Global Gaming Business, August 2017 by Global Gaming Business

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GGB Global Gaming Business Magazine

RESPONSIBLE GAMING ONLINE GAMING PLATFORMS KNOW YOUR CUSTOMER SANDS CHINA’S WILFRED WONG

August 2017 • Vol. 16 • No. 8 • $10

Tribes Go Commercial Diversifying economies by tapping gaming expertise

Rooms to Grow

Streamlining your hotel operations

g n i n r u T

the Tables Why ETGs are spreading across the casino floor Association of Gaming Equipment Manufacturers

Official Publication of the American Gaming Association

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CONTENTS

Vol. 16 • No. 8

august

Global Gaming Business Magazine

26 COVER STORY

COLUMNS

ETG Era

12 AGA Rest Easy, Nevada

Electronic table games have become perhaps the fastest-growing segment of casino supply, with new stadiumstyle setups and lower limits, a non-intimidating atmosphere and flashy new presentations that mimic nightclubs, bringing new players to the casino.

Geoff Freeman

By Frank Legato

14 Fantini’s Finance Keeping Score Frank Fantini

18 Marketing The Millennial Problem Jeff Hwang

Cover photo of the Pulse Arena at Greektown Casino Hotel in Detroit courtesy of Interblock.

FEATURES

36 Attacking Problem Gambling

The academic community and organizations dedicated to helping problem gamblers continue to search for answers to make it more efficient for casinos to battle this addiction. By Chris Sieroty

32 Table Games The Frog and the Sparrow Roger Snow

DEPARTMENTS 6

The Agenda

By the Numbers

10 5 Questions

20 Hotel Evolution

16 AGEM Page

Automation, data collection and pricing strategies join the fundamentals of customer service in the evolving craft of keeping the hotel side of gaming profitable.

41 Cutting Edge 57 Frankly Speaking 58 Emerging Leaders

By Bob Boughner and Steve Gallaway

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

48 The Platform’s the Key While numerous factors go into creating a successful online gaming program, nothing is more important than an effective software platform. By Steve Ruddock

With Warner Hospitality’s Walter Fales and Drexel University’s Jonathan Deutsch

42 Tribes Diversify Gaming tribes are using resources from their casino portfolios to diversify beyond gaming at a faster pace than in the past. By Dave Palermo

54 Knowing the Customer Tracking of spending habits and preferences in and out of the casino boils down to one goal for technology: know your customer. By Dave Bontempo

52 iGames News Roundup 4

Global Gaming Business AUGUST 2017

60 New Game Review 62 Goods & Services 65 People 66 Casino Communications With Dr. Wilfred Wong, President, Sands China

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THE AGENDA

Back to the Future

Vol. 16 • No. 8 • AUGUST 2017 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | cooley7@sunflower.com

Roger Gros, Publisher

ast month’s celebration of the 15th anniversary of GGB Magazine left me in a reflective mood. It has nothing to do with my new, more realistic “look,” which is actually a reversion to the way I appeared prior to joining the casino industry. It has left me, however, a bit curious about what the future holds for the gaming industry. Disruptive technologies have heavily impacted many industries in ways that were unimaginable just a decade ago. The reports about the death of retail aren’t that surprising given the success of Amazon, eBay and other online retailers. Some articles conjecture that those massive malls that used to thrive year-round will now become empty shells as people change their buying habits. Retail companies are scrambling to react, but we already know it’s too late for many of them. The taxi business has been totally turned upside down with the success of Uber and Lyft. Yes, there are some cities and states that are fighting against this rising tide by passing laws and regulations that make it more difficult to run these ridesharing businesses. Yet the convenience they offer seems to be winning the battle. The rapid growth of companies like Airbnb that act as a middleman to lease private homes and apartments on a short-term basis to travelers who would have ordinarily rented a hotel room has challenged the hospitality industry. And like ride-sharing, jurisdictions are fighting back by imposing taxes and fees on those willing to lease their properties. Perhaps more applicable to the casino industry is the delivery of movies and films. Gone are the video rental stores. DVDs? A thing of the past. In my business, I’ve been paying close attention to the decline in print publications in favor of online access to information. We’ve been somewhat lucky in that trade magazines seem to be a bit more resistant to this trend, but the impact is strong nonetheless. At GGB, we’ve developed some very well-received web products, so we’re trying to stay ahead of the curve. For the casino industry, the growth of iGaming was supposed to be the big threat. But that hasn’t proven to be the case; in fact, it has enhanced landbased casinos in many ways. While it’s true that gaming revenues have been flat over the past several years, that can be explained by increased competi-

Global Gaming Business AUGUST 2017

tion from more land-based casinos as well as a greater choice of entertainment options both online and off. But we all know changes are coming. Just look at the attention paid to the dreaded “M” word—millennials—over the past five years. I don’t doubt for a moment they will become gamblers just as their parents and grandparents did decades before, but what form will that take? There already seem to be indications that traditional slot machines won’t hold the same allure to them that they have to previous generations. So will that mean they’ll be gambling on their devices? And where will they play? Will they still come to the “casino” or will they gather in small clubs or large entertainment centers that may or may not be places where mainly gambling takes place? Or will we be able to figure out how to create “communities” that will attract the gamblers among the millennials? As you can tell, I don’t pretend to have the answers. I do think there will be some companies that will be thinking outside the box and pushing the envelope (sorry for the clichés) to take chances that will elevate them to become the next Amazon or Uber or Airbnb of gaming, and those companies will become the unlikely giants of the industry. Or will the current giants take the chances that will cement their positions as industry thought leaders? MGM certainly has been considering the future with the Level UP project at MGM Grand. Caesars has blazed the skill-games trail with installations in its largest properties in Atlantic City and Las Vegas. For slot manufacturers, will GameCo or Gamblit be disrupters? Or will the big companies simply co-opt what they are producing and do it better? I know that progressive management in any gaming company has to be considering these challenges. Who wants to be the next Blockbuster or Sears? For the last 15 years, GGB has been covering these changes, and I had been covering the industry for another 20 years before that. It’s been a great experience, but I think the next 15 years are going to be the most exciting that I’ve ever seen, so hold on and enjoy the ride.

John Buyachek, Director, Sales & Marketing jbchek@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Frank Fantini twitter: @FantiniResearch Geoff Freeman twitter: @GeoffFreemanAGA Jeff Hwang twitter:@RivalSchoolX | Roger Snow Contributing Editors Dave Bontempo | Bob Boughner Steve Gallaway | Dave Palermo twitter: @DavePalermo4 Steve Ruddock twitter: @SteveRuddock Chris Sieroty | William Sokolic | Michael Zhu

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

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

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

• Jeffrey Compton, Publisher, CDC E-Reports twitter: @CDCNewswire

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

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Vice President & Chief Compliance Officer, MGM Resorts International, twitter: @stephenmartino

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Steven M. Rittvo, Chairman Emeritus, The Innovation Group twitter: @InnovGrp

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

• Ernie Stevens, Jr., Chairman, National Indian Gaming Association twitter: @NIGA1985

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 901 American Pacific Drive, Suite 180 • Henderson, Nevada 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor. Copyright 2017 Global Gaming Business LLC. Henderson, Nevada 89014 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 901 American Pacific Dr, Suite 180, Henderson, NV 89014 Official Publication

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BY THE

NUMBERS

iGaMinG GRowth t

he online gaming market in the U.S. started slowly in 2013 when Nevada legalized online poker. Six months later, Delaware introduced full online casino gaming and two weeks after that, New Jersey did the same. In a report titled “The Economic Impact of New Jersey Online Gaming: Lessons Learned,” the new iGaming advocate group, iDEA (iDevelopment and Economic Association), commissioned a study by Alan Meister of Nathan Associated and Gene Johnson of Victor Strategies to outline the growth of iGaming in the industry’s most successful state. The success is not only because New Jersey is the most populous of those states, but it also has implemented the most sensible and innovative process in the industry. While revenues in Delaware and Nevada remain flat since launch, New Jersey has seen impressive growth in the last two years. To download a full version of the report and to hear a podcast with Gene Johnson, visit GGBMagazine.com.

Monthly iGaming Revenue by State, 2013-2016

Macau’s back

Macau Rebound

or two years starting in 2014, gross gaming revenues in Macau plunged precipitously. Pressure from the Chinese government made VIP players nervous about visiting Macau and demonstrating their desire to gamble. The mass market was still immature and wasn’t able to fill the void of the fleeing VIPs. That ended a year ago, when revenues in August 2016 demonstrated the first year-over-year increase in more than 24 months. Now, Macau is riding an 11-month revenue rebound, with no end in sight. The rebound has been driven by the return of some VIPs but more importantly by burgeoning premium mass-market customers who are finding a warm welcome in Macau.

% Source: Macau’s Gaming Inspection and Coordination Bureau 8

Global Gaming Business AUGUST 2017

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NUTSHELL

“They

5Questions David Rebuck

Director, New Jersey Division of Gaming Enforcement

ave Rebuck is now the longest-serving director of the New Jersey Division of Gaming Enforcement in D its 40-year history. But with a new governor being elected in November, it may be his last year. From his initial charge to reform the regulatory system in New Jersey, he has dealt with a myriad of issues from online gaming to casino closures and more focus on new technology. He spoke with GGB Publisher Roger Gros at his offices in Atlantic City in June. To hear a full podcast of this discussion, visit GGBMagazine.com. The last time we talked, Atlantic City was in dire shape, having lost five casinos in a little more than a year. Are things more stable now?

1 2 3 4 5

Anyone who looks at the numbers in Atlantic City over the last 24 months would say we have stability, even though we had the Taj Mahal and two of the three Caesars properties in bankruptcy. We weren’t seeing that continued downturn in revenue that was in play for five or six years before that. For the eight months or so since the Taj closed last October, we’ve had a real upbeat. But we have to be cautious because Atlantic City is still a very sensitive market to outside influences. The government is under a state monitor, trying to get its feet under itself. The casino industry, however, now has a very strong foundation. When the Taj reopens as the Hard Rock Atlantic City next year, will the market be able to absorb it?

Yes, because I think Hard Rock will expand the market. With their database and brand awareness, people are going to want to come here. They’re being very aggressive, putting significant capital into the property, but they have a lot of work to do over the next nine months. Last November, New Jersey voters overwhelmingly defeated an effort to bring casinos to North Jersey. Is that the last we’ve heard of that issue?

A lot of things are going to happen in the next year. We have a gubernatorial election and all the seats in the legislature are up for grabs, so we have completely new leadership. Whether or not that becomes an issue will be up to them. If Atlantic City can turn itself around and this market improves, you’re going to have less need from a public policy standpoint to expand gaming in other parts of the state. The operators here have that completely under their control. While casino executives in Atlantic City are almost unanimously impressed with your actions since you’ve been head of the DGE, they are still concerned that regulatory costs are too high. How do you respond to that?

Said It”

“What we noticed is that a lot of our properties were just slots in the box, and those were getting sort of old and tired.” —Tony Santo, chief executive officer of Gateway Gaming, commenting on his company’s plan to spend $300 million to renovate its 11 casino properties in Western Canada

CALENDAR August 15-17: Australasian Gaming Expo (AGE), ICC Sydney Darling Harbour. Produced by the Gaming Technologies Association. For more information, visit austgamingexpo.com. August 15-16, 2017: Southern Front Line Leaders Conference, IP Casino Resort & Spa, Biloxi, Mississippi. Produced by Global Gaming Women. For more information, visit ggwscholarships.fluidreview.com. September 4-6: Entertainment Arena Expo, Bucharest, Romania. Produced by Expo 24 Romania. For more information, visit earena.ro. September 10-12: IMGL Autumn Conference, Copenhagen Denmark. Produced by International Masters of Gaming Law. For more information, visit IMGL.org. September 12-13 Cyprus Gaming Show, Spyros Kyprianou Centre, Limassol, Cyprus. Produced by Eventus International. For more information, visit CyprusGamingShow.com.

I can give them two numbers. When I started in 2011, $70 million was expended on the oversight of gambling in Atlantic City. Last year, it was $46 million. We had 343 employees overseeing the work of 11 casinos. Today, for seven operating casinos, we have 255 employees, and 25 people on the books for internet gaming. I’m conscious of their concerns about the cost of regulation. We’re constantly looking at ways to reduce costs. But it’s all about integrity. I tell them if I can’t guarantee your integrity then you’re in big trouble. So I won’t sacrifice integrity simply to cut costs.

September 19-20: Central and Eastern European Gaming Conference & Awards, Kempinski Hotel Corvinus, Budapest, Hungary. Produced by CEGE Events. For more information, visit CEEGC.eu.

In the online gaming world, why hasn’t New Jersey completed interstate compacts with Nevada and even with the United Kingdom, which you were examining last year?

September 26-28: Malta iGaming Seminar (MiGS), the Hilton, Malta. Produced by the Malta Gaming Authority. For more information, visit MaltaiGamingSeminar.com.

I have re-opened dialogue with AG Burnett (chairman of the Nevada Gaming Control Board) to determine if we can get an agreement to share liquidity for online poker. But since 90 percent of our revenue comes from online casino games other than poker, it really doesn’t matter too much until Nevada allows all casino games online. With the U.K., we tried. We have three common operators between the U.K. and New Jersey, but the stipulation that we are required to house our servers in Atlantic City was a hurdle we just couldn’t overcome. Maybe the legislature will address that in the future, but it’s something we can’t change at our level.

Global Gaming Business AUGUST 2017

October 2-5: Global Gaming Expo, Sands Expo Center, Las Vegas. Produced by American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com.

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AMERICAN GAMING ASSOCIATION

Rest Easy, Nevada Legalized sports betting would bring a piece of Las Vegas to people nationwide By Geoff Freeman, President & CEO, American Gaming Association

n June, the Supreme Court of the United States announced it will hear New Jersey’s appeal challenging the Professional and Amateur Sports Protection Act (PASPA), which bans sports betting outside Nevada. The case is a nail in the coffin to the failing federal sports betting ban that has allowed an unregulated, illegal market to swell to a conservatively estimated $150 billion annually. Depending on the court’s ruling, in the not-too-distant future, states across the country could have the opportunity to decide whether sports betting is right for them—meaning a piece of Las Vegas could be closer to players across the country. But what does this mean for Las Vegas— and for that matter, Nevada’s tourism industry? Could taking sports betting and legalizing it across the country give tourists less of a reason to visit the Strip? As the nation’s premier travel and tourism destination, Las Vegas already offers legalized sports betting. The roughly $4.5 billion legal market within Nevada is one of many attractions that draws in tourists from across the world. During March Madness and the Super Bowl, where fans wager hundreds of millions of

dollars—and billions more illegally—Nevada’s population swells as visitors come from all over the world to experience the Big Game and the tournament from a sports book. However, while they’re in town, they often experience all the other things the city offers. What makes Las Vegas unique—and what continues to draw millions of travelers to the city each year—is the myriad of entertainment options for tourists and convention space for the business sector. In addition to sports betting and gaming, premier resorts in the city offer fine dining, worldclass entertainment and shopping. Some of these resorts also have convention space large enough for some of the world’s top trade shows. Las Vegas has proven that there’s something in the city for everyone. In fact, what was once a niche industry in the Nevada desert, gaming has flourished into a $240 billion-a-year industry that supports 1.7 million jobs across 40 states. And despite this growth, Nevada’s tourism numbers have not decreased. According to the Las Vegas Convention and Visitors Authority, tourism in Las Vegas eclipsed 43 million people in 2016. This continues an upward trend over the last 10 years that visitor volume has increased. Even in 2008, at the height of

Hotel occupancy rates—the truest measure of whether visitors are staying for extended periods of time and experiencing the city—have risen each year since 2010, with a peak of 89 percent room occupancy in 2016.

the financial crisis, Las Vegas saw over 37 million people come to town—proving just how unique the city is. The increase in visitors has also boosted gross gaming revenues. In 2016, according to the Center for Gaming Research at the University of Nevada, Las Vegas, Nevada statewide gross gaming revenue was over $11 billion, a 1 percent increase over the previous year. Since 2010, gaming numbers have grown year over year. Hotel occupancy rates—the truest measure of whether visitors are staying for extended periods of time and experiencing the city—have risen each year since 2010, with a peak of 89 percent room occupancy in 2016. Judging by these numbers, there’s no reason to think they won’t continue to increase as gaming’s popularity grows. If the court sides with New Jersey, it will open a new avenue for sports fans across the country to engage with the sports and teams they love. And research shows sports fans want to wager on games. Recently, AGA commissioned a national survey by Greenberg Quinlan Rosner (GQR) that found nearly six in 10 Americans— and 72 percent of avid sports fans—are in favor of ending the federal ban. GQR also found that Americans are much more likely to watch, engage with and talk about sports when they bet on games. Further, the research concluded that a majority of Americans, regardless of education, income level, political party affiliation or geographical region, want to end the federal ban on sports betting. It’s clear that Las Vegas offers so much more than just gaming and sports betting; but if the court rules in New Jersey’s favor, legalized, nationwide sports betting will bring a piece of the Las Vegas Strip to casinos across the country, but that won’t stop millions of tourists from traveling to Nevada each year to experience everything else that makes Las Vegas a one-of-akind destination.

Follow Geoff Freeman on Twitter at @GeoffFreemanAGA. 12

Global Gaming Business AUGUST 2017

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FANTINI’S FINANCE

Keeping Score Gaming stocks have outperformed the market over the past year By Frank Fantini

he old expression that it’s always darkest before the dawn would appear to apply to Everi. There was overall gloom over the hybrid casino payments-slot company at the end of last year. But not by the end of the first half of this year. As of June 30, Everi stock had shot up 235 percent, making it the fastest grower among all the gaming companies tracked by Fantini Research. Everi wasn’t alone. Gaming stocks generally outperform the broader markets, as can be seen below: Fantini Gaming Indices North America World Interactive

+21.41 percent +35.38 + 8.05

Broad Indices Dow Jones S&P 500 NASDAQ 6 Hang Seng

+ 8.03 percent + 8.24 +14.07 +17.11

Big jumps are to be expected at small companies, such as MyBet and Newgioco, which have gaming operations in Europe. And Golden Entertainment, which exploded 71 percent over the six months and now sports a market cap of a half-billion dollars, meaning it no longer is a micro cap by gaming industry standards. But the big gains came at big companies, too. Consider: • Scientific Games and Aristocrat, two of the largest supplier companies, jumped 86 percent and 46 percent, respectively. • Penn National, the large American regional casino operator, soared 55 percent. Pinnacle leaped 36 percent. • Macau-focused Wynn, Wynn Macau, Melco Resorts and Galaxy Entertainment jumped 48, 46, 41 and 40 percent, respectively. • Caesars jumped 41 percent. Here’s a sampling of gaming stocks in the first half of the year:

Global Gaming Business AUGUST 2017

Ten Best Performers Everi MyBet Newgioco Melco Philippines Scientific Games Golden Entertainment Penn Inspired Wynn Macau Wynn

% Change +235.48 percent +180.00 +172.50 +131.22 +86.43 +71.02 +55.18 +53.85 +47.81 +45.97

Largest U.S. Casino Operators Wynn Resorts +45.97 percent Caesars Entertainment +40.94 Las Vegas Sands +15.45 MGM Resorts +8.53 U.S. Regional Casino Operators Golden Entertainment +71.02 percent Penn National +55.18 +36.28 Pinnacle Boyd +23.00 Churchill Downs +21.83 Eldorado +17.99 Major Suppliers Everi Scientific Games Aristocrat IGT

+235.48 percent +86.43 +45.55 -26.51

Macau Casino Operators Wynn Macau Melco Resorts Galaxy Entertainment SJM MGM China Sands China

+47.81 percent +41.19 +40.24 +35.36 +7.86 +6.08

Sports Betting Buzz The U.S. Supreme Court recently dropped something of a bombshell in agreeing to hear New Jersey’s court appeal aimed at legalizing sports betting in the Garden State. The decision raises a lot of questions, such as whether the Supreme Court will stand with the federal ban on sports betting, nibble away at narrow legal issues or broadly decide that the federal ban is unconstitutional. The possibilities could range from initially New Jersey alone being allowed to have sports betting by, effectively, exploiting a loophole in the federal ban, to leading other states to challenge the federal ban

in new court cases, to giving Congress guidance on a new federal law, to stating that sports betting is a states’ rights issue. If the last possibility occurs, the floodgates would open. Already, a number of states have considered legislation to legalize sports betting if the federal ban goes away. The question for investors, then, is who would benefit? Assuming a state-by-state solution, beneficiaries, obviously, would differ state by state. However, two groups would almost surely stand to benefit: 1. Those companies already in the sports betting business. 2. Casino operators. Existing Sports Betting Operators Among those already in the business, two Londonlisted companies stand out: William Hill (WMH) and PaddyPowerBetfair (PPB). William Hill has clearly positioned itself to hit the ground running anywhere sports betting becomes legal. Like William Hill, PaddyPowerBetfair is a major sports betting operator in the British Isles with an American presence, TVG account wagering service. Other sports betting companies could benefit, including London-listed Sportech, which operates the OTBs in Connecticut, or Ladbrokes, which could jump into the U.S. However, WMH and PPB appear the best positioned to take advantage of what could be a huge new market for them. Casino Operators With a presence in so many states, casinos are in position to lobby legislatures to limit sports betting licenses to them, at the casinos and through satellite operations to cover a state’s entire geography. Big companies like Caesars, MGM Resorts and Boyd could operate their own sports books regionally just like they do now in Nevada. Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.fantiniresearch.com.

