higher than its historic level, but just barely at 10 times 2023 forecasted EBITDA versus the historic norm of 9.9 times. Simply put, EBITDA multiples are well below historical averages. Here’s a sampling: Caesars Golden Las Vegas Sands MGM Monarch Wynn
6.9 times vs. 6.0 9.3 9.8 7.6 9.7
9.7 times 8.8 13.1 12.5 9.4 12.8
Even companies on which Bain lowered targets have considerable upside based on current prices: Company Accel AGS Caesars Century Full House Everi GAN Golden Inspired Las Vegas Sands MGM Monarch Penn National Red Rock Resorts Wynn
Recent Price $10.84 $5.28 $40.68 $7.08 $5.43 $16.58 $3.06 $41.57 $8.10 $34.56 $29l.53 $57.77 $31.13 $32.68 $55.67
Bain’s Target NA $16 $128 $15 NA $35 $6.50 $70 $24 NA NA NA NA NA NA
Beynon’s Target $15 NA $95 $15 $12 NA NA $65 NA $44 $54 $90 $65 $46 $75
In addition to low valuations, Bain also sees many company-specific strengths for the companies above that he still rates as buys. By nature, Bain is an upbeat, optimistic guy. But natural bullishness aside, he makes a good case that gaming stocks are way oversold. In his research note, Beynon compared margins and multiples of valuation to those of the global financial crisis of 2008-09. During that period, margins declined 20 percent and commercial casino revenues fell 8 percent peak to trough. With recent regional gaming EBITDA margins around 10 percent higher today, a similar contraction would result in higher margins than before the financial crisis. Yet, gaming stocks are down 35 percent and multiples of EBITDA are down from 11 to eight times, Beynon notes. In other words, gaming stocks have been beaten down and might show resilience from here. The simplest presentation is in the table above. If Bain and Beynon are even close to right, it is clear that many gaming stocks can return 50 percent and 100 percent and higher. As such, now might be a time to do your own due diligence to find your best values, and then dive in. Frank Fantini is principal at Fantini Advisors, investors and consultants with a focus on gaming.
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AGEMupdate AGEM Member Profiles Silver Member Profile Quixant PLC quixant.com
Quixant is a global leader in gaming technology, building gaming hardware platforms that have been developed with a deep in-house understanding of the requirements and regulations of the gaming universe.
Bronze Member Profile Bluberi Gaming Canada Inc. bluberi.com
Backed by more than 25 years of industry experience, the Bluberi team is comprised of seasoned, multi-talented innovators who are focused on bringing gaming to life with entertaining games and high-performing cabinets.
Associate Member Profile Arrow International, Inc. arrowinternational.com
Arrow International is a multifaceted manufacturing and distribution operation with an extensive product line that services charitable gaming, commercial sweepstakes and lottery markets all over the world.
AGEM is an international trade association representing manufacturers of electronic gaming devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.
AGEM July 2022 Meeting Recap • Korbi Carrison, event vice president, Global Gaming Expo, gave an update to members at the recent monthly meeting. She started by giving a recap of three recent shows that Reed Exhibitions (RX) had put on this year, to give an idea of how the events market was recovering after the pandemic. All three shows were similar in size to G2E and showed good growth and a substantial increase in international attendance, which trends well for the October event. She also informed members that attendee registration is live and that all exhibiting companies should have received their individual customer invite codes to invite customers to attend G2E for free. Also live is the Exhibitor Dashboard, where companies are invited to update their listing which in turn goes onto the website. This is important so companies can get their most up-to-date messaging out and to ensure potential customers find them and know where to look at the show. A large virtual exhibitor meeting took place on July 19, where RX, the AGA and Venetian were on hand to answer specific questions regarding the show. • As part of AGEM’s unregulated gaming machine campaign, Executive Director Daron Dorsey met with FBI, Department of Justice and AGA representatives in Washington, D.C. in June. The meeting was positive, with both the FBI and DOJ saying there are continued efforts to combat this issue, including ongoing engagement and collaboration between federal and state authorities. AGEM will continue to highlight these issues, especially as sports betting and iGaming expand throughout the U.S. • Dorsey provided an update on the work of various AGEM committees that began in June. The goal of these committees is to ensure key points or messages can be brought to the wider audience of stakeholders in the community on behalf of the entire supplier sector. The Mexico Committee, chaired by Eduardo Alvarez, met in late June and discussed issues that AGEM should be focusing on and tackling in that market. The Mexico Committee is working to formalize a list of common issues so AGEM can speak with one voice about the gaming industry in the region, like the Compliance Committee’s ongoing discussions about key U.S. markets of Nevada and Pennsylvania. The Responsible Gaming Committee was due to meet in July, led by Connie Jones, AGEM’s director of responsible gaming, and an update will be provided in next month’s recap. AGEM’s Government Affairs Committee will similarly meet in August to review recommendations and strategies made by Mike Alonso, AGEM’s external government affairs consultant and lobbyist, regarding the 2022 general election cycle and 2023 Nevada legislative session.
Forthcoming Events • Nominations for the AGEM Memorial Awards Honoring Jens Halle and Peter Mead are open. Nominees should have a minimum of 10 years working in the industry and possess the qualities that both men displayed. The winners will be announced and presented during G2E Las Vegas in October. Visit AGEM.org for more information. • Discussions are in progress for an AGEM end-of-year reception for its members, most likely held in mid-November before the holiday season gets under way. This event would not be attached to the annual AGEM/McMonigle Cup golf event like in prior years. Instead, this will be an early evening event held during the week. Members will be updated with all details in the coming months.
AGEMindex
The AGEM Index fell in June by 71.71 points to 811.39, an 8.1 percent decline from the previous month. Compared to one year ago, the index was down 183.98 points, or 18.5 percent. During the latest month, 10 of the 12 AGEM Index companies reported stock price declines, and all but one company posted negative contributions to the AGEM Index. The sole positive contributor to the AGEM Index in June was Agilysys (Nasdaq: AGYS), which added 4.05 points to the index as a result of a 15.7 percent increase in its stock price. The largest negative contributor to the index was Konami Corp. (TYO: 9766), whose 14.7 percent decline in stock price resulted in a 31.61-point fall to the index. International Game Technology PLC (NYSE: IGT) saw its stock price fall 13.4 percent, resulting in an 11.13-point loss to the index. All three major U.S. stock indices saw both month-over-month and year-over-year losses in June. The NASDAQ fell by 8.7 percent from May, while the S&P 500 fell by 8.4 percent. Meanwhile, the Dow Jones Industrial Average saw a 6.7 percent decline over the month.
AUGUST 2022 www.ggbmagazine.com
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MGM’s Beau Rivage is the centerpiece of the Biloxi casino industry
Buckle Up
Biloxi!
Casino Row on Point Cadet in Biloxi, pre-Katrina
Thirty years of rockin’ and rollin’ with legal casino gaming
A
By Vincent Creel s improbable as it was that Mississippi, the buckle of the Bible Belt, would legalize gambling, there was one sure bet: Biloxi, with its colorful history and prime locale, would be a major
player. “For Biloxi, gambling is nothing new,” says Biloxi Mayor Andrew “FoFo” Gilich. “It’s part of Biloxi’s history, but it has certainly evolved over the last 30 years, in big ways and mostly all good.” Evolved indeed. August 1 marks 30 years to the day from when thousands lined up on a scorching, humid Biloxi summer afternoon, some for as long as three hours, all for a chance to pull a slot handle or pull up to a table game for the new thing in Biloxi, the thing known as “dockside gaming.” 16
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The day the Isle of Capri’s two paddlewheelers opened on the tip of the Biloxi peninsula was the precursor to an era that today sees the Mississippi Gulf Coast, with Biloxi’s eight casinos and four others in cities nearby, comprising the nation’s fifth-largest gaming market. The Gulf Coast’s $1.61 billion in revenue in 2021 was topped only by Las Vegas, Atlantic City, Chicagoland and Baltimore-Washington, and was ahead of New York City, Philadelphia and Detroit. Says Gilich, “When you consider the size of those cities compared to Biloxi and the Gulf Coast, and you consider the tremendous amount of revenue you’re seeing, that makes a statement. The achievement is that much more significant.”
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“We noticed that these cruises-tonowhere were working in other areas, so we built in a big boat slip and advertised. And lo and behold, the Europa Star from Pensacola came in and made a proposal, and the rest is history.” —Gerald Blessey, mayor of Biloxi at the dawn of legal casino gaming
For Biloxi, it’s an achievement that over the years has had the city mentioned in the same sentences as Las Vegas and Orlando. It’s an achievement that has seen the number of visitors to the city each year increase, from 1 million a year before casinos to between 13 million and 15 million today. Biloxi’s gaming market, which alone in 2021 saw record-shattering gaming revenue ($1.2 billion) and sales taxes ($13.8 million), is not unlike those of other high-performing gaming communities coming out of the Covid-19 pandemic. However, Gilich points to the epic challenges the city has overcome, and how the industry has maintained over the years: Hurricane Katrina and countless smaller storms, the BP oil spill, the national recession, and the pandemic. And, they say, it’s been done while Biloxi has retained its small-town charm and friendliness while the area continues to see a host of new amenities, from a minor league ballpark to aquariums, museums, and other attractions to complement gaming. “We don’t want to be the Las Vegas of the South,” longtime Biloxi Mayor A.J. Holloway once said. “We want to be what we are, Biloxi, a city with a colorful history and a bright future.” Legal gaming quickly resuscitated the stagnant Biloxi tourism industry, evolving into supersized gambling halls with dazzling new resort hotels and entertainment centers. The largest casino companies in Las Vegas moved in to buy out the smaller operations, and world-class resorts dominated Biloxi’s skyline by the late 1990s. Ten years into the gaming endeavor, the Magnolia State was home to three dozen casinos with 30,000 employees. Mississippi, a state that was known (mocked? disparaged?) for dirt roads, bare feet and rebel flags, had stumbled upon “the Mississippi Miracle,” and Biloxi was the Cinderella story.
Run-Up to Legalization Truth be told, August 2022 is actually not the 30th anniversary of legal gambling in Biloxi, says Gerald Blessey, the Biloxi native and Harvard-educated lawyer who was the city’s mayor from 1981 to 1989. It actually began four years before 1992. It was a time when the Biloxi economy was in a tailspin. The completion of Interstate 10 allowed visitors from Louisiana and Texas to easily bypass Biloxi and the Mississippi Gulf Coast for the clearer waters and bigger waves of the Florida and Alabama coasts. “We needed a new attraction,” Blessey says today. “We did a waterfront master plan, with citizen input. We had not fully recovered from (Hurricane) Camille in 1969, so the idea was, ‘Let’s restore our waterfront.’ “And when we started doing that, we noticed that these cruises-to-nowhere were working in other areas, so we built in a big boat slip and advertised. And
Biloxi Mayor Andrew “FoFo” Gilich believes Biloxi is still a great place to operate a casino, with two new projects on the drawing boards
lo and behold, the Europa Star from Pensacola came in and made a proposal, and the rest is history.” Almost overnight, Blessey said, “the mom-and-pop hotels and motels, which were running at 10 percent occupancy, jumped to 60 percent occupancy—with that one little boat. That was a sign that we were on to something, and it would lead to more things, because clearly there was a demand for this type of recreation. “We were an untold opportunity of really authentic, waterfront, seafront sports, billfish tournaments, sailing—you name it, all the water recreation. We’re a water town. We have 150 miles of waterfront, and so throughout our history our tourist attraction had been mainly water sports, beaches and things like that. “I didn’t realize at the time that it would so quickly become what it has now become. Clearly, the economics were there, and we were on to the kind of attraction that has really paid off. It’s not just casinos. It’s all the entertainment, the better food, the golf courses, the fishing tournaments, all the things that we had already been known for 150 years, a New Orleans kind of tourism area, middle America, Chicago and so forth, and now we’re a national attraction.” If only it were so easy, though. Both Blessey and Biloxi attorney Michael Cavanaugh, today an authority on waterfront gaming, recall the struggle to get the cruises-to-nowhere under sail to somewhere. “First of all,” Blessey said, “we had to sue the state to stop them from arresting everybody. Apparently, they had not read the federal laws in a long time in Jackson.” State leaders, Cavanaugh said, had threatened to confiscate gambling devices on the Panama-flagged ship that was sailing regularly out of Biloxi and into international waters 12 miles offshore, where the gambling took place. “We didn’t fight the law;” Cavanaugh says, “we fought for the law” that protected foreign-flagged vessels.
Rollin’ on the River Two things happened next. The first was that powerful legislators from Delta towns, Senator Bob Deering of Natchez and Rep. Sonny Meredith of Greenville, sat up and took notice of what was happening with the cruisesto-nowhere, and, for the Mississippi River, they harkened back to the days of Mark Twain and riverboat gambling. “They were focused on the riverboats,” says Cavanaugh, “and they knew we would tag along.” AUGUST 2022 www.ggbmagazine.com
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Rolling the Dice in Biloxi
Biloxi’s two Isle of Capri riverboats were the first legal gaming operations to open in Mississippi 30 years ago
The Market Rules If there’s one thing everyone agrees on these days, it’s that Mississippi chose the right path in following the Nevada free-market approach, instead of those jurisdictions that limit the number of casinos and impose high tax rates Isle of Capri Aug. 1, 1992 Now Golden Nugget Casino on gaming revenue. President Casino Aug. 13, 1992 Closed Taxes would be lower (12 percent on gross gaming revenue), and the Biloxi Belle Aug. 28. 1992 Closed number of licenses would be dictated by the market. The strong and wellCasino Magic June 1993 Now Margaritaville Resort managed will survive. Lady Luck Dec. 1993 Closed Says Harrison County Supervisor Beverly Martin, “When you have a free market with unlimited licenses, by natural circumstance, the casinos that Grand Casino Jan. 1994 Now Harrah’s Casino are existing are always going to continue to upgrade their properties, conPalace Casino April 1994 Open tinue to offer more and new amenities. I don’t think you have that in areas Treasure Bay Casino April 1994 Open that limit the licenses.” Gold Shore Casino June 1994 Closed The Nevada model also had other advantages, notes Bruce Nourse, a Imperial Palace Casino July 1994 Now IP Casino Biloxi native who made his bones dealing craps and cards in Las Vegas before Boomtown Casino July 1994 Open eventually joining the Nevada Gaming Control Commission. When Mississippi legalized gaming, it was an opportunity for Nourse to return to his Beau Rivage March 1999 Open home state, armed with working knowledge of the Nevada laws, along with Hard Rock June 2007 Open the manuals, forms and procedures that would be needed in Mississippi. Margaritaville Casino May 2012 Closed “We just plugged it right in,” Nourse recalls. “We were able to get Source: City of Biloxi started, get up and going as quick as anybody could have done because we had this template to use, which is the Nevada regulatory system. And it also helped in that the operators that were coming here from Nevada felt comfortable in Mississippi because they were under the regulatory structure of Nevada, which they The ensuing legislation originally intended to allow cruises-towere used to.” nowhere from communities that had approved a county referendum on As part of the Nevada model, anyone in the casino industry gambling. In an 11th hour move, and to avoid any jurisdictional issues who touched a gaming chip or money, or anyone working in with Louisiana on the Mississippi River, the word “underway” was remanagement, would undergo a background check. Same for moved from the legislation, which led to dockside gaming with no reowners and any distributors working with the industry. quirement that the vessels actually leave the dock. Gaming in Mississippi, Nourse once said, “would not The second huge milestone in the early days was when two just be clean, it would be squeaky clean.” Biloxi engineers, Mark Seymour Sr. and Terry Moran, working for Bruce Nourse brought Casino Magic in Bay St. Louis and Biloxi, introduced a design the Nevada regulatory process to Mississippi, Economic Impact where barges were joined and a two-story casino was built atop the a system known and As Biloxi’s current mayor, Gilich is keenly aware of the imdockside platform. The first opened in Bay St. Louis, 30 miles to appreciated by major pact of the city’s eight casinos. the west of Biloxi and closer to the hundreds of thousands of potencasino operators The $20 million in gaming taxes alone the casinos pay tial customers in the New Orleans area. each year accounts for a third of the city’s operating “Once that happened, and operators realized you could do that, budget. Toss in $10 million to $12 million in sales taxes and all of the others came behind,” Cavanaugh says. “That’s when the bigger you’re approaching half of the city’s annual budget. operations came. Instead of boats, you had essentially a floating building on The impact on the community has been profound in Biloxi. When casithe water, and you didn’t realize you were on a boat or a barge at all.” CASINO
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OPENING DATE
STATUS
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Oaklawn Racing Casino Resort Hot Springs, Arkansas
DESIGNING EXPERIENCES THAT ARE
T R A N S F O R M A T I V E
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Hurricane Katrina in 2005 destroyed the gaming industry in Biloxi only to have it rise again. The President casino barge was floated hundreds of feet and deposited across Highway 90, the main route through the Gulf Coast.
