Ggbaugust2013 by Global Gaming Business

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SociAl GAmiNG iN iNdiAN couNTry | moheGAN SuN’S Soper | oK iN oKlAhomA | michiGAN’S Four WiNdS

August 2013 • $10 • Vol. 12 • No. 8

Booming

Bally Technology company’s strategies are paying off big time

Not Nevada

California online poker debate moves ahead

Big in Bossier

First fully themed Margaritaville casino opens in Louisiana

Doing Data How analytics can drill down to success

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CONTENTS

COVER STORY Page 22

The Bally Bounce Expanded game studios, a merging of technologies between systems and slots, and an online gaming platform that will usher casinos into a multichannel world have supplier Bally Technologies riding high. By Frank Legato On the cover: Bally President & CEO Ramesh Srinivasan is congratulated by Mohegan Sun President & CEO Bobby Soper on the success of the networked NASCAR slot tournament at the Connecticut casino.

18 Sooner OK!

By Marjorie Preston

28 Pokagon Winds

The Pokagon Band of Potawatomi Indians builds its Four Winds brand into a powerful force in the Michigan and northern Indiana gaming market. By Blaine DeGracia

34 Five O’Clock Somewhere

The Jimmy Buffett’s Margaritaville brand shows its value in the casino industry with the instant-hit Margaritaville Bossier City. By Roger Gros

august COLUMNS 14 AGA Focus on Responsible Gaming Geoff Freeman

16 Fantini’s Finance Who Gives a SHIBOR? Frank Fantini

48 Tribal Online Social Gaming for Tribes John Cramp

50 Global Gaming Women Diverse Definitions Piper Overstreet-White

DEPARTMENTS

FEATURES The Oklahoma tribal gaming industry surges as the state keeps an eye on new competition from nearby states and online casinos.

Vol. 12 • No. 8

4 The Agenda 6 Dateline 13 Nutshell 38 The Power of Data

The top marketing consultants and software suppliers in the business are proving that success from marketing all goes back to customer data. By Dave Bontempo

44 California Dreaming

As California lawmakers consider an online poker bill, the state’s 59 gaming tribes continue to ponder how to benefit from internet gaming. By Dave Palermo

52 Frankly Speaking 54 iGames 58 New Game Review 62 Goods & Services 64 Cutting Edge 65 People 66 Casino Communications With Robert J. Soper, President & Chief Executive Officer, Mohegan Sun

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THE AGENDA

Online Options

Vol. 12 • No. 8 • August 2013 Roger Gros, Publisher | rgros@ggbmagazine.com Frank Legato, Editor | flegato@ggbmagazine.com Monica Cooley, Art Director | cooley7@sunflower.com

Roger Gros, Publisher

David Coheen, North American Sales & Marketing Director dcoheen@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com

ecently, two of the most revered members of the gaming industry came out in opposition to online gaming. While Global Gaming Business was the first to report Sheldon Adelson’s opinions about online gaming in an interview in 2012, he penned a column in Forbes magazine last month that crystalized his views. “There’s no benefit to our society from internet gaming,” he wrote in Forbes. “The tax revenue from internet gaming is miniscule. It’s hardly worth the paper it’s written on. So there’s no real benefit.” Down under, Len Ainsworth, the founder of Aristocrat Technologies and current chairman of Ainsworth Game Technology, echoed Adelson. “Online gaming is a train wreck waiting to happen, and I think to have a situation where people can sit at home and gamble, I think it’s a very dangerous situation,” he told Channel Nine’s Financial Review Sunday in Australia. One of the things these two legends have in common is age. Ainsworth turned 90 in July and Adelson will be 80 this month. Now, I’m not turning this into an ageist issue. After all, I’m not all that far behind either of them. But I do believe it’s a generational thing. I’d wager to say (but not online) that neither of them has a smart phone or has ever texted at any time in their lives. And that’s not a bad thing; it just is part of their generation and explains their viewpoint. And I’m not sure I don’t agree with their views. Would I prefer to live in a world where people can’t gamble in their pajamas (unless it’s a sleepover at their favorite casino)? Yes, because online gaming is a real unknown right now. I can completely understand why these two executives are uncomfortable with the activity. No one really knows what the impact of online gaming is going to be on the bricks-and-mortar casinos in North America and around the world. Life would be much simpler if there were no online gaming at all. But that horse has long left the barn. Online gaming proliferates around the world whether we like it or not. Billions of dollars were wagered online in the U.S. before the passage of the Unlawful Internet Gambling Enforcement Act of

Global Gaming Business AUGUST 2013

2006, and it has returned to nearly that level since. So to close your eyes and pretend that online gaming doesn’t exist is foolish—and dangerous. I don’t want to come off as being too altruistic, but it’s really the responsibility of the regulated gaming industry to take control of online gaming and choke off the illegal wagering that is occurring on such a massive scale. Regulated gaming can mitigate much of the harm that Adelson and Ainsworth are so concerned about. The technology available to control it isn’t perfect, but it’s sure a darn sight better than the illegal sites are offering. We can now very effectively identify who exactly is gambling, where they are located and how they are betting. Online gaming advocates cite the data we can collect from people gambling online. We can detect their gambling patterns, so if something changed dramatically, a flag can go up and the gambler can be questioned if that’s his desire. Want to self-exclude? That’s a snap with online controls. Someone on the “black list?” They won’t be able to gamble at any regulated site. Underage gambling is a specific concern of Adelson, but unless the parent is completely negligent or even worse, complicit, in the activity of their children online, that can be virtually eliminated. Should a state decide online gaming isn’t right for its residents, sophisticated geolocation programs can pinpoint where the customer is wagering, and it can be prevented. Yes, there are ways around this with “spoofing” and the like, but that takes a great deal of effort and technical expertise to pull it off. And if you’re going to do that, gambling at an illegal site will probably be easier. So I can completely understand why Adelson and Ainsworth have taken their position against online gambling. But isn’t it better for our responsible industry to control this form of entertainment (even if they think it has inherent dangers) because it will actually benefit our world? And that benefit will be a reduction in harm that would come from full-out, illegal and corrupt online gaming sites. Isn’t it better if we control it with sensible regulations, compassionate controls and a unified interest in making it fun and safe?

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

• Julie Brinkerhoff-Jacobs, President Lifescapes International

• Nicholas Casiello Jr., Shareholder Fox Rothschild

• Jeffrey Compton, Publisher CDC E-Reports

• Dean Macomber, President, Macomber International, Inc.

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

Judy Patterson, Senior Vice President & Executive Director American Gaming Association

• Jim Rafferty, President, Rafferty & Associates

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

• Steven M. Rittvo, President, The Innovation Group

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

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 6625 S. Valley View, Suite 422, Las Vegas, NV 89118 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor. Copyright 2013 Global Gaming Business LLC. Las Vegas, Nev. 89118 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: Global Gaming Business, 6625 S. Valley View Blvd., Suite 422, Las Vegas, NV 89118

Official Publication

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DATELINE TRIBAL august2013

Touchy Feely

NIGC to define one-touch bingo as Class II

he definition of a Class II bingo machine is quite complicated. The program running the machine must select number for the player similar to the way a player marks a bingo card, along with many other technical specifications, which have changed over the years. One thing that has always remained constant, however, has been the requirement that the player make at least two actions to trigger a decision. That principle is about to change, however. Last month, the National Indian Gaming Commission published a ruling in the Federal Register that said the one-touch system meets the definition of bingo as included in the Indian Gaming Regulatory Act and in existing regulations. “The NIGC believes that this proposed reinterpretation is more in keeping with IGRA’s definition of bingo and will bring clarity to the industry,” said the ruling. The Bush administration, under then-NIGC Chairman Phil Hogen, had

rejected a gaming ordinance submitted by the Metlakatla Indian Community of Alaska because it treated one-touch bingo as a Class II game. Hogen said that the game was “fully automated, fully electronic” system that eliminated certain elements of player participation, and therefore was a Class III game, not Class II. The ruling is expected to have a huge impact on Indian Country, particularly in states like California, where tribes make no tax payments to the state for revenue derived from Class II games.

Recognition Reawakening Revised BIA rules might reignite attempts in Connecticut

he revised rules for putting land into trust recently floated by the Bureau of Indian Affairs could spark a new wave of recogBureau of Indian nition requests by Indian Affairs Director tribes all over the country. Kevin Washburn Two tribes in Connecticut that had long thought that their chances of joining the Mashantucket Pequots and Mohegan tribes in building casinos were dead may see new life breathed into those dreams. The attempts by the Eastern Pequots and Schaghticokes of Connecticut to be recognized were rejected eight years ago by the BIA after more than 20 years of working within the system. Many tribes existed in the state during the first centuries after European settlement in the 17th century, but according to the federal government, only two tribes remained viable into the 20th century. Today they operate the two most successful Indian casinos in the country. However, the BIA’s draft proposal for tribal recognition, proposed by Assistant Secretary for Indian Affairs of the Department of the Interior Kevin Washburn, would make it easier for tribes to establish their viability. Said Washburn at the time, “The discussion draft is a starting point in the conversation with federally recognized tribes, petitioners and the public on how to ensure that the process is fair, efficient and transparent.” 6

from a historic tribe since 1934. The current rules require tribes to show a continuous existence since contact with the white race. Existence through the centuries and evidence of an intact cultural community are two factors that the two tribes were unable to establish. The new rules would remove those requirements.

Three tribes in Connecticut could be affected: the Schaghticokes, based in Kent; the Eastern Pequots, based in North Stonington; and the Golden Hill Paugussetts of Trumbull and Colchester. The BIA is holding hearings on its revised procedures this summer before releasing a final draft. The new procedure would allow a tribe to show genealogical descent

Global Gaming Business AUGUST 2013

Off Rez in Michigan Supreme Court will consider Bay Mills case

lthough the Department of Justice advised against doing so, the U.S. Supreme Court has agreed to hear the case of the Bay Mills Indian Community. The tribe opened an off-reservation, 84-slot casino in Vanderbilt, Michigan in November 2010 but the state of Michigan sued to have it closed—which it was, by a federal judge in 2011, who stated the tribe opened the casino without permission from the U.S. government and in violation of a state compact. The tribe purchased the casino property with funds received from the Michigan Indian Land Claims Settlement Act of 1997. The 1997 federal law distributing money to Bay Mills and four other Michigan tribes stated land acquired with interest income by Bay Mills “shall be held as Indian lands are held.” Therefore, the tribe said a casino could be built on the land. The 6th Circuit Court of Appeals agreed and on August 15, 2012, lifted the injunc-

The Bay Mills Indian Community’s casino

tion. However, the casino has remained closed pending the outcome of current litigation. It’s located about 125 miles south of the Bay Mills reservation in the Upper Peninsula. At issue in the case is whether or not Michigan Attorney General Bill Schuette has standing to sue the tribe. Schuette said he needs that authority to control the growing numbers of casinos in Michigan. Schuette said the ruling “sets the stage for an important discussion about the states’ ability to halt the unrestrained expansion of off-reservation tribal casino gambling.” The state has 23 Native American casinos.

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DATELINE EUROPE august2013

Casino MK is located in the Xscape center.

arT For arT’s sake New casino planned for Glasgow

Glasgow’s new casino plans

Xscape plans

Aspers readies new U.K. casino

new casino at the Xscape entertainment and retail complex in the London suburb of Milton Keynes is expected to provide 250 local jobs when it opens in September. Aspers’ Casino MK, located about 45 miles north of the capital, will feature a variety of traditional and electronic table games, slot machines, poker, a casual restaurant, a sports bar and a lounge. The property has appointed its management team and is launching a six-week training course for line staff. Applicants can apply for positions on the Aspers website. “Those individuals who have been involved from the outset are really excited that we’re nearly there,” said newly appointed General Manager Nigel Hartland.

Smoke Screen

Las Vegas Sands presses Spain on smoking ban

asino tycoon Sheldon Adelson has appealed to Spain’s ruling People’s Party to lift the country’s ban on smoking in public places as a condition for Las Vegas Sands’ massive EuroVegas Spanish Prime Minister resort complex to go forward in Mariano Rajoy Madrid. After meeting with Prime Minister Mariano Rajoy recently to discuss the project, which will provide thousands of jobs for Spain’s hard-pressed economy, the chairman and CEO of Las Vegas Sands said he believes the ban will be lifted. As a sweetener, he reportedly told Rajoy that LVS has more than €9 billion (US$12 billion) of EuroVegas financing already in place. Ignacio González, head of Madrid’s regional government, said lifting the ban, together with tax breaks, a relaxation of labor protections and other changes LVS wants, could be in place by the beginning of August. The smoking law has proponents, however, and they have launched an online petition drive to retain it.

£25 million hotel and casino has been proposed for Glasgow’s downtown Gallery of Modern Art. City planners are reviewing the project, backed by property tycoon James Mortimer for a location in the Scottish city’s central Royal Exchange Square. Plans call for retail outlets and around 1,000 square meters of leisure space, including a casino, a spa and other non-gaming amenities, plus a 96-room hotel and lounge and bar space. It would pro-

vide 250 direct jobs. The square is designated a Central Conservation Area, however, and the city is considering the possibility of some A-listed buildings being modified and B-listed buildings being partially demolished to make way for the complex. Richard Brown, Glasgow City Council’s executive director of development and regeneration, is recommending full approval. “The current proposals represent a very significant regeneration opportunity,” he said.

Olympic Expands in Latvia 17 casinos to be added to company’s roster lympic Entertainment Group has acquired Latvian casino operator Altea in a deal that will almost double the size of the Baltic gaming giant’s presence in the country. The transaction, whose price was not disclosed, adds 17 casinos—nine in the capital of Riga—to Olympic’s 21, which combined contain 676 slot machines and 24 table games and delivered €30 million in revenue last year. Altea’s portfolio currently includes 345 slots that generated €3 million for the company in 2012.

Black Sea Bets

Resort casino reopens in Bulgaria ulgaria’s International Hotel Casino & Tower Suites has reopened after an extensive two-year renovation costing €20 million. Located in the beachfront Golden Sands Resort in Varna on the Black Sea coast, the hotel has been International Hotel Casino redesigned and enlarged as a contemporary five-star & Tower Suites venue offering 325 rooms and suites, a spa and fitness center, a rooftop infinity pool, gourmet restaurants, lounges and new meeting, event and exhibit space. A 450-seat theater is also planned. The renovations have transformed the 24-hour casino into Bulgaria’s largest, with a new International Poker Club featuring daily tournaments and major events. “We have been planning and performing the major reconstruction of International Hotel Casino & Tower Suites for the past few years, to be able to call it the ultimate five-star casino hotel with a beach resort location in Europe,” said the property’s general manager, Vladimir Filipe.

AUGUST 2013 www.ggbmagazine.com

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DATELINE ASIA august2013

VladiVostok Bound Lawrence Ho eyes Russia’s Far East M

acau casino magnate Lawrence Ho is pursuing a casino development in Vladivostok. The co-chairman of Melco Crown Entertainment has signed an agreement to build in Russia’s designated Far East casino zone, known as Primorye, according to a report in The Wall Street Journal. Ho’s is the first big name associated with the zone, one of four the central government set aside for casino development after 2009, when the industry was banned from Moscow, St. Petersburg and other major cities where it had been flourishing virtually unregulated and lightly taxed. The other zones, all relatively remote, are in Kaliningrad in Eastern Europe, the Altai region in Central Asia and on the lower Don River near the Black Sea. Ho’s investment is being made through a Hong Kong-listed entity

Melco Crown CoChairman Lawrence Ho

called Summit Ascent Holdings, one of five bidders the Primorye government has selected to present casino proposals. It is not known how many will be selected or when, according to the

Journal. No details were available on Summit’s project except that plans call for it to open in the second half of 2014 at a site about seven miles from the Vladivostok airport. To date, none of the zones has struck a serious chord with investors, so to encourage development Primorye is offering low capital minimums and tax breaks resulting in an effective levy on gambling revenue of zero. Its other attraction is its relative proximity to northeast China, South Korea and Japan. Beijing is about two and a half hours from Vladivostok by air, Harbin less than two hours.

LAND LOCKED

Okada deal set in Manila

here was always a provision in the law that set up Entertainment City, a four-site integrated resort complex controlled by the Philippines Amusement and Gaming Corp. (PAGCOR) in Manila that required majority Tiger Resort ownership by Philippine companies. When Kazuo Okada, chairman of Japan’s Universal Entertainment, agreed to build one of the resorts (after failing to convince Wynn Resorts to partner with him), he claimed that he had received a waiver of this requirement. But when a new PAGCOR administration took over several years ago upon the election of a new president, Benigno “Noynoy” Aquino, that supposed waiver disappeared. Universal reached an agreement with John Gokongwei’s Robinsons Land Company to take the majority interest, but that deal fell apart several months ago, putting Universal in technical violation of the law. Last month, Tiger Resort Leisure and Entertainment said two unnamed

Global Gaming Business AUGUST 2013

Triad Trouble

U.S. Congress eyes Macau

A hearing of the U.S.-China Economic and Security Review Commission was held last month in Washington, D.C., and the Macau casinos were a focus. Members of the commission complained that there isn’t enough control of money laundering at the casinos, and questioned how the U.S. companies that oper- Nevada Gaming Control Board Chairman A.J. Burnett ated casinos there were responding. Commission member Jim Talent, a former admitted that triads are active in the Macau industry. Republican senator from Missouri, told the Wall Street Journal, “The truth is we really don’t have any idea what’s going on in Macau.” The Journal story said the commission didn’t understand how the VIP rooms at the casino were organized, and who controlled them. A comment by Nevada Gaming Control Board Chairman A.J. Burnett didn’t help when he said it was “common knowledge” that the VIP rooms have “long been dominated by Asian organized crime,” or the triads, as they are known in China. Burnett claimed that U.S. companies conduct “due diligence” on all VIP room operators active in their casinos and the GCB has never had to take action against them for violations. At the same time, the GCB has been active in looking into allegations, with the companies paying for investigations. But, said Burnett, there are some “good things” about the triads because they are involved in “a lot of philanthropic activities.” Commissioner Michael Wessel, a public-affairs consultant, was totally confused. “This is so complex it reminds me of a Rube Goldberg-style equation,” said Wessel. “It appears to me that there is so much slipping through the cracks.” While Burnett says the mass market is growing in Macau, thereby reducing the importance of the VIP rooms, revenue from those rooms still accounts for 70 percent of all gaming revenues in the SAR. When Daniel Glaser, the Treasury Department’s assistant secretary for terrorist financing, appeared to answer questions, several commissioners suggested to him that the department place a higher priority on its scrutiny of the Macau gaming market. “I’m not sure the companies are looking as deep as they need to in their own organizations and the profits are driving their activities,” said Wessel. “It’s worth some stricter scrutiny.”

companies have reached an agreement to take 60 percent ownership in the company, with Universal retaining the 40 percent as specified by the law. Jose Leagogo, president of Tiger subsidiary, Eagle II Holdings, said the two companies have reached an agreement, but he was bound by a confidentiality agreement that gives the groups a month to conduct due diligence. The Tiger Resort complex would contain three hotels totaling 2,000 rooms, with two luxury products and one hotel of the four-star variety, along with a casino and gaming facilities, and an indoor beach club covered by a huge glass dome. The project will also include a Las Vegas-style water show, dozens of retail shops, restaurants and convention and meeting space.

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DATELINE USA august2013

Lion SLeepS

MGM Grand’s new look, arena full-speed ahead

he days of windowless casinos are now officially over with the announcement by MGM Resorts International that the MGM Grand in Las Vegas will be taking down its front façade, from the famous MGM lion to the north end by M&M’s World. “It will put the hotel-casino directly on the Strip—opening it up for the thousands who pass by each day to see right inside,” MGM President Scott Sibella told the Las Vegas Sun. “It’s just façade walls with nothing behind them, so we can easily remove them and put MGM right on the Strip.” Demolition began in July. “Instead of rushing it for Labor Day weekend, we’ll do it properly and have it open for Thanksgiving with a full-blown, starstudded gala party,” Sibella said. MGM also is adding a new entertainment arena behind the company’s New York-New York casino hotel, set to break ground in summer 2014 and for a grand opening in spring 2016. “The business of concerts, sporting events and convention meetings is there. We are already turning down more shows in our MGM and Mandalay Bay arenas than we can handle,” MGM CEO Jim Murren told the Sun. “The new arena will add more tourists to Vegas because of a more varied selection of shows and diverse music choices.”

