Global Gaming Business, February 2017 by Global Gaming Business

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GGB Global Gaming Business Magazine

February 2017 • Vol. 16 • No. 2 • $10

Turning Japanese

TRIBAL SOCIAL GAMING HACKING PREVENTION COMMUNITY GAMING VIRTUAL REALITY SPECIAL REPORT Security & Surveillance

How casinos should develop in the Land of the Rising Sun

Drilling Down )))

Agilysys provides the data analysis that can make the difference

Going Mobile How personal devices are changing casinos

Official Publication of the American Gaming Association

Association of Gaming Equipment Manufacturers

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CONTENTS

Vol. 16 • No. 2

february

Global Gaming Business Magazine

20 COVER STORY Data’s the Key

COLUMNS 14 AGA Setting the Tone

In an era when profit for a casino hotel depends on effectively collecting and using the vast collections of available data on customer spending habits, loyalty and preferences, Agilysys is taking the lead with its software products and partnerships. To reach the next level, the company recently appointed former Bally Technologies CEO Ramesh Srinivasan (r.) as president and CEO. By Roger Gros

Geoff Freeman

16 Fantini’s Finance Comeback Kids Frank Fantini Cover photo of Jim Walker, senior vice president of global revenue for Agilysys, by Roger Gros

41 Table Games Shape Shifting Roger Snow

DEPARTMENTS FEATURES

12 IRs in Japan After years of debate, Japan’s Diet has finally legalized integrated resorts with gaming. An analysis of the law projects when actual casinos will appear in a potentially huge market.

50 All Together Now Community gaming products are creating a party atmosphere on casino floors. By Dave Bontempo

By Koji Ishikawa and Patrick Roberts

Safe and Secure Our annual World Game Protection expert report on security and surveillance in the gaming industry.

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

Features

30 Targeting the RNG

46 Taking Tribal Online

The age of computerized slot machines caused the rise of the genre, but the pseudo random number generator is still prone to high-tech cheating. By Willy Allison

36 Protecting Parking Public parking facilities, whether free or paid, pose some of a casino resort’s most daunting security challenges.

As the tribal gaming industry continues to take a cautious approach to online gaming, some in Indian Country are testing the waters. By Dave Palermo

Column 45 Virtual Reality, A Looming Game-Changer By Bruce Merati

49 iGames News Roundup Global Gaming Business FEBRUARY 2017

By the Numbers

10 5 Questions 18 AGEM Page

58 Emerging Leaders With Cherokee Nation Gaming Commission’s DeJuna Frye, Caesars Interactive’s Melanie Gross, and IGT’s Alex White

60 Goods & Services 62 Frankly Speaking 65 People

By Steve Ruddock

By Alan W. Zajic

56 Cutting Edge

By Marjorie Preston

In an age where hacking is a problem to every industry and government agency, casinos look to cybersecurity.

The Agenda

54 New Game Review

42 Going Mobile In an age where practically all new casino customers are inexorably attached to their smartphones, mobile technology takes on new importance for casinos.