Palace Casino barge
nos arrived in 1992, the city had not built a new school in 32 years, going back to 1960, with the construction of Biloxi High School. By 1999, the city had invested $80 million in schools construction, four new elementary schools and a new high school with a campus that looked more like a small college. The Biloxi Public School District had the highestpaid teachers in the state. It was an era when residents saw free recreation leagues, the lowest water and sewer rates anywhere, and about $6 billion in development, primarily on the waterfront and driven by the casino and hospitality industry. World-renowned architect Frank Gehry designed a signature museum to honor the legendary turn-of-the-century Biloxi potter George Ohr. The museum joined three others, the Biloxi Maritime and Seafood Industry Museum, a Mardi Gras Museum, and Beauvoir: Jefferson Davis Home and Presidential Library. Of course, there was the fear of increased crime from the outset. “I remember it well,” says John Miller, Biloxi’s police chief, who began his career here as a patrolman in 1989. “Overnight, they said, we were going to be overtaken by everything from the Mafia to all kinds of organized crime, and that just did not happen. Crime did grow, certainly, but it was mainly from the number of people.” Bobby Mahoney, proprietor of the popular Mary Mahoney’s restaurant, remembers it well. “People used to ask if all these casinos caused crime. I tell them that to have crime you need two things: people and money. We used to have no crime.” Added the police chief, “We did see some crimes that we’d never seen before or dealt with before, such as fraud and stuff like that, but they were very gradual. And it was no overnight impact. It took several years before we really felt any type of change in crime. “And I don’t think we ever felt it, because we’d already prepared for it. We had hired more patrolmen, bought better equipment, and we just absorbed it. We never had that really big crime wave, the big boom that some people expected. Instead, what we ended up with was better law enforcement.”
The Bump Named Katrina Biloxi was rocking and rolling, figuratively, in August 2005. The city had overseen $6 billion in development in Biloxi. Ten casino resorts helped create 15,000 new jobs. The number of visitors had grown from 1 million a year to between 13 million and 15 million a year. The city had invested tens of millions in public education, public safety and recreation, in heritage and cultural preservation of historic city-owned 20
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buildings and historic neighborhoods. Gulfport-Biloxi International Airport and the Mississippi Coast Coliseum and Convention Center were both ready to double in size. The economy and quality of life were humming along. Then Hurricane Katrina hit on August 29, 2005. Katrina destroyed 6,000 homes and businesses in Biloxi. Hundreds of historic homes and landmarks. Entire blocks of neighborhoods were reduced to debris fields or simply washed away. Giant casino barges, whose mooring systems were designed to withstand a 15-foot tidal surge and 150 mph winds, were pushed ashore, some as much as a quarter mile down the coastline, landing on the highway or crushing hotels and historic homes that had stood for decades. Fifty-three people lost their lives in Biloxi. Biloxi’s 16-square-mile peninsula was framed by destruction and devastation. Even with the devastation of such a proven and massive economic engine, there was still reluctance in some quarters of the state to allow the casino industry to move ashore, even as little as 800 feet from the water. Would the major operators be willing to make another huge investment in the wake of Katrina without moving ashore? In a word, no, says Keith Crosby, manager of the privately owned Palace Casino, whose gambling barge was decimated by the storm. “It was too risky at that point,” says Crosby, who was at the state Capitol for two weeks during deliberations as industry leaders and lawmakers debated the future of gaming in Mississippi. “Let’s put it this way. Immediately afterwards? Absolutely not. If things had simmered down, maybe. Look how long it took the housing market to recover on the beach. Fifteen years. It was over. It was either we do this or it’s over.” A year before Katrina, Crosby had traveled with other Coast volunteers to Pensacola, where Hurricane Ivan had decimated the city. He wondered what would happen if such a storm were to strike Biloxi.
Tourism Expansion The challenge today, says former Mississippi Coast tourism authority head Steve Richer, is to know the appeal of Biloxi and promote it. Does Biloxi want to be a convenience market or a leisure market? “That first one is convenience gaming, which attracts those within 200 miles or less,” he says. “It’s people who want a place with casinos and have an itch to scratch. They want to pull a slot handle. They want to try their luck and it’s convenient.
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Keith Crosby, the longtime leader of the Palace Casino, says the ability to rebuild on land following the devastation of Hurricane Katrina saved the industry on the Gulf Coast
“The other one, which is really much more rare, is a pleasure destination with gaming, one that has very different aspects. It has more things to do than just play in the casino. It uses the travel industry—travel agents, tour operators and airlines—and it’s got a lot of other things because of the destination itself. “It all goes back to marketing, because you have the product.” Thirty years after casinos were legalized in Biloxi, if there was one thing tourism advocates fear, besides a Category 5 hurricane, it would have to be protectionism, the thought of limiting new casinos in favor of existing operators. Just north of Biloxi, the Scarlet Pearl Casino in D’Iberville, which opened in December 2015, was the most recent casino to open on the Gulf Coast. Earlier that year, the Island View Casino in Gulfport also expanded with an adjoining operation, the Beachview Casino.
Gilich has long said he thought the market was primed for growth, especially after Biloxi’s gaming revenue surged a year after the new competition. Two proposals amounting to more than $1 billion have been announced by developers: The UMusic Broadwater in West Biloxi and The Tivoli in East Biloxi. But neither has yet presented formal plans to the city. “They know the market is here,” Gilich says. “They know that we have a proven track record, even when faced with man-made or natural disasters, and they know coming to Biloxi is not much of a gamble.” Biloxi native Vincent Creel was an editor and reporter before being named the city of Biloxi’s public affairs manager in 1995, a post he held until May 2022. For more memories of casino gaming in Biloxi in a longer version of this story visit GGBmagazine.com
AUGUST 2022 www.ggbmagazine.com
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Banking on HHR Ainsworth leads the way as more racetracks embrace the historical horse racing phenomenon By Frank Legato
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hen Eric Jackson, who was general manager of Arkansas’ Oaklawn Park racetrack, installed the first of what would be known as historical horse racing (HHR) or “instant racing” machines, it was the first attempt by a parimutuel operator to tap into the benefits of racetrack slots in a state where slots were not legal. The idea was to use data on past horse races—winners, odds, etc.—in a program that would let bettors wager on randomly chosen anonymous races, all on a slot-like cabinet. The first games included handicapping information on the historical races taken from the Daily Racing Form, and let players use that information to pick a horse. Before long, the winning results would be displayed as traditional slot-machine reel results. Various forms of HHR have appeared over the years, their operation often the subject of legal challenges. In markets like Kentucky, where year after year, attempts to legalize slots at the racetracks were turned back in the legislature, the HHR machines allowed tracks to raise purses and attract the quality of races that already were benefiting tracks in neighboring states where they were permitted to add Class III slots. HHR, eventually legalized by Kentucky lawmakers, has provided a lifeline to the state’s storied horse racing industry, and recently has become a hot new genre in the larger slot sector. More and more states are looking to legalize the machines, and top slot manufacturers are now porting their most popular titles to be placed as HHR machines. Most of those top manufacturers are able to do that thanks to groundbreaking efforts by a single manufacturer, Las Vegas-based Ainsworth Game Technology. Ainsworth has been at the center of HHR expansion in Kentucky, where more than 2,000 Ainsworth games—on Ainsworth cabinets—are operating across seven venues. However, in the larger sense, Ainsworth is arguably responsible for the recent growth of the genre, thanks to its HHR platform. Its technology to present historical racing data as slot machine results in popular themes was painstakingly developed alongside its original partner, Churchill Downs, Inc., and those efforts resulted in a presentation that so effectively recreated themes and game play that Ainsworth’s competitors at the top of the 22
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slot market decided to fast-track their own entries into the burgeoning HHR market by partnering with Ainsworth to port their games to HHR on Ainsworth’s platform. Today, companies including IGT, Aristocrat, Light & Wonder and Konami are introducing HHR versions of their most popular slot titles via the Ainsworth technology. David Waters, the vice president of global technologies at Ainsworth who was in the middle of that collaboration with Churchill Downs, says CDI looked to several vendors, and decided Ainsworth fit the bill for what they were trying to accomplish. “For some vendors, it wasn’t enough business to get their attention,” Waters says. “It was enough for others, but they didn’t have the library and cabinet selection. Ainsworth was kind of the ‘Goldilocks’ size for their project.” When CDI first contacted Ainsworth in 2016, there were various HHR products in the market, but none they felt would generate the kind of revenue already fueling purses at rival tracks across the Ohio River that offered Class III slots. “They weren’t happy with the HHR products that they saw in the marketplace,” Waters says, “and being Churchill, they wanted to make sure they brought the finest product possible to the market, and wanted to be able to compete with the the full Class III casinos across the river.” “Traditionally, there had been a couple other manufacturers that had been there, but the challenge was in developing a game that would be competitive with those in neighboring states, particularly in southern Indiana,” adds Deron Hunsberger, chief commercial officer for Ainsworth. “They wanted to make sure that it was something that would be able to attract those players residing in Kentucky who had traditionally gone across the river into Indiana with their gambling dollars.” One problem with earlier HHR systems was the relative simplicity of the games using HHR as the underlying math model. “They didn’t have
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the same polish and finish that the typical casino games would have,” Waters says, “and the way they played was more like you would expect the play on a three-reel, one-line game. Although they did have multi-line games, there were a lot of three-reel games, and they had (low) hit frequencies more in line with your high-denomination games. “What I wanted to build for Churchill was something that solved what I considered to be the fundamental problem with the products that were in the market. We wanted to be able to have low-denomination, high-line games. You win on some lines, you lose on some lines, with a partial pay.” It was a tough nut to crack, since parimutuel rules prohibit wins that are less than the wager, and wagers under 10 cents are not permitted, Waters says. “If I couldn’t solve that issue, I wasn’t sure that we could bring the Class III gaming experience Churchill was looking for to compete with the casinos across the river. But that’s what we ultimately were able to to solve, and we filed for patent protection for those those features.” The solution was developed on the bones of the central determinant system Ainsworth inherited with its 2016 acquisition of Class II supplier Nova Technologies. “We used a lot of the core communications infrastructure and central determination-type functionalities of Nova Technologies,” Waters explains. “After we got their Class II product integrated into our cabinets, we started working on the Washington state pull tab/VLT system, and that work had us creating the ticket stacks that would be used in the the electronic scratch ticket system of Washington state. We then expanded on that and used that type of ticket stack concept to make race ticket stacks.” Ainsworth used this technique to create games with game play and features virtually indistinguishable from their Class III cousins, but within the framework of the parimutuel rules. “To be fundamentally parimutuel, you must have a wager and you must have an outcome tied to that wager, and the probabilities or prizes have to change based off of wagers. So in HHR, as wagers come in and you get more and more wagers, the prizes need to go up. There are no fixed prizes in the HHR system.” By summer of 2018, Ainsworth got the first test lab approvals of the HHR platform, and the new paradigm for HHR was set.
Winning Formula Whatever the underlying technology, the authenticity of the slot play experience in the Ainsworth system led to rapid success. In September 2018, Churchill Downs opened its Derby City satellite facility in Louisville with 900 Ainsworth machines. The games, 16 unique titles with seven different cabinet styles, were a hit immediately, and the new HHR phenomenon would soon spread to tracks across Kentucky and beyond. One reason for the sustained success is that within months of Derby City opening, Ainsworth was negotiating partnerships to bring the games of other top manufacturers onto its HHR platform. “We felt it was best for the health of the industry to have as many vendors’ products represented in the facilities as possible,” Waters says. “We liked having a facility with 900 Ainsworth machines in it, but we knew in the long term people want to have variety on the floor, so we wanted to have other other competing products.” “I think that’s the other piece that was vital in our development with
Churchill,” says Hunsberger. “Churchill wanted to be able to compete with neighboring states, so they wanted to make sure they had the variety of product and content that would be competitive. So, part of our development with them was assuring that we could build a game development kit that would allow other manufacturers to come on our system.” Multiple manufacturers on the system also created the variety of hardware to which players in nearby states were already accustomed. “It wasn’t just making content available,” Hunsberger says. “It was making sure you had a variety of cabinets that would create an appealing slot floor, like you would have in any other casino. When you go into a Churchill Downs HHR facility in Kentucky, you’ll see the same variety of cabinets that you see in any traditional Class III casino.” That variety has grown even more as additional manufacturers enter the genre. AGS, for instance, just introduced its premium Rakin’ Bacon! Deluxe slot to the HHR market on a recurring-revenue basis. “We’ve sold HHR games in the market recently, but having Rakin’ Bacon! Deluxe as a lease game within the market we see as a great growth opportunity for us,” says Mark DeDeaux, AGS general manager and vice president, slots. “It’s something that we’re really working hard at in our partnership with Exacta, and with the customers within those markets to make sure that we have the right products and the right solutions for them.” Exacta Systems, another central-determinant solutions provider, is one of few companies besides Ainsworth offering an HHR platform that slot-makers can use to enter the market. DeDeaux says AGS chose the Exacta system because of synergies with the company’s own technology and experience in the Class II market. “Our technology has allowed us to scale into that that market segment pretty quickly,” he says. “And with our experience in Class II, we just found a lot of synergies with Exacta in terms of our technology and how they worked with us to be able to integrate and scale into the HHR market segment.” He adds that the fact games on the Exacta platform can coexist in the same space as those on the Ainsworth technology means even more variety for operators in the HHR space. The presence of multiple slot brands has supercharged the growth of the HHR genre. Historical racing has spread from Kentucky to Louisiana, Virginia, Wyoming, and most recently, New Hampshire, where two of the 17 charity casinos have already installed HHR machines on Ainsworth’s system—which, with the multiple manufacturers, now counts a total footprint of around 3,500 machines. AUGUST 2022 www.ggbmagazine.com
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“We’ve sold HHR games in the market recently, but having Rakin’ Bacon! Deluxe as a lease game within the market we see as a great growth opportunity for us.” —Mark DeDeaux, General Manager and Vice President, Slots, AGS
That includes many of the most famous titles in the industry. IGT, for instance, recently launched an HHR version of the venerable Wheel of Fortune. “IGT’s business outlook in the HHR segment is very positive,” says Luigi Cacciapuoti, IGT’s vice president of specialty product and ETG. “We are currently live with HHR products in five states, and we have room for further growth, in terms of market penetration in those jurisdictions, as well as expansion into new markets, when available.” AGS has installed its titles in all four current HHR states, and DeDeaux says the company is working on potential entry into the New Hampshire market.