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AGEMupdate AGEM MEMBER PROFILE Cooper Levenson, Attorneys at Law Cooper Levenson gaming law attorneys Lloyd D. Levenson, Lynne Levin Kaufman, Kimberly MaxsonRushton (l.) and their team are at the forefront of the newest developments in land-based and internet gaming law. Matters include all aspects of developing and opening casinos, gaming licensure, corporate financings, acquisitions, restructurings, software approvals, equipment approvals, compliance, lottery matters, parimutuel betting issues, sweepstakes and contests. With the expectation of legalized sports wagering in New Jersey and elsewhere, Cooper Levenson has the experience to advise clients in that area. It is also anticipating the legalization of recreational marijuana in New Jersey, and will expand its existing cannabis practice. Cooper Levenson is poised to expand Pennsylvania representation with passage of the gaming expansion bill in Pennsylvania. It represented a lottery courier service in its successful efforts to obtain a bill to legalize lottery courier services in New Jersey, the first state in the U.S. to do so, and is continuing representation so the lottery courier service will be operational by November 1 when the legislation becomes effective. Cooper Levenson is a co-founder and co-organizer of the East Coast Gaming Congress, and recently concluded its 21st conference. The Lloyd D. Levenson Institute for Gaming Hospitality and Tourism of Stockton University continues to be a resource to the industry through its symposiums, conferences, surveys and research. For more information about Cooper Levenson, visit www.gaminglawyers.com.

JULY 2017 KEY BOARD OF DIRECTORS ACTIONS â&#x20AC;˘ AGEM members are exploring a game/cabinet/table census project to primarily assess the makeup of the roughly 1 million gambling machines in North America. A working group met in June to discuss possible content for a scope document, and the information is now being collated. Once this is finalized, an outside company will be identified to bid on executing the census. â&#x20AC;˘ AGEM is looking at how the recently approved Nevada Assembly Bill 75 language might be implemented into regulations in other states. The bill speeds up the approval process as it takes out a layer of regulation that manufacturers have to deal with when partnering with non-licensed third parties, so each individual licensed partner assumes responsibility for who they do business with and for the content in products. Five states have been highlighted, and AGEM is currently looking at suitable legal partnerships that are able to review the language and make the correct recommendations locally. â&#x20AC;˘ AGEM and its members continue to monitor gaming expansion developments in Pennsylvania and support the introduction of video gaming terminals (VGTs) through its membership in the Pennsylvania Video Gaming Association. House lawmakers passed a bill that could bring as many as 40,000 VGTs, but the Senate version stalled and a state budget has been put forth without any gambling expansion. The debate in Harrisburg continues, but the full legislature may not officially address gambling expansion again until possibly September. â&#x20AC;˘ The Illinois Gaming Board has recently demanded that all manufacturers introduce â&#x20AC;&#x153;cryptographically soundâ&#x20AC;? random number generators (RNGs) within a six-month timeframe. This is as a result of news reports regarding Russian hacking of machines where they have been able to determine a pattern in the RNG. AGEM is supportive of this implementation, but acknowledges six months is not a feasible timeline. AGEM members agreed to draft a letter to request a meeting with the IGB so they could ask them to consider a more workable lead time. â&#x20AC;˘ As part of AGEMâ&#x20AC;&#x2122;s support of responsible gaming initiatives, the membership approved significant contributions. The Problem Gambling Center based in Las Vegas will receive funding of $50,000 as an annual contribution. This is vitally important for this worthy organization, as it receives limited funding from the state and will go a long way to help benefit problem gamblers. In addition, AGEM once again agreed to support the National Council on Problem Gambling with a contribution of $40,000 for the year. â&#x20AC;˘ AGEM welcomed two new members in July, bringing the membership to a total of 151. PariMAX, a historical racing content supplier based in Hunt Valley, Maryland, was approved as a Bronze member, while Digital Gaming Corp., based in the U.K. and delivering cutting-edge gaming software, was voted in as an Associate Member.

AGEMindex The AGEM Index reached another record high in June, continuing the momentum from previous months. The composite index stood at 421.95 points at the close of June 2017, which represents an increase of 31.77 points, or 8.1 percent, when compared to May 2017. The AGEM Index reported a year-over-year increase for the 21st consecutive month, and has climbed 161.94 points, or 62.3 percent, since May 2016. During the latest period, 10 of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price, with five up by more than 10 percent. Three manufacturers reported decreases in stock price during the month, with one posting double-digit declines.

AGEM Agilysys

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

Global Gaming Business AUGUST 2017

Exchange: Symbol (Currency)

Stock Price At Month End Percent Change Jun-17 May-17 Jun-16 Prior Period Prior Year 0.61

(2.26)

0.08

5.32

66.38

12.69

(53.75)

(0.05)

38.52

0.75

10.61

543.48

0.65

0.31

6.85

151.61

0.03

10.35

9.30

20.77

34.41

0.26

18.01

17.75

18.74

1.46

0.67

1.20

1.08

0.90

11.11

33.33

0.35

TYO: 9766 (ÂĽ)

6,240

5,440

3,895

14.71

60.21

12.30

Nasdaq: SGMS (US$)

26.40

23.20

9.19

13.79

187.27

4.05

Nasdaq: TACT (US$)

8.45

8.55

8.02

5.36

(0.01)

Nasdaq: AGYS (US$)

9.97

9.91

10.47

Ainsworth Game Technology

ASX: AGI (AU$)

2.16

2.21

2.16

Aristocrat Technologies

ASX: ALL (AU$)

22.96

21.80

13.80

Taiwan: 3064 (NT$)

17.25

19.20

37.30

NYSE: CR (US$)

78.57

77.58

56.72

1.28

NYSE: EVRI (US$)

7.40

6.69

1.15

OTCMKTS: GLXZ (US$)

0.78

0.73

Nasdaq: GPIC (US$)

12.50

NYSE: IGT (US$)

INTRALOT S.A. Konami Corp.

Astro Corp. Crane Co. Everi Holdings Inc. Galaxy Gaming Inc. Gaming Partners International International Game Technology PLC

Scientific Games Corporation Transact Technologies

(10.16)

(1.17)

(4.78)

(3.90)

Index Contribution 0.02

Change in Index Value

31.77

AGEM Index Value: May 2017

390.18

AGEM Index Value: June 2017

421.95

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MARKETING

The Millennial Problem Is the Las Vegas Strip pricing out the future?

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Gennaro: “And we can charge anything we want—$2,000 a day, $10,000 a day—and people will pay it. And then there’s the merchandise…” Hammond: “Donald, Donald…This park was not built to cater only for the super-rich.”

f you’re reading this, there’s a decent chance you’ve read my previous work on the casino millennial problem as it relates to gambling—or rather, the complete lack of proper evidence that has been presented to support the idea that there even is one. There’s no point in rehashing that here (and if you’re not familiar with those articles, just Google “casino millennial problem”). On the other hand, there is a risk that the Las Vegas Strip will have a real millennial problem in the future—and it has nothing to do with either gambling or generational quirks. Take a look at the table below and think about which parts seem most concerning to you. What we’ve witnessed here is the literal destruction of the lowend hotel supply on the Las Vegas Strip. In case it wasn’t immediately apparent, the years used in the table were selected based on Las Vegas Strip hotel implosions (some properties were imploded in parts at different times, so we use the year of the initial implosion here). Over this time period, visitation in Las Vegas nearly doubled from 23.5 million visitors in 1993 to the present record 42.9 million in 2016. However, the low-end hotel room supply did not double along with it; in fact, exactly the opposite has occurred. The low-end hotel supply has been eliminated as the market has grown. Meanwhile, virtually every new project on the proper Las Vegas Strip either built

Global Gaming Business AUGUST 2017

—Jurassic Park (1993)

}

or designed in the current millennium has been earmarked for four- or five-star hotel supply. None of this is necessarily surprising in itself; but we should take a minute and think about why this is a problem. ECONOMIC CONSIDERATIONS Are we pricing millennials out of the future Las Vegas Strip market? Now, there’s little question that the continual upgrade of the Las Vegas Strip is in large part what has driven the growth in visitation, by enhancing the appeal of Las Vegas and providing a

By Jeff Hwang

bigger draw. There’s also little question that Las Vegas has provided considerable high-end value to visitors as compared to other potential vacation destinations. But what we should really be concerned about is this: the prospect that entire legions of millennials and future generations will be priced out of the proper Las Vegas Strip entirely. Like the gambling discussion on millennials, this is simple economics: When you drive down hotel prices, you widen the potential market of visitors. But when you cut out the low-end supply and raise the price floor, you are limiting the market of potential visitors. And coming off the Great Recession, the average daily rate (ADR) on the Las Vegas Strip has more than rebounded: In January 2017, the Las Vegas Strip ADR hit $150.21—setting a new monthly record—and then broke that mark by hitting $152.30 in March.

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ANNIVERSARY A NNIV E R SAR RY

“

2000 A AT T TORNEYS | 38 LOCA AT T I O N S W O R L D W I D E˚ E˚

There just might be a real millennial problem on the Las Vegas Strip— and it has nothing to do with gambling.

”

VISITOR NUMBERS AT STAKE; NO SIMPLE SOLUTION Certainly, the point here is not to blame Wynn Resorts, Las Vegas Sands, MGM Resorts International or anybody else for knocking down older buildings and building nice places. But if you’re a Las Vegas stakeholder—as anybody who lives or visits Las Vegas is, as are the casino operators who operate here—the increasing lack of low-end supply on the Strip is a problem that needs to be thought about, and/or a market to be addressed. A big part of the problem is that there is no simple solution. The key pieces of Strip real estate are effectively pre-zoned for high-end hotel supply, as there doesn’t seem to be much of an appetite to spend $10 million an acre (Crown Resorts’ asking price for the 34.6-acre former New Frontier site is reportedly $400 million) on Strip real estate just to build a two-star dormitory. Ditto for Caesars Entertainment’s block of hotels at center Strip that’s been primed for redevelopment for over a decade now. That said, the nearly perfect string of Las Vegas visitor growth itself is at stake. Perhaps not this year or next year, but at this rate at some point there is a wall to be hit.

Jeff Hwang is a game developer and president of High Variance Games LLC, and the best-selling author of Pot-Limit Omaha Poker: The Big Play Strategy, the three-volume Advanced PLO series, and The Modern Baseball Card Investor. Follow Hwang on Twitter @RivalSchoolX.

Global G loba b l Reach Re a c h The Global The Global Gaming Gaming Practice Practice aatt G Greenberg reenberg Traurig TTrraurig U.S. CCovers overs U .S. and and IInternational nternational Markets Markets With h With hands a n ds o onn experience experience iinn Asia, Asia, Latin Latin A America merica aand nd Europe, Europe, o ur 40 40 aattorneys ttorneys know know there there iiss m ore tto o uunderstanding nderstanding ggaming aming our more llaw aw tthan han jjust ust operating operating a casino. casino. O ur aattorneys ttorneys h ave d iverse Our have diverse ba ckgrounds in in all all aspects aspects o gaming ccompany ompany o perations. backgrounds off gaming operations. W have eexperience xperience iinn working working w ith governments governments and and w ith Wee have with with rregulators egulators w orldwide. worldwide. T he Greenberg Greenberg Traurig Traurig G lobal G aming PPractice ractice can can aaddress ddress The Global Gaming ccasino asino o perations, lotteries, lotteries, charitable charitaable gaming, gaming, tribal tribal gaming, gaming, operations, IInternet nternet gaming gaming and and A ML. Our Our backgrounds backgrounds iinclude nclude rrepresenting epresenting AML. ccasino asino o wners, o perators, eexecutives, xecutives, ggaming aming m anufacturers owners, operators, manufacturers aand nd suppliers, suppliers, p rivate eequity quity firms firms and and investment investment banks banks o private onn ggaming aming rrelated elated matters. matters. T he G TG lobal G aming PPractice ractice group group iiss looking looking forward forward tto o The GT Global Gaming aattending ttending G 2E again again this this year. year. O ur aattorneys ttorneys w ill be be available available tto o G2E Our will m eet, aand nd aare re looking looking fforward orward tto o continued continued involvment involvment iinn the th e meet, llatest atest developments developments w ithin tthe he gaming gaming industry. industry. within

Global G lobal Gaming Gaming PPractice ractice RRegulatory egulatory | O Operations perations | AAML ML | IIPP | LLabor abor | LLitigation itigation | PPrivacy rivacy | RReal eal EEstate state AAcquisitions cquisitions | FFinancing inancing LLearn earn more more at at ggtlaw.com/gaming tlaw.com /gaming GREENBERG G R EEN BERG T TR RA AURIG, U R I G , LLLP LP | A ATTORNEYS T T O R N E YS AT AT LAW L AW | W WWW.GTLAW.COM W W. G T L AW. C O M The hiring of a llawyer awyerr is an important important decision and shoul should d not not be based bas ased ssolely olely upon aadvertisements. dvertisements. Before Before yyou ou decide, ask us tto o ssend end d yyou ou free free written written information infformation about our qua lifi fications and our eexperience. xperience. Prior rresults esults do qualifications no guarantee a similar similarr outcome. outcome. Greenberg Greenberg Traurig Traurig is a sservice ervice mark and a tr ade name of Greenberg Greenberg Traurig, Traurig, LLP and nott guarantee trade Gr eenberg T Tr raurig, PP.A. .A. ©2017 Gr eenberg T raurig, LLP torneys aatt La w. Al eserved. C ontact: Mar tha A. A. Sabol Sabol Greenberg Traurig, Greenberg Traurig, LLP.. At Attorneys Law. Alll rights rreserved. Contact: Martha in Chic ago aatt 312 .456.88400. °Thes o fluc tuation. Chicago 312.456.8400. °Thesee number numberss ar aree subjec subjectt tto fluctuation. 29410

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Expanding Hospitality

n this, our second in a series of discussions about the role of non-gaming amenities in both destination and regional gaming markets, we focus on the extraordinary and ongoing evolution of hotels, and how to assess, strategize and implement change. The “lens” we use is comprised of five attributes that, when integrated, provide operators with a framework to create a comprehensive strategy for developing a new hotel or rebranding and refurbishing an existing one: the strategic assessment lens. This approach has helped several operators create new development and rebranding strategies for successful restaurants, bars, nightlife, entertainment and retail venues, casinos and hotels. Consider the following developments in the lodging industry: Highly evolved mobile booking applications. Proprietary mobile booking apps

Mergers, acquisitions, new brands and refreshed brands. IHG’s Holiday Inn Express

has refreshed signage, lobby design and in-room décor standards. Middle-market regional casino operators may want to take a look at what Holiday Inn is up to. In addition to the 35 Intercontinental Hotels in North America, IHG acquired the Kimpton Hotels collection and has developed a new, fresh brand, EVEN Hotels. Consider the rollout of Pendry Hotels, developed by Alan Fuerstman, founder of Montage Hotels, and son Michael Fuerstman. “This is a new interpretation of Montage,” explains Michael Fuerstman. “The new generation of a luxury customer is not really age-specific. It’s a customer who’s matured in a way to appreciate art, architecture, design, bold experiences.” During Alan Fuerstman’s time at Bellagio, it became the first hotel in Las Vegas to receive AAA’s Five Diamond rating. The home-sharing industry. Airbnb has surpassed the 100 million-guest arrivals mark. It has recently launched Airbnb for Work, enabling business travelers to have more convenient access to Airbnb’s self-titled “Business Travel Ready” listings. Perhaps business travelers, convention attendees and corporate travel managers will consider home sharing as a viable and cost-effective option for business travelers. While likely to have more impact in Las Vegas than Louisiana, the scale and growth trajectory of home sharing should not be ignored.

The extraordinary and ongoing evolution of casino hotels BY BOB BOUGHNER

often include rooms, restaurants, nightlife venAND ues, entertainment and uniquely curated expeSTEVE GALLAWAY riences. This approach provides easy access and convenience to customers and allows the operator to harvest nearly 100 percent of the revenue for company-owned and managed venues. Booking fees, such as those charged by online travel agents (OTAs), are eliminated. MGM Resorts International, Wynn and Encore Las Vegas, Boyd Gaming Corporation, Red Rock Resorts, Eldorado Resorts and others have launched robust and user-friendly mobile booking applications. The Strategic Assessment Lens Loyalty program partnerships. Caesars Entertainment’s Total ReWhen a company is considering developing a new hotel or re-branding an wards recently announced a new loyalty partnership with Wyndham Reexisting one, assessing the product, positioning, processes, pricing and peowards. According to Wyndham and Caesars, “the move brings immediate ple requirements is an effective tool to accompany feasibility studies, demand benefit of complimentary status match to members of both programs with forecasts and return analyses. additional perks slated to come online later this summer. Once complete, Wyndham Rewards members will have the ability to book Total Rewards Hotel Product destinations directly through Wyndham Rewards channels.” The unique characteristics of the environment. From the arrival seThe Cosmopolitan of Las Vegas offers partner tier benefits to qualified quence outside the hotel, its landscape and streetscape, through the arrival loyalty cardholders at Pennsylvania’s Rivers Casino and SugarHouse Casino. lobby and corridors, to the private spaces within the guest room, the hotel Hotel room bookings are central to both of these programs, and provide product is comprised of a series of visceral experiences that should delight broader distribution and loyalty program benefits to their customers. and inform the guest. We have the opportunity to positively impact four of 20

Global Gaming Business AUGUST 2017

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The creator of the new Pendy Hotels brand cut his teeth at Bellagio in Las Vegas, bringing it the highest occupancy rate in the city

Wellness Rooms at MGM Grand promise guests a chance to feel better

“The hotel product is comprised of a series of visceral experiences that should delight and inform the guest.“ our five senses—what we hear, what we see, what we smell and what we feel by touch. Their impression of the hotel product begins outside and may or may not deliver on the promise made by the hotel’s brand position or “tone of voice” reflected in marketing and advertising materials. First-time guests have prepaid for the room or have posted a credit card without experiencing or receiving the “goods and services.” This can be a leap of faith on the part of the guest. Merely meeting expectations is a missed opportunity, and may adversely impact the guest’s intent to return. Exceeding expectations may help justify premium rates, resort fees and two or three forms of room taxes listed on the folio at checkout.

The front desk at the Mirage welcomes guests with a spectacular aquarium

AUGUST 2017 www.ggbmagazine.com

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Marriott’s St. Regis brand is the ultimate in luxury, creating a “tone” for the hotel rooms

Hotel Positioning The confluence of our products and services; our unique voice and attitude; what we say about ourselves using words and images. For a gaming property, aligning the

Establishing the tone or “attitude” of the hotel can be challenging. Should the experience be highly aspirational or very accessible? Something that is “middle of the fairway” just may confuse everyone, including potential customers, team members and lenders.

“tier” of the hotel with the positioning of the casino is crucial. Major hotel chains tend to be very specific and categorize their brands as Luxury (St. Regis), Upper Upscale (Loews Hotels), Upscale (Hyatt Place), Midscale (Fairfield Inn & Suites), or Select Service (Hilton Garden Inn). The tier or brand position impacts the design sensibility, choice of amenities, towels and linens, among other things. More importantly, it can define how the guests perceive and react to the entire campus: gaming, dining, nightlife, spa, retail and entertainment offerings. Establishing the tone or “attitude” of the hotel can be challenging. Should the experience be highly aspirational or very accessible? Something that is “middle of the fairway” just may confuse everyone, including potential customers, team members and lenders. Achieving the right balance should help operators realize premium pricing and broad-based demand, key revenue and profitability drivers. Clarity of tone from the beginning of the development or re-branding process will help avoid costly mistakes that can occur when expenditures are made that are inconsistent with the position of the brand. Decisions regarding furnishings, amenities, marketing collateral and advertising campaigns will be driven by the positioning of the hotel. 22

Global Gaming Business AUGUST 2017

Hotel Processes The unique way we deliver our products and services. Hotel operators must carefully con-

sider interactions with guests at each touch point: reservations, check-in, housekeeping, maintenance requests, in-room dining, special requests and checkout. The management and development team should collaborate and carefully consider the steps for each process, and test and rehearse them. Those processes should include service recovery procedures that are utilized when the service delivery falls short of the company or guest’s expectations. In the casino environment, it is important to carefully layer in the role of casino hosts and other customer relationship marketing personnel. Stating the obvious, room revenue from certain customers may be $0 and gaming revenue may be very significant. Effective team member recruitment, hiring, on-boarding and training are at the core of ensuring that the thoughtfully developed processes are consistently deployed across the enterprise. There are costs associated with these programs that can be quantified and managed. A key focus of technology investment should be improving the hotel’s direct booking process and guest experience when booking on the company’s website or mobile application. While OTAs may be important to a given operator, booking fees can significantly impact net room revenue, operating margins and profitability. One major hotel operator has hinted publicly that it was considering ending its contract with Expedia. Some major hotel operators are offering lower rates only to members of

Performance is at our Core. IGTâ&#x20AC;&#x2122;s Proven Performer initiative tests our core video themes on casino floors throughout the United States, so you can be confident that the games you purchase from IGT are tested and proven to be top performers. We have established stringent testing protocols with all player types, ensuring that you get the best possible product on the best possible hardware. For more information, talk to your Account Manager or visit us online at igt.com/performance to learn more. ÂŠ 2017 IGT. The trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ÂŽ, are registered in the U.S. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. Artwork, descriptions, game play, photographs, videos, and other product details depicted are subject to change

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Trivago is the latest online travel agent to take a slice of hotel revenue

Can a quality bed and bedding make a difference in creating a unique product?

their loyalty programs. This is certainly not new to the gaming industry. It has been reported that during the two-week period ending July 4, U.S. TV advertising by online booking sites Trivago and TripAdvisor was $18 million and $6.8 million, respectively. These are significant expenditures aimed at diverting traffic from your online or mobile application to a booking engine that will charge you a fee for booking the room your company built and owns.