26 The Scourge of Hacking

66 Casino Communications With David Jacoby, Chief Executive Officer, Lucky Dragon Hotel and Casino

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THE AGENDA

Women’s Work

Vol. 16 • No. 2 • February 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

n recent months, we’ve run a couple of articles in our weekly GGB News e-magazine by my friend Richard Schuetz, a longtime casino executive turned regulator, who now is executive director of the young Bermuda Gaming Commission. I’ve known Richard for longer than I (or he) care to admit, so we’re both of the same generation—one which saw the birth of the feminist movement. Now, you can debate the impact of that movement on society—good or bad—but I think Richard and I both agree with the general tenets of feminism. Women and men are equal. Women should receive the same pay for the same work. Women should be equally considered for any job opening or promotion. And discrimination against women should be called out at every occurrence. And Richard isn’t shy about making those calls. You can almost see him seething as he criticizes those organizations that are guilty of discrimination. And there are many, starting with his current role as a regulator. In July, he wrote about the dearth of women in regulatory roles, particularly in the “gold standard” regulatory state of Nevada. “For the last 61 years, the rate of a woman being on the Nevada Gaming Control Board is less than 1 percent,” he wrote. And for good measure, the recently appointed Nevada Gaming Policy Board is comprised of 12 men, no women. But if Nevada is the gold standard for regulation, it’s unfortunate that other states are copying this trend. “The state of Pennsylvania currently has seven commissioners. They are all men, and for good measure so is their executive director (since his initial column, a woman has been named as a member). Mississippi has three commissioners, and they are all men, as is their executive director. And where I am now executive director, our commission is comprised of one woman and four men,” wrote Richard. “Imagine walking into a casino and seeing that fewer than 1 percent of the employees were women, and the history of the organization was to not hire more than 1 percent women. At some point, the regulators would probably question

Global Gaming Business FEBRUARY 2017

this operator using the dual challenge of not being a suitable means of operation, and not operating with an appropriate level of character, honesty and integrity. Yet, is having a public organization that seemingly openly discriminates against women in the top spots a suitable means of operation, and reflective of sound character, honesty and integrity?” But this doesn’t stop with regulators. It’s endemic at the highest levels of the casino industry as well. In another article published in GGB News in November, you’ll find “One is the Loneliest Number,” in which Richard points to some of the industry’s major companies—Las Vegas Sands, Wynn Resorts, IGT, MGM Growth Properties, Konami and Boyd Gaming, among others—where there is just one woman on the board of directors. And even more troubling, he highlights several companies—and we’ll not mention them here—that have zero women on the boards or among their senior executives, a situation Richard calls an “embarrassment.” And I have to admit some guilt in not recognizing this. In my line of work, outside of the top executives, I’m in contact with marketing, communications and public relations executives. Many of them—I’d actually say the majority— are women, so I didn’t notice the dearth of women at the top. But now I do know. And I hope this column is just as much of an education as Richard’s other columns were for me. It’s worth your while to go read them at GGBNews.com. Just search for Richard’s name there and you’ll find them. GGB has been committed to the Global Gaming Women group since its formation by the American Gaming Association in 2011. Now that the group is autonomous and headed by former Isle of Carpi CEO Virginia McDowell, GGB is doubling down on our commitment to GGW. We publish a quarterly column by GGW leaders, and we’re going to help them re-launch the “Great Women of Gaming” awards program in 2017. It’s this kind of attention that is needed to improve the status of women in gaming. And at GGB, we’ll be participating fully in that effort.

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 Bruce Merati | Roger Snow Contributing Editors Willy Allison | Dave Bontempo | Christopher Irwin Koi Ishikawa | Dave Palermo twitter: @DavePalermo4 Marjorie Preston | Patrick Roberts Steve Ruddock twitter: @SteveRuddock | Alan W. Zajic

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/CEO, 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

Starting the ComebaCk ross gaming revenue in Macau declined for the third straight year, but the year ended with optimism as GGR for the final four months increased over the previous year. And all signs point to a strong rebound in 2017. The brokerage firm of Sanford C. Bernstein Ltd. predicts that 2017 should grow by 8 percent, with 12 percent to 14 percent of that growth coming from mass and premium mass markets, and only 2 percent to 4 percent from the struggling VIP sector. VIP baccarat has fallen from about 65 percent of the market in 2013, Macau’s high-water point, to a little over 50 percent in 2016. Source for the GGR figures is the Gaming Inspection and Coordination Bureau of Macau, and all numbers are in billions of U.S. dollars.