Bright Future New HHR markets are likely to continue to accumulate, and current markets will grow and expand. Ainsworth’s Hunsberger predicts the New Hampshire charity casinos, now very small venues, will eventually expand into larger facilities as demand increases. Kansas recently passed HHR legislation. “That’s going to allow the facility in Wichita to run up to 1,000 machines in that market,” Hunsberger says. “There’s other legislation floating around—HHR is a viable product in markets in which there’s not a large number of traditional commercial casinos or tribal casinos nearby. For those markets that are looking to generate tax revenue associated with horse racing or parimutuel, HHR is a viable alternative to the traditional Class III environment.” Hunsberger says Ainsworth and other HHR suppliers continue efforts to educate regulators in new states about HHR. “We aren’t dealing with traditional commercial casino regulatory bodies that have experience in approving games and setting regulations,” he says. “We’re now dealing with racing commissions, whose background has been in parimutuel and horse racing. And so there’s a learning curve as it’s related to that.” That learning curve has been straightened not only by Ainsworth, but by testing organizations like Gaming Laboratories International and BMM Testlabs, which both have instituted HHR approval processes. Expansion of HHR to more new states is likely. Meanwhile, expansion continues in existing HHR states, including 24
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Kentucky, where Kentucky Downs recently used the Ainsworth system to open a new venue in Bowling Green, a satellite facility to The Mint Gaming Hall at Kentucky Downs in Franklin. “Bringing Ainsworth in has helped increase and elevate our business, which in turn puts more money into the horse industry,” Dan Roy, COO of Kentucky Downs, told GGB late last year. “The install, the expansion went fantastic. We’re excited to get them up in Bowling Green, with even more content available to us, and on the eastern side of Kentucky.” Hunsberger says the variety available in today’s HHR system will not only lead to further expansion—it will promote bigger purses for horsemen. “You’re seeing the purses increase in the Kentucky marketplace, and you’ll continue to see it,” he says. “There are more facilities that are going to be coming on board over the next six months. Kentucky Downs has a couple of new locations that they’re going to be opening in southeastern Kentucky, and Churchill Downs is working on expanding their facility at Turfway Park near Cincinnati. They also announced that they’re going to be opening another facility in downtown Louisville.” In the bigger picture, it seems HHR is here to stay. “We do believe that HHR is going to have a permanent place in gaming,” says DeDeaux at AGS. “It will probably evolve over time, but having that beachhead for us and having a stable presence within that market is important to our overall strategy today.” IGT’s Cacciapuoti says the supplier is developing dedicated HHR titles in addition to porting its popular existing titles to the technology. “I believe HHR is a gaming segment that will continue to grow in the foreseeable future,” Cacciapuoti says. “I would expect interesting evolutions in
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HHR regulation as soon as next year’s legislative sessions. Currently, there are multiple U.S. states that are evaluating the introduction of HHR gaming in their jurisdictions. “The success of HHR games in states such as Kentucky and Virginia has gained the attention of regulators across jurisdictions, and IGT is prepared and qualified to scale its HHR footprint with new market opportunities. “IGT sees HHR as having a unique place in the gaming landscape and continuing to grow for years to come, given its proven capacity to bring significant benefits to the communities where introduced, create new business and employment opportunities, and support the horse racing industry.” Todd Eilers, principal, Eilers & Krejcic Gaming, LLC, agrees on HHR’s long-term viability. “HHR can be a way for racetracks to generate additional revenue to help support the existing racing business, thereby creating or preserving jobs and generating additional tax revenue to the state,” Eilers says. “We estimate there were approximately 10,000 HHRs in operation at the end of 2021, generating roughly $1 billion in gross gaming revenue driven primarily by growth in Kentucky and Virginia. Looking forward, New Hampshire, Louisiana and Kansas have all approved HHRs, which
“The success of HHR games in states such as Kentucky and Virginia has gained the attention of regulators across jurisdictions, and IGT is prepared and qualified to scale its HHR footprint with new market opportunities.” —Luigi Cacciapuoti, Vice President of Specialty Product and ETG, IGT
should provide another layer of growth, likely expanding the HHR market to roughly 20,000 games by the end of 2023.” As for Ainsworth, Hunsberger says he expects more manufacturers as partners. “The market is still kind of in its infancy,” he says. “I’m not sure how big it’s going to be. But when you start looking at the cost to develop your own system versus participating with us, our partners have been great to work with. “We compete with each other in all these other markets, but we understand, and I think they do as well, that this is an opportunity for us all to be successful together. And so far it’s worked out that way.”
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The Race Is On
There will be just two sports betting referendums in front of California voters in November, and backers on each side have deep pockets By David Ross and Patrick Roberts
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he biggest electoral battle since Indian gaming was legalized by California’s voters back in 1999 is under way in the Golden State. It is between the gaming tribes, who want to hang onto their turf, and expand it a little, and out-of-state sports betting operators, who want a piece of the action. At one time there were four possible ballot initiatives that were related to sports betting. That has been winnowed down to two. Since Indian gaming became legal in the Golden State, the tribes have successfully defended their monopoly on casino games in several electoral campaigns. The one in November is proving to be the most expensive ever, if only because the tribes and the online operators have huge war chests and can compete on roughly equal terms. We are talking hundreds of millions of dollars pledged by both sides to spend on radio, TV and online. The stakes are high. With a California sports betting industry estimated to be worth at least $3 billion, both sides have amassed at least $100 million in campaign funds. The California Legalize Sports Betting on American Indian Lands Initiative (Proposition 26) would give tribal casinos the exclusive rights to retail sports betting—except for a carve-out to the state’s four thoroughbred racetracks. That is, only sports betting where you can place your bet in a brickand-mortar building. Online sports betting would not be allowed. Besides sports betting, the tribes would move closer to their longtime goal of complete parity with Las Vegas-style casinos. They would get to introduce casino games they have heretofore not been allowed to have. Racetracks would pay a $10 million fee to offer the wagering, and tribes would be permitted to add roulette and craps to their current list of approved games. The measure would also allow any citizen to file a civil suit against anyone allegedly conducting illegal gaming activity in the absence of litigation by the California attorney general. The measure specifically excludes card clubs, which, the tribes point out, have had many high-profile violations of money laundering laws and other noncompliance violations from the state and federal governments. This measure was qualified for the November ballot last year. According to state financial analysts, Prop 26 would raise “potentially reaching the low tens of millions” in taxes for the state on an annual basis. The California Solutions to Homelessness and Mental Health Act (Proposition 27) meanwhile, would charge $100 million for licenses, with tribes paying $10 million for online licenses, but with limited branding, and would generate, according to the state, revenues “potentially reaching in the mid-hundreds of millions” annually. 26
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Tribes don’t buy the numbers, and argue that they are greatly exaggerated. They add that most of the money from sports betting will be sponged up by the “out-of-state entities,” who will absorb it as corporate profits.
Details, Details Prop 27, whose backers are seven out-of-state online sports betting operators—Bally’s, BetMGM, DraftKings, Fanatics, FanDuel, Penn National Gaming/Barstool Sportsbook, and WynnBET—doesn’t directly oppose the tribal measure. It would allow online sports betting, which would have to be connected to a tribal casino similar to the way online sportsbooks are required to be connected to land-based casinos in states like New Jersey, Pennsylvania and Louisiana. The online measure is dubbed the “Solutions Act” because 85 percent of the revenues would be devoted to homelessness and mental health, with the remainder dedicated to economic development for non-gaming tribes. Nathan Click, spokesman for the group, notes that the measure is backed by online operators, “and a bunch of mayors,” and “is the only one that will raise hundreds of millions a year to help solve homelessness and help fund mental treatment. It does that.” Click says a massive voter education campaign will be waged. “We will ensure Californians have the facts of what our measure does, and we will work to ensure that Californians understand our measure,” he says. The tribal initiative has raised millions of dollars, and expects to bombard the public with advertising at every corner. The tribes have taken the stance that the operators’ measure poses an existential threat to them and, in a series of gloves-off ads, to children. Kathy Fairbanks is the spokeswoman for the Coalition for Safe California Secretary of State Shirley Weber recently certified the “Solutions Responsible Gaming—which is Act,” which legalizes mobile sports betsupporting the Tribal Sports Wating with proceeds going to causes to help the homeless and mentally ill gering Measure. It is also leading
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“Prop 27 is not a solution to anything. It would expose children to a massive expansion of gambling and turn every cellphone, gaming console, tablet and laptop into a gambling device. Prop 27 is a direct attack on tribal gaming and Indian self-reliance.” —Reid Milanovich, Tribal Chairman, Agua Caliente Band of Cahuilla Indians the “NO campaign” against the online sports betting measure. Fairbanks has called the tribal measure “the most responsible approach to authorizing sports betting in California—all bets must be placed in person at a tribal casino with safeguards in place to prevent underage and illegal gambling.” The measure, she says, will help create jobs and economic opportunities for tribal members and increase Indian self-reliance. It will generate tens of millions of dollars annually for public schools, wildfire prevention and other state priorities, she says. Their website declares, “Out-of-state gambling corporations are promoting a deceptive proposition to legalize online sports gambling across California, turning virtually every cellphone, tablet and laptop into a gambling device. Their measure would escalate the risks of underage and problem gambling, hurt California’s Indian tribes and drain billions of dollars from our state.”
Sovereign Pressure As they have in previous gaming referendums, the tribes contend that the Solutions Act is actually a threat to tribal sovereignty. Chairman Daniel Salgado of the lobbyist group Californians for Tribal Sovereignty and Safe Gaming says staples of tribal gaming will be at risk should the proposition pass. Salgado is also chairman of the Cahuilla Band of Indians, a small California tribe that offers “limited” gaming. “From our tribe’s perspective, it hits on a couple of notes—tribal sovereignty and self-determination,” he says. “It takes away a tribe’s sovereign right to choose. We look at how many people are actually going to participate. There are a little over 60 tribes that offer gaming facilities, so those who don’t participate can’t be a part of this. When you look at limited gaming tribes like ours, we’re forced to make a determination. “On the other side, on the operator perspective, they’ve made the criteria so limiting that there will likely only be a dozen.” Often left unsaid is that tribes are leery of online sports betting, which is by far the most lucrative form. They fear that it will lure people to use their mobile devices and not visit their local casino. Another thing left unsaid is the logical and rhetorical tangle in which tribes will find themselves in a few years when they are ready to legalize mobile sports betting. Their arguments might come back to haunt them. Meanwhile, there’s an election campaign to win. For those who are largely indifferent to tribal issues of sovereignty and selfdetermination, especially two decades after those issues were supposed to have been settled in the tribes’ favor, and who don’t plan to bet, Fairbanks says there is still good reason to vote for the tribal measure. “There’s revenue,” she explains. “The state’s nonpartisan independent fiscal analyst has said the tribal measure will generate hundreds of millions in tax revAUGUST 2022 www.ggbmagazine.com
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“We have never had gaming infractions. It is important to maintain our sovereignty and to show that we should be at the forefront for this new form of gaming in California.” —James Siva, Chairman, California Nations Indian Gaming Association (CNIGA) and Vice Chairman, Morongo Band of Mission Indians enue over time. This will go into the General Fund, and be used for education or whatever. That’s hundreds of millions that benefit Californians.” A third referendum, sponsored by the Morongo Band of Mission Indians, the Agua Caliente Band of Cahuilla Indians and several other tribes, that would have permitted only tribes to offer online sports betting was shelved in an attempt to bring unity to the tribal effort. But still some tribes that would benefit from the online bill’s stipulation that 15 percent of the revenue assist non-gaming California tribes have defected. Last month two of those tribes, the Middletown Rancheria of Pomo Indians and the Big Valley Rancheria Band of Pomo Indians, threw their support behind the mobile betting bill. “We’re supporting the Solutions Act because it gives us an opportunity to protect our sovereignty and also create opportunities for economic wealth for the next seven generations for our tribe,” Jose “Moke” Simon, chair of the Middletown Rancheria of Pomo Indians, told the San Francisco Chronicle. “It also helps the state of California deal with some of the biggest problems that it has here, that are affecting every community, which are homelessness and mental health issues,” he said.
Tribal Support, Opposition Privately, some tribal leaders will concede that online sports betting is inevitable in California. However, they want to control it and to introduce it on their terms. They are leading the Coalition for Safe Responsible Gaming. It brings together all who oppose the online measure, including social justice groups such as the California Hawaii State Conference NAACP and La Raza Roundtable of California, and business groups such as the California Black Chamber of Commerce and American Indian Chamber of Commerce. It also includes 56 Indian tribes and tribal organizations. But the deep pockets of the tribes are evident in the manifestation of support for the tribal proposal. The California Democratic Party, always a recipient of tribal largesse, came out against the mobile betting bill. “By opposing Prop 27, California Democrats rejected out-of-state corporations and reaffirmed their commitment to California’s Indian tribes,” Reid Milanovich, tribal chairman of the Agua Caliente Band of Cahuilla Indians, said in a press release. “Prop 27 is not a solution to anything. It would expose children to a massive expansion of gambling and turn every cellphone, gaming console, tablet and laptop into a gambling device. Prop 27 is a direct attack on tribal gaming and Indian self-reliance.” In addition, the Coalition for Safe, Responsible Gaming announced that
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it had rallied 80 civil rights organizations, faith leaders, public safety groups, business advocates and tribes in support of the tribal effort. “The in-person Tribal Sports Wagering Act is the responsible approach to authorizing sports wagering because it’s modeled off the successful model that Indian tribes have used to operate gaming for more than 20 years,” said Tracy Stanhoff, president of the American Indian Chamber of Commerce of California, in the press release. “The revenue generated by this measure will bring tens of millions of dollars each year to our state budget and local governments alike. It will also support tens of thousands of jobs. It’s a win for tribes and all Californians.” Public safety groups have focused on the danger to children message, even though there is no documented underage gambling issues in any of the U.S. online sports betting jurisdictions. “Requiring individuals to be physically present in person to place bets is the safest and most responsible way for California to legalize sports wagering,” says Bill Young, president of the Riverside Sheriffs’ Association. “It is the best way to prevent underage gambling and ensure people are not placing bets illegally, and it provides funding for enforcement against illegal gambling and problem gambling programs.” The opposition to the tribal measure is just beginning to coalesce. The chastened card rooms and the cities where they are located launched the Taxpayers Against Special Interest Monopolies, and is trying to defeat Proposition 26, saying it would damage the state financially. According to a press release, “the measure puts more than 32,000 jobs, $1.6 billion in wages, and $5.5 billion in total economic impact at risk. Cities rely on this revenue for resident services such as public safety, housing and homeless programs.” Several city mayors, whose municipalities host card rooms, point to one aspect of the tribal measure as a raw attack on the card room industry. A press release from the California Contract Cities Association declared that the tribal initiative which allows private citizens to sue online operators “exploits the Private Attorneys General Act, opening the floodgates for frivolous lawsuits that will harm city revenues that fund vital city services such as roads, schools, homelessness services, and fire protection.” They also like the funding to fight homelessness. They cite the state’s independent fiscal analyst, which studied the measure. It found that the measure would raise hundreds of millions of dollars each year for homelessness and mental treatment. It promises to earmark 85 percent of taxes raised toward that issue. This is a powerful argument in a state where homelessness is the No. 1 political issue. But problem gaming activists join the tribes in condemning trying to solve homelessness by increasing another societal problem. They point to figures that say online gaming is more addictive than the brick-and-mortar variety. When it comes down to it, the backers of the tribal measure believe the voters should ride the horse that got them there. James Siva, chairman of the California Nations Indian Gaming Association (CNIGA) and vice chairman of the Morongo Band, hopes that Golden State voters will go with those who have shown that they can be trusted to obey the rules and share the wealth. “Having tribes in control is highly important,” he says. “We have never had gaming infractions. It is important to maintain our sovereignty and to show that we should be at the forefront for this new form of gaming in California.”