Lady Luck Nemacolin Opens New gaming venue accompanies five-star amenities

artners Isle of Capri and the Hardy family last month opened Pennsylvania’s 12th casino, the Lady Luck Casino at Nemacolin Woodlands. The casino is Pennsylvania’s second Category 3 casino, a classification of casinos that are attached to year-round resort hotel properties. These properties are limited to 600 slot machines and 50 table games, and guests are required to spend money in the resort for access to the casino. At Lady Luck Nemacolin, guests must make a $10 purchase at the property or buy a $10 gift card to enter the casino. Another alternative is to buy an annual membership for $45. Nemacolin Woodlands, located around 70 miles southeast of Pittsburgh, was already a popular year-round mountain resort destination. Isle of Capri renovated and retrofitted an existing building on the grounds to create the

Global Gaming Business AUGUST 2013

Done Deal

Pinnacle reaches agreement with FTC innacle Entertainment and the Federal Trade Commission have come to an agreement regarding Pinnacle’s $2.8 billion buyout of Ameristar Casinos. In order to satisfy the FTC and complete the transaction, Pinnacle will sell Ameristar’s casino-hotel development project in Lake Charles and Pin- St. Louis’ Lumiere Place is one of the properties that might be sold in the nacle’s Lumiere Place Casino, Pinnacle-Ameristar deal. HoteLumiere and the Four Seasons Hotel in St. Louis, subject to gaming regulatory approvals. Pinnacle Chief Executive Officer Anthony Sanfilippo said there already has been “pretty robust interest” from several buyers. In May, the FTC stopped the proposed merger between the two Las Vegasbased casino operators, citing federal antitrust issues. The FTC said the deal would hurt competition in St. Louis and Lake Charles and result in lower gambling payouts. In the 12 months that ended March 31, Pinnacle’s net revenues for its St. Louis segment were $389.4 million, with Lumiere Place contributing 49 percent. Also through March 31, Ameristar invested $144.5 million into the Lake Charles project, including purchase price, capital expenditures and escrow deposits. Ameristar previously disclosed that in the second quarter of 2013 it expects design and construction costs at Lake Charles to total $84 million. The acquisition of Ameristar will add eight casino-resorts to Pinnacle’s existing properties in Louisiana, Missouri and Indiana. The new facilities will be located in St. Charles and Kansas City, Missouri; Council Bluffs, Iowa; Black Hawk, Colorado; Vicksburg, Mississippi; East Chicago, Indiana; and Jackpot, Nevada. Pinnacle currently has seven casino properties but will have six after selling Lumiere Place.

casino—a fact that allowed it to open within a year after receiving the license, at a comparatively small cost of $60 million. The casino opened with 600 slots and 28 table games. Isle of Capri designed and is managing the casino. Part of the construction was the addition of the Isle-themed Otis and Henry’s Restaurant, complete with a giant wrought-iron fireplace. The building is styled along the architecture of Frank Lloyd Wright. “This is an architecture that we hope salutes Frank Lloyd Wright, as everyone knows he has his amazing home Falling Water very close by,” said Rich Laudon, vice president and general manager of the casino. Hundreds of customers waited outside for a noon grand opening celebration on July 1, during which Isle of Capri CEO Virginia McDowell joined resort officials to cut the ribbon on the new casino. More than 1,000 patrons visited during the first four and a half hours. Nemacolin Woodlands also features an upscale 335-room hotel, two championship golf courses, restaurants, a spa and private homes on more than 2,000 total acres. It has earned the Forbes Travel Guide Four-Star rating and the AAA Four Diamond rating, and has been honored as one of Travel + Leisure magazine’s 500 Best Hotels in the World. Established restaurants at the resort include Lautrec, which itself has earned the AAA Five-Diamond and Forbes Travel Guide Five-Star rating.

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DATELINE GLOBAL august2013

Crown Beats eCho

Company wins approval for second casino in Sydney

he New South Wales government has given Crown Limited the green light for its VIP casino and luxury hotel in Sydney. Crown’s A$1.5 billion Darling Harbour proposal was selected on the recommendation of an independent blue-ribbon panel appointed to decide between it and a counter-offer from Echo Entertainment, the city’s current monopoly operator, to expand its Star casino at the other end

Corruption Reigns in Mexico

of the harbor with $1 billion worth of new hotels and other attractions, including parklands and a pedestrian bridge crossing the harbor. The approval allows Crown Sydney, as the project is called, to proceed to the third stage of the government’s unsolicited proposal process for major projects. It now has the ability to begin negotiating a final binding offer with the state and pursue planning approval. It also

means Echo will lose its exclusive casino rights when its monopoly expires in 2019, although the company may still decide to expand the Star in an effort to beef up its competitiveness. Crown’s plans include a 60story, 250-meter-high hotel tower that will include luxury apartments, public and private gaming space, gourmet restaurants, entertainment and other leisure attractions.

Growth in Guam

Nation losing to illegal operators

Controversial bill could expand gaming

trade group representing most of Mexico’s gaming operators says unlicensed operators are costing the country almost US$80 million a year in lost tax revenues. At a recent meeting of a federal Special Commission established to examine regulatory reforms, Alfonso Perez Lizaur, president of the Association of Games and Draws Licensees, said most of the illegal venues are in four of the six states that border the United States: Tamaulipas, Chihuahua, Coahuila and Nuevo León. “Companies, legislators and the government must work in order to establish clear rules, create investment incentives and (create) respect for the law,” he said. Lizaur said the legal industry, most of which is represented by the association, has contributed about $1.5 billion to the Mexican economy, provides more than 35,000 direct jobs and 97,000 indirect jobs and pays more than $400 million a year in taxes. He said it is committed to building an industry marked by adequate controls, transparency, tax equity and problem gambling prevention. Congressman Ricardo Mejia Berdeja said the commission will continue to meet with members of the private and public sectors on the shape of the proposed reforms.

Death In Ottawa Canadian sports betting bill fails in Senate

uam Governor Eddie Calvo did not sign controversial Bill 19, which as a result lapsed into law. The measure, which was unanimously approved by legislators, regulates certain forms of gambling to raise funds for Guam Memorial Hospital and other government agencies. Calvo said, “Nothing will change except that the hospital will get more money. There won’t be any slot machines at the stores. There won’t be casinos popping up. And bingo, cockfighting, kiddie rides and Liberty machines will continue.” Calvo scolded legislators for inserting “things” that “appear out of nowhere after senators vote on a certain version of a bill.” He also reprimanded Attorney General Leonardo Rapadas for stirring up controversy over gambling while many crimes remain unsolved on the island. Calvo stated the new law must be clarified so everyone can “get back to the business of running the government.” Bill 19 originally was intended to regulate legal gaming activities, collect fees and taxes from licensed operators and raise funds for improving Guam’s sporting facilities. Noted Calvo, “Two bills sought to increase taxes on existing gaming. One bill would use the taxes for sports facilities, another to the hospital. The two bills became one, but not before some senators turned the whole debate upside down.” Rapadas presented Bill 19 as an attempt “to legalize currently illegal electronic gambling devices,” Calvo said. Gaming initiatives have been rejected by voters four times in Guam.

he Canadian Senate has adjourned for summer recess without addressing Bill C-290, an amendment to the Canadian Criminal Code that would have allowed single-game sports betting. The bill sat in the Senate for months, even after receiving overwhelming support from the House of Commons, nine provincial governments and the Canadian Gaming Association. Currently Canadians only may wager on the outcome of three or more events. Bill Rutsey, chief executive of the CGA, said, “Continued shameful inaction and procedural delaying tactics by the senators only serves to fuel organized crime and illegal offshore bookmakers, because they are the ones who profit from illegal single-event wagering. Again, I reiterate that we are talking about tens of billions of dollars leaving Canada and ending up in the hands of criminals. The Senate is obviously comfortable with this outcome, as they don’t see any urgency in dealing with the problem.” The CGA further claims that by offering legal single-event sports wagering, lottery corporations would gain an advantage over American casinos and generate jobs. 12

Global Gaming Business AUGUST 2013

Canadian Senate

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NUTSHELL

“They New Jersey is looking to stay in the game when it comes to sports wagering by arguing the matter in appeals court. Last month, attorneys for New Jersey presented their 30-minute oral argument in the U.S. 3rd Circuit Court of Appeals in Philadelphia in support of sports betting. In February, a U.S. District Court sided with the NFL, MLB, NBA, NHL and the NCAA in a ruling that would prevent a sports betting program in New Jersey. The professional leagues were joined by the Department of Justice, which maintained that betting on sports was prohibited under a federal ban that allows all but four states to offer that type of wagering. The state appealed the ruling on grounds that the sports leagues lack standing in the state. The three-judge panel did not indicate when it would rule. Visitation to Macau in May was up 9.1 percent year-on-year to 2,342,523. Visitation from mainland China grew 17.3 percent over the same month last year, with neighboring Guangdong province accounting for 43 percent of the mainland total. Mainland visitors traveling on the Individual Visit Scheme rose by 13.8 percent to 598,790. Total visitation to the territory is up 3 percent year-todate to 11,817,305. Clark County commissioners have OK’d plans for a new 26-story hotel-casino, the Dynasty, on Flamingo Road in Las Vegas. The site is now occupied by the Fortune Hotel & Suites. The property was acquired for $11 million in March 2012 and should open by 2015. Officials with Las Vegas Railway Express, who plan a “party train” that will travel between Los Angeles and Las Vegas, will begin operations next year. A related line of Casino Fun Trains will offer rail service to other casino cities that could include Sacramento to Reno, Houston to New Orleans, and Kansas City to St. Louis. The Ohio Casino Control Commission has given the go-ahead for Rock Ohio Caesars to begin building a skywalk at the Horseshoe Casino Cleveland to connect the historic Higbee Building to a parking structure across the street. The 170foot skywalk, which should cost about $5 million to complete, is expected to help generate more business during the winter by providing a covered way from the parking structure to the casino. The tiny Ramona

Band of Cahuilla Indians has signed a compact with California Governor Jerry Brown for the tribe to build a casino with 750 slots in Riverside County. The compact still requires the approval of the legislature. The tribe has fewer than 20 members and is based on a remote reservation adjacent to the San Bernardino National Forest. This would be the tribe’s first casino. A simplified entry process has been instituted for mainland Chinese traveling to Macau. Visitors now receive arrival cards at border crossings instead of having their visitor permits or passports stamped, the city’s Public Security Police said. The change is meant to simplify immigration checks and speed up passport control. Slot manufacturer International Game Technology has published an “infographic” looking at the history of Megajackpots millionaires, including total money won, “winningest states” and luckiest months. According to the report, IGT Megajackpots progressive slots have created more than 1,500 millionaires with nearly $6 billion won since the game’s 1986 introduction, more than any other gaming manufacturer. The top two Megajackpots states are Nevada at $2.3 billion won and New Jersey with $884 million won. Monaco welcomed international guests to the principality to celebrate the 150th anniversary of the legendary Monte Carlo SBM (Societe de Bains de Mer) opera house and casino, which sports a newly redesigned interior by Karl Lagerfeld. The weekend also marked the start of a special edition of Monaco’s annual summer sporting festival in honor of the milestone, featuring performances from Rihanna, Alicia Keys, Bryan Ferry and Elton John throughout the coming weeks, as well as a series of other exhibitions and events. A new report released by the Gaming Club and Juniper Research predicts that the mobile gaming industry will be valued at US$100 billion by 2017, with net profits in the neighborhood of $45 billion to be earned by the leading online gaming companies. The study cites the explosive growth of smart phone technology as the fuel for new demand for mobile casino games, as well as the wide range of mobile gaming apps for smart phones and tablets.

CALENDAR August 12-14: Oklahoma Indian Gaming Association (OIGA) Conference and Trade Show, Cox Center, Oklahoma City, Oklahoma. Produced by OIGA and Event 1 Productions. For more information, visit okindiangaming.org.

September 29-October 1: International Association of Gaming Regulators, Grand Hotel Oslo, Norway. Produced by the International Association of Gaming Regulators. For more information, visit iagr.org.

August 13-15: Australasian Gaming Expo, Sydney Convention and Exhibition Centre, Darling Harbour, Sydney. Produced by the Gaming Technologies Association. For more information, visit austgamingexpo.com.

October 8-10: European iGaming Congress, Fira Barcelona, Spain. Produced by Clarion Gaming. For more information, visit eigexpo.com.

September 23-26: Global Gaming Expo (G2E), Sands Expo Center, Las Vegas. Produced by the American Gaming Association and Reed Exhibitions. For more information, visit globalgamingexpo.com.

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

Said It”

“Online does not cannibalize land-based, for us. The experiences on offer are very different. One—online —is a solo experience and the other is a social experience.” —Peter Brooks, president and COO of Genting UK, on his company’s experience that the online casino offering does not affect its land-based business

“The gaming industry in America has always been the subject of reports that were falsely researched and relied on rumor. It never affects our business.” —Steve Wynn, who is gratified that the U.S. Securities and Exchange Commission has found no basis for bribery allegations against his company

“I really don’t recognize myself anymore. I’ve turned into that guy who’s in bed by 8 or 9 o’clock.” —Sam Nazarian, real estate mogul and former night owl who is building the SLS Las Vegas

“Tribes have spent millions lobbying to ensure that they keep the corner on certain area markets. But, again, the market remains limited… Bottom line: Casinos will never become the boon to Indians that many claim.” —New York Post, in an editorial urging Indians to move beyond gaming for economic solvency

“The fact that every local tribe stands united in opposition to this project is evidence that the approval of the North Fork compact is not a sound solution.” —Mark Macarro, chairman of the Pechanga Band, testifying before the California Senate against ratifying the gaming compact between the state and the North Fork tribe for the Golden State’s first offreservation casino

“Online gaming is a train wreck waiting to happen, and to have a situation where people can sit at home and gamble, I think it’s a very dangerous situation.” —Gaming legend and Ainsworth Game Technology Executive Chairman Len Ainsworth on the spread of internet gaming

“The Catholic Church does not teach that games of chance are sinful in and of themselves, but can become so if they deprive someone what is necessary to provide for himself or someone else. This is the fear we have.” —Dennis Poust, New York State Catholic Conference, expressing concerns about the proposed expansion of gaming in the state

AUGUST 2013 www.ggbmagazine.com

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AMERICAN GAMING ASSOCIATION

Focus on Responsible Continuing our efforts, sharing our successes By Geoff Freeman, President & CEO, American Gaming Association

t’s no secret that our industry has its fair share of vocal opponents, and it is safe to say that some of those critics will not be swayed from their opinions. But rather than focusing on our critics, I believe we should continue to focus on doing right by our customers. Our industry has a longstanding commitment to responsible gaming, and no matter how small the population is that suffers from a gambling disorder, our dedication to this population will not fade. Last month in these pages, I wrote that a key strategy of the American Gaming Association is to continue to tell our industry’s story. The story of our efforts to promote responsible gaming happens to be one of our best. It’s a story that must be told not just by the AGA or industry CEOs, but shared by the rank and file of our diverse industry to the point that we are all zealots when it comes to sending the message that we take responsible gaming seriously. This is a year-round effort, but is especially important during this month’s Responsible Gaming Education Week (RGEW). For the 16th consecutive year, RGEW will educate our employees and customers through a wide variety of initiatives. However, it’s just the tip of the iceberg when it comes to our industry’s activities. The following initiatives illustrate our dedication to responsible gaming and the necessity to continually build on—and share—this commitment:

which the industry has evolved since it was first developed. More information on the code can be found at www.americangaming.org. • Fund Cutting-Edge Research – Since the National Center for Responsible Gaming (NCRG) was founded in 1996, our industry has committed nearly $25 million to fund cutting-edge research into responsible gaming. This fall, the NCRG will host the 14th annual NCRG Conference on Gambling and Addiction, where major stakeholders come together to discuss the latest research and best practices in this field. Take a moment to learn about all of the good work of the NCRG at www.ncrg.org.

“

Our industry has a longstanding commitment to responsible gaming, and no matter how small the population is that suffers from a gambling disorder, our dedication to this population will not fade.

• Commit to the Code – This year marks the 10th anniversary of the AGA’s Code of Conduct for Responsible Gaming. The code is an industry standard for gaming companies’ approach to responsible gaming and is a model for programs internationally. A revised version of the code was released earlier this year, and reflects the way in 14

Global Gaming Business AUGUST 2013

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• Help Youth – CollegeGambling.org and a youth gambling curriculum are two initiatives spearheaded by the NCRG to create awareness, provide tools and educate students on responsible gaming. • Educate the Public – With brochures such as “The House Advantage: A Guide to Understanding the Odds,” “Taking the Mystery Out of the Machine: A Guide to Understanding Slot Machines,” “Talking with Children About Gambling” and “Keeping It Fun: A Guide to Responsible Gaming,” the AGA and the NCRG constantly strive to get responsible gaming information in the hands of more people who need it. We also recently released a new video titled “What Are the Odds?” while the NCRG put out “What is a Gambling Disorder?” Anyone can download the

brochures or watch the videos by visiting www.americangaming.org or www.ncrg.org. • Train Employees – Companies across the country are constantly training employees about responsible gaming, often utilizing the NCRG’s Partnership for Excellence in Education and Responsible Gaming (PEER), which is derived from the AGA’s Code of Conduct for Responsible Gaming, or Executive, Management & Employee Responsible Gaming Education (EMERGE), which was designed by scientists at Harvard Medical School. Information on both of these programs can be found at www.ncrg.org. • Support State Programs – Many commercial gaming companies continue to provide funding for problem gambling councils at the state level. • Self-Exclusion Programs – Even when state law does not require it, commercial casinos are enforcing self-exclusion programs for those dealing with problematic gambling behavior. • Combat Underage Gaming – In addition to the NCRG’s anti-youth gambling efforts, Project 21—an initiative to combat underage gambling— began with Harrah’s nearly two decades ago and has spread to other companies. • Answer the Call – Across the industry, companies’ dollars are helping fund and support free, 24hour gambling addiction helplines that provide counseling and guidance. • Harness Technology – In those jurisdictions where regulators have requested technological solutions to responsible gaming challenges, manufacturers have answered the call, investing in the development of game features designed to minimize risks associated with irresponsible gaming. Let’s remember that the best way to share our story is to live it. While we may not change the minds of our harshest critics, we will continue to spread responsible gaming messages while providing help to the people who need it most.

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FANTINI’S FINANCE by FRANK FANTINI

Who Gives A SHIBOR? Is the recent slump in stock prices for Macau gaming companies a buying opportunity?

he almost obsessive reading of China’s economic tea leaves has led to a nearterm bearish view of Macau. Thus the recent off of Macau casino stocks. The blame was laid on a slowdown in the Chinese economy, a reversal of money flowing out of China greater than investment flowing in, and a spike in SHIBOR lending rates. SHIBOR is the Chinese equivalent of LIBOR with SH being Shanghai as opposed to L for London. Yet, gaming revenues in Macau casinos continue to grow. They soared 21 percent in June. And most analysts believe full-year growth will be around 15 percent and maybe higher. The big sell-off has brought longtime growth stories Wynn and Las Vegas Sands down to nongrowth valuations. And, ironically, though much of the sell-off was blamed on China, the parent companies of American Macau operators declined more steeply than their Hong Kong-listed subsidiaries, which are pure Macau plays. That came despite the American economy and the Las Vegas Strip both strengthening, which should shore them up. Since then, their stock prices have risen. WYNN’s forward price/earnings ratio is 18 as of this writing and LVS is at 16. Those PEs are about where they should be given expected growth and the dividends that both companies pay. But the stock prices might have a way to run. Jon Oh of CLSA is emphatic about LVS. In a piece titled “The Path To 100,” Oh said that Macau casinos could be worth $43 a share just by LVS reaching average table yields for the market, and that Singapore could be worth $28 assuming stabilized VIP volumes. In addition, sales of non-core assets can bring in $11 a share and potential new projects have an option value of $12, Oh said. That makes for a $104 stock price. Further, LVS stock should be supported by its current free cash flow of $4 a share and recently announced $2 billion share repurchase, Oh said. And Oh sees growth ahead, projecting EBITDA up 27 percent this year to $4.8 billion

Global Gaming Business AUGUST 2013

and reaching $5.6 billion in 2015, with Singapore alone contributing $2 billion. So, a skittish bear might be a seller of Macau gaming stocks. A bull is more likely to thank the writers of scary headlines for a buying opportunity.

WHO IS THE FAIREST OF THEM ALL? Despite all the gnashing of teeth over declining revenues in Atlantic City and all the headlines about how Pennsylvania is the new leading gaming market, an interesting fact exists: Atlantic City is still the biggest regional gaming market in the U.S. Here are the average monthly gaming revenues during the first five months of the year for real markets. You’ll note that Pennsylvania is not listed because it isn’t a market. It’s more than 300 miles from Pittsburgh or Erie to Philadelphia, and those cities have more in common with the industrial Midwest than with the Atlantic coast: Atlantic City $227 million Chicagoland $185 Detroit-Toledo $134 Metro New York $113 Philadelphia $102 MS Gulf Coast $91 St. Louis $90 Kansas City $70 Now, gaming has proliferated to the point that markets overlap and there aren’t neat and distinct boundaries anymore. Resorts World in Queens takes patrons who once belonged to Mohegan Sun and Foxwoods in Connecticut. Sands Bethlehem in Pennsylvania buses Asian gamblers out of New York City. Valley Forge Casino pulls customers from the northwest edge of its territory who once went to Penn National’s Hollywood near Harrisburg, while in the heart of its territory, Valley Forge fights for Philadelphia players with Harrah’s, Parx Casino and SugarHouse. So AC might be half the size it once was, but it still generates a nice chunk of change worth fighting over.

Of course, 12 casinos cut the otherwise substantial pie into slices smaller than they would like, and maybe too small for all to survive. The commonly held belief is that some casinos in Atlantic City have to close, though each one responds, “Not me.” The list of potential closers usually starts with Atlantic Club (formerly the AC Hilton) and Resorts. But suddenly both are springing to life, at least on the revenue front. The Atlantic Club has turned around thanks to a renovation and by overtly targeting locals and lowend players. Resorts has a genuine vibe with Margaritaville opening, new manager and part owner Mohegan Sun promoting to its regional database of players and room renovations of the older hotel tower. Meanwhile, the question has to be asked, even if small properties like Atlantic Club close, how much does that benefit the rest of the market? Answer: not much.

‘‘

Though much of the sell-off was blamed on China, the parent companies of American Macau operators declined more steeply than their Hong Kong-listed subsidiaries, which are pure Macau plays.

’’

Atlantic Club and Resorts combined for average win of $21.2 million a month this year through May. Even factoring in a strong summer and assuming they can grow to a combined $30 million, their closing would be of marginal help. The big hope now is that internet gaming will generate enough revenue to be the game-changer. Citywide revenue estimates range from $200 million to over $1 billion. But that is a wait-and-see prospect. Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.gaminginvestments.com.