Hotel People Hotel Pricing Cost-based, demand-based, competition-based. Revenue manage-

ment tools are more robust today than even a year ago. However, most systems require a “learning period” during which the software creates pricing models and demand forecasts based on historical data points. A cost-based model rarely drives hotel pricing, unless unstimulated demand is very weak. Demand drivers such as seasonality, mid-week vs. weekend travel, convention and meetings business and special events are key determinants of demand and pricing strength. Competitor pricing is a factor that can be overcome with brand loyalty. In a casino hotel environment, especially in properties with limited rooms supply, which customers gain access to a hotel room is often the primary consideration, not the rate charged for the room. Carefully managing suite inventory during weekends and special events is often a manual process. Accepting the most valuable business mix is part of optimizing revenue performance. Evaluating the profitability of group inquiries, the impact of cancellations and complimentary room no-shows and effective distribution across all relevant distribution channels are essential features of a quality revenue optimization tool. Amenity-rich properties with large, well-appointed rooms and suites, unique and professionally managed spas, quality restaurants featuring compelling interior designs, popular nightlife and entertainment venues can command a much higher room rate than properties without such amenities.

Global Gaming Business AUGUST 2017

The unique way we develop and deploy our people in support of our products, positioning, processes and pricing strategies.

With a clear understanding of our other strategies, we can develop our service commitment and people plan. The ongoing cost of talent is generally the largest operating expense on the income statement for the hotel division. People drive the processes, reinforce the positioning and complete the overall product as they “reset the stage” throughout the day. Detailed staffing plans should be developed along with user-friendly position descriptions to support each role in the compendium. Many roles in the hotel are of transactional nature. Delivering the services to the customer in a non-transactional manner is not only desirable, it is achievable. It is essential for the development team, operating team and human resources team to collaborate in preparation of the people plan. Carefully planning receiving and storage areas, guest-facing work stations, break areas and back-office functions should be performed as early in the design process as possible. Bob Boughner is a senior partner at Global Market Advisors and formerly a senior executive with Boyd Gaming. Steve Gallaway is managing partner of Global Market Advisors. GMA is the leading provider of consulting services to the gaming and hospitality industries.

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PitParty Electronics are taking traditional table games to new heights—and creating a new game genre for North America

hey call it “Synergy Table Games,” and it paints a picture of one of the hottest trends on today’s gaming floors. Synergy is a unique attraction on the floor of Greektown Casino-Hotel in Detroit. It is a customized version of Pulse Arena, a product developed by Slovenia-based Interblock Luxury Gaming Products—marketed by its U.S. subsidiary Interblock USA—that has all but redefined the potential of the electronic table game, or ETG. First introduced at the 2015 Global Gaming Expo, the Pulse Arena takes the hybrid “dealer-assisted” game—a live dealer on a central table, with video of the game beamed to potentially hundreds of individual electronic player stations—and transforms it into a multimedia nightclub experience. Live DJs, giant video displays and pulsing dace lighting surround both dealer-assisted and fully automated versions of several different table games. The Pulse Arena has been drawing new players to the casino floor— many of the coveted millennial demographic, which generally prefers table games to slots and is drawn to the nightclub atmosphere. However, the company reports that players of all ages are drawn to Pulse Arena, if only because of the unique presentation of time-tested games. “For decades, operators and suppliers have been discussing what new killer applications will drive incremental growth to the casino floor,” says Interblock CEO John Connelly. “The Pulse Arena has demonstrated it is the 26

Global Gaming Business AUGUST 2017

By Frank Legato

perfect solution. We’re finding that is it not only attracting new players, but it is pulling in existing players who are ready for an exciting new experience.” Greektown owner JACK Entertainment was one of the operators on board early with the Pulse Arena, and enlisted Interblock to work on a version custom-made for its Greektown Casino-Hotel in Detroit. Greektown officials and Interblock developers worked on the project together, and on November 18, 2016, unveiled the Interblock-powered Synergy Table Games. Located on the upper level of Greektown Casino, Synergy features automated, video and live-dealer generators for four different game options: blackjack, roulette, craps and baccarat. It boasts 48 connected play stations with 27-inch video display screens and multi-game capability, all situated in a space reminiscent of a stadium. A massive video wall displays each game’s progress and statistics. Players have the option to play socially with friends while messaging one another from their electronic play stations, or they can enjoy a solo electronic table game experience. “Synergy is an industry game-changer,” says Jason Gregorec, chief executive officer and general manager of Greektown Casino-Hotel. “We were the first casino to combine Interblock’s electronic table games technology with live dealers for a brand new gaming experience. Our guests love this. We are seeing our loyalty club members spending more time playing, and we are seeing an increase of new club members.”

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“The Pulse Arena has demonstrated it is the perfect solution. We’re finding that is it not only attracting new players, but it is pulling in existing players who are ready for an exciting new experience.” —John Connelly, CEO, Interblock

ETG Era Interblock’s Pulse Arena is the latest creation in a game genre that has been on fire for the past few years, particularly in the Americas. Electronic table games have their roots in the late 1990s, when Interblock and another pioneering European supplier, Novomatic Group, almost simultaneously launched a new style of casino product—a completely automated electronic roulette game. First introduced at the ICE trade show in 1997, Interblock’s Princess and Novomatic’s TouchBet roulette products, for the first time, placed several players around a central automated roulette wheel, each player at a slot-like betting terminal. Throughout the ensuing decade, the genre grew, particularly in spacechallenged casinos throughout Europe. Interblock, Novomatic and other suppliers constantly worked on improving the genre. The rise of the Macau gaming market in the early 2000s led to the popularity of stadium-style setups, which extended the potential play stations beyond strict table-game capacity limits. A single table game could now be extended to hundreds of players. Meanwhile, pioneers of the genre continued to refine the product model. Interblock penetrated new markets with its modular Organic series of ETGs—stylish black units that fit together to allow operators to configure their own electronic pits. The ETG game library grew to include both fully automated and dealer-assist versions of virtually every table game in the pit. Interblock’s standard Arena ETG setup and its Pulse Arena are both operator-configurable as far as number of games and the design of the customized stadium. Interblock arena systems offer “dynamic settings,” which allow operators to switch seamlessly among a variety of gambling-enhancing themes to attract and target specific demographics based on the time of day, or day of the week. With the press of a button, the Arena can be transformed from a high-energy, club-like “party environment,” which may be appropriate for a Friday or Saturday night, to a much smoother “VIP setting” that features soft lights and low music designed to target core gamblers who play early in the day, or on the weekdays. The Arena can even be themed as an educational environment to teach beginning players about the product, allowing them to feel more comfortable in the space. As Interblock developed its expertise in the ETG space, so did the other

supplier that launched those first automated roulette games in the late 1990s. By the early 2000s, Novomatic Novo Multi-Roulette and Novo TouchBet Live-Roulette installations numbered more than 2,000 terminals operating in casinos around the world. Before long, it would be joined by Novo Unity II, Novo TouchBet LiveRoulette (semi-automated), Novo Multi-Roulette (automatic mechanical wheel) and Novo Flying Roulette—the products that fuel Novomatic’s ETG business today. Major suppliers of both slot machines and table games have joined the original pioneers in what is perhaps the hottest growth area in gaming supply. And all agree that the success of electronic table games in Europe and Asia has led to a worldwide surge in electronic table games as a casino offering. “There has obviously been a surge from a global perspective,” says Steph Nel, general manager for the Americas at London-based table-game supplier TCSJohnHuxley. “Having worked closely with Novomatic to introduce and distribute the first electronic roulette systems (TouchBet Roulette), we have a long history of suppling ETGs to casinos all over the world. We decided three years ago that we wanted to develop and produce our own ETG product in-house, and launched our Qorex Electronic Gaming Solutions (the company refers to the product as an “EGT,” for electronic gaming terminal) at G2E last year.” Other suppliers have similar stories. “ETG games are up globally,” says Tom O’Brien, senior vice president of sales, electronic table systems, for Scientific Games. “For the ETG sector, we’re probably up to around one-third of the market share, just in North America alone.” “The IGT customers in all parts of the world continue to express interest in our ETG offering,” says Matteo Carli, senior vice president of product marketing for IGT. “When we completed installation of the 150 ETG units at Sands Bethlehem (in Pennsylvania) last spring, we sent a strong message to the industry, that IGT is committed to this space.” “The level of interest in the past six months for ETGs in North America has been exciting,” says Kathleen McLaughlin, head of marketing for North America at Novomatic Americas. “People want new ways to spend their gambling entertainment dollars. They are constantly seeking new experiences and new products. It is currently the perfect storm for the ETG segment.” AUGUST 2017 www.ggbmagazine.com

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“We’re getting there now. We’re starting to see how well ETGs are being received across the U.S., for us as well as our competitors.”

—Tom O’Brien, Senior Vice President of Sales, Electronic Table Systems, Scientific Games

Worldwide Surge Suppliers are meeting new markets with a flood of new ETG products. As with slots and traditional table games, each supplier brings its own set of specialties to the marketplace. Scientific Games has been in the ETG business since the former Bally Technologies acquired Shuffle Master in 2013. Shuffle Master had blazed trails in the U.S. for automated table games with its Table Master series of table games, multi-player units in front of a video dealer which gained popularity in Indian casinos in Arizona and other markets that did not allow traditional table games. Table Master games were a staple of Pennsylvania casinos for the five years before table games were authorized by the state. The Table Master series evolved into what is today the Fusion series of ETGs, new technology developed by Scientific Games with complete access to the Shuffle Master library of proprietary table games and other intellectual property. “Fusion’s come a long way,” says O’Brien. “We offer pretty much all games, from Ultimate Texas Hold’em to baccarat, fully automated roulette and virtual roulette. We just came out with Stadium Blackjack, which is phenomenal. It’s going very well for us. And that’s all part of the Fusion series.” Popular Shuffle Master titles like Let It Ride, Mississippi Stud and Ultimate Texas Hold’em are holdovers in Fusion from the Table Master days. The company recently added the themed Playboy Bonus Blackjack, drawing on a Bally title from Scientific Games’ slot division. “Table Master was a super product that held its own for years,” 28

Global Gaming Business AUGUST 2017

O’Brien comments. “We went with bigger screens, going from a 73-inch screen to a 75-inch, 4K big screen, as well as a new 22-inch wide-screen cabinet. We added more side bets and more games to it. We added more signage. When we put the Fusion terminals into the Table Master product, business doubled for us.” Fusion has won big contracts for Scientific Games, including the Resorts World New York property. This is added to longtime customers like California’s Barona Casino. “We started out, believe it or not, at Barona Casino probably 10 years ago,” O’Brien says. “It’s a stadium-style setup. They’ve got 44 of our units there, working well for years, and we’re currently in the process of adding more. We took out the old product and put in the new Fusion product. Since then, we’ve offered roulette and Stadium Blackjack in that product. We’ve also been able to take Fusion to West Virginia, Ohio and Las Vegas, where we’re in the Venetian with 44 seats of Stadium Blackjack.” O’Brien adds that Scientific Games ETGs are also still present in casinos across Pennsylvania, where the company is preparing to install additional units at Sands Casino Resort Bethlehem. O’Brien says the ETG model also is being folded into PRIZM, Scientific Games’ four-player video gaming table. “The screen is 4K, with 100 different touch points on it,” O’Brien explains. “We’re starting off with Lightning Launch Roulette, which will debut in Q4 of this year.” He says the game adds a couple of twists to roulette, like allowing people to bet on the other players in the game. “When they’re all releasing the ball at the same time, based on where they land, players can win progressive amounts,” he says.

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“IGT’s entry into the ETG space has enabled the company to be a total solution provider for our customers.” —Matteo Carli, Senior Vice President of Product Marketing, IGT Plc.

Keystone Stadium Pennsylvania’s Sands Bethlehem property is the site of an ETG milestone, courtesy of IGT. In mid-2016, Sands became the first property in the East with stadium-style ETGs, when it opened the largest live-dealer stadium in the U.S. The Live Dealer Stadium Gaming attraction at Sands offers dealer-assisted ETGs in the form of 150 terminals offering roulette and baccarat. For the Sands, it was a nod to the casino’s substantial Asian clientele from New York City, who have made it the most profitable table-game casino in the state. Stadium-style ETGs are familiar to them because of their popularity in Asia. The games are from IGT’s Dynasty series, the company’s first ETG game series developed based on a patent and license assignment agreement with Paradise Entertainment, a leader in ETG sales in Macau, where it operates as LT Games. “That agreement enables IGT to develop a portfolio of

successful ETG intellectual properties and patents, in markets around the world, excluding Macau,” explains Carli. “IGT’s entry into the ETG space has enabled the company to be a total solution provider for our customers. In the time since we entered the segment, we have augmented, refined and enhanced our ETG offering. “Additionally, we have partnered with our internal PlaySpot development team, to deliver an ETG solution that seamlessly integrates with our award-winning PlaySpot mobile technology. PlaySpot players can enjoy live or electronic table games from their mobile devices, from any location within a casino.” Carli says feedback from recent trade shows, from G2E and G2E Asia to Ice Totally Gaming and the NIGA show, has been overwhelmingly positive, and the rollout of the Dynasty product has landed units in Pennsylvania, Nevada and California. “Dynasty ETGs’ strongest differentiator is the ability to accommodate as

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In addition to all the standard table games, Qorex includes the baccarat derivative Game Ball, which the company launched at G2E Asia this year.

TCSJohnHuxley’s Qorex product represents its first major entry in the ETG space. many live outcomes as an operator wishes, in a concurrent session,” Carli says. “It is an attractive feature to operators, because it empowers them to be in control of their casino floor, and optimize their patrons’ rate of play.” Carli says IGT will continue to apply its substantial R&D resources to developing products in the ETG space. “IGT is certainly committed to our ETG product offering,” he says. “We apply our industry-leading R&D measurements to ensure that we are developing unique, relevant products that are resonating with players, and help our customers achieve their desired objectives. We’ll soon be launching our new blackjack game, and further side bet products. “Through player and customer service, gaming trade shows around the world, and our regular cadence of customer interactions, I believe IGT’s ETG product strategy is aligned with our customers and their needs.”

Natural Transition TCSJohnHuxley has been a leading worldwide supplier of table games for decades, and was instrumental in establishing the first ETGs through its global distribution network, so moving into the ETG segment with their own product was a natural. “The ETG market is such a vast market, but we’ve had a lot of experience and gained a great deal of knowledge regarding what works and what doesn’t,” Nel says. “As we are a privately owned and operated family business, we are nimble when it comes to the development of certain products to meet a casino’s needs. Also, if you look at our Gaming Floor Live platform and the way our products connect to the system, a Qorex terminal is not just an EGT; it’s a powerful terminal.” TCSJohnHuxley’s Qorex product and EGTs represent its first fully owned and developed electronic table games. “Qorex is our in-house-developed electronic table game product, which we designed and built from the ground up in little over two years—a major achievement for a product like this,” says Nel. “Our product is extremely flexible and can be configured to fit any gaming environment. With three operating modes, you can either have it playing off a live table, an automated roulette wheel, or via a podium in a stadium-style setup, which you see in different parts of the world.” Nel says Qorex is the result of an intense R&D effort at TCSJohnHuxley. “A lot of passion has gone into developing this product. And although we are known for our live gaming products, this is just the next step in the evolution of TCSJohnHuxley.” In addition to the standard table games roulette and baccarat, Qorex includes an entirely unique baccarat derivative called Game Ball, which the company launched at G2E Asia this year. Nel says the company is developing additional games for the Qorex system, in both dealer-assist and automated versions. The Qorex product runs on the TCSJohnHuxley Gaming Floor Live platform, a software system that draws real-time data from table games on the floor 30

Global Gaming Business AUGUST 2017

to allow operators to optimize revenue from the pit. “Gaming Floor Live is our essential platform,” Nel says. “Everything we manufacture now connects to GFL, allowing even our proprietary products such as wheels and displays to communicate with each other, to provide information that can be utilized and controlled from the central GFL server.” Nel says TCSJohnHuxley is ready to pursue the U.S. market, not only in Nevada but in all other jurisdictions. “We are currently undergoing approval, and as soon as that process is completed, we’ll hit the ground running, as we’ve had a lot of interest in Qorex,” he says.

Novo Marches On Novomatic, meanwhile, has continued its own product development, launching the NovoStar SR1 product line, already a big success in Europe, in North America. “Novomatic Americas quietly launched the Executive SL cabinet in North America, which significantly heightens the electronic table games experience,” McLaughlin says. “The box is incredibly designed and gorgeous. Sexy. This leading-edge terminal can be displayed with virtual ‘Flying’ versions of Blackjack, Roulette, Baccarat, Sic Bo and Poker 3. “We offer dealer-operated Novo TouchBet Live-Roulette, together with automated Novo Multi-Roulette and Novo Flying Roulette, as well as baccarat and blackjack games, sic bo and slots, custom-designed and connected on the terminals to demonstrate Simultaneous Betting functionality.” “The level of interest in our ETG business for the U.S. has been exciting,” says Rick Meitzler, president and CEO for North America at Novomatic. “Novomatic has experienced success with the NovoStar S1 product line outside of the U.S., and we are leveraging that experience, data and design here in North America.” McLaughlin notes that Novomatic has been in a unique position throughout the evolution of ETGs, because the company operates casinos as well as supplying them. “Novomatic has been focused on anticipating and enhancing player experience globally because they are also operators,” McLaughlin says. “They design products for their own players. They understand players’ expectations and are continually looking to anticipate the ‘what’s next’ to expand the player entertainment expectation.”

On to America All suppliers agree that the surge in ETG sales in the near future will be in North America. “Within North and South America, the ETG segment has only in recent years become a focal point for both suppliers and operators,” says Interblock’s Connelly. “Taking into consideration that less than 1 percent of the North American

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casino sector is composed of ETGs, we expect this momentum to continue.” “North America is an immense territory on its own,” says TCSJohnHuxley’s Nel. “So, due to that, there are a lot more people moving from other territories—a lot of Asian players moving out of Asia into the Americas. And they bring certain playing styles they are used to in that market and would like to see in the different markets.” Nel and other suppliers agree that ETGs in the U.S. and elsewhere in the Americas are drawing not only new players including the millennial generation, but players of all ages seeking something different on the floor, or seeking a way to move from the slot floor to the pit without the intimidation of learning on a live game. “There are new players coming into casinos that like to try different ways of playing,” Nel says. “Sometimes a live table can be intimidating, especially if you look at different games like baccarat or roulette, which might seem easy to someone used to being in casinos, but for a complete novice player, you’d rather sit and figure it out on your own before you join an actual live table with seven or eight people.” He says this makes for a good mix of new and existing players contributing to the newfound ETG popularity. “There are new players, but traditional players also,” Nel says. “Outside of Asia, you don’t really find just a table player. You’ll find a table player that also plays slots, so they are used to electronics. That table player may migrate to an ETG. Alternatively, their favorite table may be too full, so they may as well go to the ETG, which is effectively a live table game anyway, as it’s linked to a live wheel.” IGT’s Carli agrees that ETGs are attracting far more than just the millenni-

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als. “Some of our customers view ETG as one genre for attracting younger and expanded demographics of players to casino floors, but ETGs are often viewed as a less intimidating environment than traditional live tables, offering a more private experience and eliminating the peer pressure element—and often played at a lower price point.” “These are exciting times,” says TCSJohnHuxley’s Nel. “Although the casino industry is quite traditional in lots of ways, the rapid pace that technology is moving is enabling us to make our ideas a reality. The sky really is the limit.” “I believe that we’ll see continued innovation and experimentation in this space,” says Carli, “with operators designing more themed ETG environments— that include more elaborate signage packages, for example—similar to what you would see in Macau.” Scientific Games’ O’Brien says the ETG genre in the U.S. is still in its infancy. “I think it’s still immature; they’ve taken so long to catch on,” he says. “But we’re getting there now. We’re starting to see how well ETGs are being received across the U.S., for us as well as our competitors.” “Electronic table games such as Interblock’s Pulse Arena technology have become the place where all the different segments of the market come together,” says Connelly at Interblock. “Based on current trends and performance, we can easily see 10 percent to 15 percent of every casino floor sustaining a form of electronic table games in North and South America. “ETGs are moving into the mainstream, and casinos are featuring them more prominently on their gaming floors. For Interblock and its customers, ETGs are a bridge to the future of gaming.”