Gross Gaming Revenue in Macau (in billions, U.S. dollars) $50 billion

45.2

$40

44.1

38.1 33.6

$30

28.3

$20 13.7

10.5

$10

2007

2008

2009

2010

2011

2012

2013

2014

2015

Should CaSinoS PurSue eSPortS PlayerS?

he eSports phenomenon in gaming is just beginning. The roots of eSports are video games that are played on computers, consoles or devices. So, how many people play video games that could be the target audience for eSports play in casinos? A study published by Pew Research in 2015 shed some light on who plays video games and attitudes toward those games. A full copy of the report can be found at pewinternet.org/2015/12/15/gamingand-gamers. In the main finding of the report, it found that equal numbers of men and women ever play video games, although men are twice as likely to call themselves “gamers.” About half of American adults (49 percent) “ever play video games on a computer, TV, game console, or portable device like a cellphone,” and 10 percent

27.9

23.7

consider themselves to be “gamers.” A majority of American adults (60 percent) believe that most people who play video games are men—a view that is shared by 57 percent of women who themselves play video games. But the data illustrates that in some ways this assumption is wrong: A nearly identical share of men and women report ever playing video games (50 percent of men and 48 percent of women). However, men are more than twice as likely as women to call themselves “gamers” (15 percent vs. 6 percent). And among those ages 18 to 29, 33 percent of men say the term “gamer” describes them well, more than three times the proportion of young women (9 percent) who say the same.

Global Gaming Business FEBRUARY 2017

Half of American adults play video games;

10% consider themselves “gamers”

2016

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NUTSHELL

5Questions

Richard Schwartz President, Rush Street Interactive

ush Street Gaming owns casinos in three states: Illinois, Pennsylvania and soon to be open in New York. Richard Schwartz, a former executive at WMS Interactive, joined the company several years ago with the charge of creating an interactive division that would develop both social gaming and realmoney iGaming. He spoke with GGB Publisher Roger Gros from his offices in Chicago in December. Rush Street Gaming has been one of the most progressive gaming companies in the U.S. over the past five years. Tell us the role that the interactive division plays in the overall company strategy. We identified the opportunity a couple of years ago to use online gaming as a complementary business to our land-based casinos to help branding and to drive additional traffic to our land-based casinos.

1 2

Has Rush Street used social casinos to stay in touch with its customers? How have you done that? Yes, it has. Customers of our land-based casinos today have a wide range of entertainment options, so we wanted to identify ways to engage with them when they were away from our brick-and-mortar properties. We want our SugarHouse and Rivers casino brands to be top-of-mind for our players in the digital world. We developed a proprietary interactive platform from the perspective of a land-based casino operator. We did this so we could reward the players who visit our land-based casinos most frequently. For example, our social site features a unique daily free promotional game such as wheel spins or free scratch cards. Every player is offered a chance to play one of these games daily. They win prizes that are only redeemable at the land-based property. With their loyalty card, they are able to visit the properties and redeem their prizes—free slot play, food coupons, tickets for events and more. We also have something unique in our chat room. I’m not aware of many social casinos that have them, but people can chat with each other and become friends. Despite not having a casino in New Jersey, you’ve got a real-money online gaming site in connection with your SugarHouse casino in Philadelphia. Tell us how that came about and who your land-based partner is in the state. New Jersey was the first state to legalize online gaming with a meaningful population, so we felt it was a natural market for us. And although our brick-and-mortar SugarHouse casino is in Philadelphia, a large portion of our customers come from across the river in New Jersey. In fact, we’re closer to a lot of those online customers than Atlantic City casinos are. We reached an agreement with the Golden Nugget to use their license in New Jersey, and they’ve been a great partner so far.

3 4 5

Why did you want to open an online casino in New Jersey? We saw the positive impact that online gaming has had on Atlantic City casinos, and we thought we could do the same with SugarHouse. It’s early (only a few months of activity), but the feedback has been tremendously positive. The players have really appreciated the unique selections. They’re quickly realizing the types of games and experiences we’re offering can’t be found anywhere else in the market. We’re finding it’s a great way to continue the play of our existing players and also a way to bring new players into SugarHouse.