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Choctaw

OKLAHOMA

GOLD RUSH Tribal gaming in Oklahoma is enjoying a growth spurt. Could growing pains follow? The Sooner State is keeping a close eye on possible new competition in state, out of state and online. BY MARJORIE PRESTON

klahoma gaming is on the upswing. The proof is in the numbers. • From 2010 to 2011, revenues from the state’s 116 gaming halls rose by almost 8 percent, far surpassing the 3 percent increase in Indian gaming nationwide. • Oklahoma now ranks third in casino revenues in the U.S. (behind Nevada and California), and there are an estimated 70 slot machines for every adult in the Sooner State. • In 2006, two years after lawmakers compacted with the tribes to bring Class III games on board, the state pocketed more than $14 million in shared revenues. By 2012, that total had reached almost $124 million, a 770 percent increase. As tribal leaders publicly hail the growth of their industry and expand operations accordingly, they are privately aware that the market is nearing full maturity, and may soon reach a point of saturation, decreased momentum and diminishing returns. That change would accelerate if gaming expands beyond horse and dog tracks in neighboring Arkansas and Texas. And while a casino referendum in Arkansas was invalidated by the state Supreme Court last year, in a recent poll 64 percent of Texans said they have gambled in other states and would prefer to play closer to home. Some Lone Star lawmakers, frustrated by the loss of some $3 billion spent by Texans to gamble elsewhere, will continue to push a constitutional amendment to permit additional gaming. “We owe the success of Oklahoma gaming to its illegality in surrounding states,” says attorney D. Michael McBride III, chairman of Indian Law & Gaming for Crowe & Dunlevy P.C. of Tulsa. “There are only a few tribes in Texas, and so far they have lost in their quest to engage in broader Class III gaming. But I believe that commercial non-Indian gaming will prevail ultimately in the legislature there, if not in five years, possibly within 10 years.” 18

Global Gaming Business AUGUST 2013

Changing Landscape In the late 1980s, Indian gaming in the United States was still limited to bingo parlors and old-fashioned paper games. But even then, the young industry was a primary and welcome source of revenue for the tribes. In 1988, 100 tribal gaming halls at reservations and rancherias across the country grossed $110 million. In October of that year, President Ronald Reagan signed the U.S. Indian Gaming Regulatory Act into law, and it kicked off a billion-dollar business boom. Since then, gaming has lifted many tribes from grinding poverty and transformed many into billion-dollar business conglomerates. IGRA has been “the most successful economic development policy in the history of the U.S. for tribal people,” says McBride. Thanks to gaming, many Native Americans are no longer among the “bottom 1 percent” described by Forbes in a 2011 article on Indian economies. But market maturity and potential new competition could slow their economic progress, along with a new player undreamed of even a dozen years ago: legal online gaming. In that case, even IGRA could prove an obstacle, because it demands that tribal gaming occur only on Indian lands. These “Reagan-era IGRA territorial restrictions” could thwart tribal internet gaming, with the exception of Class II linked games between reservations, says McBride. As digital games proliferate, tribes may find themselves at a disadvantage geographically and technologically as well as legally. In the 19th and 20th centuries, defeated Indian nations were forced onto reservations by the United States government. “Through fate, history and mistreatment, many of then have pretty bad locations,” says McBride. If internet gaming becomes widespread, rural operations could suffer from inaccessibility as well as the lack of technical infrastructure and bandwidth.

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Choctaw Casino

Choctaw Casino grand opening fireworks

“

We’ve been closely following the possibility of online gaming becoming a reality; all casinos should be preparing for it. But online gaming is a solitary event. When you visit us at Hard Rock, you can enjoy the games, a nice dinner and a concert with your friends. Our current plan is to continue offering the best entertainment experience for our guests.

The convenience factor also would play in. enue overall. “Young people are very comfortable with playing The differential is explained in Casino City’s 2013 Inon their iPhones and engaging in little tablet devices in dian Gaming Industry Report, compiled by economist Alan the palms of their hands,” says McBride. “If they have Meister and published by Nathan & Associates based in Arthe legal right to game in their pajamas in their bedlington, Virginia. rooms instead of driving three hours to a rural Indian Meister reports that since 2009, Oklahoma tribes have casino, they would probably pick the comfy pajamas.” been adding Class II games, which are not subject to comBut Mark Fulton, chief operating officer for pact fees, and decreasing the percentage of Class III games Cherokee Nation Businesses, with eight casinos in and non-house-banked table games like poker, which reOklahoma including the Hard Rock Hotel & Casino quire revenue sharing. That followed a three-year surge in Tulsa, believes digital gaming will never fully replace Class III games, from just 10 percent in 2005 to 66 percent the casino experience. in 2008. That growth came after the National Indian Gam“We’ve been closely following the possibility of ing Commission tried to impose limits on Class II games online gaming becoming a reality; all casinos should that would have made them less similar to Vegas-style be preparing for it,” Fulton observes. “But online games and thus less appealing to players. When the NIGC gaming is a solitary event. When you visit us at Hard reversed its position, Class II reRock, you can enjoy the games, a nice dinner and a bounded. Since then, the concert with your friends. Our current plan is to conpercentage of Class tinue offering the best entertainment experience for III games has our guests.” dropped to McBride agrees that smart operators should be about 60 per—Mark Fulton able to turn online games to their advantage. Even cent of all COO, Cherokee Nation Businesses small rural operations, like those with 60 slot magames in chines tucked away in travel plazas, could benefit Oklahoma. from internet gaming if “borders don’t matter anymore.” Some tribes contend that the in“I’m an optimistic guy; I think it can be complementary to bricks-and-mor- crease in Class II is not a way to keep tar casinos,” he says. “Well-run operations already have good relationships with more money in tribal economies. their players, and you can continue to engage players on a broader level through Sheila Morago, executive director of the use of i-gaming.” the Oklahoma Indian Gaming Association, says the rise in Class II Class Act games is a more a matter of supply Gaming tribes in Oklahoma continue to prosper, yet the state government is re- and demand. alizing less money on the deal. In 2011, the state received about $121.7 million, “You have to remember, this $1 million less than the year before. While that figure soared to almost $127.8 is the hub of Class II,” Morago million in 2012, officials attributed the rise to more total games, not more revsays. “This is where Class II

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River Spirit is growing. The Muscogee Creeks’ largest casino is now undergoing a $250 million expansion that will include Jimmy Buffett’s popular Margaritaville brand.

grew up, and the market dictates a lot of Class II play. People here like those machines. In fact, when tribes first put Class III machines on the floor, people were looking for their Class II machines. It’s all about what the player likes.” Of course, she adds, “The tribe does not share revenue with the state on Class II revenues, so that means more money for them to increase their economic development opportunities.” “Class II is still very, very popular,” agrees Pat Crofts, CEO of the River Spirit Casino, one of three tribal gaming halls in Tulsa. “People in Oklahoma grew up on Class II games. That’s what they like, that’s what they’re comfortable with. And it’s the customer who decides what you have on your floor.” McBride points out that Class II games “remain extremely important for leverage purposes, in terms of negotiating compacts as well as populating a gaming floor and maximizing profits. “Certainly Class III is very important—it’s exciting, and it’s the residual category of gaming that (encompasses) everything beyond Class I and Class II, which are pretty narrowly defined categories,” he says. “But again, when the states are requiring onerous terms to reach a bargain with tribes for Class III gaming, it makes Class II all the more important as a fallback position.”

Good Timing For now, prudent growth—primarily upgrades and additions to existing casinos—still makes sense in Oklahoma. Last year, the Chickasaw added 54,000 square feet of gaming space and a new hotel tower at WinStar, one of the largest casinos on the planet on the Oklahoma-Texas border. On the opposite end of the scale, the tribe also opened its 18th property, the $20 million Salt Creek Casino near tiny Pocasset, Oklahoma (population 158). River Spirit also is growing. The Muscogee Creeks’ largest casino is now undergoing a $250 million expansion that will bear Jimmy Buffett’s popular Margaritaville brand. Crofts believes the timing is right. “We would not be doing a project of this size if it was just going to make a bigger box; that would just ratchet up the competition among the three casinos in this area. We would be cutting up the same pie in more pieces and spending more marketing dollars doing it.” The new Margaritaville, he says, “is definitely going to grow the market.” With a new hotel, a global brand and a location near major highways and an international airport, the property will be positioned to move beyond a locals patronage (up to 90 percent of customers come from within a 75-mile radius) to attract a broader clientele, and the money-making Margaritaville name will go head to head with another major brand: the Hard Rock, formerly the Cherokee 20

Global Gaming Business AUGUST 2013

Casino Resort. Mark Fulton cites recent impressive growth at the Cherokee Nation’s eight casinos, which generated revenues of $715 million in the last fiscal year—$532 million from non-gaming amenities including entertainment, and $122 million in gaming profits a year-over-year increase of 8.4 percent. To its benefit, the company chose to grow during the recession, says Fulton, starting with the transition of its flagship property to the Hard Rock. And it’s still growing. “In the last few years, we’ve added 350 hotel rooms, built a 2,700-seat music venue, and expanded the gaming floor,” Fulton says. The Cherokees have also built a bigger property with a hotel at West Siloam Springs, opened a temporary casino and then built a permanent casino in Ramona, and built a new casino in Fort Gibson. “It’s a competitive market, so we’re always looking for ways to better differentiate our offerings, whether it’s through improvements or adding more amenities,” Fulton says. “There’s still room for growth.”

Guarding the Flank But the market is not unlimited, and some tribes are quietly branching out into other enterprises, not only to prepare for the possible contraction of casino revenues, but also because it’s good business. No one in Indian Country—in Oklahoma or elsewhere—wants tribal gaming to become what has been termed the “new buffalo:” a single, seemingly boundless source of economic supply that ultimately proves impermanent. “We have seen tremendous double-digit growth for many, many years,” says McBride. “But I think we’re going to see the growth narrow and be smaller if not flat or even diminished in the future, and tribal governments need to find more diversified ways to serve their people and fund governmental programs.” Colorado’s Ute tribe, for example, “is very successful in terms of natural resource development—oil, shale, natural gas energy… They developed one of the largest portfolios of investments as a result of their success (in gaming),” says McBride. “Others developed manufacturing facilities, maximized 8(a) government contracts, got into high-tech ventures—they’re using gaming as an economic engine to help fuel other business activity.” “There is absolutely a lot of conversation going on about it,” says Crofts. “The Chickasaw are hedging their bets a little bit by buying one or two racetracks in Texas. The Creek Nation has purchased shopping centers. Several of the larger tribes are looking for other opportunities around the country. They’re into all different kinds of businesses, but it’s been enabled by gaming, which has given them the opportunity to spread their wings and diversify.”

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The

Bally BUZZ

Bally Technologies uses games, systems and new technologies to usher its casino partners into brave new worlds By Frank Legato

t was a scene that has been repeated at casinos across the country—the CEO of one of the largest casinos in the world, Mohegan Sun, standing sideby-side with the head of one of the top gaming technology suppliers in the industry. For anyone who has been following the slot sector the past few years, it’s almost unnecessary to identify that slot-maker, Bally Technologies, which Mohegan CEO Bobby Soper heralded as a “tremendous partner.” Bally President and CEO Ramesh Srinivasan returned the compliment. The scene was repeated three times at Mohegan Sun just in the first half of this year. Bally set three world records at Mohegan with its iVIEW Display Manager (DM) networked bonusing system and its Elite Bonusing Suite (EBS) of applications. In April, the company set two Guinness World Records with a single event, setting the mark for “World’s Largest Slot Tournament” and “Most Slot Machines Running the Same Game Simultaneously,” using the “DM Tournaments” EBS application. In May, it was the “Largest Virtual Race” using the “Virtual Racing NASCAR” application. In June, Mohegan Sun hosted Bally’s 10th annual Systems User Conference, in which casino operators from around the country learn how to best use these new technologies. While these particular happenings were at Mohegan Sun, they could just as easily have been at Pechanga Resort or Barona Resort in California, the South Point in Las Vegas, or the Golden Nugget in Atlantic City. While most manufacturers complete their R&D efforts and demonstrate new technologies in a corporate showroom, Bally does it all on casino floors, and makes its customers an integral part of the development process. “All through the eight and a half years I’ve been at Bally, if you think about how our products have evolved, our customers have absolutely played the primary role,” says Srinivasan, who took the reins as Bally CEO from 22

Global Gaming Business AUGUST 2013

Board Chairman Richard Haddrill last December after serving a year and a half as the company’s president and COO. “Fundamentally, we define ourselves as a customer/market-centric, engineering-driven organization. Practically everything we do is what our customers want us to do.” This credo has led Bally, the world’s oldest slot manufacturer, to remarkable heights over the past several years—and not just in its industry-leading systems division, which was headed by Srinivasan from 2005 until he took over as president and COO in March 2011. Bally has expanded its game development operation to include multiple studios in India, California, Phoenix, Sydney, Australia, and Nice, France, in addition to the traditional R&D centers in Las Vegas and Reno. Feeding innovation to all these system and game R&D centers is another element unique to Bally, the “Innovation Lab.” Headed by Bryan Kelly, senior vice president of technology, the lab’s main purpose is to scout new technologies in the overall business world and

Front row: Mohegan Sun President and CEO Bobby Soper, Bally Technologies President and CEO Ramesh Srinivasan Second row: Bally Technologies Vice President of System Sales Tom Reilly, Mohegan Sun Vice President of Marketing and Promotions Bethany Seidel, Bally Technologies Senior Vice President of Sales Support and Customer Consulting Bruce Rowe Third row: Bally Technologies Senior Vice President of Asia-Pacific/Africa and Managing Director of Bally India Srini Raghavan, Bally Technologies Vice President of Corporate Marketing Dan Savage, Mohegan Sun Vice President of Slot Operations Frank Neborsky, Bally Technologies Senior Vice President of Technology Bryan Kelly Top row: Bally Technologies Senior Vice President of Operations and Human Resources Gary Kapral, Mogehan Sun CIO Chris Friday, Mohegan Sun Director of Slots Max McAllister, Bally Technologies Senior Vice President of Games Derik Mooberry, Bally Technologies Vice President of Client Services Sridhar Laveti

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The Bally Systems User Conference featured workshops conducted by Bally officials including Senior Vice Presidents Bryan Kelly and Bruce Rowe.

apply them to Bally slot games. Meanwhile, Bally has expanded its footprint across the world, opening up new markets in Europe, Australia, Asia, Africa and Latin America. In addition to new venues for its gaming machines, these days, Bally is devoting itself to the next big transformation in the gaming world—taking slot content to online, mobile and social venues. Following a series of technology-based acquisitions, the Bally Interactive division has created a platform that promises to seize the i-gaming moment by connecting all the technology pieces to create a seamless transition of gaming content across brick-and-mortar, online and mobile outlets. —Ramesh Srinivasan President and CEO, Bally Technologies “Taking our products across multiple channels is a big opportunity for us,” says Srinivasan. “We are making sure that all the products we are creating now integrate well across all the channels.” R&D and engineering-driven,” he says. “So, the first thing we did was built up our R&D strength. Forty-six percent of our employees were R&D employees Content is King then; today, 56 percent of our employees are R&D employees, across all divisions. While Bally is branching out across all media, it all begins with the content being We’ve made ourselves into more and more of an engineering-driven organization.” produced by the game studios. “Content is king,” says John Connelly, vice presiOn the game side, that has manifested itself in an expansion of the sources of dent of business development. “The ability to access that content is going to be game content. As more game development studios have been created around the extremely powerful, and is going to be a significant determining factor to those world, game development efforts—headed by Game Development Vice President companies supplying technology in the future.” Mike Mitchell—have benefited from a stable of new talent. Some, like former The ultimate goal, Connelly says, is to provide the same content to the Atronic game guru Jason Stage and talented slot designer Michael Gottlieb— player, whether that player is in the casino, using a tablet or PC, or playing on a whose name you may recognize from his grandfather’s legendary pinball busismart phone. However, while the company continues to work toward that goal, ness—are now part of the Bally team, but Mitchell’s crew is always open to new the evolution of Bally content already is being seen on the front lines of brickideas from third-party designers as well. and-mortar casino floors. “We’ve recruited a lot more talented people, and we’re also making use of exAnd that business is booming, led by gaming operations, which topped all ternal sources,” says Srinivasan. “There are a lot of external third-party content divisions in the most recent quarter with $102 million in revenue, thanks to hits providers who have done great work in the industry before. We are making much like “Pawn Stars,” based on the popular reality show; “Michael Jackson King of better use of them than we did before. Pop,” with its booming sound chair immersing the player in the hits of the late “Fundamentally, at our core we are a product company. And our success is entertainer; and NASCAR, which features eight top stars of the NASCAR cirgoing to depend almost entirely on how well we create, service and support great cuit and gives players a chance to play on the “team” of their favorite driver. products.” The strength of Bally’s gaming operations also is reflected in the fact that for the quarter ended in March, the company’s installed base of wide-area progresTeam Approach sive slots was up a whopping 73 percent year-on-year. The game studios themselves have a lot of help from other company divisions. For-sale machines have been strong as well, with sales for the third quarter Kelly’s Innovation Lab, for instance, has produced a variety of game-play mechanup 8 percent on revenues of $86 million, including nearly 4,100 new units sold ics and physical game additions that have distinguished Bally from other slot-makin North America alone. ers—from the “iDeck,” an LCD touch-screen button panel that has replaced According to Srinivasan, the success of the company’s game division can be mechanical buttons and doubles as a joystick-like device, to game mechanics like traced to the same factor in its system success—an emphasis on R&D. “U-Spin,” in which video bonus wheels are spun by touching the screen, the wheel “When you think about the vision we had eight years ago, we knew it was all spinning at a speed that mimics the amount of force applied to the spin.

”

Fundamentally, at our core we are a product company. And our success is going to depend almost entirely on how well we create, service and support great products.

“

AUGUST 2013 www.ggbmagazine.com

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In April, Bally set two Guinness World Records with a single event at Mohegan Sun, setting the mark for “World’s Largest Slot Tournament” and “Most Slot Machines Running the Same Game Simultaneously,” using the “DM Tournaments” EBS application.

”

We’re working on both the business strategy and the technological strategy to move the company forward in a multi-channel world, and researching how we use each of these channels to engage the players. —Bryan Kelly Senior VP of Technology, Bally Technologies

They’re all results of trips by Kelly and a relatively small team to tech conferences across the country, during which they scope out innovations that might be applied to the slot machine. “We try to focus in on maybe 10 different types of innovation per year, covering any different touch points in the casino industry,” Kelly says, “and then we try to pass as many of those as possible on to the mainline groups and get them productized.” Among the newest innovations coming out of Kelly’s group is the “Level 3” version of the iDeck, which will in turn fuel the development of more games; a technology that will allow players to use their gaming devices to connect with Facebook or other social sites; new improvements to the Bally Pro Sound Chair; and play mechanics such as “U-Steer.” In all cases, says Srinivasan, the technology addresses the needs of the customer. “One of the reasons for that is that all of us know this industry still has a lot of catching up to do in terms of effective use of modern technology,” he says. “Therefore, there is a lot of pent-up customer demand. Our customer base sees technology all around them, so there are still a lot of demands and needs they have from vendors like us that need to be fulfilled. We’ve closed that gap between what our customers need and what they have considerably in the last few years, but there is still a lot to do. “The other reason is that over the last few years, the operator side of the gaming business has become a heck of a lot more competitive than it was before, and therefore, their demands in terms of products, solutions and technology-related modules has increased.”