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IGT Cardless Connect
By Jess Marquez
DIGITAL
JACKPOT
Why cashless systems are gaming’s newest necessity
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ive years ago, cashless gaming systems were still prototypical contraptions that seemed promising yet far-off, but no more. Today’s post-pandemic, touchless economy has made cashless the hottest commodity in the industry, and companies are popping up left and right to plant their flag and claim their niche within the payment pipeline. Every industry has its faction of “old-school” holdouts, who favor the proven processes of the past instead of the uncertainty and volatility of newfangled apps, startups and software. Gaming is probably the chief example of this still left today—for years, high-tech minds have been looking for ways to revamp gaming floors that still feature cash, coin ops, indoor smoking and other images of times gone by. However, the explosion of online gaming and mobile sports betting coupled with a crippling global pandemic that made cash about as undesirable as used tissues have highlighted the fact that in 2022 and beyond, operators must invest in cashless systems if they wish to keep pace with an evolving player base that favors convenience and integration more than comfy chairs and drink service. The tide of technology has shifted in such a way that cashless payments have become a “must-have” rather than a “nice-to-have,” and there are a number of companies and suppliers who have stepped up to meet that demand; it just depends on what you’re looking for, and for how much. As with any technology update, cashless systems require investment both in terms of capital and company buy-in (no pun intended). Indeed, the old adage that “it takes money to make money” might need to be updated to “it takes some cash to get rid of cash.” The process of transitioning to cashless will look different for each operator, depending on their existing 30
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setup and future expectations, but there’s no doubt that the timeline has been expedited substantially for all companies.
Covid’s Impact on Cashless It feels rather insensitive to say that the advent of the Covid-19 pandemic was a boon to the cashless industry, but it’s not totally untrue, either, and those around the industry have acknowledged that impact. It forced many of the aforementioned holdouts to finally change their mindset towards the potential benefits of cashless, which is almost always the biggest hurdle to clear. In most cases, the capital and resources are there; it’s just a matter of adoption and implementation.
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International Game Technology, one of the leading names in gaming as a whole, noticed a marked shift in demand for its Resort Wallet and IGTPay cashless products when Covid hit, according to Ryan Reddy, the company’s senior vice president of global product marketing and payments. “Before the pandemic, we were promoting cashless technologies to our IGT Advantage users, but for the last couple of years, the dynamic has shifted to an expressed interest and demand from our customers and a high priority for regulators across the U.S.,” Reddy says. Now that the world is becoming increasingly interconnected with smartphone technology, bettors don’t want to step back in time when sitting down at their game of choice. Cashless integration is now a convenience that “many patrons expect when visiting a casino,” according to Reddy. Earle Hall, CEO of cashless provider and data management company AXES.ai, remembers that shift vividly, and how “the planet changed” in a short period of time, especially with regards to digital services. More importantly, however, Hall noticed more operators beginning to understand the wealth of customer data that comes with cashless systems, which is actually one of their greatest strengths. “What we saw (post-Covid) is our operators, our clients, started to become extremely data-centric,” Hall says. “Which means not only did they start to focus more on the data, but they started to look at the correlation of the performance of the machine, the placement of the machine with the needs of the customer in real time and the customer journey over time. So, we saw a major shift in what I’d like to call the client data maturity.” Other industries, Hall says, have already embraced and utilized that data to the fullest extent—“the Facebooks of this world, the Starbucks of this world understood this years ago”—now, gaming must adapt in order to keep pace. AXES offers a number of cloud-based data management and cashless products, including its Smart Card and Voucher I/O systems. The top of its website features a simple, alleritave motto: “Cash Carries Covid—Go Cashless.” Even gaming regulators, who are not always first in line to usher in new policy, seemed to make the shift. In August 2020, former Nevada Gaming Control Board Chairwoman Sandra Douglass Morgan remarked that with regards to cashless regulations, “Covid made everything expedite very quickly.” Morgan also added that the NGCB was “proud” of the progress that was made, and that it was happy to see more companies “embrace cashless wagering.”
The Benefits of Making the Change It’s easy to see why a cashless transition may be difficult for an industry that’s relied on cash for decades, even from a marketing perspective—after all, the iconic motifs of Las Vegas and Atlantic City don’t usually include a smartphone or payment reader; it’s much simpler to fall back on showgirls, cocktails and jackpots with piles of moolah. But in the age of information, the data reigns supreme, and cashless companies are putting that at the top of their sales pitch. Acres Manufacturing is among the suppliers making the most of this technology. The company recently unveiled its long-awaited Cashless Casino app, which is advertised as being able to facilitate a full cashless transition in 15 weeks or less. The app runs through Acres’ Foundation casino management system, and is “the only hardware in the space that’s able to get casinos real-time data from their slot machines,” according to Acres Manufacturing’s Noah Acres. Acres explains how existing casino management systems and the technology surrounding them have largely remained the same for “20 or so years,” con-
Operating a cash-heavy business is not only expensive, it also comes with a lot of added responsibilities and regulations with regards to money laundering and problem gaming. As technology improves, weaning casinos off of cash in favor of digital alternatives actually makes them safer for both bettors and operators, in the sense that funds are more secure and problem behavior can be spotted more quickly. ceived in a time when “there was no real such thing as mobile devices.” Foundation touts universal integration across machine suppliers such as Konami, IGT and Light & Wonder, which allows operators to keep their preferred machine layout on the floor. The quicker you can get detailed player data, the easier it is to market and acquire new players, and moving forward, “operators are going to be in a much more powerful position,” because if they “know how your experience is going or how your last experience went,” and if they can keep track of “all of your transactions throughout the property, they will have a lot of information that they can now use to market to you really effectively,” says Acres. In addition to the loftier, high-tech incentives, cashless systems also offer tangible benefits that are easy for business owners to see—the reduction of cash handling and storage costs is probably chief among them. To be clear, Reddy joins others around the industry in expecting cash to be “a part of the casino ecosystem for the foreseeable future,” but the “next five years will be marked with a tremendous spike in technology adoption,” and cash costs will become an increased burden for operators, especially as gaming expands into new markets. “It wasn’t that long ago where it would be really rare to walk into a restaurant or some other store and they say, ‘We don’t take any cash at all,’” says Acres. “But now it’s really common. And you go to stadiums and they don’t take cash at all. So, they’re saving so much on the labor that it takes to manage and inventory that cash, and if you look at the slot machine, there’s the bill validator and the ticket printer, and then you’ve got the casino cage and the surveillance. It’s really, really expensive, especially in the casino space.” Operating a cash-heavy business is not only expensive, it also comes with a lot of added responsibilities and regulations with regards to money laundering and problem gaming. As technology improves, weaning casinos off of cash in favor of digital alternatives actually makes them safer for both bettors and opAUGUST 2022 www.ggbmagazine.com
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“
It wasn’t that long ago where it would be really rare to walk into a restaurant or some other store and they say, ‘We don’t take any cash at all.’ But now it’s really common. And you go to stadiums and they don’t take cash at all. So, they’re saving so much on the labor that it takes to manage and inventory that cash, and if you look at the slot machine, there’s the bill validator and the ticket printer, and then you’ve got the casino cage and the surveillance. It’s really, really expensive, especially in the casino space. —Noah Acres, Acres Manufacturing
”
erators, in the sense that funds are more secure and problem behavior can be spotted more quickly. Almost all cashless solutions currently on the market come complete with safety features such as deposit or withdrawal limits and identification verification. Software provider and payment processor Global Payments has highlighted these securities in its VIP Mobility platform. The system touts “reduced antimoney laundering exposure” and provides “hardened bank-grade security to casinos’ complex gaming environments for operators who might be concerned about the safety of cashless gaming,” according to Chris Justice, president of Global Payments Gaming Solutions. “Consumers have grown accustomed to self-service and mobile-based commerce experiences, regardless of whether those experiences take place in a physical or digital space. Operators striving to remain viable must implement solutions that create the alternative, cashless experience that many patrons now prefer,” and that includes the requisite safety and security features that are seen across non-gaming payment systems and online banking. IGT offers similar safeguards in its Resort Wallet and IGTPay systems, including face and fingerprint biometrics, and multiple password controls. Bettors’ accounts are also PIN-protected, and accounts cannot be made “without meeting rigid verification of identification requirements,” Reddy says.
Digital Brass Tacks So, if cashless continues to become an obligation rather than a luxury for operators, the next most important question then becomes the costs and investments involved. 32
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A cashless transition is truly a foundational shift that requires both financial and institutional commitment, including hardware swaps, technology upgrades, employee training, and marketing changes. Some of these requirements are simple—for existing IGT clients, for example, “introducing cashless gaming via Resort Wallet and IGTPay is merely a system upgrade,” Reddy says. Other systems, according to Justice, may require “additional technology certifications on the casino floor” or “expensive casino floor network upgrades,” which “can be an unanticipated cost” for operators just starting their cashless journey. Technically speaking, all companies need to have three components in order to go sans-cash, according to Acres: “the ability to change the credit meter on a slot machine, a user interface for the players to conduct the transactions over, and a payment processor.” Thus, the properties that have already started to migrate towards new tech systems will have a better starting point from which to launch, as opposed to the down-home local casinos that will have a much more difficult and expensive transformation. In-house training and implementation also is a key factor, because if your staff isn’t dialed in on the technology at hand, chances are the overserved tourists and picky locals won’t be either. “Any time an operator asks a patron to alter his or her behavior and try a new technology, there is a ramp-up period,” says Reddy. “From our experience, employee training and on-floor ambassadors have helped fuel player adoption.” Once the hardware is paid for, the software is downloaded and the training is conducted, the next requirement is a change in marketing, which can be the toughest of all, especially when the previous images of casino lore have worked so well for so long. For Hall and AXES, this is the most important step of the process by far. “It’s not about going to the ATM machine or just pulling money out of your bank accounts and funding an app,” Hall says. “It’s more about how you get them to leave their old behavior and adopt a new behavior. And they need to either gain something or be scared of losing something… So, the only thing that they have to prepare for is their marketing plan. “The plan has to say, ‘You have this player’s club that you’ve always been in, you’re Silver. But if you migrate to the app, you automatically become Gold,’ and let’s see a goal for three months. Take Marriott—when they converted me from Hilton to Marriott, they gave me Platinum right away for three months and said, ‘Hey, if you stay X number of nights for the next three months, you will be Platinum for the next year.’ So they were using a positive strategy. You can use positive or negative, but the only way to get them to change is you’ve got to have a marketing plan.” Now that smartphones outnumber people and social media constitutes the new zeitgeist, operators will need to evolve from cash and direct mail to fintech and digital promotions in order to keep their place in a hierarchy that now includes startups, Silicon Valley types and loads of foreign interest. After all, it only takes so long before old-school nostalgia becomes obsolete and defunct.
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Team
t i r i Sp
Motivating and retaining employees is a full-time but rewarding endeavor
resources executive. “The organization gives an increase in wages and bonuses to new hires to attract them. There’d better be an option for those who are already on the team,” he says. That’s just one example of a glaring case of the inequities. “The pandemic exposed the Achilles heel not just for gaming but hospitality,” Hoover says.
By Bill Sokolic
Retention Respect
I
f you did a quick analysis of the employment picture since early 2020, it might go something like this: The coronavirus pandemic shut down casinos, hotels, hospitality and similar businesses not deemed essential. People lost their jobs. Unemployment soared. The government not only paid the laid-off workers unemployment, but unemployment on top of unemployment, and of course, stimulus checks. Two to three months later, casino hotels reopened with restrictions. The restrictions—food service was limited to take-out or room service, for example—still kept a lot of employees sidelined. As restrictions lessened, more employees were offered their jobs back. But some chose not to return. Cynics said the unemployment checks were too good to pass up. Others feared Covid. Whatever the reason, casino hotels and, for that matter, almost every employer in almost every industry could not find enough workers to meet demand. Businesses like WaWa and Target offered $15 an hour, and in some cases, signing bonuses. All well and good, but what message does that say to existing staff, says Donald P. Hoover, president, DHR Consulting, and former casino human
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Is it any wonder that employees were not wedded to their jobs? If someone offered them more money, better benefits, they’re gone. Treat them with disrespect, they’re gone. Retaining employees has become as problematic as hiring them in the first place as Covid winds down. For employers, the situation does not bode well, says Brendan D. Bussmann, managing partner, B Global. “There continues to be significant challenges with meeting the hiring demands within the industry,” Bussmann says. “It is definitely a job seekers’ market as the opportunities still outnumber the supply of available talent. You have restaurants offering bonuses out of the gate. This is about doing what you can to put bodies in open positions.” But it’s difficult to retain many individuals as they seek higher wages or promotion opportunities, Bussmann says. With those issues in play, it’s a “challenge to deliver on the experience that patrons have come to expect,” he says. No industry was hit harder by the pandemic than hospitality, says Mark Birtha, president of Hard Rock Hotel & Casino Sacramento. “We have had to react as well as evolve with regards to how we have managed through that period of time and the more recent challenges of hiring and retention.” Of late, the challenges may spur a solution of sorts. “Economic winds look to be shifting once again even as we speak, and
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Atlantic City’s Local 54 got what leaders called their “best contract ever” in recent negotiations that demonstrate casino executives recognize the value of front-line employees
the natural combination of rising costs, increasing interest rates and challenged supply chains seems to indicate that there may be a commensurate reduction in hiring in the future that will in some ways help to balance off the needs in the shorter term,” says Birtha. The current “new normal” will once again reset itself in the weeks and months to come, he says. The new normal has meant workers “being compensated more like peers in other sectors. Pay equity had to come about,” Hoover says. In that climate, Local 54 of Unite Here in Atlantic City demanded “significant” pay increases for its hotel workers or else they were not averse to a strike for July 4 weekend. “It’s led to an interesting dynamic that likely would not have occurred without the Great Shutdown,” as Bussmann calls it. The union and the casinos in Atlantic City came to terms without resorting to a work stoppage. Local 54 was wise, Hoover says; they took advantage of the situation and made a strategic move to plan a strike before a big holiday. They had a quick resolution in an agreement. But it’s more than pay equity. Flexibility is another key factor. Requesting and getting time off when needed, for instance, Hoover says. “They should have done that all along.” Hard Rock has been fortunate in retaining a substantial portion of its team through the pandemic and beyond, Birtha says. Credit the brand and culture for its role as a beacon for talent. “With all of our company’s growth and development, we have opportunities for people to relocate and be promoted around the world,” he says.
Caring Culture Retention of employees, regardless of age, speaks to the employee being part of the organization’s culture. Hoover refers to this as the “three Cs.” “Care about them as people outside of the workplace; care about them as professional team members, and act on their feedback; celebrate milestones regularly,” he says. Similar to any business when demand is high and supply limited, those in demand have leverage, consultant and former casino HR exec John Ceresani, a principal of the Pharos Group, says. Employees, he says— especially the front-line employees—were taken for granted in the pre-pandemic era. “Over the past 25 years I attended or participated in numerous gaming conferences that provided gaming insights on many topics, but rarely about our most important asset,” Ceresani says. “I spent many years in Atlantic City, in senior human resource positions, so I bear my share of the blame.