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TABLE GAMES

The Frog and the Sparrow A fable of disruption

ber, the app everyone loves from the company everyone hates, wasn’t conceived by some bureaucrat at the New York City Taxi and Limousine Commission. Google, not General Motors, is bringing self-driving automobiles to our highways and byways, while another Silicon Valley big shot, Starburst Accelerator, is trying to one-up them—like, literally—with flying cars. Netflix wasn’t a Blockbuster baby, nor Amazon a Sears scion. Had they been, they would still be relevant. Both of them. The history of commercial disruption abounds in such tales, tales of newbies beating oldies to the punch. And then pulverizing their faces into a mush of crimson-colored creamed corn! Why does this happen, over and over and over? Because, with apologies to the fabled Aesop himself, of this:

Once upon a time there was a frog who lived at the bottom of a very deep well. He had bugs to eat and rainwater to drink. He even had a lily pad to jump on and off. During the day, he could see the sun and the sky, and at night he could see the moon and the stars. He was very happy. Then one morning, right at the break of dawn, a baby sparrow perched herself on the edge of the well, and struck up a conversation. “Mr. Frog,” she called out, “Why do you stay down in that well? Why don’t you climb up and take a look around? It’s so beautiful here.” “Why do I need to come there?” the frog yelled up the well. “I have bugs to eat and rainwater to drink. I even have a lily pad to jump on and off. During the day, I can see the sun and the sky, and at night I can see the moon and the stars. “I am very happy.” The sparrow returned the next day. And the next and the next and the next. She would describe

By Roger Snow

the world she saw in meticulous detail: the trees that stretched their branches up, like they were trying to snatch the clouds from the sky; the mountains that squatted majestically, like a king on his throne; and the deer frolicking, the bears wrestling and the beavers, uh, beavering. The frog listened but was not impressed. “Why do I need to come there?” he yelled up the well. “I have bugs to eat and rainwater to drink... “I am very happy.” This continued for some time. Each and every morning, just as the sun peeked over the horizon, the sparrow would perch herself on the edge of the well and plead with the frog to join her outside. But the frog always resisted. The days turned into weeks, the weeks into months, and the months into years. And the years into decades. Then one morning the frog looked up and saw something looking down at him. It wasn’t the sparrow. It was an owl. “Mr. Frog,” the owl called down. “I’m afraid I have some bad news.” “What… is… it?” the frog said slowly, each word followed by a labored breath. “I hate to be the one to tell you this, but the sparrow has died.” The words descended to the bottom of the well—echoing as they did, as if being spoken by a chorus—and swirled there for a moment. The frog was so shocked by the news that it took him a minute to realize he was crying and another minute before he stopped. “The funeral is today, and you must come,” the owl said. The frog raised a webbed hand in defiance. “No, no… I… can’t,” he said in a strained cadence. “I’m far… too old… and… far too sick… to climb out.“ In a flash, the owl swooped down, head first— with the speed and precision of an Olympic plat-

form diver—and snatched the frog in her claws. The frog fought back, but he was trapped. He flailed his arms and kicked his legs and croaked as loudly as his lungs would allow. But despite his spasms of resistance, the bottom of the well was getting farther and farther away, while the blue sky above was getting closer and closer. Before he knew it, the frog was somewhere he had never been before. The real world. And oh, how magnificent it was. Sitting on a patch of grass, he looked to his left and his right. He look ahead and behind. He saw, as the sparrow had said, trees that stretched their branches up, like they were trying to snatch the clouds from the sky; the mountains that squatted majestically, like a king on his throne; and the deer frolicking, the bears wrestling and the beavers, uh, beavering. And then he began to cry again. “It seems there are two funerals today,” he said to the owl. “One for my friend and one for me.” “What do you mean?” the owl said, turning her head almost completely around because... you know, just to show off. “One is for a life that ended,” the frog replied. “And one is for a life that never started. Mine. I just didn’t know that until now. If I had just listened. If I hadn’t been so stubborn, I could have done something about it. But I was stuck, not just in the bottom of that well but in my own way of thinking. “And I couldn’t escape from either of them. Now it’s too late to do anything about it.” The owl looked at the frog and searched for words of comfort, but there weren’t any. She just gently picked him up—this time with his resigned compliance—and ascended high into the sky and towards the sounds of mourning. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Scientific Games Corporation or its affiliates.

The history of commercial disruption abounds in such tales, tales of newbies beating oldies to the punch. And then pulverizing their faces into a mush of crimson-colored creamed corn! 32

Global Gaming Business AUGUST 2017

G&Tfullpg.2017.qxp_Layout 1 4/3/17 4:56 PM Page 1

17th Annual

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• Best Consumer-Service Technology • Best Productivity-Enhancement Technology • Best Slot Product • Best Table-Game Product or Innovation

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Finding

Funding State support of responsible gaming treatment programs is lagging, but there is hope By Chris Sieroty

ambling in the U.S. has never been so accessible. Over the last decade, the growth of the business, both commercial and tribal, has been impressive, with a number of new markets embracing gambling as a way to increase tax revenues. A few states have welcomed online gambling, while still more sell lottery tickets online. But while most Americans now view gambling as acceptable for themselves and others, their views about problem gambling and problem gamblers are still quite poor. “They frequently misunderstand the nature of gambling addiction, seeing it as a symptom of moral weakness rather than a medical condition,” says Keith Whyte, executive director of the National Council on Problem Gambling (NCPG). Whyte says the council’s own public surveys find considerable skepticism about the effectiveness of treatment and misunderstanding about recovery. This negative public perception is a major reason why government has been reluctant to provide public funds for treatment and research, he says. It’s a major reason why “people with problems are reluctant to get help,” Whyte says. While the number of states providing services has grown from 35 in 2006 to 40 last year, and public funding for problem gambling was $71 million, it’s still just a drop in the bucket.

Global Gaming Business AUGUST 2017

“This is only 22 cents per capita, 341 times less than our per-capita spending on substance abuse, and nobody thinks the substance abuse system is over-funded,” Whyte says. Whyte describes the level of services and spend as clearly “inadequate,” especially in the states that do not fund problem gambling programs using a proportion of gaming or lottery revenue. Those states are Arkansas, Wyoming, Texas, Alabama and South Carolina. “We believe the national spend should be the equivalent of 1 percent of gaming revenue, or roughly $1.1 billion last year,” Whyte says. Although there is still no treatment standard, Christine Reilly, senior research director with the National Center for Responsible Gaming (NCRG), says there is more research today demonstrating the effectiveness of treatment strategies such as cognitive-behavioral therapy. Reilly adds that treatment includes “pharmaceutical interventions such as naltrexone, a drug that seems to blunt the craving for gambling.”

Affordable Care Act As the U.S. Congress moves forward with its efforts to make changes to or eliminate the Affordable Care Act (ACA), also known as Obamacare, as well as rollbacks in Medicaid funding in coming years, experts say problem gamblers are one of the most vulnerable when it comes to cutbacks. “We were originally hopeful that the Affordable Care Act—with its emphasis on expanded behavioral care—would help expand coverage for gam-

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“

We believe the national spend should be the equivalent of 1 percent of gaming revenue, or roughly $1.1 billion last year.” —Keith Whyte, Executive Director, National Council on Problem Gambling

bling disorders,” Reilly says. “But it’s been complicated because some states are still following old regulations about not supporting care for impulse-control disorders, a category in which gambling disorders were classified by the Diagnostic and Statistical Manual of Mental Disorders,” she says. “The 2013 change in the DSM-5 reclassifying the gambling disorder as an addiction also gave hope that expanded coverage would ensue.” “But all is uncertain at this point,” Reilly says. Whyte agrees, saying the ACA was a big step forward in providing access to behavioral health care, which includes gambling addiction. The NCPG along with the America Gaming Association, the Association of Gaming Equipment Manufacturers and the National Indian Gaming Association, sent a letter to both the House and Senate urging them to ensure their repeal-and-replace efforts did not set back this progress. “Unfortunately, the House bill would not only eliminate the behavioral health essential benefit provisions, but would also require states to consider individuals with gambling winnings above $80,000 as ineligible for Medicaid for up to 20 years,” Whyte says. Whyte and other problem gambling experts note that this provision in the House bill would eliminate health-care coverage for an individual with a serious to potentially life-threatening illness who requires more than $80,000 in medical care. “Problem gamblers may be one of the most vulnerable populations in America,” Whyte says. “Most private insurers refuse to reimburse for a primary diagnosis of problem gambling, even states that do provide funding don’t always fund treatment... and now problem gamblers who win a jackpot can lose eligibility for the last source of health care.” Problem gamblers seeking treatment report on average gambling debt twice their annual income, yet they have far higher health-care costs since they are probably the group of Americans least likely to be able to access services for their gambling problem or health care in general.

Public Health and Gambling When asked about gambling’s impact on the general health of society at large, Whyte and Reilly agree that it is the hidden impact on other diseases and disorders. Reilly stresses that gambling can have both positive and negative public health benefit. Positive in that casinos, for example, can lead to economic development and jobs with benefits such as health insurance. Of course, the negative side

is gambling disorder, suffered by approximately 1 percent of the adult general population. “But keep in mind that even though we have seen tremendous expansion in legalized gambling over the past 30 years, the rate of gambling disorder has been stable at 1 percent,” Reilly says. “This indicates that the population has adapted to new gambling opportunities.” Whyte notes that problem gamblers tend to have higher rates of other problems. “And that the more disorders you have, the greater severity of problems and higher social costs,” Whyte says. “So the 6 million or so problem gamblers drive up rates of alcohol and drug use, depression, homelessness and suicide.” And when the co-occurring gambling disorder goes untreated, it leads to higher rates of relapse and transference of problems, according to the NCPG. For example, many people are aware of the national epidemic of suicide among military personnel and veterans, Whyte says. “While the issue is extremely complex, we estimate military and veterans have at least twice the rate of gambling problems, and we know approximately 20 percent of people with severe gambling problems make a serious suicide attempt,” Whyte says. “So while gambling problems may not be a primary cause of the high rate of suicidal behavior in this population, it is likely that it is a contributing factor,” he says. A hidden gambling addiction that goes undetected and unaddressed might just be enough to push a veteran in the Veterans Administration system already struggling with alcoholism and homelessness or a service member dealing with post-traumatic stress disorder over the edge. That high rate of gambling addiction in the U.S. military is the driving force behind legislation that would require the U.S. Department of Defense to screen active-duty personnel for potential gambling disorders in both its annual health and behavior surveys. The legislation, recently introduced by Senator Elizabeth Warren, would implement recommendations in a 2017 report from the Government Accountability Office (GAO), which was initially requested by the Massachusetts Democrat in 2015. Released in January, the GAO survey found that just 0.03 percent of active service members each year were diagnosed with a gambling disorder or seen for problem gambling in fiscal years 2011 through 2015. The NCPG believes 57,000 members of the military can be classified as problem gamblers. AUGUST 2017 www.ggbmagazine.com

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Warren’s bill—the Preventing and Treating GamRose asserts that millennials’ preferences have increased bling Disorder in the Military Act of 2017—describes their risk of becoming addicted, and “not to games we gambling disorders as an “addiction similar to suball recognize as gambling.” stance-use disorders, such as those associated with alcoAs for real-money, daily fantasy sports, Rose argues hol and drugs.” games like DFS and in-play betting on sports events are She also called problem gambling a “public health perfect for millennials who follow sports. concern.” “They often are played as a social activity,” Rose According to Warren’s legislation, a gambling diswrote. “The outcomes are known quickly. And, order is a public health concern “characterized by inwhether or not DFS is gambling, it appears the games creasing preoccupation with gambling, loss of control, can be beaten by skillful play. restlessness, or irritability when attempting to stop “This characteristic of both the games and younger gambling.” players make games with some skill more dangerous Problem gambling is also identified by a “continuathan pure chance games like lotteries or roulette. A tion of the gambling behavior in spite of mounting sesports book operator told me that he was gearing his rious, negative consequences.” operation toward millennials, because younger Gambling disorders are also associated with a bettors think they know more than they actually do, higher risk of suicide attempts, substance-use disorders and are so self-confident that they are willing and even —Christine Reilly, Senior and other mental-health conditions. anxious to put money on their decisions.” Research Director, National Reilly adds African-Americans and young adults to Millennials do not realize that there are a small the list of at-risk populations. She says increased screen- Center for Responsible Gaming number of professionals, both big bettors and operaing for the disorder among these populations is a priortors, who spend hours each day calculating the true ity. odds to beat these quasi-amateurs. Also, Reilly supports expanding prevention efforts Rose also emphasized millennials’ distrust of cash, that target these groups to include gambling as well as substance use. preferring to use credit or debit cards or non-cash alternatives. “African-Americans and military veterans are at risk because they “Completely cashless gambling, with an element of skill and lots of have higher than average health problems compared with the general time to take breaks, is going to create a whole new generation of problem population,” Reilly says. “Co-occurring psychiatric disorders are the gamblers,” Rose warned. biggest factor in making someone vulnerable to a gambling disorder.” “But it is important to note that the millennials who become addicted Reilly cautions that emerging adults, age 18 to 25, are at risk because to games are just as likely to run into problems on skill contests, free games of higher rates of impulsivity and increased opportunities to gamble. and other electronic pastimes that are legally not gambling at all,” Rose

Keep in mind that even though we have seen tremendous expansion in legalized gambling over the past 30 years, the rate of gambling disorder has been stable at 1 percent.”

Compulsive Millennials Millennials don’t gamble. Not as much as their parents or grandparents, anyway. But the reluctance of younger gamblers to sit for hours at a slot machine or a blackjack table in a casino has not led to a decrease in the incidence of compulsive gambling. Born in 1980 and after, this generation grew up with technology and instant communication being an integral part of their lives. Instead of traditional gambling, millennials do play real-money fantasy sports, eSports, sports betting and in-play betting on sports, and social games like Candy Crush on their smartphones or tablets. “They are often played as a social activity,” according to Nelson Rose, a professor with Whittier Law School, who describes the generation as “avid consumers, eager to spend money, willing and eager to take risks.” In an article titled “The Next Generation of Compulsive Gamblers,” 38

Global Gaming Business AUGUST 2017

wrote. But only time will tell if Rose’s expectations are true that new forms of gambling will increase addiction. Problem gambling experts believe history has shown that problem gambling prevalence rates remain relatively stable over time despite the introduction of new technology or even increased gambling opportunities. “It certainly does appear that this younger generation is consumed by anything on that little screen that seems to be constantly before their eyes— sometimes referred to as online addiction,” says Connie Jones, director of responsible gaming with the Association of Gaming Equipment Manufacturers (AGEM). Jones says the internet is merely a vehicle for delivery of many potentially addictive behaviors such as pornography, shopping, social media and non-gambling games. “I believe this generation is very savvy on how they spend their money, and data has shown that they enjoy playing ‘for-fun’ casino games as much

(

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It certainly does appear that this younger generation is consumed by anything on that little screen that seems to be constantly before their eyes— sometimes referred to as online addiction.”

—Connie Jones, Director of Responsible Gaming, Association of Gaming Equipment Manufacturers

as or more than those for real money,” Jones says. Responsible gaming tools such as problem gambling awareness, setting limits, self-exclusion and information for help with a gambling problem are much easier to implement for online gambling games than in a brickand-mortar venue, she says. “Counseling services are even available online,” Jones says. “Never in the history of gambling have there been as many player protection measures available to gamblers.” In the state of Massachusetts, Play My Way, the responsible gaming limit-setting tool, has received positive reviews, she says. These types of features on games are common in other countries, and have just recently en-

tered the United States. As of June 30, more than 12,670 players had enrolled in the Play My Way program, according to the Massachusetts Gaming Commission. The program is one of several tools in the state’s wide-ranging responsible gaming program known as GameSense. “New and/or expanded gaming programs now consider addressing problem gambling as a priority in the initial phases of program creation, (including) Japan,” Jones says. “In the very recent past, I recall problem gambling was often a last-minute consideration for new gambling programs.” Jones says she believes the gaming industry is making giant strides in protecting consumers.

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“Barrick’s approach “Barrick’s appr roach oa ach to to philanthropy phil lanthr anthr ropy is t to o create crea ate te m mutual utu ual l lasting l la asting prosperity for communities. feel that to education pr rosperit ty fo r our ou ur co mmunities. We f eel tha at t access t o e duca ati t on is key ke ey y to accomplishing task. Through our partnership UNLV t o acco mplishing this ta t ask. Thr rough ough ou r par p ar rtnership with UNL LV V and Corporate able to the President’s President’s Co C rpora ate Council, Council, we are a able t o support support the e students students who shape of wh o will advance adv van an nce our our community communit ty and d s hape the future future o f Nevada.” Nevada.” Michael M ichael B Brown rown P President, resident, Barrick Barr rick Go Gold ld USA P President’s resident’s C Corporate orporate C Council ouncil Go Gold ld

AUGUST 2017 www.ggbmagazine.com

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The GameSense program produced the Play My Way system currently in place in Massachusetts

Not Playing the Game MGM Resorts seeks to expand the GameSense program developed in British Columbia

GM Resorts International is rolling out a unique responsible gaming program called GameSense in its U.S. casinos by the end of the year, which puts trained counselors in casinos to inform customers about the dangers of gambling. Commercial gambling revenue in the U.S. totaled more than $39.1 billion in 2016, according to data compiled by the University of Nevada, Las Vegas Center for Gaming Research. Problem gambling affects some 7 million Americans, the National Council on Problem Gambling reports. GameSense encourages players to adopt behaviors that can reduce the risk of developing gambling disorders. Some of those behaviors are setting time and money limits, and having an open dialogue with friends and family about personal gambling habits. The program will have a presence at MGM Grand, Bellagio and Borgata in Atlantic City, through GameSense information centers, where trained counselors can explain why gambling is a game of chance and debunk myths like lucky numbers or a “hot” slot machine. On its website, GameSense recommends visitors play for fun, not to make money; don’t chase losses, accept them as the cost of entertainment; and balance gambling with other types of leisure activities. “Our vision for GameSense is to transform the guest experience at our properties by providing a program that is rooted in enhanced customer service, player education and leading research,” says Alan Feldman, MGM’s executive vice president of global industry affairs. Until now, the only help for compulsive gamblers in a casino was a pamphlet called “When the Fun Stops,” and a toll-free number, 800-522-4700. For GameSense, MGM has partnered with British Columbia Lottery Corp. (BCLC), which operates 35 casinos plus bingo halls and the provincial lottery in British Columbia, Canada. BCLC created the program in the mid-2000s, and it’s not only part of the province’s lottery, but also casino gaming and sports betting. The program is also used by the Connecticut Lottery, the Massachusetts Gaming Commission, and Canadian provinces Alberta, Saskatchewan and

“

Manitoba. In Massachusetts, Play My Way is another part of a responsible gaming program under GameSense. Play My Way is a voluntary program that alerts gamblers when they are approaching their self-imposed limits for losing money. In just over a year, some 13,000 people have signed up for the program at Plainridge Park Casino in Massachusetts. MGM will offer the program at its casino in downtown Springfield, which is scheduled to open next year. Wynn Resorts’ $2.4 billion Wynn Boston Harbor is also expected to offer GameSense when it opens in 2019. The system was designed to allow gamblers to set a limit on how much they are willing to lose. Warnings pop up on slot machines telling a gambler when he or she is approaching the limit, at the limit and exceeding the limit. It does not stop gamblers from playing. Mark Vander Linden, Massachusetts Gaming Commission’s director of research and responsible gaming, says he was encouraged by the early indications of player interest. The commission has contracted with the Cambridge Health Alliance to evaluate the program to determine its overall effectiveness. Keith Whyte, executive director for the National Council on Problem Gambling (NCPG), praises the efforts in Massachusetts to create a program to help consumers gamble responsibility. But, Whyte says the NCPG is still waiting for the evaluation. He says it is always tough “to evaluate a preventative and educational tool like GameSense. “The big challenge right now is not responsible gaming tools; it is making sure there is a robust problem gambling system underneath so that when a casino player picks up a brochure, or a lottery winner calls the number on the ticket, they actually get help,” Whyte says. MGM will donate $1 million over five years to the International Gaming Institute at the University of Nevada, Las Vegas, which will research the program’s findings to improve it and aid similar efforts. —Chris Sieroty

Our vision for GameSense is to transform the guest experience at our properties by providing a program that is rooted in enhanced customer service, player education and leading research.” —Alan Feldman, Executive Vice President of Global Industry Affairs, MGM Resorts International

Global Gaming Business AUGUST 2017

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CUTTING EDGE Scents and Dollars Service: Making Scents Live VIP Player Event Producer: 133 Scentertainment LLC

t’s always a challenge for casino marketing professionals to come up with unique events that will capture the imaginations of often-jaded premium customers. The folks at 133 Scentertainment LLC insist the answer is right under players’ noses. “Making Scents Live” is an exclusive, one-of-a-kind, interactive event that is proving to be a huge hit with VIP customers. During a 90-minute “Making Scents Live” session, guests are provided a kit with six liquid fragrances and tools with which they make their own customized scent. Under the direction of a qualified “scentertainer,” they create a one-ounce bottle of perfume or men’s cologne with ingredients determined by their personal tastes and preferences. Thus, each person leaves the event with a scent that is exclusively theirs. Participants are encouraged to write down their formulas on “recipe cards” to use the remaining ingredients at home to make more of their creation, or a completely different one, and they can order refill fragrances online. Kits are created from a catalog of 300 fragrances, ranging from the typical (Patchouli, Lavender, Grapefruit) to the far-out (Play-Doh, Bonfire and Leather Jacket). Kits can be geared to a variety of themes or seasons (lighter for spring and summer, more woodsy and heavier for fall and winter). “Experiential activities are what the public is seeking today—hence, the in-

credible success of painting parties and facilities where people can cook their own meals,” says 133 Scentertainment President Karen Dubin, a world-renowned perfume expert. “But a meal is eaten and forgotten, and there’s no guarantee a painting is going to be display-worthy. “With our custom kits, everyone will leave with a scent that they personally designed and love, and each time they wear it, they will be reminded of the great time they had at the property—and, that having fun never smelled so good!” The first two “Making Scents Live” events were staged last November at FireKeepers Casino in Battle Creek, Michigan. They proved so successful that another two sessions were booked in June. “This is a fun, participatory VIP event which both women and men enjoyed and gave high grades,” says Jim Wise, FireKeepers’ vice president of marketing. “‘Making Scents made friends with our VIPs and generated great reviews and nice return on investment. “We like to be ahead of the curve, and Making Scents has the potential to be the new VIP Party of the Year.” For more information, visit 133Scentertainment.com.