Network Evolution The other side of the technology coin for Bally is systems, where the company has led the industry for years. Bally’s core systems products—ACSC and CMP casino-management systems, and SDS slot-management systems—have served as a launching point for a suite of products that is still growing. Drawing the most attention of late, of course, has been the EBS applications 24

Global Gaming Business AUGUST 2013

“

using Bally iVIEW DM. The suite of networked bonuses ranges from games, bonuses, and messages sent to individual players or groups of players to instant slot tournaments covering thousands of machines of various manufacturers, to Virtual Racing, which can beam a video horse race or NASCAR race to all the machines in a casino (players qualify through minimal play to pick a horse or a NASCAR driver, and all who pick the winner split a cash prize). It’s all done through linking the games in a casino to an Ethernet network, giving casinos extra horsepower to tailor their marketing programs. It is the marketing side of server-based gaming, and Bally has been breaking new ground in the space for years. Bruce Rowe, Bally’s senior vice president of customer consulting and sales support, notes that the marketing advantages of networked gaming have gained more attention than the original download-and-configuration purpose of the technology—dynamic changing of game content—because it can capitalize on player data to give the operator new ways to build customer loyalty and raise overall revenue. “It’s interesting we’re now almost a decade since the real discussions began concerning server-based gaming,” says Rowe, “and at that time, there were really two different viewpoints that helped us craft our vision: First, we needed a practical way to deliver these solutions across all manufacturers, and also across a multitude of generations of technology provided not only by Bally but every slot manufacturer. “Second, focusing on marketing first, as opposed to dynamic slot revenue management or access to massive game libraries, was what was most needed by the industry. What was really needed was a way to differentiate the products a customer had on the floor from the same products competitors had, by using marketing applications. You can make games more efficient to download, you can make changing games in real time more efficient, but the real effectiveness comes in marketing.” While the huge DM Tournaments and Virtual Racing events have pre-

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dictably gotten most of the press, the EBS suite of bonusing applications is full of structure for the Bally iGaming Platform, including Bally Mobile, all residing on modules that allow operators to customize bonuses, setting triggers for rewards to Bally’s back-end core systems in an open-ended architecture that permits content players while they are at the machines, instead of weeks later when they go to the from any manufacturer to be added to the front end. mailbox. “The iGaming Platform in the back end integrates with our core systems, In addition to the high-profile events, EBS has applications like U-Spin and in the front it is completely open,” explains Srinivasan. “We want to give our Bonusing, which sends an interactive game like Skeeball to the player’s screen, customers the ability to choose whatever front end they want—whichever poker with the touch mechanic used to aim and push the ball down to one of several product they like, whichever casino gaming set of solutions they like, whichever prizes; or Bonus Tournaments, which allows the casino to pick a group of players table content, whichever bingo content. We want to leave that open to our cusfor a random slot tournament, which proceeds during normal game play—the tomers. And the iGaming Platform will take care of the back end completely. We player’s hitting of the spin button on the regular game racks up points in the tour- want to provide them a solid core on which they can place any content they nament simultaneously, which means coin-in continues during the contest. want.” Other modules include Power Winners, a time-based mystery progressive; Kelly’s Innovation Lab and Connelly’s business-development team have been Dynamic Random Bonusing, which gives players a code to enter for a guaranteed working together to acquire technology and/or companies that will enable operaprize, with many winning small but one winning big; and Flex Rewards, which al- tors to complete the circle from brick-and-mortar casinos through all of the other lows the casino to create pools of players who are awarded various bonus games, distribution channels available now in much of the world and soon to be availwith the prizes rising according to tier level. able in the U.S. Rowe calls it “individualized reinvestment” in the players while they are at the “I’m John’s counterpart,” Kelly says of Connelly. “He’s the business line machines, which builds loyalty the same way as direct mail, but in real time. manager for the interactive group, with a business development strategy. I’m his “I think direct mail will always be an important part of our business,” Rowe technical counterpart. We’re working on both the business strategy and the techsays, “but what this does that is significantly different is that it allows you to use nological strategy to move the company forward in a multi-channel world, and that same marketing money when you want to communicate with that customer researching how we use each of these channels to engage the players. in real time, on an individualized basis. “John and I are together tag-teaming, going out hunting the companies, and later integrating them into the mainline business units.” “Instead of knowing that 5,000 people had a bad experience 30 days ago and Connelly handles much of the merger and acquisition work for Bally, and dropping them an offer to come back, you’re able to use that marketing money real-time, to recognize their loyalty to your casino, or to reinvest at the point of like Kelly says he wears “multiple hats,” including a dedication to achieving that dissatisfaction. We’ve done that for years in table games, where we’re able to immediately respond to a gamer’s experience in the pit, and we’re now able to do that on the slot floor.” As with all other areas, technology is being tweaked to improve EBS. For instance, Ted Keenan, senior director of product management for systems, said in a session at the Systems User Conference that future versions of Virtual Racing will —John Connelly VP of Business Development, Bally Technologies let the operator set odds, giving bigger prizes to horses or cars that rarely win. Additionally, one of the most notable revelations at this year’s User Confermulti-channel world for Bally and its customers. Connelly says the Interactive dience was what Bally calls “Super Slotline,” a technology that enables EBS without vision’s goal is to allow operators to take full advantage of i-gaming, social gamthe operator having to rip up carpets and replace wiring with Ethernet cables. ing and the mobile world in a single network, all elements—including carded Rowe calls it a “faux Ethernet” that allows the networked capabilities of EBS for play in the brick-and-mortar casino—part of the iGaming Platform. around $100 per slot machine—as opposed to around $500 per slot for complete Connelly says the network, resting on Bally core systems, will give U.S. operconversion from serial to Ethernet. ators a big advantage in the worldwide i-gaming market, because the owners of the U.S. internet casinos will be those same land-based casino operators. The Interactive Equation “Sometimes you’re fortunate enough to predict things that are going to hapWhile the Innovation Lab continues to search for ways to improve the Bally pen in the future, and if you’re correct, it gives you a strategic advantage,” Congames on the floor, for the past three years, Kelly, along with Connelly, have been nelly says. “And in this case, Bally aggressively invested several years ago with the doing double duty putting together the technology that now forms the Bally Inbelief that traditional casinos in the future would be receiving online gaming literactive division. censes versus the historical model of Europe, where in many cases traditional casiThe goal of Bally Interactive is to provide customers a way to offer not only nos were not receiving the licenses. Bally content, but content from all manufacturers who supply their brick-and-mor“For that reason, we created a third distribution channel to our iGaming tar floors, across all distribution channels—namely, on internet casinos, on socialPlatform, whereby we’ve integrated the core systems of the web-based casinos. So gaming sites, and on the player’s own mobile device, be it a smart phone or tablet. in essence, you have three channels by which to not only distribute content, but Through a series of tuck-in acquisitions such as San Francisco-based to attract players across different mediums. And we believe that is a significant MacroView Labs, with its market-leading, cloud-based mobile platform, and the strategic advantage for the traditional casinos in the United States which are internet gaming platform of Malta-based Chiligaming, Bally created the infrabeing granted these licenses. By interfacing the bonusing, the player tracking, the

”

By interfacing the bonusing, the player tracking, the rewards systems and applications into our iGaming Platform, we’ve now really created a differentiating factor by which they can compete online.

“

Global Gaming Business AUGUST 2013

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”

What was really needed was a way to differentiate the products a customer had on the floor from the same products competitors had, by using marketing applications. You can make games more efficient to download, you can make changing games in real time more efficient, but the real effectiveness comes in marketing.

T HINK T THINK THERE HER E IIS S AB BET E T TER T ER A AGENCY? GENC Y ?

“

—Bruce Rowe Senior VP of Customer Consulting and Sales Support, Bally Technologies

rewards systems and applications into our iGaming Platform, we’ve now really created a differentiating factor by which they can compete online.” Aside from the ability to award points redeemable in the casino for internet gaming and social play—and vice versa—the iGaming Platform, says Connelly, gives U.S. operators a way to exploit their other inherent advantage in the igaming market: their databases. “One of the greatest costs online, versus the traditional casino, is to go out and find players online and attract them to your online casino,” he says. “This is a huge advantage to the traditional casinos if you’re able to integrate their core systems. Because their core systems, in many cases, have millions and millions of players they have acquired over the years that are in their database. “By allowing the online platform to access that database and ensure those players have a seamless experience—meaning they’re going to be bonused and treated the same in the online world as they have been in the brick-and-mortar casino—we’ve created that bridge, which up to this point hasn’t existed. We feel that is going to be very powerful in the future.” “To be the best content and technology provider to the gaming industry, we need to make sure we enable our customers to succeed in all the channels that they choose,” says Srinivasan of the Bally Interactive mission. “We are focusing on integrating all these channels together, so that whatever channel or combination of channels our customers choose, our products will provide them a good solution.” Meanwhile, Bally has been busy building partnerships across the i-gaming world, the latest being agreements to place Bally content on the internet casinos of Paddy Power, iSoftbet, In-

terblock, William Hill, Rank and Mr. Green. More partnerships are on the way, not only with i-gaming operators but with other slot manufacturers—Kelly notes that social gaming has already proven that players want social or internet sites to mirror the floors of the brick-and-mortar casinos, and the slot titles they recognize. “The consumer is going to get what they demand on the floor, and they’re going to demand it on those other channels,” Kelly says. Finally, Bally will soon be the top supplier of specialty table games in the U.S. As we went to press, the company announced that it has entered into a definitive agreement to acquire SHFL entertainment, Inc. at a per-share price of $23.25 in cash for total consideration of approximately $1.3 billion. The transaction, approved unanimously by the boards of both companies, brings SHFL’s stable of specialty table games to Bally both in casinos and online. Srinivasan is quick to credit the abundant talent of Bally—many long-term, at a company with one of the industry’s lowest turnover rates—as the ones achieving the company’s vision. “Ultimately, a great company is just the sum of its great people,” Srinivasan says. The CEO says he is confident those people will take Bally and its customers into the new multi-channel gaming world. “Innovation is the key,” says Srinivasan. “It is a matter of creating more opportunities for our customers to succeed, and to make it more fun for their players. The networked floor gives us the base, and we have continuous innovation on products like iVIEW and EBS, to increase the possibility of success for our customers. “To be a truly great company, we need to be the enabler for our customers’ success.”

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AUGUST 2013 www.ggbmagazine.com

Winds

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THE

Answer ISBlowing IN THE

Pokagon Band of Potawatomi Indians construct a powerful brand and profitable casinos that benefit all tribal citizens BY BLAINE DeGRACIA

Four Winds Dowagiac rendering

he positive economic impact of the Pokagon Band of Potawatomi Indians spans well beyond its tribal citizens and into the surrounding geographical area of southwest Michigan and northern Indiana. Recent community development initiatives have included diversifying its industry opportunities, as well as further development of ancestral lands in South Bend, Indiana. In 2012, the tribe contributed nearly $6.7 million in local revenue sharing under its Class III gaming compact with the state of Michigan. Notably, in April 2013, the tribe opened Four Winds Dowagiac, the second satellite gaming facility to its parent casino located in New Buffalo, Michigan.

FOUR WINDS NEW BUFFALO In August 2007, the tribe’s first casino property opened its doors to the public. The casino was the first in southwest Michigan, an area which was traditionally serviced by the commercial riverboat gaming facilities located in northern Indiana and Illinois. Situated on a 675-acre parcel of land just off of Interstate 94 near the Indiana border and less than an hour drive from downtown Chicago, the New Buffalo property features a spanning main entrance complete with vaulted ceilings of a rotunda complete with stone fireplaces on each side. The 130,000-square-foot gaming floor is home to over 60 table games and 3,000 slot machines, and is directly connected to 415 hotel rooms and suites. Last year’s completion of Phase II included a 1,500-seat, multi-use event center, a new 250-room hotel tower and the Hard Rock Cafe Four Winds. The prop28

Global Gaming Business AUGUST 2013

erty currently features four different destination restaurants, ranging from a world-class steakhouse to a 500-seat buffet. Conveniently located, the 12,000-square-foot Hard Rock Cafe Four Winds is able to seat more than 275 guests while spanning two floors and displaying more than 150 pieces of rock ‘n’ roll memorabilia from Hard Rock’s collection. “Hard Rock Cafe Four Winds is an ideal place to dine and to take in great live music while enjoying the unique rock ‘n’ roll experience that only the Hard Rock can provide,” says Matt Harkness, chief operating officer of Four Winds Casinos.

SATELLITE GAMING PROPERTIES Under its amended tribal-state gaming compact with Michigan, the tribe negotiated the opportunity for two additional Class III gaming facilities within southwest Michigan. The first of the tribe’s satellite casinos, Four Winds Hartford, was built in 2011 in Hartford, Michigan, approximately 45 miles northeast of its parent New Buffalo gaming facility. It contains approximately 52,000 square feet of space, and features over 550 slot machines and nine table games. In addition, it houses a Timbers Fast Food & Deli. Most recently, on April 30, the tribe’s third gaming facility opened in Dowagiac, Michigan. The smallest of the Four Winds properties, Four Winds Dowagiac includes 300 slot machines and four table games, in addition to a Timbers restaurant. The property also features a non-smoking area

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Four Winds New Buffalo

EXISTING FACILITY EXPANSION Under the tribe’s compact with the state of Michigan, all three existing Four Winds casino properties may be expanded upon in the future. Currently, the tribe’s two satellite properties are authorized to feature 1,000 slot machines at each location. Four Winds Hartford currently houses approximately 550 slot machines while Four Winds Dowagiac holds 300. According to Wesaw, the facilities were built with an easily removable wall if necessary and depending on market conditions. There are currently no expansion plans for either facility. In addition, Four Winds New Buffalo does not have any restrictions regarding expansion, and last year Phase II was completed, debuting a new hotel tower, event center and Hard Rock Cafe. According to Wesaw, there are hopes for an additional hotel tower and more amenities in the future, depending on market conditions. The new Dowagiac casino brings the number of tribal casino properties in Michigan to 23, vying for players along with Detroit’s three commercial casinos.

INDIANA PLANS

with 20 slot machines. “Dowagiac is home to the Pokagon Band of Potawatomi Indians Tribal Government as well as many Pokagon citizens, which made it the natural location for our newest property,” says Pokagon Band of Potawatomi Indians Tribal Chairman Matthew Wesaw. Additionally, all three of the Four Winds Casino locations, along with more than 300 other tribal casinos across the nation, belong to the 16-state Native American progressive gaming network. The Four Winds Casinos also offer a signature player loyalty club, the W Club, across three gaming properties.

The Pokagon Band of Potawatomi Indians is the only federally recognized Native American tribe in the state of Indiana. In June, the tribe opened a local South Bend office to serve its tribal citizen base, and enhanced its presence in the area, which has been home to the tribe for at least 800 years. In August 2012, the Bureau of Indian Affairs published a Notice of Intent to Prepare an Environmental Impact Statement, in regards to a proposed plan by the tribe to develop land in South Bend for economic development projects. The proposed development includes plans for 44 housing units, multi-purpose and health facilities, and a Class III gaming facility with ancillary structures. “The three-part application, meaning government offices, residential units and economic development, has been made and is now in the hands of the federal government,” states Wesaw. “But there are no current plans for a casino at the South Bend location. It is simply a possibility by virtue of the way that the application was filed. Our focus is, and will remain, government services and residential units for our tribal citizens.” The tribe currently holds approximately 165 acres in South Bend that it is seeking to place into trust with the federal government to establish a tribal land base in Indiana. There are currently no tribal casinos in Indiana, though there are 13 commercial casinos in the state.

SOCIAL AND CHARITABLE CONTRIBUTIONS As a result of the successful operation of the tribe’s gaming facilities, the tribe has paid more than $70 million to the Michigan Economic Development CorporaAUGUST 2013 www.ggbmagazine.com

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Four Winds Hartford

tion and more than $24 million to local governments in the New Buffalo area since 2007. Notably, in 2012, the Pokagon Band made $5.6 million in contributions to the New Buffalo Local Revenue Sharing Board and $1 million to the Hartford Local Revenue Sharing Board pursuant to the tribe’s compact with the state. Much of this funding is used for parks, road improvement and school-related programs such as athletics, music, art and technology. In addition to its mandated contributions to the state and local governments, the tribe made nearly $35 million in additional contributions to the economy. This includes $25 million spent by the tribe with 3,132 vendors nationwide as well as $2.6 million in grants from The Pokagon Fund, which is supported by electronic gaming revenue from the tribe’s Four Winds New Buffalo. The tribe and local governments established the Pokagon Fund, which receives a percentage of funds derived from electronic gaming revenue. It is comprised of a seven-person board that receives applications for many of the same services noted above and recently began granting scholarships to those in need. The mission of the Pokagon Fund is to enhance the lives of the residents in the New Buffalo region through the financial support of local governments, nonprofits, charities and other organizations. (For more information, visit pokagonfund.org.) This fund is wholly separate from the state-mandated taxes derived under the tribe’s compact. “We felt it was important to make additional investments in the communities of Southwest Michigan and Northern Indiana through our Pokagon Fund and other direct donations to various charitable causes and events,” says Wesaw. “The Pokagon Band also makes it a priority to support local vendors and hire locally for our gaming operations and other ventures. Throughout the year, we have also worked to improve the environment through initiatives including our water quality program and our wetlands reserve program.” Other specific community outreach efforts include the annual Four Winds Invitational golf tournament, which donates proceeds from the event to Memorial Children’s Hospital. This year marked the second year of the Invitational, which featured a field of professional women golfers from around the world competing for the largest purse offered to players on the Symetra Tour—Road to the LPGA. “Last year, along with the support of several local sponsors, we raised $53,000 to support the purchase of a life-saving pediatric ambulance for Memorial Children’s Hospital, which will touch the lives of more than 500 critically ill and injured children each year,” says Wesaw. “We also donated $10,000 to the Ronald McDonald Family Room last year. We are extremely pleased that this year we will support the purchase of a neonatal incubator transport unit, which will further enhance Memorial Children’s Hospital’s ability to serve the community.” The tribe is also actively involved with assisting its citizens. Wesaw remarks, “We developed a philosophy about four years ago, under many of the same council members serving today, to focus primarily on the health, education and housing for 30

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Pokagon tribal citizens.” Wesaw says the Pokagon tribal citizenry must first and foremost be healthy in order to be confident, happy and self-sufficient. The tribe plans to break ground on a $12 million consolidated health clinic later this summer, and recently hired its first citizen doctor to serve the tribe. Educational efforts include scholarship opportunities for tribal citizens, which includes tuition and ancillary cost assistance. Wesaw notes that the tribe does not discriminate based upon age, and encourages its members to continue their education at any age. Additionally, the tribe has engaged a commercial tutoring agency to offer services to any of its tribal citizens who live throughout the greater United States. In connection with the opening of Four Winds Dowagiac, Wesaw says 32 residential units are in the process of being finalized to be offered to tribal citizens in that area. In addition, residential units will be built next year near the Four Winds Hartford Casino, and once its South Bend federal trust application is finalized, residential housing will begin to be built there.

DIVERSIFICATION EFFORTS In an effort to diversify itself outside of the casino industry, the tribe announced this year that it will proactively begin pursuing brick-and-mortar businesses outside of gambling to build economic diversification into its portfolio. The tribe’s development arm, Mno-Bmadsen, was chartered in 2007 as a wholly owned, unincorporated instrumentality of the tribe, which is afforded all of the privileges and immunities of the tribe, including immunity from taxation, regulation and unconsented suit. According to the Mno-Bmadsen, it “serves as an engine for the economic development efforts of the Pokagon Band of Potawatomi. Since its creation, the tribe has embraced a network of self-sustaining trade and self-reliance within its community. Mno-Bmadsen is the next step in sustaining the tribe through mergers, acquisitions and investments that will allow it to continue to thrive in the centuries to come.” Under its charter, Mno-Bmadsen ultimately seeks to develop its resources in a manner that produces maximum long-term value for the tribe’s citizenry while establishing a secure investing environment. Subsidiaries and recent acquisition projects of Mno-Bmadsen include an architecture and engineering company. Additional targeted industries include heath care, elder care and medical devices, manufacturing, green/sustainable industries, human capital development, information technology, gaming suppliers and hospitality, food production, government contracting, and commercial real estate. Its most recent acquisition includes Accu-Mold LLC, a Portage, Michigan-based manufacturing and engineering firm. The Pokagon Band of Potawatomi has shown that, through sound leadership and innovative planning, sustainable social, cultural and economic benefits can be obtained to service its tribal citizenry as well as its host communities, not only now, but for many future generations to come. Their economic footprint has grown substantially since the opening of their first gaming property in 2007, and there do not appear to be any signs of a slowdown under current leadership and expansion efforts being made by the tribe. Blaine DeGracia is on the staff of Regulatory Management Counselors of East Lansing, Michigan. He can be reached at degracia@rmclegal.com.

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Enlightened

Leadership T

he Pokagon Band of Potawatomi Indians is led by Chairman Matthew Wesaw. Wesaw has spent much of his career in public service and, until his retirement in 2001, he served with the Michigan State Police. During this time, Wesaw served as vice president of the Michigan State Police Troopers Association. Additionally, Wesaw served as the director of government relations for the Michigan State Police Troopers Association until March of 2008. In 2004, Wesaw was appointed by then-Michigan Governor Jennifer Granholm to the Michigan Civil Rights Commission, becoming the second Native American to be appointed to the commission. He now serves as the commission chairman. Wesaw was elected as tribal chairman of the Pokagon Band of Potawatomi Indians in 2009. He also serves as the president and CEO of the Pokagon Gaming Authority, the governing body that oversees the tribe’s Four Winds Casinos. Also in 2009, Wesaw was elected by the leaders of the Midwest’s 37 federally recognized tribes to the position of area vice president of the National Congress of American Indians, and in 2010, he was selected to the position of recording secretary of the NCAI. Notably, in 2012, Wesaw was selected for the Tribal Leader of the Year Award by the Native American Financial Officers Association (NAFOA). The award is presented to an individual who has led a tribe in a major economic development project. In 2011, the Pokagon Gaming Authority closed on a $410 million senior secured credit facility, the proceeds of which were utilized to refinance bond debt and fund a hotel expansion for the Four Winds Casino in New Buffalo. “It is such a privilege to honor and recognize the excellent work Chairman Wesaw is doing to benefit Indian Country,” says Bill Lomax, NAFOA president. “He is truly an innovator and an inspiration.” “While I appreciate the award, I believe the recognition really identifies what we, the Pokagon government’s elected officials, and our entire staff have accomplished,” says Wesaw. “We have all worked hard to exhibit a strong positive working atmosphere with our citizens and partners.” The Four Winds casino operators also were instrumental in the success of the tribe’s gaming ventures. Matt Harkness is chief operating officer for all three of the Four Winds gaming facilities. His tenure with the tribe began with the opening of its first casino, Four Winds New Buffalo, and he has played an active role in the opening of the Four Winds satellite casino properties. He is accompanied by Frank Freedman, who was recently named general manager of Four Winds Hartford and Four Winds Dowagiac, and continues to serve as assistant general manager of Four Winds New Buffalo. “It has been a great pleasure working closely with both Matt and Frank throughout the years,” says Wesaw. “Their work ethic, attention to detail, and dedication to customer service has set the tone for the entire staff at Four Winds Casinos, which is a big reason why we have had the success we’ve had.” Prior to his involvement with the Four Winds Casinos, Harkness began his gaming career in 1979 as a craps dealer at Resorts International in Atlantic City. He was also a part of the opening team at the original Golden Nugget in Atlantic City, owned at that time by Steve Wynn. He ended his 15-year tenure with the Trump Organization as the general manager at Trump Plaza, a position he held for five years.