You’ve recently signed a deal with Income Access to handle your affiliate transactions. How important is the affiliate market for the SugarHouse site? It’s a very important aspect of online gaming and how to attract new players to your site. The affiliate channel is an excellent way for us to educate our players about all of our games, promotions and events. We offer affiliates the chance to grow their business in the United States.

Global Gaming Business FEBRUARY 2017

“They

Said It”

“I would like to make the Philippines the next Hawaii, given that there are a lot of great beaches here. In Beijing, China, the air is polluted and I feel there are people there who would want to get away to a fresh place. I think the Philippines would be one of the best tourist spots for everybody.” —Kazuo Okada, gaming tycoon, on the opening of his new integrated resort, Okada Manila, in the Philippines’ Entertainment City in late December

CALENDAR February 7-9: Western Indian Gaming Conference 2017, Morongo Casino Resort & Spa, Morongo, California. Produced by the California Nations Indian Gaming Association. For more information, visit WIGC2017.com. February 7-9: ICE Totally Gaming, ExCeL London, U.K. Produced by Clarion Gaming. For more information, visit icetotallygaming.com. February 9-12: London Affiliate Conference 2017, Olympia National, London. Produced by iGaming Business. For more information, visit londonaffiliateconference.com. February 21-23: World Game Protection Conference, M Resort, Las Vegas. Produced by World Game Protection Inc. For more information, visit worldgameprotection.com. February 27-March 2: Mobile World Congress, Fira Gran Via and Fira Montjuïc, Barcelona, Spain. Produced by GSMA. For more information, visit MobileWorldCongress.com. April 10-13: Indian Gaming 2017, San Diego Convention Center, San Diego, California. Produced by the National Indian Gaming Association. For more information, visit IndianGaming.org. April 26-28: GiGSE 2017, San Diego, California. Produced by Clarion Gaming. For more information, visit GIGSE.com.

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Turning Japanese An overview of the new casino gaming law in Japan By Koji Ishikawa

n late December, the Act Concerning Promotion of Development of Integrated Resort Areas (the IR Act) was passed into law by the Japanese National Diet (parliament). With passage of the IR Act, Japan has introduced the legalization of limited casino gaming in the form of integrated resorts (IRs), and abandoned its long-held comprehensive ban on casinos. Past, Present and Future of the IR Act and IRs in Japan An alliance of 74 Japanese lawmakers formed in April 2010 in an effort to introduce integrated resorts in Japan. This alliance drafted the original version of the IR bill in 2011. An updated version of the bill was first submitted to Japan’s National Diet in December 2013, but failed to pass due to insufficient political support. Political support grew over the past three years, and the alliance of progaming lawmakers eventually expanded to more than 200 politicians. Ultimately, the IR bill received strong cross-party support from all major political parties in Japan, and only minor changes to the bill were needed to obtain sufficient votes for passage. Such changes mainly included incorporation of additional protections to prevent problem gambling, the chief issue that generated some political opposition.

Where Gaming Currently Stands in Japan The IR Act does not legalize wholesale casino gaming in Japan, but instead provides for the creation of a limited number of integrated resorts. Japanese IRs will integrate casinos with facilities such as international conference and exhibition centers, hotels, shopping centers, restaurants, theaters, amusement parks, sports complexes and other similar attractions. Moving Forward The IR Act does not itself introduce a detailed regulatory framework for integrated resorts in Japan. Additional bill(s) will need to be enacted to create such regulations for the establishment of IRs in Japan. According to the IR Act, the “government shall take necessary legislative measures approximately within one year after (the IR Act) comes into force” to enact these regulations. Nevertheless, given the time needed for selection of host city or cities, planning, construction and other steps needed for integrated resorts to begin operations, it is commonly understood that the attempt to have integrated resorts in Japan prior to the 2020 Olympic Games has been abandoned. There has instead been a shift in focus from IR development for the purpose of the 2020 Olympics to a focus on attracting foreign tourists to Japan on an enduring basis into the future.