“The pandemic exposed the Achilles heel not just for gaming but hospitality.” —Donald Hoover, President, DHR Consulting
“The industry needed to invest large sums of money in advancements in gaming and systems technology, customer loyalty programs and competitive acquisitions to compete in this new gaming world,” Ceresani says. “We always said our most important and competitive asset is our people, but most organizations in and out of the gaming industry have failed to significantly and thoughtfully invest in this precious commodity. “The revolutionary advances we have made over the years in these areas are mind-boggling. They required high intelligence, relentless commitment, clear-eyed focus and dedicated resources. Those qualities have rarely been present in a focused commitment and deep curiosity of the evolution of the workforce and their wants and needs,” Ceresani says. In the current climate, that has to change, Hoover says. “The organization has to be aware of the opportunities to go to another organization. Hopefully, they stick around in their 20s, 30s and 40s.” To do so means more than higher income and promotion opportunities. It means expanding the small touches: providing tickets for pro sporting events; creating internal softball, bowling and other leagues; employee trips. Some of these add-ons are already happening to a degree. “These things are staples of the industry to keep people recognized,” Hoover says. Analysts have a name for abandoning jobs for greener pastures: the Great Resignation. According to an article in bestcompaniesaz.com, it’s a term used to describe a predicted mass exodus of employees from the workforce. The idea is that, as baby boomers retire and millennials enter their prime working years, there will be a massive shift in the labor market. This could lead to widespread resignations as workers take advantage of their newfound bargaining power to demand better working conditions and higher wages.
Data Don’t Lie So far, the data supports this theory. According to the Bureau of Labor Statistics, the quit rate—which measures the number of workers who voluntarily leave their jobs—has been steadily rising since 2014. And while it’s still below pre-recession levels, Great Resignation statistics are rapidly ap-
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“We are constantly looking at what the needs are and framing them in the lens of ‘do the right thing’ to make the appropriate decision.” —Mark Birtha, President, Hard Rock Sacramento
proaching an all-time high. This suggests that workers are feeling more confident about their job prospects and are more likely to jump ship if they’re unhappy with their current situation. Nearly one in four workers, or 25 percent, will resign in 2022, says the online assessment provider Questionmark. The reasons behind this mass exodus are numerous, but they can be boiled down to three key factors: • A desire for greater adaptability •A need for better pay and benefits •A lack of trust in leadership “Until a segment of the workforce that participated in the Great Resignation returns, this is going to be a challenge for the next few years,” Bussmann says. “Inflation, gas prices, and supply chain issues collectively are a different story, and one we have not seen in over four decades. It’s made things much more challenging for the entire workforce as their wallets have become that much tighter.” Compensation at its core should always be tied to performance, Birtha says. Inflation throws a wrinkle into this theory and, as goods and services increase in price, often wages grow commensurately. “That is the environment we are in today, and we have all had to take a hard look to ensure we balance the macroeconomy with the salary and wage needs of our teams,” he says. “It’s a timeless proven result that when we take care of our employees, they take good care of our guests. This conversation varies by market and region, by company and via competition, so there is no one answer for every situation. We have worked very hard with our unions, corporate management, ownership and our employees to stay ahead of the curve.” Hard Rock exhibited this with discretionary bonuses last year, not just for management but for all team members. This was coupled with higher than anticipated wage and salary increases, Birtha says. “So we are constantly looking at what the needs are and framing them in the lens of ‘do the right thing’ to make the appropriate decision,” Birtha says. In reality, sustaining real and lasting success is rooted in a people culture, Ceresani says. “Therefore, we need to attract and retain talent, like we are a sports team. I believe the recruitment and retention challenges are the new normal and require innovative strategies, from compensation to engagement and ownership of results. “The answer, I believe, is as simple as treating and caring for our internal customers (team members) like we do our external customers. If we need to attract external customers, in a competitive environment, we incentivize them to walk through our doors, and once they are in we make them feel special and they trust us.”
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Nearly one in four workers, or 25 percent, will resign in 2022, says the online assessment provider Questionmark. The reasons behind this mass exodus are numerous, but they can be boiled down to three key factors: • A desire for greater adaptability •A need for better pay and benefits •A lack of trust in leadership
That being said, the organizations that have a history of focusing on their culture and “walking the talk” will continue to be successful in any turbulence, Birtha says. “We listen to what our team members want, and we commit to building long-term relationships with guests and employees alike,” he says. “During the pandemic we paid our team members and provided benefits even while we were closed, and often gave out grocery gift cards and other support services. “We hear from our employees through surveys and sit-downs to address their needs and stay a step ahead in terms of providing new resources, benefits, promotions, training, compensation needs and other requests to maintain a robust workforce.” Still, the impact of Covid on the mindset of the workforce of today and tomorrow created a time for reflection which influenced millions of workers to rethink their way of living, which includes their work life. “Candidly, they want to be part of something bigger than themselves: a team,” Ceresani says. This comes down to culture again, Bussmann says. “Great organizations will keep those around through the good times and the challenging times.”
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EMERGING LEADERS Technology and Regulation Vishal Patel Engineering Manager, New Jersey Division of Gaming Enforcement ishal Patel earned a bachelor of science degree in electrical engineering from Clarkson University in Potsdam, New York in 2004. His first job was one state down for an entry-level position with the New Jersey Division of Gaming Enforcement in 2005. “It was the best career opportunity for me at the time based on the education and technical experience required for the position, as well as the scope and responsibilities associated with the work,” says Patel, a Malaysian native who moved to the U.S. at age 18. As an entry-level engineer, Patel developed broad experience testing slot machines and associated products to meet the rules and technical standards established by the state. It’s now 2022, and Patel still works for the agency as engineering manager for the Technical Services Bureau, where he oversees the engineering, math and field inspections units. “I am fortunate to work with a great group of caring and talented individuals within the division and the industry,” he says. The success of high-profile projects such as the launch of internet gaming and sports wagering, new casino openings, and major casino IT upgrades relies on the collaborative efforts of such colleagues, which contributes to overall job satisfaction, he says. “Each day brings new challenges and opportunities for further growth, which is an important reason why I’ve remained with the division.” As manager, Patel ensures that new products and new technologies meet the established standards and are completed in a timely manner to meet launch dates. These efforts ran into something of a brick wall when Covid-19 struck in early 2020. “Covid-19 required us to quickly transition to remote work, and fortunately we had great success in maintaining productivity with the evaluation of engineering submissions, especially all products related to internet gaming and other investigative functions,” Patel says. The transition also accelerated the need to
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update internal procedures from paper checklists and physical files to electronic ones, which is now standard practice, says Patel, who enjoys traveling with his family and hopes to take them to Malaysia in the not-too-distant future. Looking ahead, Patel still sees plenty of work to do with online gaming, and sportsbook operators adding innovations to improve offerings and patron experience. What’s more, brick-and-mortar casinos upgrade to the latest casino systems capable of offering additional features such as cashless wagering and sophisticated promotional campaigns. His job goes beyond simply seeing that the games work as promised within the state’s regulations. “My role, along with other regulators and industry partners in the coming years, is to guarantee that the technologies that are being leveraged to make gaming easily accessible and more userfriendly for patrons are also implementing more sophisticated responsible gaming, fraud detection, and cyber security controls,” Patel says. “We are always learning and updating our skill set in the evergrowing field of business intelligence and data analytics to ensure that we achieve the strongest patron protection controls.” The DGE has already begun taking the necessary steps by recently mandating new best practices in cybersecurity with similar best practices in responsible gaming to follow by the end of this year. Sounds like the DGE and counterparts in other states will require new engineers well into the future. “The best advice that I can offer is to not be complacent,” Patel says. “It is easy to get comfortable with a routine set of assignments which can limit opportunities for future growth and advancement. The gaming industry is multi-faceted with a diverse need for experienced and knowledgeable individuals. It is important to take on additional responsibilities when available and to proactively pursue more challenging assignments or projects.” —Bill Sokolic
Global Gaming Business AUGUST 2022
Unintended but Decisive Colin Mansfield Senior Director and Sector Head for U.S. Corporates – Gaming & Leisure, Fitch Ratings olin Mansfield’s involvement in the gaming industry began in a somewhat unintended manner. In the early years, Mansfield was working for a financial data firm and his coverage happened to include a few public large-cap U.S. gaming corporations, along with insurance companies and small-cap banks. After receiving his chartered financial analyst (CFA) designation, Mansfield joined the U.S. Corporates team at Fitch Ratings, where he started covering the gaming industry specifically. Up until that point, he was more focused on equity, and Fitch marked his first step into the credit markets. Nevertheless, focusing on gaming and helping cover Caesars Entertainment during a turbulent time “integrated” him to the industry—he is fascinated by high capital intensity for massive integrated resort developments, prominent jurisdictions and markets, theories on maximizing slot and table game revenues, and the industry personalities. As Mansfield began covering the sector more in earnest, he soon realized that he would continue to be involved in the gaming industry because of the enthusiasm. As Fitch continued to grow, Mansfield and his team built out their leisure coverage that now ranges from cruise and theme parks to fitness centers and recreational products. Today, they cover more than 60 companies across the gaming, lodging and leisure sectors. Mansfield’s passion and perseverance guided him through a zigzag path. Prior to becoming a gaming credit analyst, Mansfield bounced between a few sales jobs (including being a stockbroker) and tried to break into sell-side equity research right after the financial crisis. Hard work in the early part of his 20s, including getting the CFA
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designation and building up a comprehensive skill set, ultimately got well rewarded. “Joining Fitch presented me with amazing longterm career opportunities,” says Mansfield, advising young professionals that “opportunities present themselves in a non-linear fashion—you can’t predict when they’ll cross your path, but building a skill set with the longer-term vision of being prepared is the best way to position yourself for success.” Mansfield has been doing numerous speaker series via the analyst classes in the Fitch Corporates group and has been sharing his career story within the organization to instill the long-term mentality for career-building. Additionally, he makes sure to carve out time for his younger colleagues, as he highly appreciates the opportunity of having a manager who spent one-on-one time guiding him through the gaming industry and corporate credit analysis. “Having one-on-one exposure to my manager was key to my development, and I am trying to pay that forward,” says Mansfield. Looking at the gaming industry tomorrow, Mansfield believes it is becoming more mainstream and less taboo, particularly after the broad legalization of sports betting. “Gaming is part of everyday conversations now more than ever, and I think that creates opportunity for more young professionals to consider it as a career path,” he says. Fitch Ratings promotes a lot from within and encourages rotations through groups across different asset classes, risk management, and managerial roles. As Mansfield sees it, his previous mentors’ and managers’ advancements to bigger roles are a strong motivator for those who want to follow similar career paths. One particular aspect of covering the gaming industry that Mansfield truly adores is the work-related travel. “My colleagues and I have been fortunate enough to travel all over the world to see the material capital investments made by the companies we cover,” says Mansfield. “Besides traveling overseas, those trips to smaller U.S. markets have been an added benefit since they are usually places I wouldn’t expect to travel to, such as Biloxi, Laughlin, the Catskills and Black Hawk.” In his spare time, Mansfield is a golfer who also enjoys cooking and history. He is especially interested in the American pre- and early Revolutionary War history and first-half 20th century European history. A recent trip to Normandy and the D-Day beaches touched his heart in a profound way. —Michael Zhu is a partner with The Innovation Group.
“I have built great relationships, and developed as a professional as well as a person, all from my interactions within this great industry.”
Testing Your Future Joseph Marchetti Director of Systems and Audit, Gaming Laboratories International f you grow up in Las Vegas, working in the casino industry in some capacity is bound to cross your mind. For Joseph Marchetti, that thought brought him to Gaming Laboratories International, the leading company which tests technology for regulatory compliance and function. Armed with a degree in software programming from ITT Tech, Marchetti joined GLI in 2005, attracted by the ever-changing technology and regulations upon which the industry is built. “Plus the friendly team members who interviewed me,” he says. He started as a Level 1 test engineer in the engineering department. He still works for the company, grabbing advancements at every level—he is now director of systems and audit. “I have been very fortunate to have the chance to work in multiple lines of the business and with multiple clients over the years. This has kept my interest very well. In addition to that, it is the people that I get to work with every day,” says Marchetti, who relaxes by hanging out with friends and family, and if he gets a chance, playing video games. His favorites are the role-playing Final Fantasy, Call of Duty and the Mario Kart racing games. For all the chaos it brought, Covid-19 made GLI even more agile and global then it already was, Marchetti says. “Lines of communication have improved enough with the wider acceptance of technology like Microsoft Teams.” Teams integrates the people, content and tools, according to Microsoft. Marchetti sees a bright future in the next five years and beyond. There have been great advancements made in the areas of cashless and iGaming in the past few years. “I expect that this trend will continue over the years to come,” he says. “I anticipate an increase in the submissions and conversations around these technologies in the near future and will work with the GLI teams to best prepare for them.” That said, GLI and similar firms should have positions opening up to meet the demand, making these jobs fertile ground for engineering job seekers. “Keep it in mind—I have built great relationships, and developed as a professional as well as a person, all from my interactions within this great industry,” Marchetti says. —Bill Sokolic
I
AUGUST 2022 www.ggbmagazine.com
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NEW GAME REVIEW by Frank Legato
Golden Fire Link Light & Wonder, Inc.
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his new game series on L&W’s Kascada cabinets centers around values displayed on “Fireballs” on the reels. The base game is played on a five-by-four reel array, but during the main progressive bonus and free-game event, the reels can expand to eight rows. The game is available in 10-line, 15-line, 20-line and 50-line versions. Featured base-game titles in the series are Dragon Song and Buchae Blossom. Fireball symbols result in instant awards of credits or jackpot prizes. During the base game, the Fireballs return from one to 100 times the total bet, or one of the two static jackpots—a $15 Mini or $50 Major. During the free games bonus, Fireballs return up to 20 times the bet, the Minor or the Mini. During the main Golden Fire Link feature, Fireballs are good for up to 100 times the bet or one of the four jackpots—the Minor or Mini, the Major progressive resetting at $500, or the Mega progressive resetting at $10,000. The Mega also can be won via a line combination of five bells. Scattered green gem symbols on the three middle reels trigger eight free games, and the reel array can expand during the feature—beginning with five rows, each “Unlock Row” symbol activates another row, up to the maximum eight rows. Fireball symbols return the prize displayed.
Manufacturer: Light & Wonder, Inc. Platform: Kascada Format Five-reel, 10-, 15-, 20- or 50-line video slot Max Bet: 200, 500 Denomination: .01, .02, .05, .10, .25, 1.00, 2.00 Top Award: Progressive; $10,000 reset Hit Frequency: 30.01% Theoretical Hold: 5.06%-12.49%
Four or more scattered Fireball symbols in the base game trigger the main Golden Fire Link hold-and-respin bonus event. The four Fireball symbols remain in place after their value is awarded on an accumulating display. Players are given three free spins, and each time a Fireball lands, the additional bonus is awarded and the spins return to three. The Fireballs also expand the reels one row, up to the maximum eight. Collecting 24 or more Fireball symbols during the feature unlocks a top bonus wheel, with the chance to win the top progressive prize.
Money Line Everi Holdings
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his game on Everi’s Empire Flex cabinet employs a novel display, play mechanic and math model. During game play, cashon-reels symbols, multipliers and free-spin symbols appear on an otherwise blank game field, which accommodates three reels and five rows of symbols. It is an easy-to-learn play mechanic based on successful three-reel mechanical themes, with a “what-you-see-is-what-you-get” pay scheme. On random spins, all empty reel positions on the third reel will fill with cash symbols—five cash amounts, with any multipliers on the other reels applying. “Free Spins” scatter symbols on the first two reels trigger seven free spins, with possible re-triggers. A wheel symbol on the third reel triggers a spin of a bonus wheel at the top of the display, yielding credit awards ranging from $30 to $750 and a possible multiplier up to 6X. Money Line features player-selectable multi-denomination and the ability for players to choose to
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Manufacturer: Everi Holdings, Inc. Platform: Empire Flex Format Three-reel, single-, three- or five-line video slot Max Bet: 450 Denomination: .01, .02, .05, 1.00, 2.00, 5.00 Top Award: 125,000 Hit Frequency: 61% (.01, .02, .05), 56% (1.00, 2.00, 5.00) Theoretical Hold: 4%-15%
activate one, three or five pay lines. The game also offers a clear bet-up incentive with volatility decreasing and feature frequency increasing at higher bets and denominations.