Global Gaming Business AUGUST 2013

“

WE HAVE ALL WORKED HARD TO EXHIBIT A STRONG POSITIVE WORKING ATMOSPHERE WITH OUR CITIZENS AND PARTNERS. —Chairman Matthew Wesaw President and CEO, Pokagon Gaming Authority

—Matt Harkness COO, Four Winds Casinos

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r a P r ot Power By Roger Gros

Margaritaville Bossier City opens with potential to dominate market

he power of the Margaritaville brand has become apparent throughout the past several years. The first iteration of the distinguished restaurants and entertainment brand in the gaming industry came in 2011 when a Margaritaville restaurant and themed gaming area opened in the Flamingo Hotel in Las Vegas. Replacing a lightly used corridor, the area opens onto the Las Vegas Strip, and was the company’s first foray into gaming. Along with singer Jimmy Buffett, the partners in the project used the Flamingo as a gaming experiment. In 2012, Margaritaville Biloxi opened, the first new casino to open in that market since the devastation of Hurricane Katrina. Although the performance of the property has not been up to expectations because of a variety of reasons (poor location, no hotel, continuing bad market), it still has created a legion of Parrothead followers. In May of this year, a Land Shark Grille, Five O’Clock Somewhere Bar and other Margaritaville amenities combined with a themed section of the casino floor opened at Resorts Atlantic City. Owner Morris Bailey was looking for a way to attract more players, and it has apparently worked, with the Margaritaville section of the property, at least, quite busy. But the flagship of Margaritaville’s casino brand opened in mid-June with the debut of the Margaritaville Bossier City, a fully themed, brand new casino hotel in Louisiana’s largest gaming market. Margaritaville was the first entirely new casino hotel to open in the market in a dozen years, and early results indicate that it is a tremendous success, with the potential to dominate what was a slumping gaming jurisdiction. 34

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Market Maker The Shreveport/Bossier City market has the largest concentration of casinos in Louisiana. Six casinos—Eldorado and Sam’s Town in Shreveport, and Horseshoe, Diamond Jack’s and Boomtown, along with Margaritaville, in Bossier City—plus the Louisiana Downs Racino have scuffled for market share recently. The improvement of the Oklahoma Indian casinos has seriously impacted the Dallas-Fort Worth market, at one time the principal feeder for Shreveport/Bossier City. The Dallas metroplex is at least a three-hour drive from the Louisiana casinos. Some of the newer and larger Oklahoma casinos are just an hour and a half from Dallas. According to Paul Alanis, CEO of Bossier Casino Venture Inc.—which developed the Margaritaville Bossier City with co-owner and Board Chairman Billy Trotter—the casinos of Shreveport/Bossier City had not reinvested in

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Clockwise: Ribbon-cutting opening ceremony; pool; rolling the first dice at opening cermony; suite

their properties for years. “The casinos are old and tired,” says Alanis, who formerly was CEO of Pinnacle Entertainment and president of Horseshoe. “They are all multi-floor riverboats with low ceilings and few amenities.” Margaritaville, on the other hand, has a single-level casino with high ceilings and wide aisles. “Patrons asked us in the beginning when we were going to bring the barge in,” he laughs. “I pointed to the casino and said, ‘There it is.’ They couldn’t believe it.” In addition, Margaritaville has a wide variety of amenities, including all the restaurant and bar brands included under the company’s umbrella, along with an intimate 900-seat theater. An 18-story hotel holds almost 400 rooms, including suites with balconies on each corner of the tower. And it was all accomplished on time and on the $200 million budget. Alanis says his relationship with Trotter and the Margaritaville company made it a natural match. “I’ve known the Margaritaville folks for a decade,” he explains. “I had the original idea to do the Margaritaville in Biloxi when I was CEO of Pinnacle, on the site that Harrah’s used to do the same thing. Arthur Goldberg got behind it, but when he died, the idea died with him. I advised them on the Margaritaville site in Las Vegas at the Flamingo and negotiated the deal at Resorts in Atlantic City. But we’ve been waiting for the right time to do a full casino hotel, and that’s what this has become. For the rest of my career, I’m going to be dedicated to growing this brand with them. It has tremendous potential in the gaming and hospitality sector in the next 10 years.” When Trotter agreed to join Alanis in Bossier City, the match was complete. Alanis says the brand is powerful.

“Margaritaville is a dramatic, powerful brand in the restaurant and entertainment area,” he says. “It speaks to a true lifestyle. We will take that brand and carbon-copy it into the casino. I have taken the best of Las Vegas—Wynn Resort, the Mirage, a little of the Cosmopolitan; the colorful, comfortable, tropical color schemes, material—and created an elegant casino where the best players feel comfortable. We can connect the true, heavily Margaritaville-themed areas—the restaurants, the pools, the performance hall—with the casino, so you have the best of both worlds. “People can eat in our elegant restaurant, Jimmy’s, which I believe will be one of the best restaurants in this region, or go next door to the Margaritaville, with the signature volcano show and live music, or stop in our wonderful buffet. People are smiling, having a great time. My concept is ‘Step Up but Not Away’—which is the company motto now.” Barry Regula, the general manager of Margaritaville Bossier City, says the brand is what made the difference in the attention it has received in the marketplace. “The brand is so important,” he says. “There was a high level of interest even before we opened, with endless interviews and previews and the like. People wanted to know what was going on inside the beautiful new tower. “If it was ‘Joe’s Casino’ or something like that, I don’t think it would have had the attraction or the anticipation that a Margaritaville brings. We know from working with the Margaritaville people and other market research that we have done for a themed casino, Margaritaville is very high on the list of themes that gamblers would want to visit. It’s right up there with Hard Rock. It resonates with people who are just looking to have a good time in a restaurant, dining and entertainment experience. All of that combined has brought a lot of people to our property over the last month.” AUGUST 2013 www.ggbmagazine.com

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Opening Frenzy The June 15 opening of Margaritaville attracted thousands of new customers. Regula says preparation was extensive but futile. “It felt like gaming had just been legalized in Louisiana,” he says. “The crowd was much larger than expected. We had a good mix of invited VIP customers, but the retail play was huge, much more than we anticipated. It was more than just coming to experience a new casino. It was coming to witness the Margaritaville promise and how we would deliver. It was paradise in Bossier City. “We never saw the wave of people slow down. As much as we had planned for the big crowds—we set up satellite players club booths, we brought in additional embossers, we used hand-held Playersoft technology to enroll players, we used ACI kiosks to sign people up—it still wasn’t enough. We had lines virtually out the door. We more than doubled our pre-opening database in the first 20 days.” Alanis says the power of the brand will enable Margaritaville to grow the market rather than simply cannibalize existing customers. “From the beginning,” he insists, “I said we would grow the market. And I think we’ll grow it even more than we anticipated, because the reaction from those in outer markets who have seen this property has been so dramatic and favorable. We can recapture some of that Dallas business that is going almost exclusively to Oklahoma now. It gives people a reason to come back. “We’ll take some market share away from others, sure. I do expect to do a combination of both. But a new product like ours can bring a new vibrancy and excitement to the market.” The market itself is deeper than many realize, says Alanis. “This market has always been about ‘Ark-La-Tex’…. from Arkansas, through northern Louisiana and into eastern Texas,” he says. “The market is substantial. There are over 400,000 adults living in this area. In southern Mississippi, it’s only 50,000 people with an ocean on one side. (This market) has always been influenced by east Texas. It’s not just Dallas-Fort Worth; it’s Tyler, Texarkana, Longview, Kilgore, Marshall… all those communities within an hour or an hour and a half from here, where people can drive in, spend the day here, and drive back home in the evening. But I think we can compete with everybody inside a 300-mile radius for a weekend or overnight stay. We’re going to get people from Houston, Little Rock, New Orleans and even as far away as Memphis.” Another attraction of Margaritaville Bossier City is the adjacent Louisiana Boardwalk, a 500,000-square-foot outdoor outlet shopping mall, which includes a Bass Pro Shop next door to the casino. Like Maryland Live!, which has experienced great crossover from the Arundel Mills Mall south of Baltimore, the po36

Global Gaming Business AUGUST 2013

tential for additional foot traffic from mall visitors is extensive. “This is the No. 1 tourist attraction in northwest Louisiana,” says Alanis. “The Bass Pro Shop is the most profitable in their chain based on square foot sales. The Regal Cinemas is the most successful of the chain in Louisiana. We are the logical extension of that. The synergy is great. I have one tiny retail store in Margaritaville. I don’t need any more because of the proximity of the mall.” And because the mall is there, the lack of a parking garage isn’t as detrimental to Margaritaville as it might be. Alanis says it was a concern prior to the opening. “My biggest concern was parking spaces,” he says. “We have 5,000 spaces between us and the mall. That sounds like a lot but on Saturday night, every single one of them is going to be full.” Regula says they’ve been making efforts to mitigate the situation. “Because we’re located next to a shopping mall, people are used to parking and walking, so it hasn’t been an issue,” he says. “We’ve tried to negate it by running golf carts out to the parking lot. While we’re doing well with it, we recognize that we need a parking garage, and that will be included in phase 2 of the property.” With seasoned marketing executive Glenn Buxton leading a team tasked with bringing in the top players, Alanis says he hopes the hotel will be filled with gamblers most of the time. “We want to sell rooms to the public, but I hope and expect that we’re going to have gamblers who are going to want to stay with us throughout the week, and a good percentage of those rooms will be taken by comp customers,” he says. “We have the nicest rooms in the market. Beautiful views, ceiling fans, bars, balconies and more.” Regula says the simple attractions of Margaritaville have made a difference in attracting players. “It’s remarkable how you can make such a difference by doing a little thing like adding a balcony to the tower,” he says. “No one has that in the market. We get more requests than we can accommodate for a balcony room, so that’s going to continue to be very popular. We can give them to our very best players and sell them to retail customers at a premium rate. And no one has incorporated the beautiful Red River into their properties the way we have, which is a little astonishing. The balcony suites have another benefit, says Alanis. “We have regulations in Louisiana where people can smoke in the casino but can’t smoke in the guest rooms,” he explains. “With the balconies, we give smokers the opportunity to step outside to have a cigarette. So smokers and non-smokers have the best of both worlds.”

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Data-Driven Why customer information can unlock a gold mine for casinos BY DAVE BONTEMPO

ce Rothstein could not have endured this. Robert DeNiro’s old Las Vegas movie character smugly portrayed his company’s marketing dominance in Casino. The trips, shows and meals, he indicates, exist to snare customer money. “And in the end,” DeNiro concludes, “We get it all.” Not any more. The “we’s” multiplied faster than the customer base with gaming’s massive 1990s expansion. And the “all,” gaming’s composite revenue pie, shrunk into bite-sized profit margins during the Great Recession. Operators need an answer. Enter the data czars—companies that dice, slice, crunch and squeeze numbers to extract financial gains. Their advice helps many casinos find 5-10 percent more revenue in their database, and some substantially more, via changes in comping. This process becomes millions of dollars saved, numerous jobs preserved and even the difference between profit and loss. Comping’s eyeball era, in which a supervisor or host routinely gauges a customer’s worth on the floor, gives way to color-coded charts, graphs, 3D tools and hourly reports. Direct-mail campaigns can be assessed and adjusted midstream with email blasts and text messages that reflect recent gaming history. Numbers crunching and gut instincts have come together. Casino operators navigate the forest of prolific data and shake the money trees, while trying not to alienate customers who complain about reduced offers. Information is massive, even unwieldy, and execution must be smart. Small gains matter, because never again will one property, or market, “we get it all.” 38

Global Gaming Business AUGUST 2013

The Finer Points Randall Fine is the turnaround king, anchored by algorithms and software. The former executive for Harrah’s Entertainment and Carl Icahn’s gaming company led Greektown Casino in Detroit out of bankruptcy in 2009-10. He now commands the marketing charge for Revel in Atlantic City, which recently emerged from bankruptcy. His innovations have been both an individual and company trademark. Fine’s Las Vegas-based outfit has become one of the gaming industry’s largest strategy, consultancy and management companies. He has championed, with figures and software, an important premise. “Operators have tens of thousands of customers in their active database, and they are only scratching the surface with this information,” Fine indicates. “In many cases, they spend way too much money on

“

Operators have tens of thousands of customers in their active database, and they are only scratching the surface with this information. We help them be more efficient and determine where the diamonds are in the rough. We enable them to go far deeper into their data. —Randall Fine The Fine Point Group

”

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Marketing Results Inc.

customers for whom they could get the same business even if they spent far less. “We help them be more efficient and determine where the diamonds are in the rough. We enable them to go far deeper into their data. The average segment breakdown for casinos is eight. We can give them 200-500.” The deeper breakdown could include age, marital status, household income, etc. It can also entail market experimentation. In a target group that normally gains $100 in comps, some could be given $50 to see if the change affected someone’s decision to visit. While Fine’s comping advice is based in data, he embedded a human gut instinct into Revel’s program. Customers have begun cashing in Revel’s eye-popping “You Can’t Lose” promotion, applicable to July play. Patrons can recoup most of their slot-machine losses for that month at a 5 percent clip over 20 weeks. The promotion appears laden with giveaways, but Fine has bet that players will return for free money and add their own funds to the small bank account awaiting them. Fine intoned his own movie theme, The Godfather, in calling it an offer customers can’t refuse. Fine’s outfit continues to evolve technologically as well. It unfurled the LaserPoint CRM product last year. This is a cloud-based, software-as-a-service product intended to package and automate database marketing at a price lower than a single database analyst. The system promises 10 times the customization of typical casino direct-mail programs, 15 percent increases in revenue and 50 percent reduction in the time necessary on property to manage direct-mail programs. There is no software setup or installation for the casino. The property submits data through a secure web portal. The data runs through LaserPointCRM’s algorithm-based segmentation system and the monthly mail campaign file is sent back to the casino, through the same secure web portal, ready to take to the print shop. Fine tapped a colleague from the Greektown era to sell it. Alex Calderone, the former Conway MacKenzie restructuring specialist who helped recruit Fine for Greektown, was hired this year to lead LaserPointCRM. This product is the software extension of the philosophies Calderone heard from Fine several years earlier. Calderone was asked to build upon LaserPointCRM’s early success. “We were looking to get into at least one state with this,” Fine says, “and we 40

Global Gaming Business AUGUST 2013

ended up in five (Washington, California, Minnesota, Mississippi and Oklahoma), so we’re very excited about that. Software takes a long time to sell in this industry.” Fine remains a staunch believer in direct mail. Technology companies that print coupon offers out of slot machines, for example, favor a marketing process right on the game. Many believe direct mail has outlived its usefulness. “Anyone who says that must not work at a casino,” Fine says. “There is not a casino in the United States where the marketing department would say direct mail is passé. Casinos are different than most other industries, and I’ll tell you why. In many of those industries, 90 percent of the cost of the direct mail piece is printing and mailing. Only 10 percent is the actual offer, and it’s usually something lame. Ten percent off something lame is not compelling. “With casinos, however, 90 percent of the cost is the actual offer. You are sending them free money to play, free hotel, etc. Given the older age of our customers, they want to be able to touch that offer, to feel it, to put it on their refrigerator, because it has free money in it.”

A Financial MRI What’s in a name? Everything, according to Marketing Results Inc. founder and President Gary Border, a former Harrah’s Atlantic City executive who formed his own company in 1988. It has offices in Las Vegas and Sicklerville, New Jersey. The company, which engages in campaign management and consulting for casinos throughout North America, derived its name from an icon. Or make that, Icahn. “Back in 1987, I was reading an article Carl Icahn had written, and he asked, ‘Why don’t people use the word results in the name?’” Border recalls. “That sounded like one of the smartest concepts I had seen for a marketing business.” Border unveiled his own smarts, joining legendary casino operator Jack Binion as a partner and senior vice president of the newly formed Horseshoe Gaming Corp. in 1994. Ten years later the company that began with $40 million was

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sold to Harrah’s s for $1.45 billion. Success today requires a numerical perspective, Border says. “There is so much competition in this market that you have to be on your data game,” he says. “You need analysis to support most decisions. At one time, you could make the decisions without data and if you made mistakes, nobody noticed. Now if you are more than 100 percent invested in a customer (comps exceeding theoretical win), you have a problem.” Border’s company touts AIM (Advanced Intelligence Marketing), which rolls out its fourth generation software in the next 90 days. It is a casino database marketing tool driven by technology, and it is a logical extension of the third generation, a 2011 rollout that enables real-time information. The fourth generation makes this technology more available via smart phones, tablets, etc. All told, AIM allows operators to obtain daily mini-reports along with a monthly summary of their direct mail campaign. The information is stored in a central location, cloud-security style, and can be accessed quickly. A lengthy process precedes AIM’s implementation. Marketing Results conducts an overall property look, including a database analysis of the last 24 months. A market research segment follows, producing a “shared wallet” view of the casino. Then comes a lengthy executive meeting to review recommendations. Somewhere in this process, Marketing Results combines hotel and gambling databases if needed, enabling these parts of a property to work together. The casino will retain Marketing Results for at least a year and renew for

one-year periods. It will be able to utilize the software and take part in a weekly conference call. One of MRI’s favorite segmentations is the profiling of a customer into five life stages. The first is a gambler a property has never seen, labeled a prospect. Stage two is a new member who signed up for a player’s club card. The third stage, a regular player, involves anyone who has made multiple trips. Stage four is a fader, a gambler whose visits are declining. A stage five player is inactive. These segments will help determine a property’s comping and recruitment efforts.

Klebanow: Interpretation is Everything Andrew Klebanow has participated in the hospitality industry since 1975. Before becoming a consultant in 2000 and later forming Gaming Market Advisors, he served as vice president of marketing at Sam’s Town and Santa Fe Gaming. He oversaw repositioning and re-branding of player rewards programs at both properties. While other companies tout products, he offers the classic consultant’s role. In his view, there is no substitute for common sense. “Systems that gather, store and analyze player data continue to evolve and are now very robust,” he says, “but data warehouses and analytical software also require skilled operators. Those operators may work at the casino or for a vendor. They know how to use the system, but do they know what questions to ask to

AUGUST 2013 www.ggbmagazine.com

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“

In the U.S., you may not see the mail used much five years from now. We can learn a lot from emerging markets. In the Philippines, for example, they have an interesting problem. The mail doesn’t work. But everyone’s got a mobile phone and everyone’s got an internet account. —Andrew Klebanow Gaming Market Advisors

solve problems unique to the business?” Klebanow illustrates his philosophy with an anecdote from a recent casino property tour. “The casino was otherwise quiet, but these banks of video poker machines were full,” he says. “It struck me as odd that the rest of the property was not that busy. “What the property said was, ‘The customers love them, we have a high win per day, no worries, who cares who is really playing them?’ We dug deeper and saw that all these customers used all their free play, all their comps, all the points they had accrued. Once you factored that in, these players weren’t profitable.” Even when data is compiled, it may be incomplete. Casinos factor in comps, meals, gifts, etc., but often fail to account for taxes, Klebanow says. The tax on free play adds considerably to the offer, but “somehow, the taxes never seem to find their way onto the expense line,” he says. The cost of conducting a campaign is thus more expensive than casinos originally thought. Klebanow, based in Las Vegas and Denver, works on a project basis. He will be asked to provide recommendations for a property to make better use of its database and conduct a better marketing campaign. That might mean helping a company understand its own logistics, like food and beverage. “When customers are asked for their rewards card when they buy a meal at the buffet, for example, their expectation is that they will get a discount or a free meal after X purchases,” he indicates. “Now, most casino buffets operate at a loss or at a minimal profit margin. Throw in a discount or rebate program and that profit evaporates, or worse, increases the size of the operating loss.” While Klebanow values human-nature knowledge in the technology age, he sees the handwriting on the tablet, so to speak, for direct mail operations. “In the U.S., you may not see the mail used much five years from now,” he says. “We can learn a lot from emerging markets. In the Philippines, for example, they have an interesting problem. The mail doesn’t work. But everyone’s got a mobile phone and everyone’s got an internet account. “What you need to do is have the customers visit a casino website, have them log on and see their offers on their computer and their mobile phone. You can send them reminders, saying, ‘We credited you with $50, click here,’ and when you click, you see the $50 offer. You don’t need the mail for that.”

Looking at Games While the industry craves information, Casino Data Imaging puts a special concentration on the games themselves. Analysis in this area concerns the envi42

Global Gaming Business AUGUST 2013

”

ronment in which customers play. Evaluation can mean the interpretation of product placement, game traffic, and even ergonomics, besides revenue. “You want to know which games are trending up, which ones are down and where your best games are located,” says George Levine, executive director of sales and marketing for CDI, the Las Vegas-based company which began providing slot analysis in 2001 and evolved into other games. “What is winning, what is losing for you? Where are the games placed? Is something affecting its performance—whether the game is placed near signage, or a problem with aisle space, even the comfort in seating?” CDI products are in more than 150 casinos, including giants like Mohegan Sun, he says. The company places its software into the property’s casino management system and then educates the operators. “You can have the greatest concept in the world, one that everybody wants, but if it can’t be implemented properly, it is useless,” Levine says. “We are interested in interrogating the folks (clients) on the things that are actionable to them and then helping them. “Part of the installation process is to thoroughly understand how the casino conducts analysis. This includes understanding the questions they must answer every day. Understanding this is key in formulating the best practices for each individual user, which makes our product easy to use.” The company has expanded from its CasinoCAD@Slot Analysis product range into GlobalSuite, which addresses other games as well. It rolled out 11 months ago. “CasinoCAD is CDI’s legacy slot analysis program,” Levine explains. “GlobalSuite encompasses all the popular features of that platform and much more in features and the depth of analysis. Examples include MultiGame/Multi-Denomination analysis, pivot analysis from the visual map and/or reporting module, dynamic reports where you can easily change the report parameters, multi-point performance color coding and more. CasinoCAD was solely for slots. GlobalSuite also includes modules for table games and player data.” Interactive Performance Analysis (IPA) is a new feature located within the GlobalSuite data dashboard control center. IPA quickly allows the end-user to first select the required analysis categories such as denomination, manufacturer, game theme, lease products, areas, banks, etc., to compare and contrast to one another and house averages. Regardless of the supplier or the operator using that supplier’s products, all of the new technology in marketing through analytics comes back to a basic common thread: Data is king.