Group Solution Product: grouprev Company: The Rainmaker Group

s the recognized leader in revenue and profit optimization solutions for the gaming and hospitality industry, Rainmaker Group offers a comprehensive suite of cloudbased solutions designed to help its clients maximize revenue from every segment of their business. One of Rainmaker’s most in-demand solutions is grouprev, a unique tool that allows gaming properties to optimize their potential to win highly lucrative group business. Implemented as either a stand-alone solution or along with Rainmaker’s popular guestrev solution, grouprev makes it easier for revenue managers to navigate the complex and intricate data required for assessing group requests and driving conversion rates. Recently, Rainmaker upped the ante, introducing group forecasting functionality as a significant enhancement to both its grouprev and guestrev solutions. An industry first in revenue management, group forecasting provides the ability to project future group business demand. This allows revenue managers to optimize their pricing, as well as the overall profitability of their property, by using more accurate projections for

group demand and a hurdle rate that considers potential displacement of both business segments. Key features of grouprev with group forecasting include: • granular forecasts by day and by group segment • a displacement module that captures the effects of both transient and group displacement on quoted group rates • a high-level, forward-looking view of optimal transient and group segment mix • visualization of group and transient demand mix which easily identifies opportunities for revenue enhancement Grouprev, with the addition of group forecasting, helps hotels and casinos minimize the risk of underpricing for future dates that may have considerable demand for group business. This enhancement is projected to drive increased revenues with an estimated 2 percent to 3 percent lift, depending on group volume. For more information, visit www.letitrain.com.

AUGUST 2017 www.ggbmagazine.com

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ABOVE & Beyond Tribes growing casino portfolios and diversifying economies BY DAVE PALERMO

rom Atlantic City to South Korea, to the Caribbean Islands, American Indians are looking beyond their reservationsâ&#x20AC;&#x201D;and even U.S. bordersâ&#x20AC;&#x201D;in growing their tribal gambling portfolios. But tribal economic diversification beyond casinos, largely fueled by gambling resources, is occurring at an even faster pace. Economic progress in Indian Country predicted with passage in 1988 of the Indian Gaming Regulatory Act (IGRA) has dramatically accelerated in the last five years after a slow start leading into the depression of 2007, industry sources say. The accumulation of revenue and diminished debt tied to casino development, improved human resources and business acumen, and an increasing willingness of lending institutions to invest in Indian Country are all factors in the economic growth of many indigenous communities. Tribes are launching and acquiring business enterprises beyond casinos and tourism, including commercial real estate, technology, agriculture, manufacturing, government contracting and traditional and green energy.

In addition to its vibrant international presence, the Seminole Tribeâ&#x20AC;&#x2122;s Hard Rock International recently purchased the former Trump Taj Mahal in Atlantic City and the Rideau racetrack in Ottawa, Ontario, which will be rebranded as Hard Rocks

Global Gaming Business AUGUST 2017

Meanwhile, as the tribal casino market grows saturated and opportunities for gambling on Indian trust lands become scarce, an increasing number of tribes are acquiring off-reservation casinos and launching commercial gambling ventures. Hard Rock International, a multibillion-dollar enterprise of the Seminole Tribe of Florida, continues to generate headlines with domestic and international expansion, pursuing projects in Japan, Costa Rica and Spain. Its worldwide ventures include a purchase of the former Trump Taj Mahal in Atlantic City, set to reopen in the summer of 2018 under the Hard Rock brand. The company also recently added a racino near Ottawa, Ontario, the Rideau Carlton racetrack. Mohegan Gaming & Entertainment, an enterprise of the Mohegan Tribe of Connecticut, last year added a planned South Korea gambling resort to the list of casinos and racetracks it owns or manages in Atlantic City, Pennsylvania, Connecticut, Louisiana and Washington. The Poarch Band of Creek Indians of Alabama last year partnered with

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Connecticut’s Mohegan tribe has entered into a joint venture to develop a massive integrated resort at Korea’s Incheon airport

the Washoe Tribe of Nevada in opening the Wa She Shu Casino in rural Gardnerville. The band also acquired the Marriott Resort & Stellaris Casino in Aruba and a greyhound track and poker room in Florida. Laguna Development Corporation, the economic arm of the Pueblo of Laguna in New Mexico, earlier this year purchased the Isle of Capri Casino Hotel Lake Charles in Westlake, Louisiana. And Global Gaming Solutions, an enterprise of the Chickasaw Nation of Oklahoma, purchased Remington Park racetrack in Oklahoma City and owns 49 percent of Lone Star Park in Grand Prairie, Texas.

Gaming Expertise With the maturity and growing saturation of the largely rural $30 billion U.S. Indian gambling market, which consists of 480 facilities in 28 states, it comes as no surprise tribes would utilize their expertise in acquiring and/or managing commercial and tribal casinos off their reservations. It’s been quite an evolution since the explosion of tribal casinos began with passage of IGRA, when many tribes initially turned to commercial gambling companies for investment capital and management expertise. Things have changed. “This is an industry that has matured, and the tribes with it,” says Dante Desiderio, executive director of the Native American Finance Officers Association (NAFOA). “Tribes in the beginning were trying to figure out how to do this. Now we’ve taken on the role of gaming management companies. We’re at the point where we’re going into other markets.”

“Tribes are good operators. They’ve developed top-notch, high-quality management teams.” —Matt Sodl, co-founder and managing director of Innovation Capital, on the ability of tribal authorities to operate commercial casinos “Tribes are looking beyond the domestic market,” Desiderio says. “You might have heard about tribes thinking about expanding to the Caribbean. That’s a trend worth paying attention to.” That tribes have become adept at casino operations also was to be expected. Unlike commercial casinos that generate revenue for shareholders, tribal gambling funds housing, health care, education and other government services. It’s crucial to the tribal community that casino operations are efficient and well-regulated. “Tribes are good operators. They’ve developed top-notch, high-quality management teams,” says Matt Sodl, co-founder and managing director of Innovation Capital.

Getting state and local approvals for commercial casinos is often quicker than the lengthy, risky and politically onerous process under IGRA, particularly when a project involves placing newly acquired land in federal trust. “You’re seeing much more of a proactive effort by tribes to seek out commercial opportunities,” Sodl says. “They are much more open about their willingness to do business in a commercial environment. “Tribes that have accumulated net worth and have been smart when it comes to reinvestment of their capital have the ability to look at other markets, and are out competing against commercial entities to buy properties; absolutely.” Some ventures are intended to protect tribal gambling markets against the encroachment of commercial casinos. Tribes and commercial gambling companies almost equally split some 1,000 casinos nationwide, a roughly $68 billion market that is growing increasingly competitive. The Mohegan and Mashantucket Pequot tribes of Connecticut recently got approval from the state legislature to build a $300 million commercial casino in East Windsor. The project is intended to dilute the impact of MGM Resort International’s $950 million casino and entertainment complex under construction in nearby Springfield, Massachusetts. “Tribes aren’t going to sit back and watch commercial operators camp out on the fringe of their territories,” Sodl says.

Economic Conversation Has Changed “Gaming is still a very significant, important part of tribal economies,” says Kristi Jackson, chairwoman of TFA Capital Partners. “Looking forward, though, the conversation we have with just about all our tribal clients is how they can grow beyond gaming. “They’re seeing increasing casino competition. They’re seeing cash flows remaining relatively stable or in some cases declining. There is a need in most cases to look beyond the boundaries of the reservation and do things that will diversify the economy. “An absolute trend is the diversification away from home-based gaming. Some tribes are looking at geographical diversification. They are looking to do gaming outside of the reservation boundaries to mitigate economic or competitive issues,” Jackson says. “Others are saying they don’t want to continue with gaming as other businesses become available. They’ll look at hospitality. They’ll look at other forms of entertainment. They’ll look at real estate.” “Whether it’s due to the saturation of tribal gaming or whether it’s just the logical next step, there does appear to be an acceleration of economic diversification out there,” says Fred Schubkegel, a Michigan tribal attorney. “It’s really taken off now, finally.”

Intent of IGRA Becoming A Reality The congressional intent of IGRA was to assist the 367 federally recognized tribes in the lower 48 states in strengthening their governments and building diversified economies. With the exception of a handful of natural-resource tribes in the Great AUGUST 2017 www.ggbmagazine.com

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Oklahoma City’s Remington Park is owned by the Chickasaw Nation, which also owns half of Lone Star Park in Texas

“Tribes needed roads and houses and fire protection and health care. Many tribes had to build governments from the ground up. That had to come before business diversification.”

Laguna Development Corporation, an arm of the New Mexico tribe, has purchased the Isle of Capri in Lake Charles

—Valerie Spicer, Partner, Trilogy Group

Plains and Southwest, most indigenous communities have struggled, subsisting on federal and state grants to operate inadequately funded schools, health clinics and other services. Much of Indian Country remains plagued by poverty and high unemployment. IGRA and gambling have enabled some 250 tribes—many with marginal casinos on remote reservations—to expand and subsidize government programs and services. Gambling also is helping create a generation of educated indigenous Americans needed to manage tribal programs and economies. With enactment of IGRA, tribes were quick to launch casino ventures or expand existing bingo operations with the goal of providing for immediate needs, including government infrastructure, housing, health services and education. “We were desperately poor,” Jeff Crawford, attorney general for the Forest County Potawatomi of Wisconsin, recalls of the early 1980s, when some $300 a week began trickling in from a small tribal bingo operation. “You have to put food in people’s bellies. You have to have a roof over their heads. You have to provide medical care,” Crawford says. “That’s exactly what the tribe did. We poured resources into what was immediately needed.” A decade later, the tribe acquired and placed in federal trust a crumbling Milwaukee Indian school and used the land to expand the bingo business. “It took time to overcome the despair in Indian communities,” says Valerie Spicer, founding partner in the Trilogy Group, a tribal government relations firm. “You first had to work on the infrastructure needs of your community. “Tribes needed roads and houses and fire protection and health care. Many tribes had to build governments from the ground up. That had to come before business diversification.” Tribes such as the 500 citizens of the Forest County Potawatomi 44

Global Gaming Business AUGUST 2017

lacked an educated work force and skilled, educated individuals to build and manage a diversified economy. The Potawatomi also struggled politically to obtain a long-term casino regulatory agreement, or compact, with the state of Wisconsin. Without an extended compact it was extremely difficult to obtain the financing needed to expand the casino and diversify the economy. “Gaming was not a sure thing for us,” Crawford says of the political pushback to casinos on tribal land. The Poarch Band of Creek Indians of Alabama, which owns three Class II bingo casino resorts, has also operated in an often-hostile political environment. Legislators and state officials refuse to negotiate a Class III compact with the band, the state’s only federally recognized tribe. The uncomfortable political environment hastened the band’s desire to seek casino opportunities in Nevada, Florida and the Caribbean. Meanwhile, Creek Indian Enterprises (PCI) is diversifying the tribe’s economy with 14 hotels, an amusement park and PCI Aviation, which makes parts for military aircraft. “We know we’re going to have challenges—perhaps even roadblocks— with the state of Alabama,” Vice Chairman Robert McGhee says. “The market may become saturated. We don’t know what the future of gaming is in the state. “While we have the financial resources and the ability to do so, we want to look for opportunities that can sustain us if something were to happen with gaming. We’ve proven ourselves when it comes to gaming and hospitality. We’re always looking at the possibility of working with other tribes and going into different markets. We’re also looking at an investment fund to build six or seven more hotels throughout the United States.”

Getting a Head Start A handful of tribes such as the Crow Nation of Montana and the Southern Utes of Colorado—blessed with natural energy resources such as coal, oil

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state, less than all but two of the 28 states with tribal and gas—established tribal or federally chartered economic developcasinos. ment corporations long before IGRA and compacted gambling, with About 130 of the 250 tribes with casinos have the goal of launching business enterprises. There were others. revenue allocation plans allowing for distribution “A lot of tribes that structured themselves for business growth .@E?4<B97AC checks to individual tribal members, according to with separate development corporations seem to be moving along A>C@8ED<EA6CE the Department of the Interior. Many of the larger at a pretty fair clip,” Spicer says. 8D5C><D3D:?ADB@ per-capita checks go to small-enrollment tribes in The Mississippi Band of Choctaw Indians, under visionary ?"?2E3>B;E metropolitan areas. Chief Phillip Martin, established Chahta Development in 1969, 6B;C*4?<C8E “Some per-capita tribes have very little financial first to build tribal housing and later to craft wire harnesses and =?;D@=1E"B;C flexibility,” Jackson says. “Non-per-cap tribes may speakers for the automotive industry. A>D4C<E?>CE9BB0D@= have a high level of government programs and buildThe Chickasaw Nation of Oklahoma formed Chickasaw Na?AE=CB=>?/6D:?9 ing and services. Asset allocations are going into intion Industries—a federally chartered corporation—in 1995, nine vestment-type opportunities to grow the overall years before it negotiated a gambling compact with the state. CNI 8D5C><D3D:?ADB@1 government profile. is a holding company with a dozen subsidiaries engaged in manu!6C2E?>CE9BB0D@= “Everything centers on capital,” Jackson says. facturing and technology, health care, defense logistics and business ABE8BE=?;D@=E “You either have a lot of capital and you want to insupport services. B7A<D8CEB3EA6CE vest or you’re trying to do something and need capiBill Lance serves as the tribe’s secretary of commerce, oversee>C<C>5?ADB@ tal.” ing 60 tribal casino and non-gambling businesses employing more 4B7@8?>DC<EAB than 6,500 workers. ;DAD=?ACE )7D98D@=E.E(79A7>?992E “We have been fortunate and blessed to have a very forceful, inC:B@B;D:EB> #D:6E-:B@B;2 novative tribal government,” Lance says—particularly Bill :B;/CADAD5CE The goal of many indigenous communities is to deAnoatubby, the tribe’s governor for more than 30 years. D<<7C<1, velop an economy reflective of their history, culture “Because of Governor Anoatubby’s leadership, we have always and traditions. had a diversification strategy,” Lance says. “We have been methodi- — Kristi Jackson, Chairwoman, Whether it is fishing tribes in the Northwest, cally executing that going forward.” TFA Capital Partners agricultural tribes in the Midwest or ranching tribes Forest County in 2002 established the Potawatomi Business in the Great Plains, gambling resources are credited Development Corporation, which today provides technology, with enabling tribes to expand their markets, often goods and services to the military and manages environmentally to overseas customers. friendly construction and renovation projects. Spicer, who until recently served as executive director of the Arizona InThe tribe recently purchased a bank and a Milwaukee hotel. It also built a dian Gaming Association, notes that the Ah-Chin Indian Community is $33 million wholesale data center and a waste-to-energy anaerobic digester and now able to export its cotton. The Fort McDowell Yavapai Nation is finding biogas plant capable of converting food waste into enough electricity to power foreign buyers for its pecan harvests. 1,500 homes. “I like that gaming enterprises have allowed tribes to not only reinvest in “Our goal is not only to become economically self-sufficient but also energy their historic economics, but reinforce their traditions and values,” she says. self-sufficient,” Crawford says. “If there’s any kind of a theme, the tribes I work with take a long-term view,” attorney Schubkegel says. “You’re not seeing tribes team up venture %C?>@D@=E'>B;E&?;49D@= investors to buy and flip a company. That’s not been the tribal mindset. Building and financing casino resorts and tourism on the reservation helped “They’re also looking at sustainable opportunities with respect to the enlargely impoverished communities lacking human resources develop the busivironment. They’re looking at a business with an ethical purpose with the ness acumen needed to move ahead with various ventures. goal of more than just making money.” “Gambling has been a great classroom for tribal economies,” Lance says. “There’s no doubt about it.” $>BAC:AD@=EA6CE-@5D>B@;C@AE “You go from seeking out a person with a financial background, to a compElders with the Forest County Potawatomi decades ago noticed diminished troller, to a chief financial officer,” Crawford says. “I’ve seen that progression.” potency in medicinal herbs on their rural Wisconsin reservation and changes Small-enrollment tribes with limited land bases—such as the 110 federally in the habitual behavior of the wildlife. recognized Indian communities in California—may choose passive investments “The elders were having these discussions long before the debate over rather than launching business enterprises or building community infrastrucglobal warming,” Crawford recalls. ture. The Potawatomi casino was credited with providing the tribe with the California generates about $8 billion of the annual $30 billion won by legal and financial resources to defeat an effort by Kennecott Minerals Comtribal casinos. Yet there is only about 500,000 acres of Indian trust land in the 46

Global Gaming Business AUGUST 2017

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pany to mine zinc and copper on land near the town of Crandon on the Wolf River in northeast Wisconsin. Forest County Potawatomi and the Mole Lake Ojibwe eventually purchased the site. Forest County Potawatomi’s Greenfire management team ensures that new buildings on the tribe’s reservation are energy-efficient with a minimal impact on the environment. “Coming from nothing and now having resources, it was a time for us to define ourselves,” Crawford says. “That’s what we’re doing.” “We needed to build an economy reflective of the community and what was important to us. In our case that meant environmental protection and green energy. We focused on things back home.” As is the case with many tribes, Forest County used gambling revenues to acquire and place in trust fee lands within its checkerboard, 17,000-acre reservation. Forest County Potawatomi was conservative in growing an economy. Initial investments following enactment of IGRA weren’t jaw-dropping. Sixty of 77 residences on the reservation were mobile homes. The reservation needed

housing, a feed store and a grocery store. “We wanted to build things that were important to the tribal community and the surrounding communities,” Crawford says. “They weren’t home runs. They weren’t intended to be home runs. They were necessities. “We didn’t overextend ourselves,” Crawford says of tribal economic investments and enterprises. “There were failures. There were no disasters.” It has been common for tribes to invest in environmental projects such as clean energy and securing water rights. Washington tribes restored fisheries. Other tribes engage in wildlife preservation. While much of Indian Country remains impoverished, the growing tribal economy has contributed jobs and economic growth to largely rural non-Indian communities surrounding tribal lands. “These tribal economies are literally woven in the fabric of the states in which they are located,” Lance says. “You know, tribes aren’t going anywhere. They’re never going to sell and move their corporate headquarters. They’re not passing dividends to shareholders. The money generated by the tribal enterprises is turned over to the local communities. It has more of an economic impact.”

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Looking Under the Hood Pala Interactive CEO Jim Ryan discusses the role of software in online gambling By Steve Ruddock

he success of an online gaming site is dependent on a number of interwoven factors. This menagerie includes everything from branding to marketing to customer service, but the most important factor is also the most often overlooked: software. Software is the lifeblood of an online gaming site. It’s the end product all the marketing, branding and customer service are built around. And after more than 20 years of online gambling, the efficacy of software is largely taken for granted. But not all online gambling software is created equal, and in that respect, the makeup of the online gambling industry resembles a lot of other established industries. The online gambling market has: • Well known brands with proven track records. • Niche platforms that deviate from what has become the industry standard, or focus on a specific vertical or market. 48

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• Startup companies trying to gain a foothold in the market. Each has positives and negatives, and different levels of risk and reward.

iGaming in the U.S. In the nascent legal U.S. market, the established online gaming providers have been the go-to platforms. Established companies have battle-tested software, and the experience to tailor the platform to each jurisdiction’s regulatory requirements that the somewhat conservative brick-and-mortar casinos running the sites prefer. But not everyone in the U.S. online gaming market wants to divvy up profits with a platform partner, or use software that deviates only in branding from many other operators. They’d rather have 100 percent control of the platform and the direction they take. Rush Street and Pala are two examples of companies that have decided to blaze their own online gaming trails.

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“The platform needs to support a network model which would allow for a number of different poker brands to offer poker games in the same liquidity pool.” —Jim Ryan, CEO, Pala Interactive

Both companies’ online casinos have been able to grab modest but significant market shares in New Jersey, despite neither company having a casino presence in the Garden State, and launching well after most of their competitors: Pala in November 2014 and Rush Street in September 2016.

Creating Uniformity In the online casino world, software plays a critical role, but not as much as it does in online poker. There is less deviation between online casino platforms, and returns tend to be identical across all platforms in the jurisdiction. Because of this, and for other reasons to be noted later, any perceived inadequacies are easier to offset through promotions, game selection and a user-friendly interface. As New Jersey-based gaming industry analyst Robert DellaFave explains, “Ease of use is a big draw for me. If I can’t log on, make a deposit and find a game of my liking within a couple of minutes, I tend to shy away from the site. “But what keeps me coming back is game selection, incentives such as free play and regular promotions, and server stability—I can’t emphasize how important it is that a game not crash on me. It’s such a buzzkill.” But there are limits to what players will put up with. DellaFave says he tries to avoid some New Jersey sites because their platforms aren’t simply inferior, they’re bad. “Even if they offered me a solid reload bonus, I can’t see wanting to deposit at a site with inferior software,” DellaFave says, adding, “But you never know.” As DellaFave explains, the uniformity in the online casino industry has seeped into the way online casinos reward players. “These days, a lot of sites run promos that offer a percentage return on net losses,” DellaFave says. “While there’s some value there, I just don’t find them appealing, because if I win I get nothing… And isn’t winning one of the primary goals of every gambler? “Instead, I like good, old-fashioned match bonuses, so long as the wagering requirements are reasonable. A 100 percent match up to even $50 would be enough for me to give a rarely visited site a second look.” For an online poker player, there isn’t a “you never know.” It would likely take the CEO showing up with a bag of money for them to play at a site with vastly inferior software.