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Lightning Dollar Link Aristocrat Gaming
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ristocrat Gaming reprises one of its most popular game groups, as well as its much-copied “Hold & Spin” mechanic, in this new version of the Lightning Link series, Lightning Dollar Link. Lightning Dollar Link gathers the best of Lightning Link, Dragon Link, Dollar Storm and Buffalo Link, and adds an experience that appeals to players across denominations and preferences. Lightning Dollar Link offers lower denominations for core Hold & Spin players. The expanded denomination sets the range from penny to $5, creating appeal to low-denomination, mid-denomination, and high-denomination players in one game. Lightning Dollar Link gives players more Manufacturer: Aristocrat Gaming choices than ever as they select their line Platform: MarsX Portrait count. Lower-denomination players can Format: Five-reel, five-, 10-, 50- or 100-line video slot choose to play a 50-line or 100-line game, Max Bet: 450 In addition to the Hold & Spin while $5 denomination players can choose to Denomination: .01, .02, .05, .10, 1.00, 2.00, 5.00 bonus, Checkered Flag and Chica play a five-line or 10-line configuration. Top Award: Progressive; $10,000 reset Bonita offer free games with the popular Lightning Dollar Link launches with four Hit Frequency: Approximately 40% “Symbol Reveal” mechanic, and Raging titles: Checkered Flag, Chica Bonita, Kung Fu Theoretical Hold: 5.53%-10.2% Bull and Kung Fu Master offer free Master and Corrida de Toros. All feature the games with “Twin popular Hold & Spin bonus, in which three Spin” reels. Completely new added symbols in the Hold & free spins are awarded, and cash-on-reels symbols lock in place. Each additional Spin feature give players the chance to win a cash symbol returns the spin count to three, and filling all spots with cash symprogressive jackpot value up to three times bols returns the top Grand progressive, resetting at $10,000. from a single Hold & Spin symbol. The other three jackpots also can appear in the Hold & Spin feature, includLightning Dollar Link is featured on the ing static prizes of $10 (Mini) and $50 (Minor), and a progressive resetting at MarsX Portrait cabinet. $500 (Major).
Majestic Moon Triple Sparkle Konami Gaming
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his new game on Konami’s Dimension 49 cabinet has a unique primary game feature and a bonus feature that can land one of four jackpots. The base game is a five-reel, 40-line video slot, with the central smiling moon character as a wild symbol. During the primary game, if a frame appears over two or more reels, the Sparkle Feature is triggered. Any reels with a frame are nudged until all positions on the framed reel are the same symbol. If the player bets 180, 270 or the maximum 360 credits, the Triple Sparkle feature is activated. When the feature is active, all line wins are multiplied by two, three or four credits wagered per line, respectively. If reels are framed during this feature, the potential framed symbols include all the jackpots—static bonus jackpots of $50 (Mini) and $100 (Major), and progressives resetting at $1,000 (Mega) and $10,000 (Maxi). If all symbols inside a frame are randomly replaced with one of the jackpot symbols, that prize is awarded. There also is a free-game feature, triggered during the Sparkle Feature or Triple Sparkle Feature. When one of these features is active, a woman symbol on two, three, four or five reels triggers 10 15, 20 or 40 free games, respectively. During this feature any moon symbol appearing
transforms all symbols on that reel to the wild moon symbol.
Manufacturer: Konami Gaming, Inc. Platform: Dimension 49 Format: Five-reel, 40-line video slot Max Bet: 450 Denomination: .01, .02, .05, .10 Top Award: Progressive; $10,000 reset Hit Frequency: 39.29% Theoretical Hold: 3.92%-17.8%
AUGUST 2022 www.ggbmagazine.com
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RESPONSIBLE GAMING
Media Missteps The cost of misinformation about gambling addiction is high but can be reduced
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recent study of gambling-related content in a broad range of media sources reveals that opinions expressed as facts in news coverage pose a greater threat to those at greatest risk. The lack of scientifically derived, evidencebased research is all the more important in that gambling is mentioned in a staggering 25,000 outlets each day, the study shows. The study was commissioned by the International Center for Responsible Gaming (ICRG), the leading advocate for scientific research on gambling and gambling disorder. By relying more on opinion than scientifically derived, evidence-based research, the media are complicit in furthering policies and regulations that are potentially injurious to those at greatest risk. Gambling has proven to be a counterintuitive subject when dealing with at-risk and harmed individuals—all the more reason to trust science, not opinion, in crafting effective public policy. For example, many media stories about sports wagering have circulated the idea that this form of gambling is riskier than others. However, we don’t know if that’s the case. There is currently no body of scientific research to support this notion. In fact, we know very little about sports betting in the U.S. Claims about sports wagering should be taken with a healthy dose of salt until the research is done. That is why the ICRG has awarded a Center of Excellence Grant to study the health impact of sports wagering in the U.S., research that will help provide the evidence needed to determine the health risks and how best to develop responsible gaming among these players. There are also examples of misuse of available information. Many stories point to increased calls at gambling helplines as “evidence” that the prevalence of gambling disorders has risen. This assumption is wrong for several reasons. Helpline traffic is unreliable as an indicator that the prevalence rate is growing. There are other factors that may influence the number of calls to a helpline, such as expanded advertising and promotion. Many of the states require operators to post 42
Global Gaming Business AUGUST 2022
By Arthur B. Paikowsky
helpline numbers in television advertisements. For some gamblers, this could be the first time they became aware of an 800 number for gambling problems. Further, analysis of the call center records has historically revealed that a percentage of people call to check on where they can place a wager or why their wagering account isn’t working. The impact of advertising itself is another area of speculation in the media. To be sure, the blitz of ads about sports wagering raises many questions. Will they trigger people struggling to stay in recovery? Will they attract people vulnerable to developing a gambling problem? What is the impact on children? Unfortunately, we have little research to provide the evidence needed to answer these questions or develop guidelines for responsible advertising. What is the cost of misinformation about gambling? Individuals and families who are seeking help for gambling problems may be misled by false information on gambling addiction. Misinformation can also prevent the development of safe and effective public health policy on gambling. We don’t allow the “gray literature,” research not published in reputable, peer-reviewed journals, to guide cancer research and policy—why is gambling addiction any different? What can be done to combat misinformation? First and foremost, we need more scientific research on gambling disorders. This is a young and fast-moving field of study, and we recognize that it’s difficult to keep up with new findings. The ICRG has committed to expanding its funding for high-quality research selected in rigorous, worldwide competition. This is vital because the National Institutes of Health, the leading source of health research funding in the U.S., rarely supports gambling research. Gambling companies and related industries involved in gambling can follow the lead of ICRG’s donors who have generously supported research for more than 25 years. Gaming regulators can consult with scientists when they establish responsible gambling requirements for operators.
Public health and treatment professionals can take advantage of evidence-based resources such as the website of the Division on Addiction at Cambridge Health Alliance and Harvard Medical School (www.divisiononaddiction.org). The division sponsors The Wager, a monthly research brief written for a non-academic audience and an online screen that offers a quick and confidential assessment tool for people concerned about their gambling. The ICRG also offers education for treatment
There are also examples of “ misuse of available information.
Many stories point to increased calls at gambling helplines as ‘evidence’ that the prevalence of gambling disorders has risen. This assumption is wrong.
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providers at the annual conference and the webinar series. Everyone—including the media—is welcome to consult with the ICRG staff or visit icrg.org if they have questions about gambling disorders and responsible gambling. If we don’t have the answer, we can refer you to scientists who know the state of the research base. The ICRG is committed to collaboration using the latest evidence to ensure that the public and all stakeholders have access to the highest-quality research on gambling addiction so as to support effective and impactful industry regulations and public policies. The ICRG is a global leader in scientific research on gambling disorder and responsible gambling. Founded in 1996 by the American Gaming Association, the ICRG seeks to help individuals and families affected by gambling disorder through the highestquality research and evidence-based education programs. For more information, visit icrg.org. Arthur B. Paikowsky is president of the International Center for Responsible Gambling.
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FRANKLY SPEAKING by Frank Legato
Hot-Doggin’
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t is summertime, and in the gaming industry, that can mean only one thing. That’s right. If you’re in Las Vegas, stay in the darned
house. No, that’s not what I meant. In this modern industry, awash as it is since 2018 in the world of sports betting, summer—in particular, July, when I’m writing this—means betting on “athletes” whose specialty is hogging down as many hot dogs as humanly possible in a ridiculously short amount of time. Ah, yes. On the Fourth of July, the sports-betting attention fell upon that most famous of annual events in the sport of “competitive eating,” the Nathan’s Hot Dog Eating Contest in Brooklyn, New York, and all the bookmakers in the nation agreed on one thing: perennial hot-dog eating champion Joey Chestnut would retain his championship belt. (I think it fits even after all the weenies have been gobbled.) Chestnut was the heavy favorite—at -3,000 before the contest. Of course, he won. But this year’s tube-steak-noshing event was not without incident. In fact, it had politics, heroism and controversy, which is pretty remarkable for an annual event where a bunch of people stand around and stuff frankfurters and buns down their gullets. The controversy surrounded the over/under. The politics consisted of an animal rights activist with a sign. And the hero? That same champion dog-gobbler, Chestnut. Since I can sense you’re on the edge of your seat, here’s what happened. Last year, Chestnut set a record by eating 76 hot dogs in, like, a minute. (OK, it was longer than that. Someone should look that up.) Many of the books placed the over/under for this year at 74.5 weenies. With the contest under way and the dog-gobbling proceeding at a nauseating pace, suddenly, an animal-rights protester climbed up on the stage with a sign reading “Expose Smithfield Deathstar.” It was a protest aimed at pork supplier Smithfield Food. Chestnut was distracted by the guy. In fact, he was downright mad. He stopped his dog-noshing at just 17 tube steaks, grabbed the guy, took him down in a chokehold, and threw him into the arms of security personnel, who took him off the stage. Then, he went back to the scarfing at hand. He still won the contest easily for his 15th dog-noshing title. However, his winning total was a paltry, comparatively anorexic 63 hot dogs. That meant anyone who took the over at 75 weenies lost their bets. However, in remarkable gestures of fairness, FanDuel and DraftKings both refunded the over bets in light of the Smithfield Deathstar distraction. What I find even more remarkable, though, is Joey “Jaws” Chestnut. 44
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AUGUST 2022
Here’s a guy who can scarf more than 70 hot dogs in about 15 minutes, and he’s still thin. In fact, he judo/kung-fu’d a guy off the stage— and it says here he came into the event on crutches with a ruptured tendon in his foot. This guy’s Hot Dog Batman. He’s the Smithfield Deathstar. I eat two hot dogs and I’m ready for a nap, during which the wieners are transformed into about 10 pounds of fat. By the way, despite Chestnut’s gastronomical heroics, actually watching the hot dogeating contest is pretty rough. A bunch of people with hot dogs and buns stuffed into their faces is quite a ghastly spectacle. You never seem to see the yellow penalty cards assessed for “messy eating,” but it sure looks messy from this perspective. And because Chestnut has been so dominant, we never get to see the finer points of the sport come into play. According to the rules, partially eaten hot dogs at the end of regulation still count, as long as they’re subsequently swallowed. (Yikes.) If there is a tie, the contestants go to a fivehot-dog “eat-off” to see who can eat that many more quickly. Further ties will result in a sudden-death eat-off of one more hot dog in the fastest time. It’s kind of like a shootout in hockey, only with processed pork. But that doesn’t matter. As long as Chestnut’s in the game, it’s not happening. Are there in-play wagers offered by the sportsbooks during hot-dog eating contests? Can you bet on who will wretch next? On the next contestant to gag when a hot dog chunk sails down his esophagus? How about a wager on how far Joey Chestnut can fling an animal rights activist? Incidentally, People for the Ethical Treatment of Animals has a slogan for Smithfield Foods: “Cruel to Pigs and Humans.” Evidently, they have demonstrated unfair labor practices, in addition to, you know, slaughtering 30 million pigs a year. Of course, the Major League Eating organization has a counter-slogan: “You Can’t Do Nathan’s with Tofu.” (You’re right. I made that up.)
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Social Selling Social media is replacing traditional marketing of casino gaming By Dave Bontempo
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aming has adopted a stunning new social media-driven era. The personality-based concept of reality TV met the world of casino and online gaming in early July. Las Vegas debuted a slot machine named for, of all things, a social influencer. Brian Christopher, known for amassing an online cheering section to watch him gamble, has become more than just the face of this novel concept. He’s the machine. Gaming Arts’ Brian Christopher Pop N’Pays More slots debuted at the Plaza Hotel & Casino in Las Vegas. It’s a logical follow-up to the creation of a casino slot area dedicated to his favorite games there last year. Social media is no longer a mere link between outlets like Facebook, Twitter, Instagram and TikTok. Nor is it simply a vehicle to drive casino revenue. It’s an interactive gaming niche. Christopher attracts more than 5.1 million unique viewers and more than 1.3 million global subscribers, who watch him play slots and cheer him on. He symbolizes where the social media-gaming marriage is heading. His stature caps a decade-long movement that mirrors the growth of this new synergy. It’s a partnership that would have yielded staggering odds had it been a futures bet 10 years ago.
Planting the Seed “The advent of social media essentially killed traditional marketing,” says Erika Taylor Montgomery, CEO of Three Girls Media in Yelm, Washington, about 75 minutes south of Seattle. “It has completely revolutionized the way brands are marketed in the casino industry.” Montgomery’s life journey parallels the ascent of the new communications age. She was a television news anchor in San Francisco, juggling earlymorning hours around the schedule of young children. Montgomery eventually evolved out of television and formed the company in 2005 that now has 10 employees (Three Girls is not tied with a particular number of people; Montgomery thought the name was catchy.) 46
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Three Girls Media has several clients in varied businesses. Some are in the casino industry, including Red Wind casino in Olympia, Washington. The company has monitored industry changes, especially the dramatic impact of Covid in 2020. Home-based employees became a dream fit for socialmedia content. “What happened as a result of Covid is that more people are on mobile devices and computers than ever before,” she says. “Having a really good social media strategy is critical for reaching clients in the gaming and casino industry.” Montgomery favors the use of video, especially short messages of up to 60 seconds. The video quality does not need to reflect the expensive bells and whistles associated with television production. Smartphones will do nicely, thank you. “Your message does not have to be slick and posh,” Montgomery asserts. “Any good smartphone is capable of taking fantastic video. What stops companies from succeeding in this space at times is the belief that you have to come up with something that is professionally produced with fancy lighting and multiple cameras. You don’t need that now.” Instead, the video should reveal the human element behind the brand. Montgomery believes customers love to see one concept repeatedly in videos—people. “One thing I love is video that gives a behind-the-scenes look at what people do not get to see on the casino floor,” Montgomery says. “Take them behind the scenes in a restaurant. Give people a sneak peek. Let them hear from the people who work on the brand. “People love to see the human side of what’s behind a brand.” Montgomery believes this human portrayal augments traditional video that spans the realm of showcasing big winners, announcing tournaments
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At its core, social media is free. You can choose to spend thousands of dollars in traditional advertising or you can decide that just posting something and giving you an organic presence is absolutely free. —Erika Taylor Montgomery, CEO, Three Girls Media
and informing customers of upcoming events. There’s another reason to love video, Montgomery asserts. Marketing messages can spread like wildfire among like-minded customers. “There is one study revealing that 85 percent of social media users want more video from brands,” Montgomery asserts. “People also share video twice as much as any other content.” Demographics are important too. Younger people may flock to TikTok, which has a “mind-blowing average of 14 hours a month on the app” by approximately 1 billion monthly users, Montgomery indicates. Older decision-makers may prefer an outlet like Facebook. Montgomery indicates that sharp companies recognize the ability to spread the word without spreading the bread. “At its core, social media is free,” she says. “You can choose to spend thousands of dollars in traditional advertising or you can decide that just posting something and giving you an organic presence is absolutely free.”