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It’s Not

Nevada Nation’s largest gambling state looking to online poker By dave Palermo

t was some kind of justice that descendants of American Indian victims of the genocide surrounding the California Gold Rush would gather at an Indio casino last June to begin renegotiating tribal-state regulatory compacts for what has become the nation’s largest Indian gambling market. “The mood was mostly positive,” Michael Lombardi, gambling commissioner for the Augustine Band of Cahuilla Indians, says of the meeting with Jacob Appelsmith, aide to Governor Jerry Brown. “Appelsmith’s message was, ‘We respect you as governments. We want to engage in a respectful, government-to-government process.’ Everything he said supported that.” The likelihood that compacts with most of 59 tribes operating 60 casinos would be extended 20 to 25 years means California’s $7.4 billion tribal gambling industry will grow even larger. Meanwhile, there are ongoing efforts to launch a statewide, multibilliondollar internet poker industry. And there is also a legislative proposal to legalize sports wagering. California tribes, card clubs and legislators are largely in agreement on bill language to legalize online poker. But legislation is bogged down by the inability of a few politically powerful tribes to agree on who should take a leadership role in the bill-making process. “This is all ego-driven,” a lobbyist who requested anonymity says of the Indian wars over online gambling. “It’s that simple.” Regardless of what transpires in the tribal squabbles over internet poker, it appears California has usurped Nevada as the nation’s gambling mecca. California’s 60 tribal casinos and approximately 75 operating card rooms

combined in 2010 to win more than $8.2 billion, according to several sources. The lottery in 2012 reported $1.8 billion income on ticket sales of $4.3 billion. And parimutuel racetracks paid out $2.4 billion on $2.9 billion in wagers, a net win of $400 million, according to the California Horse Racing Board. The approximately $10.4 billion in gross gambling revenue generated by casinos, card clubs, racetracks and the lottery puts California on a par with Nevada casinos and slot machine outlets, which in 2012 won nearly $10.3 billion, according to the Nevada Gaming Control Board.

Historical Approach Californians’ propensity to gamble dates to the Gold Rush and European settlement in the mid-1800s. It was a violent, racist era. In an effort to rid the state of its indigenous peoples, Sacramento lawmakers offered a bounty to militias who roamed the countryside, murdering and kidnapping Indian men, women and children. Gambling was widespread. And legal card rooms have been in existence for more than a century. Poker remains the game of choice. “California has had a long association with poker,” says Eugene Johnson, vice president of market research and online studies for Spectrum Gaming Group. “You go back to the Gold Rush days, gambling has always been a big thing in California.” Tribes and card clubs have been working with legislators for four years in an effort to legalize online poker, spurred on by analysts who predict California’s 38

‘We have a lot of experience as tribes—collectively— with the game of poker and in particular regulating that game.’

‘We’ve taken an allinclusive approach to this bill and have asked Indian country to discuss it with us.’

—Mark Macarro Pechanga Chairman

—Jacob Coin San Manuel Executive Director of Public Affairs

Global Gaming Business AUGUST 2013

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The approximately $10.4 billion in gross gambling revenue generated by casinos, card clubs, racetracks and the lottery puts California on a par with Nevada casinos and slot machine outlets, which in 2012 won nearly $10.3 billion, according to the Nevada Gaming Control Board. million citizens would generate a third of the nation’s internet gambling market. H2 Gaming Capital predicts internet poker in California would total $648 million in wagers the first year, a figure it said would grow to $1.13 billion in five years. Former California Finance Director Timothy L. Gage, in a 2010 report for the now-defunct California Online Poker Association (COPA), an alliance of tribes and card clubs, put the anticipated first-year wagering at $452 million. Online poker wagers for years have been going to offshore websites. “Even though there are no California internet operations, California is one of the largest and most lucrative gaming markets,” says state Senator Roderick Wright, chairman of the Government Organization Committee and sponsor of enabling legislation. “The only stakeholder not benefiting are the people of California, who are watching this money get exported out by the boatload, from which we receive no benefit. And we have no ability to protect the California consumer.” While Wright struggles to get tribes to reach consensus on online poker, his legislation to legalize sports wagering should a federal prohibition be lifted failed for the second year to make it out of committee. Wright pledged to renew the effort.

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Tribal Online Wars Two online wagering bills have been introduced in the California legislature, one (SB51) sponsored by Wright and a second (SB678) by Senator Lou Correa. The Correa bill is being drafted in cooperation with a group of some 15 tribes headed by the San Manuel Band of Serrano Mission Indians. A third proposal is being offered by a coalition of eight tribes, including the Pechanga Band of Luiseño Indians. The San Manuel bill draft and what has been dubbed the Pechanga proposal seek a greater role for tribal regulators. Although language in the two tribal proposals is reportedly similar, efforts to reach consensus on a single bill have been futile. The Pechanga group has expressed displeasure with San Manuel for pulling out of ongoing tribal discussions and participating in the now-defunct COPA, a coalition of some 60 tribes and card clubs seeking enabling legislation. “Why should we reach out to them? They left the group,” says lobbyist David Quintana, who represents three tribal members of the California Tribal Business Alliance, partners in the Pechanga coalition. Jacob Coin, San Manuel’s executive director of public affairs, says the tribe has extended a conciliatory hand to Pechanga and its coalition, sending them revised drafts of SB678. But efforts to discuss the matter have fallen on deaf ears.

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‘San Manuel isn’t trying to get ahead of anybody. We’re trying to get something done.’ —Jerry Levine San Manuel Attorney

“We’ve taken an all-inclusive approach to this bill and have asked Indian country to discuss it with us,” Coin says. “We’ve been open with our draft. We’ve shared it with Pechanga and everybody else. They have not responded to our outreach.” “No one can be irritated by the process San Manuel has taken,” says tribal attorney Jerry Levine. “They’ve been totally transparent and inclusive. “San Manuel isn’t trying to get ahead of anybody. We’re trying to get something done.” Tribal squabbling is trying the patience of legislators and their aides, one of whom outwardly sighed when discussing the matter. “It’s sad that they can’t at least have a discussion,” said the aide, who requested anonymity. Appelsmith, speaking at the recent Global iGaming Summit and Expo (GIGSE) in San Francisco, was more direct. “We don’t want to see something that isn’t right for tribes, but we also want them to get past the infighting over tactical, technical trivialities,” he said. “I think that something could be put in place fairly quickly if those can be overcome.”

Matters of Contention Balancing the legal, government status of tribes with an online poker industry that would include commercial card clubs and perhaps parimutuel racetracks and advance deposit wagering (ADW) operations has proven to be difficult. Online poker in California would not be conducted under the Indian Gaming Regulatory Act, which governs tribal casinos and gives tribal commissions primacy for regulating the industry. But many tribes, particularly those in the Pechanga coalition, seek a “presumption of suitability” for licensing and, in general, some recognition, if not respect, for their governmental sovereignty. Wright, meanwhile, is steadfast that participants in online poker form LLCs with officers subject to background investigations and licensing by the state Gambling Control Commission. Wright is taking a hard line on the issue because the state Department of Justice has advised him of the legal obstacles in attempting to license a tribal government. “The asset (online poker) belongs to the state and the state will develop the scheme as to how the asset is managed,” Wright told delegates to the National Council of Legislators from Gaming States (NCLGS) meeting earlier this year in Las Vegas. “Everyone who participates in the scheme will be totally subject to California law.” Having said that, Wright and others are not in disagreement with Pechanga Chairman Mark Macarro’s suggestion that allowing tribes a regulatory role could provide resources and expertise needed to speed up launching the industry. “We have a lot of experience as tribes—collectively—with the game of poker and in particular regulating that game,” Macarro says. “Not only should that not 46

Global Gaming Business AUGUST 2013

‘The only stakeholder not benefiting are the people of California, who are watching this money get exported out by the boatload, from which we receive no benefit.’ —Rod Wright California Senator

be discounted, it needs to be brought to the fore.” A “false front” clause in the Pechanga proposal intended to both limit eligibility to tribes and card clubs and prevent financing by online poker vendors is believed to be targeted at the Rincon Band of Luiseño Indians and United Auburn Indian Community. Rincon has a management agreement with Caesars Entertainment, and United Auburn is a partner with online giant bwin.party entertainment. The popular Caesars brand and the deep pockets and online expertise of bwin could give Rincon and United Auburn, owners of the Thunder Valley hotel casino, a competitive advantage. But Macarro says the intent of the Pechanga proposal is to adhere to the state’s “public policy of limited gambling.” Racetracks and ADWs would be prohibited in the Pechanga proposal from obtaining licenses. Wright’s legislation would license “entities already engaged in legal gambling operations,” including tribes with state regulatory compacts, card clubs, racetracks and ADWs. A source familiar with the San Manuel and Pechanga proposals says legislating limits on license eligibility could lead to lawsuits on constitutional grounds. The court action would delay launching the industry. “The marketplace is going to determine the winners and losers,” says the source, who requested anonymity. “If the state issues six, eight, 10 licenses, in a matter of a year or two, three or four will become the key platform operators are going to migrate to. “Pechanga may fear Thunder Valley and Rincon. They may view them as 800-pound gorillas. The real 800-pound gorilla is PokerStars,” the online poker giant targeted with Full Tilt in the 2011 “Black Friday” crackdown by the U.S. Justice Department. “They’ve been hovering around the Capitol and have been for the last two months.” PokerStars and Full Tilt would be prohibited in “bad actor” provisions in the Wright bill and in the Pechanga proposal from obtaining a license. The firms were indicted for accepting wagers in violation of the Unlawful

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Legislation

Internet Gambling Enforcement Act (UIGEA) of May Not Be Close 2006. The cases were later dismissed. Online poker legislation is not likely to reach a vote PokerStars, reportedly in partnership with the before the end of the year. And it’s not Hawaiian Gardens card club, hired former U.S. House certain how much tribal consensus is necessary to get Democratic leader Dick Gephardt to lobby Sacraa measure through the Senate and mento lawmakers in an effort to do away with “bad Assembly. actor” prohibitions. The Pechanga coalition includes such politically Rincon lobbyist Jerome Encinas says legislative powerful tribes as the Agua Caliente Band of prohibitions targeting PokerStars and Full Tilt are not Cahuilla Indians, Viejas Band of Kumeyaay Indians, necessary. Barona Band of Mission Indians and Yocha Dehe ‘We must methodically It would be advisable, Encinas says, to leave suitWintun Nation. develop and implement ability issues to the state Department of Justice as the But the San Manuel group has enough political public policy that is industry regulator. clout to block any legislation that puts restraints on smart, thoughtful and “Why write legislation that would take them out?” Rincon, United Auburn and their partners. Encinas asks. “Let the Department of Justice do their job. well-researched.’ Rincon published a full-page advertisement in the “If you put licensing prohibitions in the legislation Sacramento Bee urging tribes and the legislature to you end up in court. If you’re restrictive on everything, —Robert Smith avoid “delays and obstruction” that make the state you’re going to end up in court.” “vulnerable to federal legislation.” Pala Chairman It would be unwise to put down a $50 million liRobert Smith, chairman of both the California cense fee deposit and pay a $5 million background inTribal Business Alliance and Pala Band of Luiseño vestigation for a business partner with a questionable history, Encinas says. Indians, wrote an opinion-page article advising tribal leaders and legislators “If you’re stupid enough to pay $5 million knowing they’re going to have isnot to be “shortsighted.” sues, do it,” he says. “The Department of Justice is going to do their job. They’re “We must methodically develop and implement public policy that is going to say, ‘You did what you did. We’re not licensing you.’” smart, thoughtful and well-researched,” Smith said.

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TRIBAL ONLINE

Social Gaming for Tribes What to do while waiting for Congress or the states to act

he 112th Congress is well behind us and, once again, attempts to enact federal legislation that would legalize and regulate a U.S.-based internet gaming scheme have been thwarted. Rep. Peter King (R-New York) and Rep. Joe Barton (R-Texas) have both introduced their versions of an internet gaming bill in the 113th Congress. However, without renewed efforts by Majority Leader Harry Reid (D-Nevada) to move a bill forward, the likelihood of federal legislation appears dim for the 113th Congress as well. More importantly, from a tribal perspective, what can tribes do to respond to the increasing threat by state lotteries to dominate the internet gaming market? The now-infamous December 23, 2010 Department of Justice opinion gave states and state lotteries the green light to proceed with establishing intrastate, internet gaming schemes which could potentially exclude both tribal and commercial gaming. In response, commercial gaming giant Caesars Entertainment has refocused its lobbying efforts in support of internet gaming from a federal level to a state level in hopes of taking advantage of the burgeoning state-by-state internet gaming movement. Caesars Interactive has also acquired Californiabased social gaming developer Buffalo Studios, and already owns social gaming site Playtika. Another gaming giant, IGT, has also grown impatient waiting for federal legislation and is promoting its own social gaming site, DoubleDown. And, who can blame the states and commercial gaming for wanting to become part of this lucrative business? Internet gaming is already an integral part of the international gaming market. As of 2011, internet gaming represented 8 percent or $320.1 billion of the global gaming market, and is expected to reach 9.8 percent or $435.3 billion of the global gaming market by 2015. The United States is the only country which has not legalized some form of internet gaming even though, as of 2008, 28 percent of the international market are U.S. players, representing $21 billion in revenue. Absent a federal bill, will tribal gaming be prohibited from participating in this rapidly expanding business opportunity?

Global Gaming Business AUGUST 2013

By John Cramp

The tribes in California are actively engaged in developing and enacting their own intrastate, internet gaming legislation, but where does that leave tribes in the rest of the country? Ironically, the failure of Congress to pass legislation on a federal level may, in fact, present an opportunity for tribal gaming. Although a federal bill would have clarified the legal and regulatory process for tribal participation in the internet gaming industry, it would have also created pressure for tribes to enter and compete in an industry for which many tribes may not be prepared.

“

Maryland Live! opened a free-play online casino on the Aristocrat nLive platform. They found that 12 percent of their online, free-play database, after opening their online account, had come into the casino to play for real money. Moreover, those players came in 40 percent more frequently, were worth 20 percent more per visit and stayed 10 percent longer than the average patron per visit. In addition, social gaming can allow tribal gaming operations to build a potential new customer base by tapping a new, younger demographic. Currently 100 million Americans play games on a smart phone, tablet or similar device, and by 2015 more people will surf the web on their phones than on their desktop computers. Social gaming can also provide models and data for understanding current and future gaming trends, provide player tracking and player purchasing information, enhance cross marketing, contribute to the sale of non-gaming products and entertainment products, and drive land-based players to bricks-and-mortar facilities by providing prizes and other incentives. Finally, and most importantly, by utilizing social gaming and social gaming marketing now, tribes will be prepared and poised from both a technological and regulatory perspective to enter either a federal or state internet gaming market once it has become legalized in the United States. When the Indian Gaming Regulatory Act was enacted in 1988, the original intent was to legalize Class II bingo operations on tribal lands. Who knew that bingo would be just a stepping stone to the world-class casinos now operating in Indian Country? And who knows what opportunities will be open to tribes as they enter this next exciting phase in Indian gaming?

By utilizing social gaming and social gaming marketing now, tribes will be prepared and poised from both a technological and regulatory perspective to enter either a federal or state internet gaming market once it has become legalized in the United States.

In the interim, social gaming, also known as “free play,” provides a legal, low-cost means of entering the internet gaming market. Because social gaming utilizes virtual money, as opposed to actual money to participate in the game, it does not fall under the “prize, chance and consideration” characterization that defines “gambling” and is, therefore, legal because there is no real-money play. Social casinos are an estimated $2.1 billion industry, growing to $2.75 billion by 2015. Since 2010, the number of social gamers who play casino games has doubled to 173 million, and in the U.S. alone there are 35.4 million monthly social casino players. Today North America represents 41 percent ($863 million) of the $2.1 billion worldwide social casino market. The recently opened bricks-and-mortar casino

”

John S. Cramp is co-founder of Gaming Network Solutions LLC (www.gamingnetworksolutions.com), where he currently serves as CEO. Gaming Network Solutions is a gaming software developer and provider of online and mobile, multi-player game applications.

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GLOBAL GAMING WOMEN

Diverse Definitions What diversity really means in corporate America

hen we hear “diversity” used in a general sense, it evokes a picture filled with faces reflecting various ages, genders, races and ethnic backgrounds. What do we envision when it’s used as part of a corporate mission statement? That depends on whom you ask. While most of us agree that representation from various groups in all sectors of the gaming industry is good for business, we need to focus on representation in positions of influence. How many female leaders and minority groups are represented in the top tiers of a single gaming corporation? How much decision-making power do these individuals have? Do they have a say in providing new opportunities and promoting diversity in business practices? I don’t pretend to speak for every minority group. As a black woman who runs a governmentaffairs consulting practice for gaming clients, I believe we’ve made some progress. As an industry, however, we’ve still got a lot of work to do beyond the smiling multi-colored faces that appear in the corporate annual reports. While many gaming companies have established entire departments dedicated to addressing diversity needs, there are still some misperceptions about what real diversity looks like. When I first took a job in the government affairs department of a major gaming company in 2004, it took me more than a year to persuade people in the surrounding community that I had been hired to handle government relations and public affairs, not diversity in the workplace. When politically organized minority groups and representatives of initiatives like Global Gaming Women interact with corporations, they typically find themselves dealing with high-level executives from the diversity department. If corporations truly want to promote women and minorities in this industry, diversity should not be relegated to a departmental conversation but be a discussion that happens at every level of the organization. Otherwise, isn’t diversity just tokenism? The executives at the helm of the largest gaming companies in the country seem to understand the difference. MGM Resorts International continues to collect top honors from national diversity publications and watchdog groups, while other major companies are following suit.

Global Gaming Business AUGUST 2013

By Piper Overstreet-White, Piper Overstreet Consulting

The philosophy must extend beyond the designated office space housing a company’s diversity department. It should permeate every department at every level and extend to outside contractors, consultants and vendors. In fact, most companies now offer periodic reports that outline their diversity goals, numbers and achievements. Obviously, the conversation about diversity has grown, but has the advancement of women been a part of this discussion? As an example, the Congressional Black Caucus Institute will host its annual Tunica Policy Conference in Tunica, Mississippi, August 15-17. In conjunction with this event, the American Gaming Association will host its annual Diverse Vendor of the Year Awards, honoring the industry’s top minority-, women- and disadvantaged-owned business enterprises. In addition, the AGA will also host the first Global Gaming Women breakfast in Tunica, which will help female leadership continue the dialogue with their personal insights on career and business issues. This is where minority- and women-owned businesses can really do our part to help realize the

the better gaming companies want to get in touch with you. I started my government-affairs consulting practice in 2010. I’m pleased that my former employer, a major gaming company, is now one of my clients. I attribute it not only to maintaining a good rapport with past employers and clients, but remaining a relevant part of the conversation. If potential clients don’t know minority consultants are there, we can’t expect to be included. Looking forward, there are many questions that arise when attempting to continue the conversation about diversity in the gaming industry. How do we keep diversity at the forefront in a changing gaming environment? The proliferation of casinos throughout the United States and abroad presents us with new challenges. Diversity numbers should increase based on filling positions in areas along the Eastern seaboard and in the South, where there is a higher concentration of minorities in the workforce. How do these numbers translate to influence and dollars for minorities? States like Pennsylvania have included diversity requirements in their laws, giving the Gaming Control Board unspecified inves-

“

The philosophy must extend beyond the designated office space housing a company’s diversity department. It should permeate every department at every level and extend to outside contractors, consultants and vendors. In fact, most companies now offer periodic reports that outline their diversity goals, numbers and achievements. goals of true diversity. We need additional venues, similar to the events taking place in Tunica, to collaborate on these ideas and help diversity become an integral part of the conversation. Many companies are looking for professionals who seize these types of opportunities to grow their business potential and connect with others in leadership on these topics. If you’ve stayed on the leading edge of your profession and the latest industry trends, many of

”

tigative powers with regard to applicants. Should diversity plans be included as part of the requirement for gaming licenses in all new jurisdictions? And where do women fit in this conversation overall? When all of gaming has truly embraced diversity, legislative mandates and internal quotas won’t be necessary—but we haven’t quite gotten there yet. Progress isn’t always linear; we need to keep a watchful eye and do our part as minority and female business professionals to ensure true inclusion.

I speak responsible gaming.

How do YOU say Responsible Gaming?

Ich verstehe die Sprache des veranwortungsvollen Glücksspiels.

Parlo la lingua del gioco responsabile. Hablo el idioma del juego responsable.

Je joue de manière responsable.

Eu falo a língua do jogo responsável.

RESPONSIBLE GAMING EDUCATION WEEK August 5-9, 2013

The gaming industry is proud of its diversity — our employees and customers come from all over the world. But no matter what language you speak, it’s important that everyone understands responsible gaming. During Responsible Gaming Education Week and throughout the year, be sure you are fluent in the most important responsible gaming messages, whether it is “set a budget,” “know the odds,” or “gamble only for entertainment.” If you know how to speak responsible gaming, you can share that knowledge with colleagues, friends and family. When we all speak the same language, we can all keep it fun.