A Cautionary Tale No company illustrates this difference better than Ultimate Poker. Following a successful launch in Nevada and New Jersey, Ultimate Gaming was poised to be a major player in the burgeoning U.S. online

gaming market. And just like that, it all came crashing down. Within a year of its New Jersey launch, Ultimate Gaming pulled out of the market. A couple months later, and less than two years after it first launched in Nevada, the once-promising Ultimate Gaming was no more. Poker proved to be Ultimate’s Achilles heel, evidenced by Ultimate’s mixed-bag performance in New Jersey, and its inability to compete with WSOP.com despite being the “only game in town” for several months. In Nevada, as soon as an alternative appeared, players ran from Ultimate Poker, and the site quickly became second fiddle in a two-fiddle band. In New Jersey’s six-operator market, Ultimate Casino was competitive and Ultimate Poker struggled. Ultimate Casino had a 16 percent market share in December 2013, compared to Ultimate Poker’s 3 percent market share. The disparity occurred despite the company’s poker-centric focus, and its willingness to throw tons of money at its “poker problem.” On the marketing front, Ultimate signed some of the biggest names in poker, including Antonio Esfandiari—fresh off his record-setting win in the Big One for One Drop Tournament that saw him pocket the largest prize in poker history, $15 million. Ultimate surrounded Esfandiari with a group of young, charismatic players, including rising star Jason Somerville and his RunItUp brand. Ultimate was able to leverage its stable of poker talent, and was one of the first online gaming operators to embrace social media and video. When it came to intangibles, Ultimate was a home run. Poker players heaped praise on its customer service department, headed up by player liaison Terrence Chan, who served admirably as the company’s director of player operations. Ultimate was also an innovator on the promotional front. As it struggled to meet tournament guarantees in New Jersey, Ultimate came up with the idea for its Noverlay promotion, where Ultimate refunded tournament buy-ins if specific tournaments reached their guarantees. Basically, there was a lot to like. But there was one thing in particular not to like. In the end, nothing Ultimate Poker brought to the table was enough to overcome the lackluster software. Its casino held its own, but poker players had no patience for the company’s not-ready-for-primetime software. The software was playable, but didn’t meet the baseline expectations of poker players. PocketFives co-founder Adam Small summed it up on Twitter when Ultimate officially closed its doors in November 2014. “Ultimate Poker’s advantage was its undoing,” Small tweeted. “They beat everyone to the market in Nevada, but their product was clearly rushed.” An online casino with “rushed” software could still appeal to the DellaFaves of the world, but for an online poker site it’s a death sentence. AUGUST 2017 www.ggbmagazine.com

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Building An Online Poker Platform Ultimate Poker learned this lesson the hard way, as no matter what it tried, poker players simply couldn’t look past the software. And ultimately it was done in by its platform—pun intended.

Online Poker Is More Difficult The companies that have come after Ultimate are very aware of this dynamic. “The effort and cost of developing and maintaining a platform that supports the game of poker is an order of magnitude more complex and expensive than what is required to develop and support casino or other online games,” Pala Interactive CEO Jim Ryan says. “The product needs to manage real-time interactions between unique players that could number in the thousands at any given time. Lag in the performance of the product will not be tolerated by the consumer. “Transactions associated with operating a poker platform quickly accumulate into the millions, and as such, the platform needs to efficiently manage, store and retrieve data, thereby requiring processing power and storage that increase the cost of supporting the platform. “In addition to the need to manage real-time transactions, there is also a need to store and provide for the timely review of historic play. Platform support of poker tournament play requires an additional and unique set of complex coding requirements. “The need to consolidate and move players through levels and the need to deal with numerous exceptions that happen during tournament play require a specific level of expertise in the platform provider’s product and technical team that is unique in the gaming industry. “To cap off the complexity of the system architecture, the platform needs to support a network model which would allow for a number of different poker brands to offer poker games in the same liquidity pool.” Ryan goes on to talk about the added support systems online poker requires:

Fraud Detection & Investigation System—The platform

Architecture—meaning, the “platform is built with layered architecture that separates the roles and concerns. This means presentation, business logic, foundation APIs and database are managed in separate layers. Each layer is delivering what it is responsible for. Layers interact through a formal protocol (e.g., web services) to keep the platform modular and robust.” Stateless—meaning, the “servers should be stateless to achieve scaling. Servers can be added horizontally as volume increases.” Database schema—meaning, “the schema in the real-time gaming database should be optimized for gaming needs (not necessarily for business KPIs—these are addressed by data warehouse).” No single point of failure—meaning, “each role in the platform should have a redundant solution. There shouldn’t be a single role on a single server/services that if it fails the entire system collapses.”

Failover and redundant—meaning, “each role must have redundancy and failover solution. Failover should be automatic.” Implement core competency functionality, and use third parties for everything else. Security—meaning, the “security zones must be established; encryption where necessary; access to components should be by need only; data protection and malicious actions should be blocked and monitored. Platform must have built-in security.” Mobile—meaning, the “platform must support mobile and various other clients. The platform should be agnostic to client technology.” Operational excellence—meaning, the “platform must be built with

needs to identify transactions that may be related to chip dumping, player collusion, bots and unusual wins and losses. This system is unique to poker, and needs to be supported by a team that will investigate each case.

operational excellence in mind. This means platform should accommodate automated deployments, on various hardware environments, support load balancing, enable monitoring, logs and log analysis.”

Poker Operations—The success of a poker room or network is in large part related to a group of individuals who define, review and refine games offered in the room, as well as blind structures and tournament schedules. The operations team is responsible for understanding what is happening in the market, taking customer feedback and adjusting to the needs of the customer.

Gradual degradation of service—meaning, “the platform should handle partial error situation by gradual degradation of functionality but still continue to service.”

Payments and Customer Support—A fundamental element to the success of a poker offering is the ability to get money in and out of the system in a timely fashion and to have the needs of the player supported by a knowledgeable customer support team. That is a lot to digest, and a heavy lift, but if a company is intent on being a player in the online poker industry, it’s what is ultimately required—pun intended, again.

Ryan offers a blueprint of sorts, 10 all-important components that go into an online poker site:

Global Gaming Business AUGUST 2017

Putting It All Together For an online poker operator, choosing to build a proprietary platform is a path fraught with danger, but one where there could be greater potential rewards at the end of the rainbow, because of its complexity. In New Jersey, online casino revenue is six times online poker revenue. Couple this with the difficulties Ryan rattles off above, and it’s easy to see why some operators have decided to forego poker entirely, and why others have shifted most of their focus to casino—the low-hanging fruit, so to speak. This creates opportunities for a company that sees a long-term opportunity in online poker… provided they avoid the pitfalls that did in Ultimate Poker.

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Technological Advances

SCOTUS to Hear NJ Sports Betting Case

he Supreme Court of the United States will hear the appeal of the state of New Jersey that challenges the federal law banning sports betting. The case will be on the high court’s docket in the fall. The case appeals lower-court rulings striking down a New Jersey law that authorized state-regulated sports betting, meant to create sports books at Atlantic City casinos. Governor Chris Christie signed the law in 2014, drawing a swift lawsuit from the four major professional sports leagues and the NCAA. New Jersey voters overwhelmingly approved a sports betting referendum in 2011. Arguments by the state’s lawyers have challenged the constitutionality of the federal 1992 Professional and Amateur Sports Protection Act (PASPA). The law bans sports wagering in all but four states that had previously approved some form of sports wagering. Of the four, only Nevada has full single-game sports betting; the other three have forms of parlay wagering. “This federal takeover of New Jersey’s legislative apparatus is dramatic, unprecedented, and in direct conflict with this court’s 10th Amendment jurisprudence barring Congress from controlling how the states regulate private parties,” Christie argued in the appeal before the Supreme Court.

Following Advice New Jersey lawmakers crafted their sports betting law following an opinion by former U.S. Solicitor General Donald M. Verrilli, Jr., who asserted in a brief filed with the Supreme Court that New Jersey was free to repeal its state ban against sports wagering “in whole or in part” without violating PASPA. The bill Christie signed into law did precisely what Verrilli had suggested—repealed the state ban on sports betting to institute a state-regulated system. However, the solicitor general’s office subsequently reversed Verilli’s opinion, saying that any state law authorizing sports betting would vi52

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olate the federal ban. In May, current Solicitor General Jeffrey Wall filed a brief with the court recommending that the justices reject hearing New Jersey’s appeal. The court’s decision last month to hear the case was a surprise to many, since the high court has typically followed the solicitor general’s opinion in declining to hear previous cases. In general, the court only agrees to hear 2 percent to 3 percent of all cases referred to it, making any case a long shot from the beginning. The decision has given a boost to advocates of a PASPA repeal in suggesting the justices feel New Jersey’s arguments have merit. None of those advocates has been more vocal than the American Gaming Association, which has been involved in a campaign to repeal PASPA as the New Jersey case has wound its way through the courts. In a press call immediately after last month’s announcement, AGA President and CEO Geoff Freeman said the court’s decision to hear the case is “another nail in the coffin of PASPA.” “This has been a failed ban on sports betting,” Freeman said, “which has created an unregulated $150 billion illegal market with no oversight for law enforcement and no accountability to regulators and no concern for the integrity of the games.” Freeman repeated the AGA’s longstanding position that PASPA has failed to prevent sports betting, noting that while $150 billion was wagered illegally on sports in the U.S. last year, only $4.5 billion was wagered legally in Nevada. He said that while adding one state to those offering legal sports betting is not going to solve this overall problem, the Supreme Court’s willingness to hear the case “furthers the likelihood of congressional hearings this fall” in the legislation introduced earlier this year to repeal PASPA, which is supported by the American Sports Betting Coalition, a group of lawmakers, law enforcement officials and local and state government the AGA assembled earlier this year.

Freeman also noted that the atmosphere in which the 1992 ban was passed no longer exists—the technology to regulate, control and monitor sports wagering, as proven by successful European programs, has advanced to the point of ensuring integrity both of wagering and the games themselves. He added that attitudes towards sports betting also have changed, with the heads of the major sports leagues—notably the NBA and the NHL—coming out recently in saying the federal ban should be at least re-examined if not outright eliminated. Arizona, Louisiana, Mississippi, West Virginia and Wisconsin joined New Jersey’s effort to have the case heard by the Supreme Court. Meanwhile, reaction poured in around the industry to the Supreme Court decision. In Connecticut, representatives of both gaming tribes, the Mohegan Tribe and the Mashantucket Pequot Tribe, lauded the decision. “We are pleased the Supreme Court has agreed that it should hear this important case,” Kevin Brown, chairman of the Mohegan Tribe, owners of Mohegan Sun, said in a statement. “And we are hopeful (the justices’) decision will provide further encouragement for Congress to take the steps necessary to create a safe and regulated sports wagering marketplace in the United States that will protect the players and the sports themselves. Mohegan is well poised to thrive in such a regulated marketplace.” Mississippi state Rep. Scott DeLano told the Biloxi Sun Herald that sports betting could usher in another golden age for the state’s casinos. “We feel this could be another 1990s for the state of Mississippi,” DeLano said, referring to the first explosion of construction and expansion for Mississippi casinos. “We want to be ready for any new investment that we can do in a responsible way. I would be surprised if we don’t get (sports betting) this coming session.” Even Las Vegas casino operators, owners of a monopoly on legal sports betting, welcome expansion of wagering to other areas. “It’s not a bad thing for us,” MGM Resorts Sports Book Director Jay Rood told the Las Vegas Review-Journal. “Since we’re a brand that’s beyond Las Vegas, we’re interested in it being allowed in other jurisdictions, especially the jurisdiction where we currently reside (in New Jersey).” MGM owns the Borgata in Atlantic City, as well as properties in several other states. “A long time coming, today’s announcement is welcome news to the citizens of New Jersey who overwhelming voted for a constitutional amendment to allow sports betting in our state,” U.S. Rep. Frank LoBiondo (R-N.J.) said in a statement posted on his website. “The billion-dollar sports betting industry should not be limited to a few states, nor should the federal government stand in New Jersey’s way.”

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about it based on careful study, and I haven’t gone that far to give you an opinion today,” he told the Senate he Coalition Against Internet committee. Gambling, funded principally The memo concluded that online by Las Vegas Sands Chairman gaming and lottery were not covered Sheldon Adelson, ran into a hurdle Attorney General Jeff Sessions under the 1961 Wire Act, and conlast month. Encouraged by Attortended only interstate sports betting ney General Jeff Sessions, who said during his conwas barred by the law. firmation hearings that he would review the 2011 Should the DOJ reject the memo, there is no Department of Justice memo that effectively legalconsensus on what the consequences would be either ized online gaming and lottery, the coalition hired a to the states that currently offer iGaming or states lobbyist to urge Sessions to revoke that memo. now considering it, such as Pennsylvania, where But the lobbyist the group hired, Charles Adelson’s company owns Sands Casino Resort BethCooper, a longtime friend of Sessions, turned out lehem. LVS is funding a campaign to stop a gamto be a problem. It seems Sessions hired Cooper as bling expansion bill, focusing not on online gaming his personal attorney following the congressional but on legal slots in bars and restaurants. investigations of Russia’s election influence. That Without Sessions, the DOJ gave no indication put Sessions into conflict on the two issues, and he if and when the agency would review the memo. recused himself from any consideration of the memo’s status. U.K. Regulator Cracking “There’s been a change in administrations, and Down on Online Operators that’s when fresh looks take place,” Cooper told nline gambling companies doing business in Bloomberg News about the DOJ memo. “This parthe U.K. are facing a crackdown from the ticular legal issue has certainly struck us as sufficountry’s Competition and Markets Authority over ciently questionable that it ought to be deceptive practices in sign-up promotions and reconsidered.” player withdrawal conditions. Sessions seemed to indicate that he considered The authority is launching a probe and enthe memo questionable when he said during the forcement actions into the £4.5 billion gambling confirmation hearings that he was “shocked” when market, saying it believes customers are being deit was issued in ’11. ceived in sign-up promotions and operators are un“I would revisit it and I would make a decision

Adelson’s iGaming War Takes a Hit

U.K. Football Association Ends Online Gaming Sponsorships

he U.K. Football Association has decided it can’t remain affiliated with gambling companies, canceling a £4 million-a-year contract with U.K. bookmaker Ladbrokes. The FA’s governing body conducted a three-month review of the appropriateness of the deal while the association has been strictly enforcing a ban on players and people connected to the sports betting on soccer matches. The FA has been criticized for the affiliation, including by soccer player Joey Barton, who is serving an 18-month ban for gambling offenses. Barton has accused the FA of hypocrisy on gambling issues. “We would like to thank Ladbrokes for both being a valued partner over the last year and for their professionalism and understanding about our change of policy around gambling,” said Martin Glenn, FA chief executive, in a press statement. The English Football League, however, said the decision will not impact its own relationship with Sky Bet, which is in its fifth year. A spokesman for the league told the U.K.’s Guardian newspaper, “The EFL is of the firm belief that there is no conflict in having a commercial relationship with the gaming industry, as it is the FA who have the ultimate responsibility of enforcing any breach of the existing betting rules that all those who participate in our competitions have to adhere to.” The FA said it will “continue to work with betting companies, including Ladbrokes, as they play a key role in sharing information on suspect betting patterns, and so help in regulating the game.”

fairly holding on to their money. The investigation is part of a joint program between the country’s Gambling Commission and the authority over how online gambling companies treat patrons. Officials said the commission has identified a number of operators it intends to target with enforcement actions, but did not name them. The focus is on sign-up promotions, which are used to attract new customers by offering bonuses. The authority, however, feels that customers aren’t getting the deal they expect, as the terms and conditions of the deal can be confusing and unfair. Players, for example, may be required to place a large amount of bets before they can claim bonus money, often meaning they can’t “quit while they’re ahead.” There are also charges that some companies block withdrawals, regardless of whether bonus money is involved. The authority says it has received more than 800 complaints from consumers, including that many companies have minimum withdrawal amounts far larger than an original deposit, or place other restrictions on withdrawing money. “We know online gambling is always going to be risky, but firms must also play fair,” said Nisha Arora, CMA senior director for consumer enforcement, in a press statement. “People should get the deal they’re expecting if they sign up to a promotion, and be able to walk away with their money when they want to. Sadly, we have heard this isn’t always the case. New customers are being enticed by tempting promotions, only to find the dice are loaded against them. And players can find a whole host of hurdles in their way when they want to withdraw their money.” The probe is backed by the Gambling Commission.

Illinois Online Gambling Bill Fails

he Illinois legislature adjourned at the end of May, but Governor Bruce Rauner called lawmakers back to the capitol to try to pass a budget bill. The special session ended Friday, June 30 without a budget for the third consecutive year—and without an online gambling/daily fantasy sports bill. The House Executive Committee met during the week but took no action on either H 479, the iGaming/DFS bill, or on S 1531, a DFS-only bill. The Illinois Senate had passed the iGaming/DFS bill 42-10 at the end of May. DFS companies DraftKings and FanDuel operate in Illinois although a 2015 attorney general opinion stated DFS is illegal gambling. Online gambling is available through unregulated offshore websites. Supporters estimated the state could earn $1.7 billion through legal online gaming and $280 million in revenue in its first year of being legal, mainly from online casino games and poker.

AUGUST 2017 www.ggbmagazine.com

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Knowledge is Golden Why customer information is more than just good service by Dave Bontempo

he phrase that pays has gotten a raise. Know Thy Customer no longer simply describes the small business edge gained by additional hustle. It has become the lifeblood, data sustenance and policy handbook for gaming’s multibillion-dollar industry. Grasping this dynamic, now spread across several areas, significantly impacts operators. Data reveals customer habits, marketing addresses them, mobile apps greet younger players and security innovation connects them all. Each sector is prominent for casinos viewing razor-thin margins and cutthroat competition. They can’t over-comp or under-perform. And what they interpret must be implemented at the figurative speed of light. A looming wild card further raises the stakes. Gaming has become increasingly subject to Bank Secrecy Act requirements and enforcement efforts in the last 10 years. The BSA requires institutions to report information to the Financial Criminal Enforcement Network about their customers’ transactions, primarily the source of funds. Gaming properties must thus also Know Thy Regulator. Knowledge has thus become more than power in the gaming business. It’s the Bible. Enter the innovators, who direct them to chapter and verse.

Vantiv Advantage Operators need a deep grasp of customer trends, according to Joe Pappano, senior vice president and managing director for Vantiv Entertainment Solutions. The company was formed in 2013 as a subsidiary of Cincinnati, Ohiobased Vantiv Inc. Its specialties include payment processing, security and fraud, data and analytics and cashless gaming. Vantiv Entertainment’s gaming contribution emerges through the payment-solutions, security and data-analytics realm. It also has a partnership with Sightline Payments. “The industry has evolved from this concept of knowing your customer to now understanding your customer,” he indicates. “What is driving this evolution is payments. When you introduce payments into the gaming ecosystem— which Sightline Payments and Vantiv Entertainment Solutions have done 54

Global Gaming Business AUGUST 2017

through innovation—you bring a different lens through the convergence of gaming and non-gaming activity. Because a large portion of a casino’s revenue can be driven by non-gaming activity, it’s never been more important to truly know who your customers are. By having access to the payments data, it allows operators to enrich the customer/player persona by establishing a DNA through buying behavior, spending habits, affluence and what their preferences are.” How do you drill that down? “The convergence of all the disparate technologies, or points of interaction within a casino or resort, is also driving this notion of understanding your customer,” Pappano says. “From a social site to a self-service kiosk, to interactions at a retail facility—we are working to bring those technologies together to provide an understanding of who the customer is. Vantiv is the nucleus of payments innovation and embedding/enabling disparate technologies that are being consumed within a casino. We can create an output that is meaningful and extends the breadth and depth of casino’s knowledge of a player—something they have never been able to do before. With that knowledge, casinos can better optimize and grow their revenue base.” Pappano says the industry knows what consumers do before and after entering the casino because of advancements like data science. The concept is tied in with Vantiv iQ, which touts several benefits to business. The userfriendly interface allows quick access to transaction data while analytics and reporting drive efficiencies to help customers view snapshots of processing and payment history. This category includes key historical reports containing information related to reconciliation, interchange management, fees, possible fraud, exception handling, etc. Vantiv iQ customizes data and provides proactive notifications that help customers monitor their business with alerts including chargebacks, statements and reports. Actionable insights are available at the click of a button. “Data science deciphers a customer’s total spend by category,” Pappano says. “This leads to smarter decisions about who to partner with in a business or co-marketing sense, whether online or in a brick-and-mortar setting. There

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“

The convergence of all the disparate technologies, or points of interaction within a casino or resort, is also driving this notion of understanding your customer.” —Joe Pappano, Senior Vice President and Managing Director, Vantiv Entertainment Solutions

are also geo-spatial opportunities. You can know exactly where, in a given area, a consumer is most likely to transact. This information can be incredibly valuable in terms of determining shuttle bus placements, outdoor advertising and, potentially, additional locations to target for expansion. “Now, we can truly create a single view of the customer where the casino and entertainment industries have traditionally had an abbreviated version. Being able to take data points, provide them in a meaningful manner and supply a user interface that is seamless across platforms… That becomes a powerful tool that can empower any business.” Pappano notes that customers have a discretionary income which they partly spend on entertainment. This spend equates to 8 percent to 10 percent of their total income, he says. “By having access to payment data, we have a different look and feel of their behaviors when it comes to their entertainment spend,” he asserts. “From an operator’s perspective and with respect to their spend, we know that the cost to acquire players has never been higher. By tailoring offers that resonate with their targets, we can help reduce that cost.” Security has always been the flip side of gaming’s fast-paced innovation. Pappano told GGB last year that chip technology would improve brick-andmortar security to the point where hackers would be driven toward the online space. He indicates that the online realm plans to enhance its safety when MasterCard pilots facial recognition for an online transaction this fall. Pappano says this unprecedented step will tie back to the industry goal of a frictionless experience.