DOING THE NUMBERS

hile the passage of the integrated resort bill in Japan was widely hailed in the casino industry, it’s still unclear how much the market is worth. While some estimate it could be as high as $40 billion annually, others are more circumspect. One of the unknown variables is whether Japanese casinos would be able to attract Chinese VIPs, or even if the Chinese government would allow that to happen. Some believe a market of only Japanese locals would be sufficient to guarantee success. But Japan seems to want to copy the Singapore model, where integrated resorts are used to boost tourism and business development. Union Gaming analyst Grant Govertsen says the passage of the first bill “is a landmark occasion and should be a shot in the arm as it relates to investor sentiment in all gaming names that could be players in Japan.” He told Yogonet that it’s hard to estimate gross gaming revenue for the market “because we don’t yet know any of the most important variables from which we could estimate a market size. Namely, the government still needs to create and

pass the so-called IR Implementation bill. It is this bill that contains such pertinent details as the number and location of licenses, the tax rate, whether or not locals will be allowed to gamble, etc.” Govertson does believe, however, that Japan will be the second-largest gaming jurisdiction in Asia, and far exceed GGR produced on the Las Vegas Strip. Possible participants in the market include all the usual suspects—MGM Resorts, Wynn Resorts, Caesars Entertainment, Genting, Melco Crown, Galaxy Entertainment and others. But some believe successful bidders will have to make deals with Japanese companies. Takashi Kiso, chief executive of Japan’s International Casino Institute, told the New York Times that ownership would probably take the form of joint ventures between international gaming operators and Japanese companies. “Looking at the debate in Diet, there’s a lot of resistance to the idea of 100 percent foreign-owned casinos, so that is probably off the table,” Kiso said. —Patrick Roberts

Global Gaming Business FEBRUARY 2016

Prefectures and Cities Showing Interest in Integrated Resort Areas Several cities and prefectures have expressed an interest in bidding for an integrated resort in their localities. Such cities and prefectures include Hokkaido, Akita, Tokyo, Yokohama, Chiba, Osaka, Wakayama, Nagasaki, Fukuoka and Okinawa. The front-runners thus far are generally understood to be Osaka and Yokohama. It is still far too early to accurately forecast the sites for any integrated resorts. Locations selected for IRs will be determined by the national government through an application process completed by the local governments interested in hosting an integrated resort. The local governments’ applications are expected to include information such as details concerning the business operators that will establish and operate the integrated resorts within the locale, as well as related business plans. The business operators will be selected through a separate bidding process carried out by the relevant local government.

Koji Ishikawa is managing shareholder of Greenberg Traurig, Tokyo.

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TRANSFORMING GAMING BY BUILDING

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AMERICAN GAMING ASSOCIATION

Setting the Tone Memo to President-elect Trump details casino gaming industry’s priorities By Geoff Freeman, President & CEO, American Gaming Association

016 was a remarkably consequential year for the gaming industry. Just consider the following things that took place: The National Hockey League announced that Las Vegas will host the newest expansion franchise; the National Football League entertained very public discussion and consideration of Las Vegas as the best future home for the Oakland Raiders; the Commission on Presidential Debates hosted the final debate—watched by 71 million people—in Las Vegas; and a former casino owner was elected as the next president of the United States. Two things stand out as remarkable about each of these occurrences. First, all of them are unlikely to have taken place just five to 10 years ago, and second, antiquated concerns about casino gaming did not appear as an obstacle in any of these situations. This is a remarkable transformation for the gaming industry—one that solidifies its place as a mainstream industry that is a critical provider of high-quality American jobs, needed tax revenue, and a proven partner to organizations seeking to strengthen communities from coast to coast. It is an incredible time to lead the gaming industry, and I could not be more excited about what the future holds. Today’s American Gaming Association is leveraging the industry’s national footprint and never-higher approval ratings to pave the way for vital reinvestment and exciting innovation. The AGA—once seen as a promoter of Las Vegas Strip properties—has succeeded in uniting the gaming industry. At the start of 2017, we now represent nearly 90 percent of the commercial gaming sector, 95 percent of the supplier sector and nearly one-third of the tribal gaming community based on total revenue in each category. This is a remarkable transformation. As a unified industry, we are better positioned than at any prior point to achieve our objectives. Three critical examples of this in 2016 included the IRS choosing not to pursue a misguided policy to lower slot tax thresholds and 14