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FRANKLY SPEAKING by Frank Legato

Art Magnates

Global Gaming Business AUGUST 2013

VIC TOR RINAL DO

nce in a while, when I can’t think of something to write about, I look up my column from exactly one year ago, to see if there’s anything I can “update,” or “steal.” In August 2012, I wrote about how hard it was to do two magazines in a month, in that case Casino Design along with GGB. This month, the two magazines I did are GGB and G2E Preview. I can effectively update last year’s comments thusly: It is still hard to do two magazines in a month. Moving on… A Palm Springs, California artist is preparing a piece for an exhibit opening in the fall that he calls “Santa’s Casino Stealth Bull.” According to the Baltimore Business Journal, Santa’s Casino Stealth Bull includes “toilet bowls, reindeer antlers and casino parts.” The artist, Kenny Irwin Jr., who, it says here, is known for building “dreamscapes,” told the newspaper his new creation is “going to be pulled by nine robo deer made out of full-size toilet seats.” Wow. Think of what Rembrandt could have done with toilet seats, had they been invented. But it’s not the “robo deer” that piqued my interest. It’s the “casino parts” that are reportedly part of Santa’s Casino Stealth Bull that have me perplexed. What casino parts? Part of the Mirage volcano? The marquee from Hooters? A gaming table from Sinatra’s Cal Neva? An ashtray from the MGM? Maybe the deal is that the toilet seats are out of a casino somewhere. Perhaps someone grabbed the thrones from the Dunes before they blew it up. Sometimes, I don’t get art. Moving on again, a Bethlehem, Pennsylvania man who three years ago was evicted permanently from the Sands Casino Resort Bethlehem slipped back into the property, sat down at the bar, and, according to police, “stole drinks.” The man ran up a $36 tab, with no money on him and no intention to pay. “I thought I was invisible,” the man said. Not really. He didn’t say anything, but perhaps he figured that since he was banned, nobody would ever know he was there. Or that banned patrons are entitled to bar comps. Just as with Santa’s casino parts, I am perplexed. But not as perplexed as I am with Paul Davies. (Segue rating: 7.1.) Davies, an adjunct journalism professor at Temple University and a research fellow for the New York-based think tank Institute for American Values, wrote a column blasting New York Governor Andrew Cuomo over the casino issue.

The column, published by the blog Syracuse.com, criticized Cuomo’s push for casinos in upstate New York. Professor Davies wrote as follows: “Cuomo has provided no evidence to his claim that upstate casinos will become tourist magnates.” Tourist “magnates,” Perfesser? I thought a tourist magnate was a wealthy baron who owned a chain of tourist getaways, or maybe a chain of tourists. OK, he may have a point in his column about the state government’s push for more casinos being an ill-considered move. But I’m not listening to any journalism professor who doesn’t know the difference between a magnet and a magnate. Finally, the Fantasy Springs Resort Casino outside of Palm Springs is serving as the setting for the SyFy Channel original movie Blast Vegas. According to a description of the film on the mydesert.com news site, Malcolm In The Middle’s Frankie Muniz “plays a nerdy friend who tags along with a group of wild frat brothers who head to Las Vegas for the spring break of a lifetime. After one of them steals an Egyptian relic from a casino, an ancient curse is released, and things get ugly.” Boy, I hate when that happens. Take one little trinket from a display at the Luxor, and your family members all turn into jackals. The article continues: “At some point in the movie, a computer-generated plane will crash onto the craps table on the gaming floor, the 18th hole at Eagle Falls Golf Course will become a tiger habitat and the area outside the Fresh Grill Buffet will be a museum complete with priceless Egyptian relics.” Whew! Thank goodness it was just a computer-generated plane. Someone could have gotten killed. Now, I could maybe buy the story line of a tiger habitat along a golf course. I’ve seen something like that in a casino before, although not on a golf course. But priceless Egyptian relics outside a buffet? “Go get me more bread pudding, Irving… Hey, isn’t that Nefertiti?” What can I say? It’s been a perplexing month. You know, some people call me a slot-machine magnate. Or is it magnet?

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Barton Introduces Online Poker Bill nline poker is back on the Partnership table at the U.S. House of Scramble in Representatives. Congressman New Jersey Joe Barton (R-Texas) introduced the Internet Poker Freedom Act, asinos in Atlantic City are which would legalized online going all in when it comes poker throughout the U.S. In to online gaming. Partnerships June, New York Republican with internet gaming companies Congressman Peter King rewere announced for Trump Taj leased a bill that would legalize Mahal, Trump Plaza, Resorts full online gaming in the U.S. Casino Hotel and Tropicana Barton is back after he preCasino Hotel, as properties in Congressman Joe Barton sented a similar bill in the the city line up their alliances in House two years ago. It died after the new and evolving form of receiving a couple of committee hearings, but he has gambling. higher hopes for this measure. In addition to tax revAll 12 casinos made submissions to the New enue for the federal government, it benefits poker Jersey Division of Gaming Enforcement to seek players, he says. permits to offer online betting, and revealed “United States consumers would benefit from a plans concerning internet partnerships. The program of internet poker regulation which recogDGE had set June 30 as a deadline for casinos to nizes the interstate nature of the internet,” the bill notify the agency that they had concluded or says, “but nevertheless preserves the prerogatives of were pursuing partnerships. In February, Goverstates and federally recognized Indian tribes.” nor Chris Christie signed a bill to allow Atlantic The bill is short on specifics but identifies a few City casinos to offer table games and slot games benefits: over the web to qualified players within state • Establishes standards for online poker licensborders. ing; “For applicants that meet this filing deadline, • Allows states to continue to license and reguthe division will be in a position to determine if late online poker at the state level; they can commence internet gaming operations • Ensures that tribes have the same rights as any by the go-live date,” said Lisa Spengler, spokesother entity that would apply for an online poker liwoman for the DGE. cense; The aggressive launch date is scheduled for • Creates an effective means to prevent minors November 26, but could change as the DGE from playing online poker; goes through its regulatory review of the partner• Identifies and helps to treat problem gamblers; ships, as well as evaluates the security and opera• Prevents players from non-participating states tions of the online systems. Web companies that from playing; are teaming up with Atlantic City casinos had • Allows players to self-exclude and set limit until July 29 to file for a formal New Jersey interlosses; and, net gaming license. • Prevents money laundering. On July 1 Trump Taj Mahal announced its King’s bill is much more specific, outlining a departnership with Ultimate Gaming, which partment to oversee online gaming, who could parlaunched the first legal U.S. poker site in Nevada ticipate as operators and players, how payments in April. Two days later, in an unexpected move, would be processed and more. Resorts announced a partnership with PokerBarton’s bill does contain a “bad actors” clause Stars, the controversial company recently that would prohibit online gaming operations that thwarted in its attempt to take over the Atlantic accepted bets after the passage of the Unlawful InterClub Casino Hotel. That was followed a few net Gambling Enforcement Act in 2006 from particdays later by an announcement from Trump ipating in any online poker industry in the U.S. for Plaza, which will partner with Betfair, and Tropifive years. cana, which will team up with Gamesys.

Global Gaming Business AUGUST 2013

“We are excited to be entering into an agreement with Trump Taj Mahal Associates to bring online gaming to New Jersey,” said Tom Breitling, chairman of Ultimate Gaming. “This represents a huge step forward in our desire to offer Americans across the nation the opportunity to enjoy safe and regulated online games.” The partnership does not extend to the Taj Mahal’s sister property, Trump Plaza, which has conducted negotiations on its own. The struggling casino had reached a $20 million buy-out deal with the Meruelo Group in March, only to see the deal collapse a month later. Trump Entertainment is actively trying to sell the Plaza, which came in last in terms of gaming revenue for 2012. The Plaza will now partner with Betfair, a U.K.-based betting exchange company that operates online casino software through GameAccount and poker through Ongame. Betfair also owns TVG, which is an online horse-betting company in the United States. TVG is licensed in New Jersey to operate exchange wagering on horses. Since the beginning of the year, PokerStars has been trying to buy the Atlantic Club, another struggling Atlantic City property looking to tap into the potentially lucrative online gaming market. In April, the casino terminated a $15 million purchase agreement with PokerStars because the online gaming giant did not meet a licensing deadline. After the Rational Group, PokerStars’ parent company, paid the casino $11 million to help it survive the winter, the court decided the Atlantic Club was within its rights to terminate the deal under the existing contract, and seek a new buyer. PokerStars appealed the decision, but lost the case just days before the partnership with Resorts was announced. Based on the timing, PokerStars was most likely negotiating with Resorts even as it attempted to keep the Atlantic Club deal alive. Another online relationship involves Tropicana with Gamesys, the company behind the first realmoney casino games on Facebook. Those games— Bingo and Slots Frenzy—are only available to U.K. residents. A popular game provider in Europe, Gamesys has had experience with other U.S. gaming companies, most notably Caesars Entertainment, for which they helped launch CaesarsCasino.com. The new partnership will help them break ground in New Jersey later this year, where they can offer a full array of their gambling products to online players. Other partnerships that have been previously announced include the Golden Nugget, which will team with Bally Technologies. Bally, best known for its casino systems and slot machines, is one of the few U.S.-based companies to provide online services to a casino in New Jersey. Under provisions in the state’s internet gaming bill, land-based casinos in Atlantic City are free to partner with foreign-based firms. Both Caesars En-

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tertainment Corp. and the Borgata Casino Hotel & Spa have teamed with experienced U.K. online operators. Caesars, which owns four properties in Atlantic City and remains the world’s largest casino company, previously announced it is partnering with the Gibraltar-based 888 Holdings Plc to help it run its internet operation. Caesars will bring its popular World Series of Poker brand to the Boardwalk, mirroring its soon-to-be-released online gaming site in Nevada. The Borgata is also teaming with a company based in Gibraltar, bwin.party Digital Entertainment Plc. The casino, owned by MGM Resorts International and Boyd Gaming Corp., will promote its games through the Borgata website and bwin’s PartyPoker, according to Boyd Vice President Bob Boughner. Both bwin.party and 888 have strong positions in the European online gaming market, and will bring their technical know-how and gaming platforms to the table.

Adelson Amplifies Online Opposition

n an interview with Global Gaming Business magazine last year, Las Vegas Sands Chairman and CEO Sheldon Adelson publicly said for the first

time that he opposed online gaming for a variety of reasons. A few months later, he told the American Gaming Association that he would oppose any federal bill that legalized online gaming, although he may not actively lobby against it. Last month, Forbes magazine published a column penned by Adelson that outlined the reasons he opposes internet gambling. He said he is “adamantly opposed to the legalization and proliferation of online casino gaming,” and that he sees the activity as “a societal train wreck waiting to happen.” He estimates that the impact on land-based gaming in the U.S. could be substantial. He compares the loss of business by the European land-based casinos with the U.S. “Recent research from a number of European countries shows that the proliferation of internet gaming has, as a start, resulted in a 20 percent decrease in visitation to the land-based casinos in those countries,” Adelson wrote. “What does that information foretell for us here in the United States? To begin with, a loss of 200,000 direct gaming industry jobs and additional 200,000 lost indirect and induced jobs. That’s 400,000 lost jobs in casino-hosting cities across America.” He went on to warn about greater damage to society as a whole.

Sheldon Adelson

“The possibility of underage children finding ways to place online wagers and the possibility of people betting under the influence of drugs or being coerced are all scenarios that can happen when the person is only monitored by their own computer screen,” he says. “On the other hand, when a person makes an effort to get dressed, join some friends and head to the local casino for a night of entertainment they must show themselves as adults, and their behavior can be observed and ultimately managed by security and other staff if needed.” Adelson’s column drew heavy criticism and derision from online gaming advocates. Martin D. Owens, a California attorney versed in internet laws, believes Adelson’s views are long disproven. “Mr. Adelson,” he says, “is staging a very belated and unimaginative rear-guard action.” Owens particularly points at errors in Adelson’s

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Pincus Out; Mattrick New CEO at Zynga thinking about online gambling addictions. He points to many studies, particularly one by the Harvard Medical School, that show the problem gambling rate online is almost exactly that of land-based gamblers—less than 2 percent, a finding confirmed by a separate study by the state of California. “The overwhelming majority of online gamers play in a very moderate manner, spending minimal amounts on gaming,” Owens says.

Delaware Issues Proposed Online Regs

tate officials have published new regulations for administering internet gambling in Delaware. The regulations were posted last month by the state lottery office. Some of the highlights of the proposed regulations: • The lottery director would have latitude to authorize any and all online games, including the standard slot and table games and “any other game which is determined by the director to be compatible with the public interest and to be suitable for use after such appropriate test or experimental period as the director may deem appropriate.” • Tournaments involving any and all approved games are permitted at the director’s discretion. • The term “internet lottery” is applied to all online gaming activity, “including internet ticket games, the internet video lottery and internet table games.” • A “technology provider” is defined as “any person or entity who proposes to contract with an internet lottery agent or the agency for the provision of goods or services related to an internet lottery.” • There is a prohibition on licensing any entity for internet gaming if any of its officials have a conviction “within 10 years before the filing of the application, of any felony, a crime of moral turpitude or a crime involving gambling.” This would tend to exclude the internet gaming entities indicted by the federal government in the 2011 “Black Friday” i-gaming shutdowns. • The application fee for a Technology Provider license is set at $4,000, and the applicant must cover the cost of the lottery’s background check. • Companies licensed as Technology Providers cannot have direct financial interest in the operation of any of the games. Other regulations set up minimum internal control standards, and place enforcement of punishment for violations under the control of the lottery director.

Don Mattrick

n a move that could boost the fortunes of the social gaming company, Zynga has hired Don Mattrick, former head of Microsoft’s Interactive Entertainment Business, as its new CEO and a member of its board. Mattrick will take over operation duties from Zynga founder Mark Pincus, who will remain chairman of the board and Zynga’s chief product officer. The appointment has come at a critical time for Zynga, which has begun to make inroads into real-money casino gaming in the U.K., just as its social media games continue to lose players. Under a partnership with experienced online casino operator bwin.party, Zynga in April launched two real-money online games, ZyngaPlusPoker and ZyngaPlusCasino. In addition, the company recently bought the Chicago-based Spooky Cool Labs, a leading developer of social, free-to-play online casino games— including the popular social media game Wizard of Oz. With its partnership with bwin and the acquisition of Spooky, Zynga is creating an infrastructure that will expand its reach in the real-money casino world. But as the company continues to pursue new revenue sources in real-money games, its domination of the social media world has been steadily crumbling. Zynga Poker was once the most popular free-to-play casino-type game on the web, but players have been dropping out as new competition has come on the market. Caesars Interactive Entertainment, the social casino arm of the world’s largest gaming company, Caesars Entertainment, has surpassed Zynga as the No. 1 publisher of social casino games, according to a report by research firm Eilers Research. Due to its poor showing and its lag in shifting into mobile games, the San Francisco-based firm was forced to close three offices and fire 18 percent of its workforce, as well as terminate some of its games. That’s why Mattrick’s hiring could be critical to Zynga’s future. Mattrick, head of the Microsoft division that produces Xbox, will bring his muchneeded interpersonal skills and industry knowledge to the table, and could strengthen the company in the social games department. What Mattrick has in store for Zynga and how that company will evolve remains to be seen. AUGUST 2013 www.ggbmagazine.com

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NEW GAME REVIEW by Frank Legato

Cash Spin Multi-Spin Bally Technologies

his is a variation on the Bally “U-Spin” feature—the technology that lets players touch a bonus wheel on the giant vertical video screen and send it spinning, at a speed relative to the pressure applied. In this case, there is a triple wheel—three concentric wheels that work together in a bonus to award credits, free spins and the chance at one of several large jackpots, including two progressives. The base game—the reels are displayed on the bottom of the long video screen—is a three-reel, 27-line slot. In addition to the big wheel bonus, there are two other featured events. A pick bonus, triggered when three scattered coin symbols land on the reels, gives the player the chance to select a coin on the screen to reveal either a credit award or an award plus an additional pick. The other bonus event, the free-spin round, is one of the possibilities on the big wheel bonus. When the U-Spin symbol appears in any position on the third reel, the player is prompted to spin the outer

wheel on the three-wheel display. One of the spaces on which it can land awards 12 free games. The wheel bonus can be triggered again on a free spin for additional free spins, up to a total of 60 free games. The rest of the spaces on the outer two wheels are credit awards, bonus multipliers and arrow symbols. The arrow symbols progress the player to the next bonus wheel for another spin, and the innermost wheel consists of several awards in the tens of thousands of credits and two progressives, a Minor resetting at 5,000 credits—$50 in the penny version—and the Major, which resets at $1,000 on the penny version of the game. Manufacturer: Bally Technologies Platform: Alpha 2 Format: Three-reel, 27-line video slot Denomination: .01—500.00 Max Bet: 200, 400 Top Award: Progressive; 100,000-credit reset Hit Frequency: 35.03% Theoretical Hold: 5.94%—14.91%

Passport to Riches: Opulent India Konami Gaming

his is the latest game in Konami’s “Multi-Mystery Xtra Reward” series, and the second to carry the “Passport to Riches” theme. In this case, the theme depicts royalty and wealth in ancient India. The minimum bet is 40 credits, which covers the 20 paylines at a credit per line, plus a 20-credit ante to activate the Multi-Mystery Xtra Reward feature. In the base 20-line game, line wins are multiplied by credits wagered per line. Scatter wins are multiplied by total credits wagered. Each reel contains a number of adjacent positions that are randomly replaced with one of the following symbols: elephant, snake, pot, fan, A, K, Q, J, 10, or 9, before the reel spin is initiated. All replacement positions are filled with the same symbol. The woman symbol is wild, substituting for all but scatter symbols. The only primary-game bonus feature is a free-game event. Three, four or five flower symbols trigger 15, 20 or 30 free games, respectively. Any six or more flower symbols across all the reels trigger 60 free games. All wins during free games are doubled, and additional free games can be triggered when the flower symbols land during a free spin. The cartoon dragon character appears randomly after a spin to activate the Multi-Mystery Xtra Reward feature. Like the name indicates, the extra rewards can happen at any time during the base game. When the random event occurs, one of several bonus features is triggered:

Global Gaming Business AUGUST 2013

In “Free Reels,” a second set of reels randomly appears on the top screen for an individual bonus spin. The “Wild” feature applies to “Action Stacked Symbols,” which are clusters of the same jackpot symbol—another trademark Konami feature. During the reel spin, the Action Stacked Symbols will all randomly change into wild symbols. In the “XL Wild Reels” feature, randomly, after the reels stop spinning, one large reel will spin over the existing reels, potentially adding additional wild symbols. Manufacturer: Konami Gaming Platform: KP3 Format: Five-reel, 20-line video slot Denomination: .01—5.00 Max Bet: 1,000 Top Award: 200,000 Hit Frequency: Approximately 50% Theoretical Hold: 4%—18%

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NEW GAME REVIEW

Ripley’s Believe It Or Not! American Gaming Systems

his is the first game in the new AGS “It Pays To Know” series, which features knowledge-based bonus sequences in which players who correctly answer trivia questions win the highest awards. The 30-line video slot is based on the legendary comic strip of the same name, for which the late Robert Ripley traveled the world seeking out oddities and amazing facts. As AGS has done with other games in its Roadrunner series, the main bonus is accompanied by an extensive lineup of secondary bonus events. The main bonus event, the Trivia Progressive Bonus, carries a guaranteed prize, potentially one of five progressive awards if the player answers a question correctly. The five progressive levels include “Optimist,” resetting (in the penny version) at $25; “Smarty Pants,” resetting at $62; “Bookworm” at $100; “Brainiac” at $250; and the top jackpot, “Know It All,” resetting at $1,000. When the Trivia bonus is triggered with three or more bonus symbols, a multiple-choice trivia question from categories ranging from sports to Ripley’s oddities appears. If the player answers correctly on the first try, one of the five progressives is awarded. If not, a fractional portion of the progressive connected to the question is offered. AGS has added an intriguing feature to help players in the trivia round. Base-game play can earn up to three “assist features” which can be saved for the bonus. The “Eliminator,” which is automatically applied in the bonus if earned, eliminates one of the wrong answers. The “Stats” tribute, also automatically applied, presents historical data about how other players have answered the question on the first response. The “Re-Do” feature kicks in if the player is wrong on the first guess, offering a chance to receive the progressive on the second guess. Other bonus features include a physical bonus wheel, triggered when the Ripley’s symbol morphs into a

wheel. The wheel includes credit amounts and a question mark, which gives the player a choice of a credit award or the “Hyper Wild Super Spin.” This feature gives the player a choice of two from a field of 11 objects. Those two symbols transfer to one reel, and the rest of the reel symbols on the screen become wild for one “mega-spin.” Other bonuses include random “Electric Wilds,” with animated lightning that “shocks” symbols to become wild; and “Pick’em & Free Spin,” in which the player picks objects to win awards and to enhance a free-spin round with bonuses and extra free spins. After the picks, free spins commence, starting with six spins. Manufacturer: American Gaming Systems Platform: Roadrunner Format: Five-reel, 30-line video slot Denomination: .01, .02, .05 Max Bet: 250 Top Award: Progressive; $1,000 reset (times denomination) Hit Frequency: Approximately 50% Theoretical Hold: 6%—12%

Splitting Hares

International Game Technology

or this game, IGT uses a fantasy theme centered around cartoon rabbits, with beautiful artwork and a clever base-game feature involving symbols that “multiply.” In a new feature called “Symbol Burst,” the payouts extend beyond lining up five symbols—there can be two or more symbols in a single reel spot, for as many as 15 possible symbols on a single payline. For example, on the screen pictured, there are symbols displaying two matching rabbits on the first reel, three on the second reel and two on the third reel, and the payout is 250 credits for seven of the symbols on a single payline. If two or three lady bug symbols land

on the center reel, the player wins a scatter pay and the free game bonus is awarded. The free games are unique in themselves—the player can pick the volatility of the bonus by selecting five, eight, 10 or 12 free games with awards higher for fewer games. There is also a random “Bonus Boost” that increases the award when the bonus is complete. The Bonus Boost and Symbol Burst features are designed to encourage high coin-in, up to the maximum wager of 400 credits. Manufacturer: International Game Technology Platform: AVP Format: Five-reel, 40-line video slot Denomination: Multi-Denomination Max Bet: 400 Top Award: 100,000 Hit Frequency: Approximately 28% Theoretical Hold: 2%—15%

Global Gaming Business AUGUST 2013

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GOODS&SERVICES

G2E Asia 2013 Breaks Records he seventh annual Global Gaming Expo Asia Tdeesbrought together a record number of attenfor the leading networking, trade and educational showcase for the Asian gaming industry. From May 21-23, 5,851 attendees—an increase of 16 percent compared with 2012 attendance figures—visited the Venetian Macao in Macau S.A.R., People’s Republic of China, for the premier event for gaming professionals and decision-makers in Asia. These figures, released by G2E Asia organizers Reed Exhibitions and the American Gaming Association, reflect a continued expansion of gaming throughout Asia. “The gaming industry continues its ascent as one of the most dynamic, fastest growing and increasingly important sectors of our regional economy,” said Nat Wong, president of Reed Exhibitions Greater China. “On behalf of Reed and the AGA, I’m delighted to have welcomed a record number of visitors and exhibitors to G2E Asia. This exhibition, together with the corresponding conference program and value-enhancing networking activities, has provided a powerful platform for hundreds of local suppliers to showcase their gaming solutions to a generous audience in Macau for the seventh consecutive year.” Some 139 companies from 19 countries converged at G2E Asia 2013 to display a wide range of products, including slot machines, accessories, gaming software, casino furniture and security systems. While recording a 19 percent increase in showroom floor space over 2012, for a total of 76,245 square feet (7,087 square meters), the exhibition welcomed 33 new exhibitors to promote their offerings alongside new products and services from some of the world’s leading providers of gaming operations solutions. The G2E Asia 2013 Conference, a three-day 62

Global Gaming Business AUGUST 2013

event that drew 642 participants, highlighted the latest trends in gaming and examined how businesses can compete effectively on a global scale. It provided high-value seminars that covered a diverse array of topics, including market segmentation, optimizing financial management of gaming operations, the evolution of the Philippines and Taiwan into major gaming destinations, innovations in gaming technology, brand-building, and how gaming can be a metaphor for the Chinese worldview. G2E Asia producers have already begun planning for the 2014 event, scheduled for May 20-22 at the Venetian Macao. For more information on G2E Asia, visit www.g2easia.com.