Choosing a Gaming Law Team
Is No Time to Roll the Dice
”
Setting the Table About four years ago, boxing commentators for streaming giant DAZN were stunned. They had been assigned to conduct extensive interviews and televise the pro debut of someone named Jake Paul. It was contrarian. DAZN had spent over $500 million annexing the services of Canelo Alvarez and Gennady Golovkin, two of the sport’s superstars, in an attempt to control the business. It was big names only. What was this attention to a fighter making his pro debut? The answer: eyeballs. Paul, according to industry estimates, has more than 30 million viewers between YouTube, Instagram and Twitter. He’d gained attention with a 2017 video titled “It’s Everyday Bro,” portraying a white rapper and a young group of cronies extolling the virtue of social media hits and a fancy car. The video was effective in a unique way. According to Wikipedia, it has more than 5.5 million dislikes, 19th of all time. It once was in the Top 5.
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AUGUST 2022 www.ggbmagazine.com
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Jake Paul, according to industry estimates, has more than 30 million viewers between YouTube, Instagram and Twitter
tries to reflect the realities of the mass audience. Once casinos began to reopen from the pandemic, for example, Christopher tactfully embraced it. “I jumped on the first plane after a casino in Coeur d’Alene (Idaho) was back open,” he recalls. “I wanted to show my audience what it was like to be in a casino. It was the first time they had been seeing me in which a mask was on my face. People could see me getting my temperature taken and then what the machines looked like and what the casinos looked like with the dividers. “I didn’t take any money from sponsorships (or casinos). It was simply a matter of letting people see that the casinos were going to be operating.” A breakthrough phase in his emergence occurred last year. The Plaza designated a gaming area in his name. There are 27 machines in the Brian ChristoPre-fight press conferences involved comparisons of YouTube followers bepher Slots at the Plaza area. tween Paul and his opponents. Forget the nuance of the Sweet Science. A A first-of-its-kind collaboration, they established the Plaza as the ultimate fighter can’t simply talk smack. It should be social-media smack. destination for slot machine enthusiasts looking to play the games that they Paul has vaulted into prominence, gained respected boxing trainers around have watched on the social media influencer’s channels. him and now openly talks about fighting Mike Tyson or Floyd Mayweather. “Social media has transformed our daily lives, including the casino experiSomewhere, at some point, Paul will obtain a stratospheric payday by virtue of ence,” says Jonathan Jossel, CEO of the Plaza Hotel & Casino. “People want mastering the new medium. to share the fun they’re having, the thrill of winning, and watch others do the Christopher, comparatively, is far more subdued, but he is the gaming massame. Brian Christopher is a trailblazer in this regard with his YouTube videos, ter of this universe right now. and we are proud to partner with him.” He is not an over-the-top media personality. But he is the first to link two The nearly 2,500-square-foor gaming space accommodates guests 21 and powerful concepts, the reach of social media and the intoxication of slot maolder and is styled with fun backdrops for selfies, group shots and Instagramchines. Christopher lets the game’s bells, whistles, payouts and near-misses mable moments. It also enables social media posting of videos by controlling drive the content of his presentation. He adds conversational wit, enough to the music volume and playing only copyright-friendly songs that can be posted occupy attention without diverting attention from the game. on social platforms. Christopher is indeed the individual that personifies the social-media wave. Each game in the space was carefully selected based on the most iconic moHe made a 2016 video for a hobby and, voila, became an internet juggernaut. ments from over four years. The games are all Christopher’s favorites, and were The native of Canada, who now lives in Palm Springs, California, struck oil hand-selected by him. with the concept of captivating people long enough to watch him play slots. The success of the slot area led to the big leap, Christopher narrates live videos from varied casiChristopher’s own machine, which Gaming Arts nos, in which he gambles thousands of dollars of is launching in Nevada, California, Arizona, his own money. Oklahoma and other locations, he indicates. FeaYouTube and Facebook followers attend the tures of the game, which he helped develop, inevents via social media and weigh in their supclude the reels growing seven spins out of 10. A port. Brian Christopher head is a valued commodity, “Adults like gamers and video games,” especially if it lines up over a reel. If a player has Christopher observes. “They like watching other two Christopher heads, and needs one more, anpeople play, just as the way you might envision other Christopher head may appear out of kids who like to see other kids play with their nowhere and create a payday. toys. The experience for someone watching can be Social media influencer Brian Christopher at the slot “The key aspect of the game is to keep the aualong the lines of what might it be like if it was you section named after him at the Plaza Hotel dience entertained,” Christopher says. “I think in that position. I could win five grand or I could music plays a big part in that. Bonuses play a big lose five grand. I can have $100 going on any spin. part as well. People want action.” “I was lucky right from the beginning,” Christopher indicates. “It was Christopher takes his stature seriously. He agrees with Montgomery’s obabout being in the right place at the right time. About a month afterward, the servation that production does not have to be slick and posh. But he wants to channel started soaring. It was popular and just kept growing.” stay ahead of competition, and has added a second camera to his video presenSoon afterward, he became part of the YouTube partner program and was tations. One captures the game, the other is on him. able to monetize his efforts. Christopher now travels the country, bringing visiThroughout the industry, it will be interesting to see where the socialbility to a particular property via the social-media outlets. In turn, he can monmedia parade heads next. Other properties with Christopher slots are likely in a etize the efforts via meet-and-greets or by striking a deal with a property along gaming niche that has gained wings. the lines of an entertainer. A new frontier has opened up. One reason for Christopher’s success is a socially conscious blueprint. He 48
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CUTTING EDGE by Frank Legato
Versatile Hardware PRODUCT: Universal Cabinet MANUFACTURER: Interblock Luxury Gaming Products
nterblock has released the latest in its lineup of innovative hardware, the Universal Cabinet (UC). This breakthrough form factor represents a new and unique segment of electronic table games, designed with players and operators in mind. The UC provides casino operators with a variety of game options, including craps, roulette, blackjack, baccarat and sic bo, in a solitary environment and in a smaller footprint, configurable in three-, fouror five-seat carousels. For players, the Universal Cabinet provides an intimate ETG experience that flows at the player’s own pace without the intimidation often found at traditional live table games. This technology gives patrons comfort in returning to casinos and operators the ability to improve their bottom line. With Interblock’s proprietary soft-touch gel buttons, located on both sides of the play station and in the middle of the play station’s techno-gel arm rests, players can initiate the game, allowing them to control the speed of play. The individual play experience of this game removes the waiting time associated with other players making decisions on the same game. Due to its design, the Universal Cabinet can be assembled and displayed in a straight line, in a round carousel, or back-to-back. Allowing optimal use
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of any casino space, the multi-cabinet assembly does not take more than 89 inches in length and 78 inches in width. Up to five cabinets can be assembled in the carousel shape, up to six in the back-to-back, and up to three as the single-sided line. Optionally, an LED Player Information Display (PID) can be added to the multi-cabinet assembly to enhance its already-attractive appearance. A round PID collects information from all connected cabinets and displays it according to the importance of events. The content dynamically changes to attract casino visitors and nearby players. Merchandising content and customized casino graphics can be displayed alongside the minimum and maximum bets, side bet and jackpot amounts, and top win announcements. The popular Golden Ball Roulette game is one of the options available for the Universal Cabinet. Using the Universal Cabinet Vertical Roulette as a base to introduce a new product to the players, a beautiful redesign was done to match the overall look with other Golden Ball products. Features include special lights that announce the golden ball event. For more information, visit interblockgaming.com.
Gifting Loyalty PRODUCT: Nizoni Electronic Essentials COMPANY: Imagine This
magine This has announced a new line of products for casino loyalty gifting programs. Nizoni Electronic Essentials is the company’s new line of cuttingedge electronics, which are already seeing outstanding response levels industry-wide. The four-piece Nizoni collection consists of: • USB 3 Mode Selfie Light • Stereo Earbuds with built-in mic • 10,000 MAH Power Bank with charging cord • Twin Portable Wireless Speakers Presentation is important, and the Imagine This spot-color retail packaging is eye-catching, motivating, and it gives the gift a high perceived value which supports the re-gifting aspect. Imagine This goes to great lengths to ensure the packaging is built tough inside and out. Imagine This tests its products for a variety of demographics all over North America, prior to investing in a large inventory position. Nizoni has passed the
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test with flying colors. This means operators can rest assured their products and their response rates have already been vetted. The mission at Imagine This is to continue to lead the charge in developing and producing innovative products. The company’s product development team stays on top of trending products, features, and color schemes, with a focus on producing dependable high-quality products so players trust in the gifts offered and keep coming back for more. Imagine This has over $50 million in stock of top-performing products ready to ship. Operators don’t have to worry about an order not showing up when bought from Imagine This—the company has a 100 percent on-time delivery record. For more information, visit imaginethis.com.
Strength in Numbers
More than 160 member companies from 22 countries Nearly $21 billion in direct revenue • 61,700 employees 13 publicly traded companies • ONE POWERFUL VOICE Address worldwide industry expansion, regulatory and legislative issues • Discounts on major trade show booth space Promote responsible gaming initiatives • Updates from influential global industry leaders Advertising discounts in leading industry publications • Educational partnerships benefiting students and members Visibility in AGEM’s print advertisements • Exposure for publicly traded companies in the monthly AGEM Index Join AGEM today and work together with the world’s leading gaming suppliers. Daron Dorsey, Executive Director +1 702 277 3641 • Daron.Dorsey@AGEM.org Tracy Cohen, Director of Europe +44 (0) 7970 833 543 • Tracy.Cohen@AGEM.org Connie Jones, Director of Responsible Gaming +1 702 528 4374 • Connie.Jones@AGEM.org Design & photo-illustration by Jeff Farrell.com • AGEM and charter ESP member since 2007.
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©2022 Association of Gaming Equipment Manufacturers (AGEM). Membership list current as of July 2022.
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GOODS&SERVICES
John and Noah Acres
ACRES LAUNCHES ‘CASHLESS CASINO’ APP
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cres Manufacturing Company has launched an app that enables implementation of cashless wagering more quickly than any other technology. Called “Cashless Casino,” the new application enables casino operators to deploy the industry’s best-of-breed cashless gaming and loyalty solution within 15 weeks of order. Cashless Casino is powered by Acres’ Foundation technology, the industry’s only solution capable of processing both real-time gaming data and cashless transfers to and from any slot machine or table game. Acres’ efforts to innovate solutions that enable a more intuitive adoption of cashless gaming technology will help set the stage for the option of a completely cashless casino gaming floor within a few years, which will eliminate cash-handling expenses and drive a better overall player experience. “Early deployments of Foundation cashless gaming have proven that cashless players increase their play and visitation,” said Noah Acres of Acres Manufacturing. “As a result, casino operators are increasingly expressing wide-scale interest in deploying cashless gaming technology. “However, implementing cashless gaming quickly becomes a burdensome, do-it-yourself project for operators, as they struggle through the limitations of decades-old legacy casino management system (CMS) technologies to integrate a payment processor and user interface while solving for dispute resolution and regulatory compliance. These issues have dramatically slowed industry adaptation of cashless gaming. “Cashless Casino addresses this challenge by making the rollout incredibly easy and intuitive, as it enables operators to focus on player education and the gaming entertainment experience.” Cashless Casino works on any slot machine or table game, including those connected to casino management systems from Aristocrat, IGT, Konami and Light & Wonder. These legacy CMS solu-
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tions continue to account for play and loyalty data, while Foundation processes the entire machine event stream in real time, resulting in over a thousand times more data being provided to the casino. Casinos can select one or more payment providers, including Everi, FABICash, Flexia, Koin, Sightline Payments and Trustly. An interface to Marker Trax, a casino marker solution, is also included. Furthermore, Cashless Casino satisfies all regulatory requirements by providing audit reports and dispute resolution tools and can serve as the required system of record. “Cashless Casino allows gaming operators to position themselves for an entirely cashless future in which casinos transition away from physical player cards, kiosks, and direct mail,” said Acres. “These legacy technologies and practices are quickly being abandoned by other industries, and by implementing Cashless Casino, operators can engage with their customers more easily in the mediums they prefer while also benefiting from operating efficiencies. “Driving higher loyalty engagement is the core value proposition of our Foundation technology, and incorporating innovative player loyalty features into Cashless Casino is a key differentiator in the player experience. Cashless Casino enables casino operators to significantly improve their connection and engagement with their players.”
SEMINOLE CASINOS DEBUT ARISTOCRAT PROGRESSIVE SLOT
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uilding on the success of its high-denomination slot machine Dragon Link, Aristocrat Gaming and Seminole Gaming recently launched the Dollar Storm slot, which offers a progressive jackpot starting at $1 million. The machine can only be found at Seminole Hard Rock Hotel & Casino properties in Hollywood and Tampa, Florida. Each location offers its own $1 million jackpot. “The addition of this game to both of these casino floors is another example of how Aristocrat continues to bring engaging high-limit content to slot players,” said Aristocrat Gaming Senior Vice
President of Commercial Strategy and Business Analytics Jon Hanlin. Seminole Gaming Vice President of Gaming Operations Juan Martinez said, “Since November 2021, we’ve had seven $1 million winners on our Dragon Link machines across our Seminole Hard Rock properties in Hollywood and Tampa. Now we can offer the $1 million progressive awards to an even larger audience with the new $5 minimum bet option.”
SEGA SAMMY TO INTRODUCE NEW CABINET AT G2E ASIA
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lot supplier Sega Sammy Creation announced it will launch its Genesis Crest 43J cabinet to Asian markets at the G2E Asia: Special Edition Singapore trade show in August. Featuring a stylish 43-inch J-curve 4K monitor, the Genesis Crest 43J features a player panel highlighted by a 13.3-inch LCD touch screen and a wireless phone charger. The full HD 27-inch topper allows for clear and sharp images to be displayed with maximum visibility. “On top of the top-notch quality and reliability, the Genesis Crest 43J also makes maintenance easier and more efficient for technical service,” said Masahiro Kurosaki, managing director of Sega Sammy Creation. “We have spent the past few years developing and planning the best hardware and software combination, and the result is what I believe is our strongest cabinet offering to date. The game content will make full use of the hardware capabilities and allow for a broad range of game types and features.” The Genesis Crest 43J will provide an expansive game library with a variety of content to cater to any market, according to the company.
LIGHT & WONDER ACCEPTS AMENDED SALE AGREEMENT FOR OPENBET
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ight & Wonder announced that it has reached an amended agreement with Endeavor Group Holdings, Inc. to sell its sports betting division, OpenBet, to Endeavor for $800 million, down by a
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third from the original deal for $1.2 billion. Analysts say the amended deal reflects depressed valuations in the sports betting marketplace. Under the definitive purchase agreement with Endeavor, a global sports and entertainment company, Wonder will receive $750 million in cash and $50 million in Class A common stock of Endeavor Group Holdings, Inc., based on the volume weighted average price of such stock in the 20 days before the date of the amendment, or total gross proceeds of $800 million and estimated total net after-tax proceeds of approximately $700 million. “The amended purchase agreement provides a strong valuation in the current market,” said L&W in a press release, “and also increases the speed and certainty of closing by modifying the conditions for closing, including Endeavor’s agreement to waive the closing condition requir-
ing regulatory approval by the Nevada Gaming Control Board, if required.” Under the revised terms, the transaction is anticipated to close by the end of the third quarter of 2022, subject to the remaining applicable regulatory approvals and customary closing conditions. The recently completed sale of the Scientific Games lottery business and the pending sale of OpenBet will cumulatively generate approximately $5.6 billion of estimated net after-tax proceeds.