track player activity through a “Big Brother”-style program, the Justice Department’s Financial Crimes Enforcement Network and the international Financial Action Task Force praising the gaming industry’s commitment to anti-money laundering compliance, and the Federal Trade Commission’s important decision to respect the business value of and consumer benefits associated with resort fees. In each instance, the casino gaming industry’s unified position and strategy drove a favorable outcome. As we build on the success of 2016, the incoming presidential administration and new Congress present new opportunities and potential challenges. In both areas, we will be aggressive and clear in advocating for what is best for gaming and our customers. AGA is eager to work with the Trump administration, and we’ve sent a memo to the Trump transition team detailing policy issues critical to gaming’s success. In the letter, we detail how the AGA seeks to build a public policy environment that is conducive to reinvestment and innovation—two essential elements of a successful entertainment product. In addition, the AGA hopes to highlight two key initiatives to the Trump team. First is illegal gambling. The gaming industry has forged strong ties with law enforcement to expose and eliminate illegal gambling activities, which fund large criminal enterprises involved in human trafficking, racketeering, money laundering, extortion and fraud. Last year, AGA worked with members of the Senate Judiciary Committee as it examined the nomination of Attorney General Loretta Lynch and received assurance that the Justice Department would dedicate attention to illegal gambling. A few months later, we formed a partnership with the FBI to help solicit tips from citizens about illegal gambling activities. Second is sports betting. President-elect Trump has expressed his views on sports betting and appears to agree that current law has failed. His comments acknowledging the vast illegal bet-

Global Gaming Business FEBRUARY 2017

ting market that exists are encouraging. We are optimistic that states and tribes will soon have the opportunity to choose if they wish to regulate sports betting in the same way they have chosen whether they wish to regulate other casino gaming products. But we have a lot of work to do—even before we see any type of legislation begin moving on Capitol Hill. We’re also encouraged by President-elect Trump’s desire to rebuild our nation’s infrastructure. There’s no doubt that making it easier for people to get from point A to point B, whether it’s going across the country or across town, will help our industry grow and generate even more tax revenue. Further, more people finding well-paying jobs as part of an investment in infrastructure means more discretionary income for working families who have not recovered from the recession as quickly as others. Another important issue is travel. Clearly, this matters to gaming companies, who rely on significant travel from around the world. We will continue to support a robust and secure Visa Waiver Program and encourage a welcoming environment for foreign visitors, many of whom are interested in enjoying the casino gaming experience. Finally, it’s important to keep Yucca Mountain a figment of the federal government’s imagination. It simply makes no sense to store the country’s dangerous nuclear waste a mere 90 miles from the world’s premier tourist and business travel destination. One accident could devastate not just the gaming industry and Las Vegas, but the entire state of Nevada. 2016 was a year of tremendous growth for the casino gaming industry. The AGA looks forward to working with the Trump administration in 2017 to advance key issues important to gaming’s future.

Follow Geoff Freeman on Twitter at @GeoffFreemanAGA.

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S3H, Inc. SH Architecture Silver State Schools Credit Union Smart City Southern Glazer’s Wine and Spirits Southwest Airlines Steinberg Diagnostic Medical Imaging Centers Stovall & Associates Sunstate Companies LLC The Albrecht Group - Merrill Lynch Financial Advisory Team The Coffee Bean and Tea Leaf The Cosmopolitan of Las Vegas The Howard Hughes Corporation The HRL Group, LLC The Korte Company The Siegel Group Nevada Inc. The Vista Group Thomas & Mack Company USAA Savings Bank Vintner Grill Wells Fargo Bank Nevada Wells Fargo Foundation Western States Contracting Wolfgang Puck Fine Dining Group WVC Yokel Local Internet Marketing Inc.