Finding Deep Understanding

environment. Eventually, systems became more electronified, and things were stuck in a phase of solely knowing the basics of players’ gaming habits for quite some time. “Post-9/11 and the legislation that ensued, businesses were asked to better know their customer—legally they have to know names, addresses, phone numbers and more details about who they are doing business with.” He notes that in the post-9/11 world, Nevada passed legislation around a unified wagering account. There used to be separate sectors for race and wagering accounts, interactive and brick-and-mortar accounts, he says. Those three have now been consolidated into a single wagering area with the stipulation that a provider of that account must “know their customer.” “You must have a name, address, Social Security number—or a similar identifier—and know who this person is before allowing them to wager. From a Sightline perspective, we’re talking about knowing your customer and understanding your customer.” Sattar believes the levels of understanding between casinos and their customers continually deepens. “We continue to talk about the convergence of gaming—not only do we know who these people are and how they comply with financial and gaming regulations, but we know where they spend their money, how they spend their money, what time of day they spend their money,” he indicates. “We’ve taken traditional casino loyalty, which started with a basic knowledge of their play, and complemented it with promotions where players like to dine, buy their coffee, where they like to shop and what kinds of foods they like to eat. We see ‘Knowing Your Customer’ as the baseline, but we believe ‘Understanding Your Customer’ as truly knowing what they like to do and then being able to cater offerings based on individual preferences.

Omer Sattar, the co-founder and executive vice president of strategic initiatives for Las Vegas-based Sightline Payments, believes knowing the art of knowing customers must eventually yield to predicting them. “Gaming started out anonymous—casinos didn’t know their customers,” he says. “Then along came the loyalty card system, which meant that you could know something about your customer, like how long they sit at a slot machine or what type of slot machine they like to play. Loyalty programs started out very rudi—Omer Sattar, Co-Founder and Executive Vice President of Strategic Initiatives, Sightline Payments mentary, and it was a touch-andfeel ‘Know Your Customer’

“

We continue to talk about the convergence of gaming— not only do we know who these people are and how they comply with financial and gaming regulations, but we know where they spend their money, how they spend their money, what time of day they spend their money.”

AUGUST 2017 www.ggbmagazine.com

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“

Casinos can be doing better about their approach to risk. Change cannot come without risk. They need software companies that can help them mitigate this risk.” —Kahlil Ashanti, Founder, SpendSight Technologies

Small Companies Tout Big Value Kahlil Ashanti, founder of Vancouver-based SpendSight Technologies, hosted a conference along with Sattar at the Canadian Gaming Summit in Vancouver in June. It focused on player engagement in the digital age. The panel discussion entailed tools, trends and insights about understanding players without losing touch. The conference underscored Ashanti’s belief that big industries can be outhustled by smaller ones that know their marketplace. He says it also provided validation for his SpendSight product, aimed at linking the quick-decision-making arm of a small outfit with the needs of a large company. “We have a fully executed contract with a large North American gaming company with an anticipated rollout later in the year,” Ashanti says of his product, now in beta testing. Ashanti’s company has a proprietary algorithm that allows its software to predict the behavior of players club members and their trends over time. It’s cloud-based, customized and capable of providing a glimpse of 40,00050,000 players, he says. Ashanti believes companies like his help large ones make faster decisions in their far riskier worlds. Large gaming outfits not only must know their customers and competitors, but must ward off gaming cheats. “The industry has a closed ecosystem; it needs to open a bit to provide the bridge to the future,” he says. “Casinos can be doing better about their approach to risk. Change cannot come without risk. They need software companies that can help them mitigate this risk (for instance, with security compliance capability incorporated into products). “A palpable fear of so many legacy industries that die is that they did not know the customer,” Ashanti continues. “Look at Blockbuster, Barnes & Noble, Kodak, JC Penney, Radio Shack. Even Macy’s is closing stores. When I was a kid, they were the Microsoft of their day. The bottom line, though, is industries change. People come up with bold new products and approaches to them. Uber (which turned the taxi-driving business on its ear) asked for forgiveness rather than permission. Everybody lost their mind, but now we think first of taking Uber before selecting a cab.”

Taking ‘Umbrage’ to Fraud There’s an irony in the area of security. It doesn’t generate revenue, and can be viewed as a necessary evil. Yet one can hardly spend too much on it: one major fraud event can affect balance sheets for years. BSA requirements also force periodic system upgrades. The security requirements leverage the sophisticated tracking methods gaming operators already apply to their patrons, and reflect a tradeoff. Federal agencies want help determining the source of funds to prevent fraud and money laundering. In return, properties see more financial tributaries flow into the river of revenue. Biometrica Systems, formed in 1998, helps the industry catch advan56

Global Gaming Business AUGUST 2017

tage players, cheats and thieves, according to its CEO Wyly Wade. The Las Vegas and Virginia-based outfit supports casino surveillance, security and compliance teams, state regulatory boards and commissions. Biometrica now has a database of 100 million names, according to Wade, and its products are most generally used in the facial-recognition realm. The company’s relevance stems from federal requirements. Wade cites IRS rules requiring casinos with gross revenues exceeding $1 million to file suspicious activity reports and track aggregate transactions of more than $5,000 per day. This combats money laundering. “The logic behind our products is threefold,” he says. “You can’t track $5,000 if you can’t track dollar one; you can’t monitor a suspicious pattern unless you realize there is one by tracking events; and you can’t know someone is who they say the are unless you can verify the background.” UMBRA, the name of a product that will be released this summer, is the only private-sector, law enforcement-verified database, he says. It includes arrests, charges, cases and dispensation, along with photos and biographical information. This helps casinos to better “Know Their Customer,” a requirement as a non-banking financial institution, Wade indicates. “Think of UMBRA (it means the darkest part of a shadow, in Latin), as something like a Google for criminals. Basically, any authorized person on the system (say, someone in law enforcement, or security or surveillance personnel, for instance) can log on and look up ABC person immediately—just like when you Google someone,” he asserts. “The difference is, this is all law enforcement-verified criminal records; it’s not just everything and anything that’s out there on the internet. That can’t always be verified.” Wade says this is not Big Brother watching clients. The idea is not mass surveillance, but merely to track verified criminals of all stripes, from thieves to drug and human traffickers, to money launderers to terrorists, to protect and secure people and assets. Biometrica can help casinos in several ways, he says. “We have several use cases, be it the investigator who is suspicious of an individual or the actions of that individual, between our desktop tools that work with your surveillance professionals to capture and compare in the video stream,” Wade indicates. “Or the security professional on the gaming floor using their mobile phone to determine if a person has been banned from the property using our mobile app. Or to be able to maintain chainof-customer for an event at the pool to be able to hand over to law enforcement while being able to document it on the scene rather than going back to the security desk.” UMBRA is one more tool casinos have to fortify their operations amid a sea of variables. The companies who service gaming have given it a clear blueprint. For customer identification, it is important. In the compliance realm, it is essential. Overall, those who prosper will be properties that take this information to another level.

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FRANKLY SPEAKING by Frank Legato

Robots and Fingers Power spokesman yukked it up in a press statement: “I’m really proud of this statue, if only because it’s the first time that I can legitimately claim to have a huge erection.” Har! “We tried to make the installation look as lifelike as possible to Theresa May—which is why it’s two-dimensional and largely wooden.” Oh, SNAP! They even called it the “Mother of All Theresas.” Hey, we’re here all week! It’s all typical of Paddy Power, which promotes its political betting with gags like a section of its website where you can slap your favorite politician with a wet fish. OK, it’s a virtual fish, but it’s still hilarious. It’s not just Paddy Power that’s loaded with wisecracking wise guys. Big bookmaking companies tend to have weird jokester qualities. Remember Sportbet a few years ago? Just before the World Cup got under way in 2014, the Australian bookmaker floated a giant inflatable Jesus over Melbourne, clad in the jersey of the Australia Socceroos and displaying the pose of Rio’s Christ the Redeemer statue. A Sportbet spokesman said it was meant to convey that “divine intervention” was needed for Australia to win the World Cup. Astonishingly, the Jesus balloon didn’t deliver the Socceroos. We’re still waiting to see what the Mother of All Theresas accomplishes from her backwards-victory-sign/double-bird-flip/Moe-eye-poking gesture toward the European Union. If nothing else, it’s sure to help Paddy Power. Personally, I have no horse in this Brexit race, but I will say this: We can all get along in this world, as long as the bartenders are human. VIC TOR RINAL DO

lright, this automation thing is getting a little ridiculous. A few months ago, I told you about Rose, the flirtatious robot concierge at the Cosmopolitan of Las Vegas, the Alexa voice-activated system doing butler stuff at the Wynn, and a driverless vehicle taking tourists around Downtown Las Vegas. I kind of like being able to ask the nightstand for restaurant reservations and show tickets. I like asking my phone to bring me some towels. Face it, a butler would be better, but I still like it. But this latest bit of Las Vegas robot witchery is something I cannot abide. There’s now a bar in the Miracle Mile Shops at Planet Hollywood called Tipsy Robot. Despite what I initially hoped, the name does not mean there’s a floor show featuring drunken robots clanking around, getting dented up as they stumble about. No, Tipsy Robot is the first bar on the Las Vegas Strip to feature robot bartenders. The robots are at one of the establishment’s two bars. Customers sit down at tablet stations to order, or order their drinks on their smartphones through the handy Tipsy Robot app. After they pay, they get a QR code, which is scanned to enter the order in the system. No, no, no. This will never work. The robots, if they can be called that, look like industrial equipment whirring around between 60 different liquors, mixers and plastic cups. Robots should have personality, like R2D2, or Robot B9 on Lost in Space. Secondly, they are, well, hardware. How are you going to tell your problems to a bartender who is hardware? At least have standard responses programmed in, like “Ah, it’ll be alright!” or “Gee, women, huh?” or “That’s no reason to blow your brains out. Have another drink.” Finally, a standard one-shot drink at the “Bionic Bar” is $14. Danger, Will Robinson! They say the $14 includes “both taxes and gratuity.” Hold the phone! Gratuity? I’m tipping the gizmo? What, they don’t pay them enough? In other news, those wacky bookies are at it again. Paddy Power, the Irish bookmaker, marked the start of Great Britain’s Brexit negotiations by erecting a giant statue of British Prime Minister Theresa May on the White Cliffs of Dover, “flipping off” Europe and the European Union across the English Channel. The statue is really just a wooden cutout of May draped in a Union Jack dress, but at 110 feet tall, that just makes it look all the more creepy. And I’m sorry, though they say she’s doing a “double flip-off,” she’s really doing the Churchill-style backward “V for victory” sign from World War II. It is also the sign Moe used to make before he poked Larry or Curly in the eyes, but I’m pretty sure that’s not what Paddy Power meant to convey. Paddy Power offers all sorts of bets around Brexit and U.K. elections and just about everything else, so its obvious intention was to get its names in front of bettors, but in typical cheeky fashion, the Paddy

AUGUST 2017 www.ggbmagazine.com

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EMERGING LEADERS The ‘People Business’ Walter Fales Chief Development Officer, Warner Hospitality eflecting back, Walt Fales knew he was destined for the “people business” from an early age, stating, “I was the kid always out at my lemonade stand. I sold candy on the school bus and solicited advertising buys for my high school athletic programs.” Fales became well-known as the “Lawn Ranger” after starting a landscaping business at age 13 which ultimately grew to more than 40 clients. He has always been a bit of a workaholic, and some things haven’t changed much over the years. Now, as chief development officer at Warner Hospitality, Fales still cites work ethic, passion for excellence and drive for continuous improvement as the cornerstones of his rise in the gaming industry, having spanned 13 different titles ranging from roles in analysis to finance to casino marketing to development, throughout his still-young 15-year gaming industry “I had never been to career. Las Vegas before, but I Fales has always enjoyed tackling new opportunities outside of his realm of expertise, enabling him to learn about saw a business model new disciplines and make observations on where improvethat was the epitome of ments can be made. This willingness to seek out new experithe ‘people business,’ ences has added tremendous value as he’s advanced into new with 100 different leadership roles. departments and “I was never a fan of ‘the way things have always been almost 6,000 team done’ or the path of least resistance,” says Fales. It is his passion for continuous improvement—the desire to figure out members. That was the why, the how, and the “can this be better”—that has more people than the helped Fales provoke change and find new ways of looking at entire population of my old challenges throughout the better part of his career. hometown in Fales credits much of his success to his mentor, Mark Indiana! I said, Birtha, another “hotelie” from the School of Hotel Adminis‘Where do I sign up?’” tration at Cornell University. Now president of the Hard Rock in Northfield Park, Birtha provided Fales with generous mentorship in his early years—often letting the starving college student volunteer for events that Birtha hosted to fulfill the roles of registration and debt collector in exchange for free food—which gave Fales the opportunity to meet all of the attendees firsthand and form long-lasting relationships. “Mark provided invaluable advice about how to succeed in the gaming industry that I am incredibly grateful for to this day,” recalls Fales. “Mark invited me to help develop the Venetian’s first formal internship program back in 2001. I had never been to Las Vegas before, but I saw a business model that was the epitome of the ‘people business,’ with 100 different departments and almost 6,000 team members. That was more people than the entire population of my hometown in Indiana! I said, ‘Where do I sign up?’” And Fales has never left the gaming industry. In terms of today’s gaming industry, Fales believes there are big opportunities for young emerging leaders to succeed. “Those who are willing to give it their all, to go above and beyond, and to spend their early years learning and gaining experience in as many disciplines as possible, will rise above their peers quickly,” Fales says. —Michael Zhu, The Innovation Group

Global Gaming Business AUGUST 2017

Culinary Teacher Jonathan Deutsch Professor, Drexel University Center for Hospitality and Sport Management onathan Deutsch found his calling at 14 when he learned to cook. During high school, he cooked for his family’s summer camp for those with disabilities, an experience which foreshadowed the importance of food in shaping hospitality. That importance shaped a career that led Deutsch to his current title as professor, Center for Food and Hospitality Management and Department of Nutrition Sciences at Drexel University in Philadelphia. Deutsch’s parents were not so enthusiastic about his ambitions, but went along if he earned a college degree. He did, from the Culinary Institute of America in 1997. He received a B.S. in hospitality management at Drexel in 1999 and a doctorate in food studies and food management from New York University in 2004. “Those formative experiences in both culinary and academia I kept separate,” says the Scranton, Pennsylvania native. “Now I’m really enjoying their combination, teaching, researching and writing about food service management, product development and social and cultural aspects of food and hospitality.” At Drexel, Deutsch teaches courses in food service, hospitality management and culinary arts. He writes a weekly column in Restaurant Business magazine. “Lately, I’ve been working in the area of reducing food waste and improving health through culinary innovation and product development,” he says. The world of academia creates a seasonal flow and constant change. Drexel works on quarters, with a new schedule every 12 weeks— a new group of students, new assignments and research projects. “It can be challenging, but is great for people like me who have varied interests and short attention spans,” says Deutsch, who plays the tuba. While Deutsch seems removed from the casino world, he’s not. Casino resorts are a microcosm of the hospitality industry, he says. “Leisure tourism, meetings and conven-

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“Leisure tourism, meetings and conventions, F&B, rooms, spa, retail, gaming, entertainment and attractions all convene under one roof. I can’t think of any other facet of the industry where that is as clearly visible.” tions, F&B, rooms, spa, retail, gaming, entertainment and attractions all convene under one roof. I can’t think of any other facet of the industry where that is as clearly visible,” says Deutsch, who met his wife Molly in the culinary end, where he cooked and she served in a restaurant. Deutsch credits two figures from the Atlantic City gaming industry as mentors: Bob Ambrose, a colleague at Drexel, and Alyce Parker, a Drexel board member. “They really took me under their wings to introduce me to everyone I needed to know,” he says. Also, Stuart Schulman, who served as Deutsch’s first department head in academia at the City University of New York. “He continues to be a great mentor,” Deutsch says. “I still send him papers to read for feedback before I

click ‘submit.’” These relationships inform his view of the hospitality experience—the bars and restaurants, the people-watching, sitting by the pool, hearing live music or taking in a show. “I think too often food is thought of as a ‘must have’ revenue center, not a leader in shaping the experience,” he says. “When I vacation, the first thing I do is choose a hotel and the second thing is make dinner reservations. The rest—gaming, retail, attractions—follow.” Based on his own pathway, Deutsch offers young people this advice: “Say yes to everything at first—opportunities, seminars, programs, volunteering, jobs. Then you can edit.” —William Sokolic

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NEW GAME REVIEW by Frank Legato

JackPOP!

Novomatic Americas

his new game on Novomatic’s Dominator Curve cabinet includes a unique path toward one of five jackpots displayed on the top of the monitor. The Dominator Curve’s giant curved LCD monitor displays a comicbook-style array of characters and “Pop!” icons. The base game is a five-reel, 40-line video slot featuring frequent wild symbols. Just above the reel array are two “Jackpot Reels” that can only be activated with an extra wager. They come into play with respect to the five top “JackPOP!” jackpots. Two “Pop!” symbols on the reels return the $2 prize; four Pop! symbols win $10; five symbols, $20. There is only one “Pop!” symbol per reel, so the player must activate one Jackpot Reel to land six “Pop!” symbols to win the $100 JackPOP!, and must activate both Jackpot Reels to win the top prize, with a reset level configurable by the casino. The prizes become more frequent during the free spin round, triggered by bonus symbols on the first, third and fifth reels. The player is awarded seven initial free spins. During each free spin, one random reel contains only wild symbols, “Pop!” and “+2 Free Spins.” Free spins are added to the meter as the latter symbol lands, extending the bonus round, and the extra “Pop!” and wild symbols increase the win frequency for the players.

Manufacturer: Novomatic Americas Platform: Dominator Format: Five-reel, 40-line video slot Denomination: .01 Max Bet: 400 Top Award: 500 times line bet Hit Frequency: 42% Theoretical Hold: 5%-14%

Midnight Stampede Aristocrat Technologies

his video slot, available in 15-line or 30-line configuration, features a play style with sounds and other features similar to Aristocrat’s mega-hit Buffalo Stampede, but the rumbles preceding a major win are from stampeding rams instead of buffalos. There are two initial titles under the Midnight Stampede series name—“Midnight Rumble” and “Super Stampede.” The main feature in the primary games of both titles are 2X wild symbols, which combine in winning payline combinations to form wins of up to 32X on any given line win. There are two mystery “minigames” that randomly replace all major symbols on the screen—any symbol other than poker and scatter symbols—with one symbol. One of the mystery events replaces the symbols with one pre-selected by the player; the other replaces with a random symbol. There also is a random “Blackout” win cycle, during which only winning symbols are shown and all others are blacked out.

Global Gaming Business AUGUST 2017

There also is a free-spin event, triggered by two, three, four or five scatter symbols, for five, 10, 15 or 25 free spins, respectively. Free spins are retriggered by two, three, four or five scatter symbols. Finally, Midnight Stampede features a two-level mystery “must-hit-by” progressive. The Minor progressive resets at $200 and must hit by $250. The Major progressive resets at $1,000 and must hit by $1,250. Manufacturer: Aristocrat Technologies Platform: E*Series Format: Five-reel, 15-line or 30-line video slot Denomination: .01 Max Bet: 150, 300 Top Award: $1,250 Hit Frequency: Approximately 50% Theoretical Hold: 3.49%-11.89%

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Ocean Magic

International Game Technology

his new ocean-themed video slot features mystery wild symbols and a unique boost in hit frequency with an additional wager. The base game in Ocean magic is a four-byfive video slot (five reels, four symbols per reel) with 50 paylines. A mystery wild feature can occur whenever a bubble appears over the reels. A bubble turns the symbol underneath into a wild symbol for that spin, substituting for all but the treasure chest bonus-trigger symbol. If the player doubles the minimum bet— 100 credits as opposed to the 50 credits to cover the paylines—it activates the Bubble Boost feature. With the additional bet, up to seven additional bubbles can appear on each spin. This applies to either primary-game spins or free games. The extra bubbles, and thus, extra wild symbols, boost the base-game hit frequency from 20.2 percent to 38.2 percent, or a hit of

some kind every 2.62 spins. Three or more scattered treasure chest symbols trigger the free games bonus. Players pick from floating bubbles to reveal extra picks and free games. Players are awarded up to 20 picks depending on the number of treasure chest symbols that triggered the bonus. Free games can be re-triggered for up to 750 free games. The player selection can be re-triggered four times. One or more bubbles appear below each reel and move up one position at each spin before landing on one symbol. Manufacturer: International Game Technology Platform: CrystalDual, CrystalSlant Format: Five-reel, 50-line video slot Denomination: .01-5,000.00 Max Bet: 2,000 Top Award: 15,000 times line bet Hit Frequency: 20.2%-38.2% Theoretical Hold: 4%-14%

Space Invaders Scientific Games

ith this game, Scientific Games enters the skill-based slot arena with a skill version of Space Invaders, based on the legendary video arcade shooting game first released in 1978 in Japan and brought to the U.S. by Bally, and as part of the first Atari videogame consoles. The base game for Space Invaders is a six-reel, 60-line video slot on the Blade s32 cabinet. During the main game, the object is to collect “shots” through special symbols. Collecting 50, 100 or 150 shots gives the player the option to enter the main Space Invaders Bonus. Alternatively, the player has the option to “buy” 100 shots for 2,000 credits and bypass the reel-spinning game altogether, making it a pure skill game. The bonus plays out exactly as the arcade game, with players awarded credits for each alien ship shot down, or alternatively, one of the “Jackpot Pools” displayed at the top of the screen. If you hit the mother ship, you advance a level for higher wins. Each jackpot pool represents the value of all of the invaders in that level, plus the credit value of hitting the UFO in the Space Invaders Bonus. With each spin, the value of random invaders in a level will be increased and the value will be added to the meters. As the player is awarded the various amounts in each level, the amount of the pool will reduce. Once that level is completed, if the value is below the reset amount, the

pool will reset. Level 1 resets at 2,665 credits, Level 2 resets at 5,165 credits, and Level 3 resets at 10,165 credits. The game program has a variable payback percentage, based on skill level of the player, from a minimum 86.73 percent to a potential 96.8 percent with a maximum skill level. Manufacturer: Scientific Games Platform: CPU-3.5X Format: Six-reel, 60-line video slot Denomination: .01-100.00 Max Bet: 250 Top Award: 25 times total bet times denomination Hit Frequency: 45.75% Theoretical Hold: 3.92%-13.27% (variable based on skill)

AUGUST 2017 www.ggbmagazine.com

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GOODS&SERVICES

Left to right, Clark County Commissioner Susan Brager, Aristocrat Americas Managing Director Matt Wilson, Howard Hughes Corporation Summerlin President Kevin Orrock and Nevada Governor Brian Sandoval got together for the groundbreaking of the new Aristocrat headquarters in Las Vegas

ARISTOCRAT BREAKS GROUND ON NEW U.S. HEADQUARTERS

evada Governor Brian Sandoval joined other state and local officials and Aristocrat Americas Managing Director Matt Wilson to break ground on the supplier’s new two-building, 180,000-square-foot headquarters in the Las Vegas suburb of Summerlin. Sandoval was joined by Clark County Commissioner Susan Brager and Kevin T. Orrock, president of Howard Hughes Corp., Summerlin, and dozens of Aristocrat employees in the groundbreaking ceremony. Aristocrat’s new campus will consist of two three-story structures, and will house more than 600 employees. The campus will be a hub for the company’s Class III Americas team, helping to support customers across North America, Latin America and the Caribbean. The campus will consolidate the functions of several Las Vegas facilities in one location. “We’re going to bring all of our employees in here to collaborate in an amazing space,” said Wilson. “The building itself is world-class. Today’s groundbreaking represents more than just a physical move for Aristocrat; it represents a mind shift.” The project architect is Ed Vance & Associates Architects, the interior architect is HOK, and the general contractor is Martin-Harris Construction. The campus is projected for completion in late 2018.