Konami to Double Size of LV Headquarters lot manufacturer Konami Gaming has begun Sof itswork on an expansion that will double the size Las Vegas headquarters. The company will add a new 193,000-squarefoot building adjacent to its current 123,000square-foot headquarters, which is located on a 12.33-acre site south of McCarran International Airport. The project is slated to be complete in the summer of 2015.

Konami Gaming, which is a subsidiary of video game giant Konami of Japan, will increase staffing levels and consolidate all offices under one roof in the expansion, which will allow the slotmaker to close a satellite corporate office and warehouse facility in Las Vegas. “What this project shows is the company’s commitment to the gaming industry and the opportunity we see for expansion and growth,” said Thomas Jingoli, senior vice president of Konami Gaming, in an interview with the Las Vegas Review-Journal. “A facility of this size offers us the space we need for the three-to-five-year growth plan we have established for the company.” The new facility is expected to receive the Silver certification for Leadership in Energy and Environmental Design (LEED). It will include a subterranean warehouse and assembly facility, subterranean parking, research and development facilities and an automated manufacturing floor.

NEWave Installs at Charles Town oftware supplier and consultant NEWave anSsoftware nounced that it is adding its leading TINCheck to the package of business management and compliance software it already provides to Penn National’s Hollywood Casino at Charles Town Races in West Virginia. Previously, NEWave installed its Audit Manager and Title 31 software tools at Charles Town. The casino will use NEWave’s TINCheck software across the entire operation, from slot floor to table games. An integral part of the company’s award-winning myCompliance Manager software suite, TINCheck is designed to simplify verification of patron information by quickly validating address and tax I.D. information. TINCheck verifies against the IRS Tax Identification Number (TIN) database for both employer identification number (EIN) and Social Security numbers, ensuring accuracy and reducing or eliminating discrepancy penalties and B-Notices.

Bally Launches NASCAR Slot lot manufacturer Bally Technologies began the Sthemed U.S. launch last month of its NASCARvideo slot, with the game appearing in casinos throughout the country. The machines originally were rolled out under a brief exclusive by Boyd Gaming properties. The slot is the result of a partnership between

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Boomtown Picks Aristocrat and system manufacturer Aristocrat TechnoloSninggieslotOasis announced that it has installed its award-win360 casino management system at

Bally and the National Association for Stock Car Auto Racing, better known as NASCAR, to create a slot game that captures the excitement of the sport. It features five top NASCAR stars— Dale Earnhardt, Jr., Jimmie Johnson, Kevin Harvick, Jeff Gordon and Clint Bowyer—one of which the player picks at the start of play. When selected, the theme of the game switches to match the colors, number and images of that driver. The bonus is a 3D video NASCAR race. “We know there is a big crossover with our fan base and gaming,” said NASCAR Vice President of Licensing and Consumer Products Blake Davidson. “We have some good research that shows our fans have a natural affinity for gaming overall.” More than that, racing fans have loyalty to the individual drivers, which is translating into loyalty for the new slot game, according to Bally officials.

Boomtown Casino Hotel in Reno, replacing the former system to link and monitor all of the casino’s 600 gaming devices. The full Oasis 360 system purchase includes several advanced modules, including the bonusing suite Speed Solutions, which includes the award-winning nRich, Ricochet Rewards and Jackpot Announcer features. Aristocrat also installed its nCompass LCD, which offers operators the ability to communicate more dynamically with players by running flash content and highlighting property amenities, all with an easy-to-use touch-screen interface. Oasis 360 was rated the Most Widely Used System in the 2013 Goldman Sachs Slot Manager Survey.

CNIGA Picks Cadillac Jack Progressive maya Gaming Group announced that its wholly A owned subsidiary Cadillac Jack and the California Nations Indian Gaming Association (CNIGA) have entered into an agreement for Cadillac Jack to become the provider of wide-area progressive (WAP)

gaming products to CNIGA’s member tribes. The agreement received a unanimous vote of approval from the executive board of CNIGA. “Cadillac Jack’s WAP products have built a loyal player following, generating impressive jackpots and providing consistent revenue on casino floors,” commented Lee Acebedo, executive director of CNIGA. “We at CNIGA are extremely excited to introduce Cadillac Jack’s quality WAP products to our 23 gaming tribal members and their players.”

BMM Receives WLA Accreditation aming testing company BMM Testlabs anG nounced that it has received World Lottery Association (WLA) accreditation as an official WLA Certification Service Entity. Additionally, Thomas Bierbach, BMM’s director of lottery security and audit services, has been accredited as a WLA Security Control Standard Auditor. “Receiving WLA accreditation is a valuable recognition of BMM’s competency as a security control standard auditor and adviser,” said Bierbach. “It validates BMM’s years of extensive security experience in the lottery industry, which lotteries can draw from to help them meet security and certification objectives.” BMM is recognized as an expert in lottery security, including information security, player protection and fraud prevention.

GLI Receives Colorado Renewal eading gaming testing company Gaming LaboraLDivision tories International announced that the Colorado of Gaming has granted the company a new contract to serve as a certified testing laboratory for the state’s gaming industry. The contract was granted after a Request For Information process conducted by state officials. The RFI included strict performance and Colorado-based facility requirements that must be adhered to in order to achieve “Certified Vendor” status. GLI is already in conformance with these standards, continuing a status dating to the start of gaming in Colorado. Only test labs designated as “Certified Vendor” can perform testing for the Division of Gaming, and GLI is the only test lab to have achieved this status. GLI’s Colorado lab has been adding staff consistently for more than a year, and is now home to more than 100 employees. The increase in staff necessitated GLI Colorado’s recent expansion of its facility in Golden, Colorado. GLI serves more than 455 global jurisdictions, more than 130 of which exclusively accept GLI certification letters. AUGUST 2013 www.ggbmagazine.com

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CUTTING EDGE by Frank Legato

Bingo Bonus Product: Bingo 6 Manufacturer: Ortiz Gaming

rtiz Gaming has launched an electronic bingo game that offers multiple chances to win. Bingo 6 is comprised of four cards with 24 numbers each. Forty-four balls are drawn from a central server, in a main draw in which every player wins a prize. At the end of the main draw, players are offered the opportunity to join the Extra Bonus, a seven-level feature during which a new ball is drawn at every level and marked on the activated card for a chance to win additional prizes. Besides the guaranteed prize, a total of 10 prizes are offered, plus the jackpot. The Ortiz jackpots, on all of the company’s titles, are true community bonuses, with winnings shared among all players. When a player wins a jack-

pot, while the big winner gets the full jackpot amount, every other player on the bank of games wins a percentage of the jackpot. This results in a lot of interaction among players, who encourage each other to bet more, to increase the jackpot amounts to be shared. “This brings true community excitement and participation to the gaming floor and increases time-inchair,” says an Ortiz official. “Regardless of the game title, regardless of the denomination, or the number of credits played, everyone shares in every jackpot. In every country where Ortiz games have been installed, players root for each other to win jackpot amounts to be shared by everyone. This level of player excitement increases coin-in, and thus, win per unit.” For more information, visit ortizgaming.com.

Mobile Network Product: Mobile Hospitality System Manufacturer: MICROS Systems

ICROS Systems has launched what it calls the “next-generation hardware platform” for mobile business operations in the gaming and hospitality industries. Components of the system include the mTablet and mStation products for customer service functions and OPERA Mobile, a fully integrated hospitality network. The mTablet is a sleek, durable tablet that is purpose-built for the hospitality industry. Unlike consumer tablets, MICROS mTablet’s fullcolor LCD display provides a traditional display experience along with outstanding daylight viewable capability and enhanced battery life. With the mTablet’s enriched battery, and the mStation wireless network, employees can service customers wherever they are on site. The mTablet provides fully integrated payment processing, and offers Wi-Fi and Bluetooth connectivity. An expanded operating temperature range of 14 degrees to 140 degrees Fahrenheit and weather-proof hardware allow for both indoor and outdoor use. OPERA Mobile is a fully integrated solution enabling property personnel to check in and check out guests, organize housekeeping activities, manage task sheets, and coordinate room maintenance through the use of mobile devices. OPERA Mobile aids in optimizing revenue opportunities and operational efficiencies while maintaining a full-service, personal touch. OPERA Mobile’s Housekeeping Task Companion solution increases efficiency as it provides housekeeping staff the ability to change a hotel room’s housekeeping status on the go, as well as provide instruction to other staff members as to which rooms to clean next. The Housekeep-

Global Gaming Business AUGUST 2013

ing Task Companion system determines which rooms to clean based on various factors: if the room is in backlog, how many guests will occupy the room, the anticipated arrival time of the new guests, and when the current guests will check out. For more information, visit micros.com.

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PEOPLE AINSWORTH AT 90

en Ainsworth, the affable Australian who has launched two successful slot manufacturing companies, turned 90 July 11. Ainsworth built his first Len Ainsworth slot machine in 1953, while working in his family’s dental equipment company. He parlayed that into Aristocrat Leisure Industries, which remains one of the top slot-makers today. After leaving Aristocrat in 1994, he launched Ainsworth Game Technology a year later. The company, which Ainsworth still heads as executive chairman, has captured a 35 percent share of its home Australian market, as well as big shares of markets in Asia and elsewhere and, most recently, making inroads in the North American market. Ainsworth stock has risen 145 percent in the past year, making Len Ainsworth a billionaire all over again. Asked by the Australian publication BRW how he was going to spend his birthday, the indefatigable Ainsworth replied, “At work! I’m going to go to work in the normal fashion, but tomorrow night I’m having a bit of a party.” The publication reported that the “bit of a party” included around 400 guests.

OSWELL NEW SENECA COO

he Seneca Gaming Corporation has appointed gaming industry veteran Audrey Oswell Audrey Oswell as the corporation’s chief operating officer. Oswell will work closely with the senior management team and the corporation’s board of directors in managing the business and operational aspects of Seneca Niagara Casino & Hotel in Niagara Falls, Seneca Allegany Casino & Hotel in Salamanca, and the new Seneca Buffalo Creek Casino in downtown Buffalo. Oswell has more than 30 years of experience in the gaming industry. Previously, she was chief gaming officer at Atlantis on Paradise Island in the Bahamas. She also worked in upper management at Resorts International and Caesars in Atlantic City and the Cosmopolitan in Las Vegas.

state Senate. Governor Jerry Brown announced the appointment last month in Sacramento. Batjer would be in charge of the agency that administers state operations such as procurement, information technolMarybel Batjer ogy and human resources, according to the Sacramento Bee. Batjer joined Caesars Entertainment in 2005. Before that, she worked in state and federal government in Nevada, California and Washington, D.C. She served as cabinet secretary for former Governor Arnold Schwarzenegger of California from 2003 to 2005, chief of staff for Nevada Governor Kenny Guinn from 2000 to 2003 and undersecretary at the California Business, Transportation and Housing Agency from 1997 to 1998 under Governor Pete Wilson.

NEW SENIOR EXECUTIVES ADDED AT REVEL

wo new senior executives have been added to Revel Casino Hotel’s management team, continuing the resort’s restructuring efforts after emerging from pre-packaged bankruptcy in April. Scott Kreeger will join Revel’s senior team as the new interim chief operating officer. Kreeger, a former senior vice president of operations at Station Casinos, will serve as second-in-command to Jeffrey Hartmann, who was brought on in March as Revel’s interim chief executive officer. Kreeger has held vice president and general manager positions at several Station Casino properties, including Green Valley Ranch and Red Rock Casino. Prior to joining Station Casinos, Kreeger held senior gaming operations and marketing positions with MGM Mirage. At Station, he was responsible for all technology initiatives and operations, and thus could help the struggling Atlantic City casino explore its mobile and online gaming options. Former Trump Entertainment Resorts Inc. attorney Loretta Pickus has been appointed as Revel’s senior vice president and general counsel. Pickus’ previous post was attorney at Trump Entertainment Resorts Inc.

BATJER LEAVES CAESARS

MARKLING EXITS NEVADA GAMING BOARD

arybel Batjer resigned last month as vice president of public policy and corporate social responsibility of Caesars Entertainment, to become secretary of government operations for the state of California, pending confirmation by the California

erry Markling, who has been chief of the Nevada Gaming Control Board’s enforcement division since 2005, is leaving the agency at the end of August to pursue “a new opportunity in the gaming industry,” according to the Las Vegas Review-Journal.

Markling has spent 22 years with the board and a total of 43 years in government service, including two decades with the Provo, Utah, police department, where he reached the rank of captain before retiring. “He’s been an incredible asset to the board and a trusted colleague,” said Gaming Control Board Chairman A.G. Burnett. “I have relied on his opinion and advice regarding complicated criminal and gaming regulatory matters, just as four previous chairmen did.”

R FRANCO APPOINTS NEW CEO

enior management professional Pedro Melendo Derqui has been appointed chief executive officer at Spanish gaming manufacturer and operator R Franco. His tenure began on July 1. Melendo has a degree in managing and marketing from ESIC Business and Marketing School and a program leadership development degree from IESE. Over the past 20 years, he has worked in a variety of industries for companies including Sogecable, Trans TV and ASM, a subsidiary of the Agbar Group. Since 2005, Derqui has been general manager at the Norte Facility Group, involved at both the national and international levels. According to a statement from R Franco, Derqui will be part of a strategy to strengthen the international presence of the company.

August 2013 Index of Advertisers AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Ainsworth Game Technology . . . . . . . . . . . . .43 Aruze . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Bally Technologies . . . . . . . . . . . . . . . . . . .2, 49 BEGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Cantor Gaming . . . . . . . . . . . . . . . . . . . . . . . .21 Casino Design magazine . . . . . . . . . . . . . . . . .59 Cuningham Group . . . . . . . . . . . . . . . . . . . . . .55 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . .63 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53, 56 Gaming Support . . . . . . . . . . . . . . . . . . . . . . .47 Gasser Chair . . . . . . . . . . . . . . . . . . . . . . . . . .33 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Global Cash Access . . . . . . . . . . . . . . . . . . . . .67 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 JBA Consulting Engineers . . . . . . . . . . . . . . . .25 Konami Gaming . . . . . . . . . . . . . .9, Back Cover LT Game . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Multimedia Games . . . . . . . . . . . . . . . . . . . . .11 NEWave . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Ortiz Gaming . . . . . . . . . . . . . . . . . . . . . . . . .39 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . .27 Spielo International . . . . . . . . . . . . . . . . . . . .31 WMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

AUGUST 2013 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Robert J. Soper

President & Chief Executive Officer, Mohegan Sun

obby Soper is a member of the Mohegan tribe and has been an executive with the Mohegan Sun organization since 2001. He was the first president and CEO of Pennsylvania’s Mohegan Sun at Pocono Downs and was named to the same position at the tribe’s flagship casino, Mohegan Sun in Connecticut, last September. Prior to operating the Pennsylvania casino, Soper was senior vice president of administration at Mohegan Sun and was legal counsel for the Mohegan tribal government. Connecticut’s Mohegan Sun just announced a new retail mall that will connect to the existing shops at the property, along with other changes. Soper spoke with Global Gaming Business Editor Frank Legato at Mohegan Sun in April. To hear a full podcast of this interview, visit www.ggbmagazine.com. GGB: What’s it been like since you returned to

we’re in challenging economic times. The consumer mindset has changed. They have fewer discretionary dollars to spend. Competition has also been impactful, especially as it relates to casinos opening up in New York. We’ve gotten more strategic and more productive and feel good where we are right now. There’s more competition coming on in Massachusetts in several years. Do you think Mohegan Sun has enough non-gaming attractions to appeal to the overnight and weekend customers? We think there are lots of differentiators. We have not only one of the best entertainment venues in the casino industry, but overall venues. We are one of the premier entertainment venues with our arena in the Northeast. I doubt if any of the Massachusetts casinos will be able to match this venue. And when you add our food and beverage, retail, and other non-gaming amenities, I don’t think anyone will be able to match us.

Mohegan Sun in Connecticut? Soper: It’s been great. I’ve been reunited with many of the team members with whom I worked closely before leaving for Pennsylvania almost eight years ago. The transition has been great and I’m happy to be back in Connecticut.

In Pennsylvania, you ran one of the most successful casinos in the state. Is it a challenge to come back here to a market that is struggling? This is still one of the premier destinations in the United States. Perhaps I’m a bit biased, but I think it’s the most exciting casino destination in the country. Anytime you have the opportunity to work in an environment like this, you take it. It is a challenging time. It’s a difficult economic climate. Competition has grown, but we still continue to be one of the most successful casinos in the world. What is the chief reason for the recent revenue slump at Mohegan Sun and in Connecticut in general? The economy is the primary driver. In most markets, we’ve seen declines reflective of the fact that 66

Global Gaming Business AUGUST 2013

What have you done since you returned to turn things around? I can’t disclose what we consider trade secrets, but we’ve focused more on our analytic strategies, which get even more sophisticated with the depth of our data. We’ve always used this data wisely, but we’ve stepped it up recently. We’ve become more specific in analyzing and leveraging that data. Culturally, we’ve begun to loosen up. Times have been challenging in the casino business over the past few years, but we’re ready to have a little more fun. Have you been able to use the Pennsylvania property, and now the property in Atlantic City, to cross-market the Mohegan brand? There are many more opportunities to get the message out to our customers. We can leverage the destination here, starting with the top-notch entertainment and our great amenities that Pennsylvania doesn’t have. And it’s not uncommon for our Connecticut guests to visit Pennsylvania or our new property in Atlantic City, where we manage Resorts. Our customers are able to use their players club points at any of our three properties.

You’re hoping to add a fourth property in western Massachusetts. It’s a bidding process, so what do you think your chances are there? It’s a competitive process, but we think we have the best site and proposal. We remain optimistic, but only time will tell. We’re going to be prepared for competition in Massachusetts either way. There will be impact, and we have to be ready. It may change the dynamic of our strategy if we don’t win a license, but either way, we’ll be prepared. You’ve got some great brands in all your properties. Margaritaville in Connecticut and Atlantic City; Michael Jordan in Connecticut; Bobby Flay and Wolfgang Puck. Are you going to continue this trend? We’ve partnered with some quality brands. I think there’s a balance between presenting those brands and developing your own concepts. We first determine what our guests and potential customers want, and that will dictate whether we’ll implement a brand. Any thoughts on marketing with Foxwoods in this region of Connecticut? This has been done in the past, but there are currently no talks about this. But we’re open to partner with any third party that creates mutual benefits. Given the coming competition, do you think the New England gaming market is becoming saturated? It’s hard to say. With the introduction of gaming in Massachusetts, there will continue to be growth, but once that happens, we’ll be closer to that point. There will be opportunity for growth once the economy improves. We probably won’t get back to 2008 levels, but we’ll get close with a better economy. What does it mean to be the first tribal member to lead this casino? I’m humble that the tribe and the council have provided me this opportunity. I have skin in the game, and it creates more incentive for me to see us succeed.

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