p. 16 fanitini feb:Layout 1 1/12/17 5:17 PM Page 16

FANTINI’S FINANCE

Comeback Kids After a good 2016, where will the success stories be in 2017? By Frank Fantini

ith 2016 now behind, it’s time to focus on the year ahead. But with a quick look back, 2016 was good for the gaming industry and maybe one difficult to replicate. Las Vegas boomed. Macau rebounded. Regional markets finally fully recovered. Interest rates remained low. How good a year is reflected in the stocks that comprise Fantini’s Gaming Indices, especially in comparison to broader market indices:

Fantini North America Fantini World Fantini Interactive

148.65 133.23 186.22

+24.31% +10.13% - 20.11%

Dow Jones S&P 500 NASDAQ Hang Seng

19,762.60 2,238.83 5,383.12 22,000.56

+10.88% + 8.74% +13.66% - 6.80%

The year represented a comeback for some unlikely sectors: Macau and suppliers. Despite all the negative sentiment that had driven down Macau stocks, the bottoming out last summer and now five straight months of gaming revenue gains clearly caught investor attention. Five of the six casino concession holders saw their stocks rise, led by MGM China, up a whopping 65.77 percent. Melco Crown, whose relatively new Studio City casino failed to live up to billing in spurring mass-market visitation, was the only decliner, falling 5.36 percent. Major suppliers, likewise, had to deal with negative sentiment as investors worried about the debt piled up by Scientific Games and the continuing sluggish sales in North America. Yet, the stocks enjoyed a healthy year with SGMS leading the way, up 56.08 percent. Tiny companies produced the biggest returns. Table game supplier Galaxy Gaming led the way, up 327.6 percent to 58 cents a share as the company turned profitable. DEQ, which makes side and bonus bets for table games, soared 184.62 percent as it is being bought out by Scientific Games. Trans World, a U.S.-based operator of central European casinos, jumped 130.95 percent. 16

All the big Las Vegas casino operators performed well, led by Wynn’s 32.79 percent advance and followed by MGM Resorts at 26.89 percent and Las Vegas Sands at 26.23 percent. Regional and Las Vegas locals casino operators also had strong years, with Eldorado and Isle of Capri rising in tandem since the announcement of ERI’s purchase of ISLE. ERI jumped 54.09 percent for the year and ISLE led all regionals at 73.68 percent. The merger is expected to close in the second quarter. One of the quietest companies, Carl Icahn-controlled Tropicana Entertainment, enjoyed one of the biggest gains as investors saw low valuation and corrected that by boosting the stock 75.94 percent. Interestingly, while Japan still doesn’t have casinos, it does have gaming companies, and several performed outstandingly. They were led by Sega Sammy, up 59.66 percent, followed by Universal Entertainment, up 52.72 percent. Konami, a consumer entertainment company with a large gaming component, did even better, leaping 63.93 percent. So that was 2016. What about 2017? One concern has to be that the long economic recovery might be at least interrupted by recession. Meanwhile, the Fed has launched a series of interest rate hikes. And, while the goal is a return to normality, higher rates will increase competition for investor dollars and might sap some of the energy out of the economy. Interestingly, high rates could benefit slot machine companies that fund giant jackpots through annuities. If 2017 meets bullish expectations, companies to look out for will be MGM Resorts and Caesars among the big operators and Eldorado and Boyd among the big regionals. MGM has become the analysts’ darling as it focuses on debt reduction and profit growth. The company has been helped by the Las Vegas boom. MGM ended the year with its own exclamation point as National Harbor opened near Washington, D.C., an affluent, recession-proof market of 9 million people counting Baltimore. Caesars will likely get its operating company out of bankruptcy early in the year and begin to be followed by investors on its fundamentals again, and they are healthy fundamentals that have been