GLI ACQUIRES NMi GAMING

he Gaming Laboratories International group of companies announced that it has acquired rival testing company NMi Metrology & Gaming Ltd. and related gaming assets (NMi Gaming) from NMi Certin, B.V. and related parties. The acquisition benefits NMi Gaming’s clients 62

Global Gaming Business AUGUST 2017

by providing them with instant global reach through GLI’s accredited 475 jurisdictions. Additionally, the transaction benefits GLI’s clients by allowing the firm to provide greater levels of service and attention. NMi Gaming has offices in GLI CEO the United Kingdom, the James Maida Netherlands, Italy, Spain and Canada, and will continue to operate under the NMi Gaming brand name for the foreseeable future. Customers can expect a business-as-usual approach while also being able to leverage GLI’s global presence to grow and enhance NMi Gaming’s services. GLI President and CEO James Maida said, “Over the last two years, the GLI Group has completed multiple strategic acquisitions, such as Bulletproof, Kobetron Inc. and Gaming Informatics LLC, which further enhance our business offerings and increase the level of customer service that the GLI Group provides to our gaming clients globally. Now, with the acquisition of NMi Gaming, we have created synergies that are beneficial to both NMi and GLI clients and provide additional bandwidth for even greater customer service.” NMi Gaming’s Andrew Rosewarne said, “This is an excellent opportunity for our customers, as this allows us to leverage GLI’s worldwide coverage while retaining the dynamism of our independent operations.” NMi Gaming was founded after the privatization of the Dutch Legal Metrology Service in 1989, and its gaming division has substantially grown in size and prominence since it commenced an international expansion in 2010. In recent years, NMi Gaming has become a major force in the areas of iGaming, land-based certification and auditing while retaining its strong presence in key European markets.

SCIENTIFIC GAMES LAUNCHES ‘THE SIMPSONS’

cientific Games Corporation announced the launch of The Simpsons, a new wide-area progressive slot game featuring beloved characters and settings from the record-breaking popular animated television

series of the same name. The Simpsons slot game is showcased on the groundbreaking immersive Gamescape cabinet. The Simpsons boasts six bonus games centered on popular characters from The Simpsons television series, including the Donut Wheel Bonus, Moe’s Pranks A Lot, Apu’s Scrat-ChaPa-Looza, Krusty’s It’s Cobblering Time, Wiggum-A-Role and Homer’s Monorail Madness. The Simpsons is played on a base game with multiple features including symbol cloning, a mystery symbol, and character re-spin features. Players also have the option to make an additional bet for a chance to increase the bonus feature prizes. The Gamescape cabinet is designed to envelop players in the gaming experience with three vivid HD displays, a 40-inch top screen, and an ergonomic 10.4-inch tablet multi-touch button panel display, all integrated for coordinated game play graphics that give players the sensation of being immersed in the world of Homer and friends. The extra-wide display allows for the game’s bonus features to expand the game array up to 24 reels, giving players more ways to win. The game also integrates an industry-first gesture control element utilizing motion-sensor technology to allow the player to physically interact with the game in some of the bonus features.

DUETTO TO SUPPLY LIVE! HOTEL IN MARYLAND

oftware supplier Duetto announced that it is implementing its cloud-based Revenue Strategy solutions for Live! Casino & Hotel Maryland—the current Maryland Live! casino in the Baltimore suburb of Hanover that will rebrand with the completion of its integral hotel in the first quarter of 2018. Under the agreement, Duetto will provide the benefits of Open Pricing, loyalty pricing and business mix optimization for the company’s 250-room boutique Live! Lofts property, and for the flagship Live! Hotel. Duetto’s GameChanger application will enable Live! to manage pricing and demand for the more than 500 rooms and suites at the property, providing flexibility and versatility and enabling the property to utilize casino patron value in pricing recommendations. “We are very happy to announce this partnership with Live! Casino & Hotel Maryland,” said Duetto CEO Patrick Bosworth. “In today’s fast-paced and complex marketplace, Duetto’s

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Duetto CEO Patrick Bosworth

cloud-based revenue strategy solutions provide the ability to fully optimize revenue, manage distribution complexity and optimize business mix. As more hoteliers in the gaming space embrace the benefits of open pricing and seek deeper insights into property performance, we are excited to partner with innovative operators such as Live! Casino & Hotel Maryland.” “Duetto has addressed the shortcomings of legacy revenue management systems and is performing exactly as we had hoped—helping us optimize our business mix to improve financial results and compete more effectively in a highly competitive market,” said Alfonso Rodriquez-Aceves, director of revenue optimization for Maryland Live! “We look forward to continuing and building this great working relationship in the years ahead.”

EVERI INTRODUCES ‘CASABLANCA’

veri Holdings Inc. announced that it has officially launched a premium video slot on its new Empire cabinet based on the classic 1942 film Casablanca. Casablanca, the slot machine, represents a “significant step forward in Everi’s overall product roadmap strategy,” according to Dean Ehrlich, the company’s executive vice president and games business leader. The game is being launched in partnership with Warner Bros. Consumer Products Inc. The base game is a five-reel, 30-line penny slot with a five-level progressive jackpot—each of the bottom four levels linked to a character from the film. The top progressive, resetting at $3,500, is hit by filling AUGUST 2017 www.ggbmagazine.com

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the entire three-by-five screen with either the “Grand” or “Wild” symbol. The lower-tier progressives are won through the Knock On Wood Bonus, which spins a bonus wheel that includes all five progressives, including the top Grand prize. The progressives are available at all bet levels. The base game also includes a “Mystery Pick Bonus,” a picking event in which the player gets three picks from 12 symbols for credit awards or an “Exit Visa,” which triggers a new bonus. A second mystery event is the “Chance Multiplier,” which adds a multiplier of 2X, 3X or 5X to a winning spin.

CASINO DE LA VALLÉE CEMENTS LONG-TERM PARTNERSHIP WITH CPI

asino de la Vallée has signed a long-term Preferred Partnership Agreement with Crane Payment Innovations (CPI), a Crane Co. Company. Under the agreement, the Italian operator will continue to specify the SC Advance note acceptor on all new and replacement slot machines. Casino de la Vallée, also known as Casino Saint Vincent, first began using SC note acceptors from

previous note acceptors—especially in challenging operating environments like smoking rooms. SC Advance was specifically created to resolve these challenges. Imbued with highly engineered mechanics and outstanding sensing technology, SC Advance takes performance to the next level, delivering the industry’s highest acceptance rate for street-grade notes—including those that are dirty, damp, crinkled or torn.

G+D CURRENCY TECHNOLOGY ACQUIRES PROCOIN

K-based G+D Currency Technology recently acquired the German firm Procoin GmbH, which provides counting, sorting and packing machines in the coins sector, plus banknote counters. The purchase of Procoin, with its wide product range and strong European distribution network, will help G+D Currency Technology expand its coins segment offerings and strengthen its position as a global market leader for cash cycle automation. Procoin, headquartered in Frankfurt, was founded in 1998. G+D Currency Technology Chief Executive Officer Wolfram Seidemann said, “The global volume of cash will grow steadily. For this reason, G+D Currency Technology’s acquisition of Procoin represents an investment in a market with an exciting future. We are bringing together Procoin’s technically advanced product range with G+D Currency Technology’s strong global presence. This enables us to offer outstanding support to our customers at every point in the cash cycle.”

ILLINOIS APPROVES GOLDEN ENTERTAINMENT LICENSE CPI in June 2008. Ezio Diemoz, slot manager, remembers noting an immediate and positive difference from day one: “Our previous note acceptors were very sensitive to dirt,” he said. “They simply couldn’t perform in our smoking room without jamming and rejecting notes, and the player experience was really suffering. When we switched to CPI, though, we finally got the great acceptance we were looking for. The SC note acceptors run like clockwork even when our smoking room is at maximum occupancy. Now we’re getting the highest level of performance across our entire floor, and our players are happier than ever.” Many customers who have switched to CPI have reported similar performance issues with their 64

Global Gaming Business AUGUST 2017

he Illinois Gaming Board approved Golden Entertainment Inc.’s application for a video gaming terminal operator license. As a result, a wholly owned subsidiary of Golden Entertainment will operate VGTs in liquor-licensed establishments including bars, restaurants, truck stops and fraternal and veterans organizations. Illinois is the fourth state where Golden Entertainment is licensed, along with Nevada, Montana and Maryland. Golden Entertainment operates more than 7,500 devices in nearly 700 locations in Nevada. It also is Nevada’s largest traditional tavern operator with 56 locations and operates three casinos in Pahrump. In Montana, the company operates 2,900 devices in 290 locations. And in western Maryland, Golden Entertainment operates the Rocky Gap Casino Resort.

HOUSE ADVANTAGE ACQUIRES CLUBLINQ SUITE

ouse Advantage (HA), an industry leader in loyalty strategy and solutions, announced that the company has acquired the ClubLinq API and solution suite, from Intermezzo. With the transaction, HA’s strategy and solution sets expand to further offer unique capabilities and features, for casino gaming and non-gaming enterprises of all sizes and jurisdictions. “ClubLinq has proven to be an effective suite of niche loyalty products and services, having won technology innovation awards from the Gaming Technology Conference and elsewhere,” said Jon Wolfe, CEO of House Advantage. “We continue our ongoing commitment to broad functionality, third-party integration and robust data solutions, by bringing the ClubLinq solution into House Advantage.” As part of the sale transaction, Intermezzo CEO Jeff Baldi joins the HA team as vice president of sales, where he will oversee sales teams for HA’s leading HALo suite of loyalty products and integrating ClubLinq into the House Advantage portfolio.

AMAYA TO RELOCATE, CHANGE NAME

anada’s Amaya Gaming announced plans to change its corporate name to the Stars Group Inc., reflecting its most prominent business unit as parent company of PokerStars, the world’s largest operator of online gaming sites. The name change comes as the company prepares to move its headquarters from Montreal, where it has been based since 2004, when the company was founded by former CEO David Baazov, to Toronto.

The change of name and location is subject to approval of Amaya shareholders, who meet next month. In a conference call, CEO Rafi Ashkenazi said the changes are meant to embrace the company’s future and to recognize the loyalty customers have shown to the PokerStars brand. He also said the change will come after the company names a new chief financial officer to replace the retiring Daniel Sebag. The changes reflect an effort by the company to redefine itself following a difficult year in which Baazov stepped down amid an insider trading scandal. Ashkenazi has since worked to improve the management team of the company and to pay down debt.

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PEOPLE CAESARS ENTERTAINMENT APPOINTS SENIOR EXECUTIVES

aesars Entertainment Corporation last month announced the appointment of two senior executives to help lead the company’s growth and value creation stratMarco Roca egy. Marco Roca will join Caesars Entertainment as president, global development, reporting to President and Chief Executive Officer Mark Frissora. Michael Daly will join as senior vice president, strategy and M&A, reporting to Eric Hession, chief financial officer. The appointments of Roca and Daly follow two years of strong performance in which Caesars Entertainment has improved its operating model, driving over 800 basis points of adjusted EBITDA margin expansion and improving revenue growth across the enterprise. The completion of the Caesars Entertainment Operating Company (CEOC) restructuring, anticipated by the end of the third quarter, will create additional opportunities for growth. Roca brings more than 30 years of hotel and gaming development experience to Caesars Entertainment. Most recently, he served as executive vice president and chief development officer for Hard Rock International. Daly joins Caesars Entertainment from GE Capital, where he was responsible for strategy, M&A and corporate development. He has spent the last 15 years at GE and GE Capital in a variety of strategy and finance roles.

ALANIS REPLACES RAVICH AT MARGARITAVILLE-BOSSIER

ossier Casino Venture Inc., owner and operator of Margaritaville Resort Casino in Bossier City, Louisiana, announced that Paul Alanis has been elected to replace Jess Ravich as chairman of the board of directors. Alanis, who dePaul Alanis veloped the property, will serve as chief executive officer and chairman. “Our company has made enormous progress over the four-year period we have been operating, but I believe we have yet to realize our full poten-

tial,” Alanis said. “I intend to move us aggressively forward in continuing to improve our property and provide the best entertainment experience possible for our loyal customers.”

NIGA NAMES BEAN VICE CHAIRMAN

avid Bean, a tribal council member of the Puyallup Tribe of Washington, has been named vice chairman of the National Indian Gaming Association. He was sworn in June David Bean 20 and will serve out the remainder of the term of the previous vice chairman, until elections in 2018, when he could run for re-election. He succeeded Kevin Leecy, who had to leave the post after he lost an election for chairman of the Bois Forte Band of Chippewa Indians. Bean told the Tacoma Weekly, “I am almost without words. It was a surprise and is an incredible honor to be recognized in this way by the NIGA board.” Talking about his new role, Bean said, “Because casinos are a big part of tribes’ economic development, we need to be on the front lines of anything impacting that positively or negatively.”

HARD ROCK INTERNATIONAL ANNOUNCES EXECUTIVE HIRES

ard Rock International recently announced the appointment of three key corporate executives in accordance with the brand’s strategic growth plan. Jon Lucas Matt Harkness was named chief operating officer, Dale Hipsh was promoted to senior vice president overseeing the hotel portfolio, and Sean Caffery was hired as senior vice president of casino development. The company also announced that Matt Harkness was named president of Hard Rock Hotel & Casino Atlantic City. As a New Jersey native with decades of gaming experience, Harkness’ appointment is a strategic move for the brand, bringing experienced gaming leadership to the significant property launch. A new face to the brand, Harkness joins Hard Rock as an industry veteran with more than 30

years of managerial experience in the gaming industry. For 15 years, Harkness worked in Atlantic City for Trump Casino Resorts. Additionally, he was chief operating officer of Four Winds Casinos in Michigan. Most recently, he held the position of general manager at Lucky Dragon Hotel & Casino in Las Vegas, where he led the operations team through pre- and post-opening.

AUGIE RENNA NAMED VP AT FOXWOODS

oxwoods Resort Casino last month announced that Augie Renna had joined the team as vice president of national marketing. Renna brings over three decades of casino marketing Augie Renna experience and leadership to the resort. Renna has held multiple high-profile leadership and marketing positions throughout his career, and most recently was the president of national marketing for Tropicana Las Vegas. Prior to that he was the senior vice president at the Golden Nugget from 2011 to 2012, senior vice president of marketing at MGM Mirage from 1995 to 2011 and vice president of marketing at Trump Entertainment Resorts from 1991 to 1995.

GGB

August 2017 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Agilysys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34, 35 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 G&T Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 GGB News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 GGB Podcast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 GGB Subscription . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Greenberg Traurig . . . . . . . . . . . . . . . . . . . . . . . . . . .19 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9, 23 Incredible Technologies . . . . . . . . . . . . . . . . . . . . . . .31 Interblock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Joseph Eve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Konami Gaming . . . . . . . . . . . . . . . . . . . . . .Back Cover Scientific Games . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Subway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 TCSJohnHuxley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 UNLV Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

AUGUST 2017 www.ggbmagazine.com

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CASINO COMMUNICATIONS

he Sands China empire in Macau is vast and varied. The leadership of the company requires knowledge of all the elements of an integrated resort. And Sands China has multiple IRs. Dr. Wilfred Wong was appointed president almost two years ago, marking the first time an ethnic Chinese was put in charge. Wong has presided over the construction and opening of the Parisian, the latest must-see attraction in Macau. Wong met with GGB Publisher Roger Gros at his offices in the Venetian in May. For a full podcast of this interview, visit GGBMagazine.com. GGB: Explain what impact the opening of the Parisian has had on the other Sands China hotels, and on the company as a whole.

Wilfred Wong: This latest addition to the Cotai properties really complements what we already have. The Parisian is a themed resort and particularly targets the mass market. We think that’s where the growth is, and the performance of Parisian after its opening testifies that this is the right approach. We have a retail mall that is targeted at fashion. We have another 14 to 15 F&B outlets. And of course, we have all kinds of nongaming amenities. We built a half-size replica of the Eiffel Tower. We have a themed swimming pool, and a children’s play area. What people normally worried about is whether there’ll be any cannibalization of the business, and in fact, what we saw was, there was no cannibalization. There was a net increase in our business volume, the revenue, as well as the overall growth of the Cotai property. What has been the reaction of the customers to the property?

The reaction has been good, because we really targeted this property as an affordable luxury. It is luxurious but also affordable. And a lot of the visitors come for the MICE business. They like the theme, they like the public space, they also like the gaming and non-gaming facilities. And a lot 66

Global Gaming Business AUGUST 2017

Dr. Wilfred Wong President, Sands China of them like the restaurant in the Eiffel Tower, which is unique. How did you handle staffing the resort?

We have a mix of about two-thirds experienced staff, and one-third newly recruited. So, of the 6,000 employees, 4,000 had worked in our properties before. And this really gave us the opportunity of assembling a very effective team, from day one. We started training six months before opening, so, from day one, there were very few hitches. Let’s talk about the rebound of revenue in Macau. Luckily, Sands China wasn’t hurt as badly as some of the other properties, because you didn’t depend on the VIP market as heavily as some of the other properties did. Now that it’s coming back, where do you see most of your revenue coming from?

The mass market is still very much the growth area. The market has been growing very fast, and we grow faster than the general market. So, we are focusing still a lot on the mass market, where the contribution to profit is better. But, we never forget about the VIP segment, which is equally important. We remain very competitive. We still try to improve our services to our VIP customers. So I would say that we’re trying to cover both the VIP and the mass segments, but obviously, with all the non-gaming facilities available, we have a better chance of growing the mass market than the other competitors. The Hong Kong-Macau-Zhuhai bridge is getting close to completion. When the bridge opens, how do you expect that to operate, in terms of how the ferries have operated in the past?

We are in constant touch with the Macau government. I think at this stage, they are still talking to the Hong Kong government on how the bridge would operate. I envisage that there will be a limit on the number of private vehicles

being allowed into Macau, because Macau is a small place, but there should be licensed shuttle bus routes, which will be able to take passengers straight from the Hong Kong airport to Macau. And hopefully, that is going to overcome one of the major hurdles that the MICE event organizers normally face, and that is you have to clear customs twice. I think Zhuhai is going to be another important link, because the high-speed rail in China goes to Zhuhai, and if we have the bridge, we can have shuttle buses picking up passengers from the rest of China, through that bridge, to Macau. That’s also very good for our business. Is it difficult to really get the message out to Chinese markets, because you can’t even mention gambling in China?

Well, if you look at the building area of our properties, only 5 percent is gaming and 95 percent is non-gaming. So, it’s not difficult for us to show that range of services and facilities that we are offering. Plus, the entertainment that we’re promoting really gives us an edge in any overseas promotion. There have been some reports in the media that the government may require all Macau operators to reapply when the concessions start expiring in 2020. What do you know about the process?

We haven’t heard anything from the government. Obviously, it’s getting closer to the period where the government needs to tell us what to do. But certainly, the government is having to evaluate the huge amount of money that all six of us have invested into making it work, and especially in contributing to the community of Macau. Any suggestion that there might be additional concessions issued?

We don’t know. And obviously, this has to take into account President Xi Jinping’s comment about Macau not over-relying on gaming. I think the government has to consider that.

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