IGT COMPLETES iSOFTBET ACQUISITION
PlayDigital content library to approximately 225 proprietary games, in addition to providing a world-class, proprietary game aggregation platform to distribute third-party games, and leading datadriven promotional and user-engagement tools. Oakvale Capital LLP acted as lead financial adviser to IGT. Wachtell, Lipton, Rosen & Katz served as legal adviser to IGT and KPMG LLP acted as the company’s tax and financial due diligence adviser. M. Firon & Co. and Wiggin LLP served as legal adviser to iSoftBet. BDO Israel acted as independent registered public accounting and tax firm of iSoftBet.
ZITRO’S GLARE INSTALLED IN SPAIN
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nternational Game Technology PLC announced that it has completed its previously announced acquisition of online and mobile game content supplier and aggregator iSoftBet in a cash deal valued at €160 million (US$164.4 million). The acquisition more than doubles the IGT
lot and bingo supplier Zitro announced that the BR Group has installed titles in the company’s new Glare family of cabinets in its Bingo Plaza in Murcia, Spain, with other BR bingo halls in Murcia to follow. Among Zitro’s titles at the venues on the new Altius Glare are the multi-game Wheel of Legends, while the Allure Glare cabinet features the Bashiba Egyptian title. “With the new Zitro games and cabinets, we
AUGUST 2022 www.ggbmagazine.com
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offer a wide variety of gaming experiences to cover the variety of customers we have in our gaming hall,” said a BR Group representative. “We are happy with the reception these games are getting.” Zitro’s products have been deployed as of late in the Spanish market and Latin American jurisdictions such as Mexico and Peru, with Glare cabinets expanding across bingo halls such as Mexico’s Palace Bingo & Sports Bets Casino group properties, Codere’s Bingo Canoe in Madrid and more.
HIVESTACK AND AXES SIGN STRATEGIC ‘DOOH’ PARTNERSHIP
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XES.ai announced last month it has concluded a global strategic alliance with Hivestack, the world’s leading independent
programmatic digital-outof-home (DOOH) ad tech company. This partnership will enable AXES to connect the Hivestack supply-side platform (SSP) to the AXES omnichannel deAXES.ai CEO Earle Hall mand-side platform (DSP) to broadcast premium, programmatic DOOH cross-channel media campaigns on a global scale to the more than 25,000 AXES DOOH screens as well as push content to the mobile applications in the AXES App Store. “We are very excited about the value-add to our clients,” stated Earle G. Hall, president and CEO of AXES.ai. “Hivestack has built a cuttingedge supply-side platform that offers tremendous real-time value, content, data and statistics. The Hivestack content-rich platform will definitely be a tremendous added value to our clients and their customer journeys.” “AXES is a global technology leader in the land-based casino segment,” added Bruno Guerrero, COO of Hivestack. “Their cloud-based platform offers many revenue-generating opportunities, and we are excited to penetrate this new market segment with AXES. The Hivestack ex-
pertise, technology and data will fuel this partnership so that AXES can create extraordinary value for its clients, and we are proud to have created this exciting partnership.”
JACKPOT DIGITAL DEBUTS PAIR OF ETGs AT SD’S ROSEBUD CASINO
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ackpot Digital Inc. has completed the installation of two Jackpot Blitz electronic table games (ETGs) at South Dakota’s Rosebud Casino. The games officially went live on June 29. The tables can seat up to 10 players, and feature a state-of-the-art 84-inch touchscreen. Jackpot Digital Inc. is a leading ETG manufacturer for the cruise ship industry and regulated casino industry. The company specializes in multi-player gaming products, including poker and casino games, which are complemented by a suite of back-end tools for operators to efficiently control and optimize their gaming business.
SLOT MACHINE DELIVERIES HIT SUPPLY CHAIN ROCKS
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he deliveries of slot machines to about 30 casinos, some of them expansions or new properties in North America, are maneuvering through shoals of supply chain issues that occasionally spill out onto the rocks.
According to a report in the Nevada Independent, as many as 13,700 new slot machines are in danger of not being delivered to the casinos that need them. The main issues are high-tech components, the same kind of components that are forcing some car manufacturers to leave their automobiles sitting unfinished in factories. The most attention is being paid to bill validators, which are attached to slots and accept cash or ticket vouchers—and convert them into credits. The manufacturers are largely in Asia, and many of them are in China, which is experiencing problems due to its extended Covid-19 epidemic lockdowns. Eilers & Krejcik Gaming partner Todd Eilers told the Independent, “Everyone is trying to figure out a work-around.” 54
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BENEFITING
BACK ON THE UPSWING The 23rd Annual AGEM & AGA Golf Classic Presented by JCM Global came roaring back in 2022, raising $180,000 for the ICRG and its important research into problem gambling. Thanks to the generosity of players and sponsors from across the gaming industry, the event has now raised more than $2.5 million toward the ICRG’s mission. Get involved year round and support efforts against problem gambling by visiting icrg.org. We’ll see you on the greens in 2023!
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PEOPLE CROWN NAMES CHAIRMAN & CEO
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ustralian operator Crown Resorts has announced that current CEO Steve McCann will soon resign after an Ciarán Carruthers exhausting 13-month tenure, with industry veteran Ciarán Carruthers set to take his place once he receives the requisite regulatory approvals. Carruthers is currently COO of Wynn Macau Ltd. Bill McBeath According to Crown, the change will take effect September 30, with McCann staying on for a short period to help guide the transition. The company also announced a number of other appointments: Bill McBeath, former CEO of the Cosmopolitan of Las Vegas, is the new company chairman; John van der Wielen, former head of HBF Health, is the new chairman of Crown Perth; and John Borghetti has been named chairman of Crown Sydney after previously serving as managing director of Virgin Australia. The news comes shortly after Crown was officially acquired by Blackstone Group. Chris Tynan, Blackstone’s head of real estate Australia, thanked McCann for “his leadership over the last 13 months, including implementing a strong reform and remediation plan and improving the culture of Crown Resorts.” Tynan also welcomed the new hire by calling Carruthers a “highly experienced and respected industry veteran who shares our commitment to continuing the transformation at Crown and delivering an exceptional experience for all visitors.” McBeath comes on board after Blackstone finalized the sale of the Cosmopolitan, which McBeath had revitalized over the last several years. Prior to running the Cosmopolitan, McBeath spent his career with MGM Resorts and Mirage Resorts, running such properties as the Mirage, MGM Grand and Aria.
FORMER NGCB CHAIR APPOINTED AS RAIDERS TEAM PRESIDENT
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he Las Vegas Raiders have chosen Sandra Douglass Morgan to be the team’s new president. Morgan most recently served as the chairwoman of the Nevada Gaming Control Board
Sandra Douglass Morgan
from 2019 through 2021. Morgan said she is “thrilled” to join the team during what she called “one of the most exciting times in the history” of the storied franchise. The move is especially noteworthy for the NFL, as Morgan is now the first black woman to be appointed as a team president in the league’s history. She was also the first black woman to lead the NGCB.
COUGHLAN TO STEP DOWN AS HEAD OF WYNN MACAU LTD.
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ynn Macau Ltd. President Ian Michael Coughlan will step down from his role at the conclusion of his current contract, which runs through February 28, 2023. Ian Michael The news was announced Coughlan by parent company Wynn Resorts Ltd. According to Wynn, Coughlan will stay with the company in an advisory role through the end of 2023. He will also remain on the company’s board of directors in a non-executive position until its next general meeting, which is scheduled for May 2023. The company will promote current Vice Chairman Linda Chen to the role of president, effective March 1. Coughlan has been with Wynn since 2007, and assumed the presidency of Wynn Macau after the departure of Gamil Aziz in late 2016. He is seen by many around the industry as a solid, steady leader who helped Wynn transition as a company after former CEO Steve Wynn’s fall from grace in 2018.
NEL JOINS GALAXY GAMING AS SENIOR VP OF SALES
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alaxy Gaming, an independent developer and distributor of casino table games and technology, announced that industry expert Steph Nel has joined the company in the position of senior vice president of worldwide sales. In this new position, Nel will lead Galaxy’s sales team and oversee the company’s continued Steph Nel market expansion worldwide. With a gaming career spanning 20 years and several continents, Nel brings extensive knowledge and experience to the Galaxy Gaming team. He started his career as a dealer in South Africa and has since traveled and worked as a sales and business development gaming leader in Africa, the United Kingdom, and now in Las Vegas.
Most recently, Nel held the position of managing director of the Americas at TCSJohnHuxley. During his time there, Nel oversaw the firm’s asset purchase agreement of Gaming Partners International’s North American business, as well as the Midwest Game Supply acquisition in 2022.
STAR NAMES COOKE AS NEW CEO
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ustralian operator Star Entertainment Group has certainly had a rocky Robbie Cooke year or so, with suitability inquiries and allegations popping up all over the place—however, the company is trying to right the ship, and has appointed Robbie Cooke as its new CEO, three months after his predecessor Matt Bekier resigned amid the chaos. The hire is still pending approval from regulators, and the company has not confirmed a start date for Cooke at this time. Cooke most recently served as the managing director of fintech company Tyro Payments. Before that, he was CEO of lottery operator Tatts Group from 2013 to 2018. Star said Cooke’s experience in finance will be of vital importance for the company, given its ties to money laundering and other financial mishaps.
GGB
August 2022 Index of Advertisers
Acres Manufacturing . . . . . . . . . . . . . . . . . . . . . .7 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 AGEM & AGA Annual Golf Classic . . . . . . . . . .56 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Aristocrat Technologies/Games . . . . . . . . . . . .60 Axes.ai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Casino Player Media . . . . . . . . . . . . . . . . . . . . .43 Emerging Leaders . . . . . . . . . . . . . . . . . . . . . . .53 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Fantini Research . . . . . . . . . . . . . . . . . . . . . . . .54 Fox Rothschild . . . . . . . . . . . . . . . . . . . . . . . . .47 Gaming Laboratories International . . . . . . . . . .11 iGaming Player . . . . . . . . . . . . . . . . . . . . . . . . .55 Global Gaming Business . . . . . . . . . . . . . . . . . .10 HBG Design . . . . . . . . . . . . . . . . . . . . . . . . . . .19 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14, 15 Incredible Technologies . . . . . . . . . . . . . . . . . .25 J Carcamo & Associates . . . . . . . . . . . . . . . . . .29 OIGA - Oklahoma Indian Gaming Association Tradeshow . . . . . . . . . . . . . . . . . . .45 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 G2E Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 UNLV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Zitro International . . . . . . . . . . . . . . . . . . . . . . .59
AUGUST 2022 www.ggbmagazine.com
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CASINO COMMUNICATIONS
Q
&A
David Cordish Chairman and CEO, The Cordish Companies
T
he Cordish Companies is a family business that stretches back for five generations. David Cordish is the chairman of the company that has been a pioneer of urban development in cities around the world. Ten years ago, Cordish got directly involved in gaming with the opening of LIVE! Casino & Hotel Maryland, one of the most successful casinos on the East Coast. The company has since expanded into Pennsylvania and has grand plans for the future. He spoke with GGB Publisher Roger Gros from his offices in Baltimore in June. For a full audio and video podcast of this interview, visit GGBMagazine.com.
GGB: You are celebrating your 10th nniversary in gaming but your roots go far beyond that. Explain your first involvement with a gaming property. David Cordish: We were the developer, from the
ground up, of two of the great casinos in America: the two Hard Rocks in Florida. We put up all the equity, we got the financing, we did the design. We did everything. And Jim Allen was an employee of the Cordish Companies in Baltimore. We took him to Florida, and he’s been there ever since. He’s magnificent. I think he’s one of the top gaming gurus in the United States. But those were our first two: the one in Tampa and the one in Hollywood. How did you get involved with the Seminoles initially?
Chief (Edward) Billie called in the late ’90s, and said, “I have two licenses, one in Tampa, one in Hollywood; we do bingo, we want a billion-dollar Vegas-style casino. Are you interested?” Well, I knew where the locations were. Who wouldn’t be interested? My first question to the chief was, “Why are you calling me? We’ve never done a casino.” He says, “I’m calling you for a very simple reason. Everybody else has turned us down.” He had called Caesars, he had called MGM and all the others. 58
Global Gaming Business AUGUST 2022
And for various reasons, they couldn’t see the sense of doing a billion-dollar casino off of a bingo license. Well, we were able to figure it out. Maryland LIVE! was the first one you wholly owned and operated as well. It was and still is a unique property.
Well, thank you. The property has changed so much, you would not recognize the place. The Maryland law that we were subject to 10 years ago was slots only, so we didn’t have a poker room, we didn’t have card games. We were constrained land-wise, so we couldn’t build a luxury hotel, which we’ve now done. Clearly, it is now a full-blown entertainment complex. And now we have a sportsbook. I think without any real fear of contradiction, Maryland LIVE! now is one of the top casino resort entertainment complexes in the United States as measured by our revenues and our number of our visitors. We’ll be approaching $800 million GGR this year. It’s part of your idea for the LIVE! concept. You’ve done this in many cities now. Xfinity LIVE! in Philly, and now in St. Louis and Kansas City. Where did that idea come from, and what makes it successful?
I’ll try to take you back a little and give you the history of it. What we were until the late ’90s was a real-estate development company. And we developed from the ground up, over that time, about 85 million square feet having nothing to do with casinos. Our specialty was mixed-use development, some of the residential and hotels and office and everything else. But there was always an entertainment focus in our mixed-use projects, where we were the operator. Whether it’s a restaurant, or a bar, or a live musical venue, over the decades, we now have over 200 venues, and we call those “LIVE! Entertainment Districts.” We went to the U.S. Patent Office, and we got the name LIVE!, all in caps with an exclamation point, copyrighted around 30 or 40 years ago.
What attracts you to gaming?
You’re entertaining people; it’s a good sensual experience. You’re employing thousands of people at good pay and benefits. And clearly—if you pick your locations right—ought to make a buck or two. The odds are the house wins. And so it’s just math, and you need volume. And volume is dependent on your location, and how well you run it. And what distinguishes a great casino from an average is what you put into it. We all play blackjack. We all have the same odds, and we all have the same slot machines. More or less, my machines are the same as theirs. What makes the difference is what else you do to make it an experience. So, we knew we’d be good at that, and it’s a great business, and once we did the two Seminole Hard Rocks, we never looked back. You went into Philly, with opening the Philly LIVE! there. How is that performing?
First of all, we have a great location. We decided the place to put it was in the middle of the Stadium District, where you have within one parking lot the Eagles, the Phillies, the Flyers and the 76ers. Virtually nowhere in America does that exist. And they draw over 10 million people a year, and you are right off of I-95. It’s a fantastic location. And we were very fortunate to win the award. We had a partner that we bought out, because our view was to build really a first-class facility, the best thing to do was to own it 100 percent. We built Philly LIVE! in the midst of Covid. It was not easy. It was not fun. But we opened in the middle of Covid, and the city was very aggressive with its mandates. But now it’s going great. We’ve been able to add a lot of entertainment at Philly, just the same way we do at Maryland LIVE!, and it’s a good formula. And actually, we’ve learned—and we’re a little surprised—that the two are close enough —a two-hour drive— that we’re getting customers from Philly who come down to try Maryland and vice versa. Same rewards program. So, it’s been a good story.
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