Global Gaming Business FEBRUARY 2017

masked by the bankruptcy, management says. Eldorado will more than double in size in the second quarter when it closes on the purchase of Isle of Capri. ERI thinks it can significantly improve ISLE’s margins, and it has the track record to give that goal credibility. Further, ERI looks to expand even more through acquisitions. Boyd has quietly put itself in a growth position with three recent casino acquisitions in the Las Vegas locals market, and by owning a chunk of resurging Downtown Las Vegas. Here are some broader thoughts on 2017: • Regional casinos depend most on the health of the economy. With retail and restaurant sales already down, it is likely that a slowing economy will at some point take its bite out of gaming. • Las Vegas is booming, and there is no reason for the boom to end as long as people continue moving to the Sun Belt, and that is for the foreseeable future. And reinvestment continues to make Vegas the city that reinvents itself. However, the Great Recession showed that Las Vegas is not recession-proof, so there could be a serious interruption of the boom. Otherwise, it’s all systems go. • Reno and Denver are boomtowns, too. That is good news for Monarch, which has two casinos, one in each market, and Eldorado, which has a big Reno presence and will add Denver when it buys Isle of Capri and its two Black Hawk casinos. • Macau. If U.S. regional casinos depend on the economy, Macau casinos depend on government policy. Policy now appears sanguine, even accommodative, after several years of near hostility. If I had to put a few words on it, I’d say I’m neutral on the market and unsure who wins and loses in the competitive struggle, though Las Vegas Sands has the proven business model and its new Parisian fits hand-in-glove into it. Finally, the Chinese economy could fall into recession, exacerbating the competitive fight. 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.

MEET US 19 AT THE

Play a round on the spectacular, award-winning greens of Cascata at our 19th Annual Golf Classic! The 19th Annual AGEM/AGA Golf Classic Presented by JCM Global is one of the gaming industry’s premier events with proceeds benefiting the National Center for Responsible Gaming. To date, the Golf Classic has raised more than $1.6 million to advance the NCRG’s important research. And we’re on par for another incredible year with exciting contests and a wide range of terrific raffle prizes. Golfing positions are sold on a first-come/first-served basis, so tee up and reserve your spot today. Visit jcmgolfclassic.com now or call 702.651.3472 for registration and sponsorship opportunities.

CASCATA, BOULDER CITY, NEVADA

Tuesday, April 25, 2017

Global Gaming Business

p. 18 AGEM:Layout 1 1/12/17 5:17 PM Page 18

AGEMupdate AGEM MEMBER PROFILE

NYX Gaming Group Limited is a leading digital gaming provider headquartered in Las Vegas, with a staff of more than 1,100 employees globally across Europe, North America, Asia, New Zealand and Australia. After acquiring OpenBet in May 2016, NYX is uniquely positioned to provide exciting playerdriven solutions across all verticals and channels through best-of-breed content, proven technology and a full suite of industry-leading products and services to some of the foremost gaming operators, lotteries and casinos across the globe. NYX also has one of the broadest distribution bases in the industry with over 200 unique customers, and the widest portfolio of content available from its own global studios and broad partner network. The industry-leading iGaming catalogue delivers content across web and mobile formats, focusing on bingo, casino, lottery and sports book verticals. As NYX moves forward into 2017, the vision remains to be the world’s leading supplier of bestof-breed digital gaming content and technology. The NYX team is committed to providing its valued customers: • Open and flexible platform solutions • The largest content portfolio in the industry • Innovative, player-engaging games and promotions • Superior customer service The main focus for NYX for the first quarter of 2017 is to enhance the award-winning Open Gaming System (OGS) platform by combining the best-of-breed technologies of NYX and OpenBet to give our customers more flexibility and choice. Led by its Sydney-based studio, NextGen Gaming, NYX will focus on providing even more innovative gaming features designed to attract, engage and retain players. NYX will continue to strategically expand into key regulated markets through its omni-channel offerings, such as its recent expansion into Italy, the Netherlands and the Baltic states. NYX is looking forward to showcasing its leading end-to-end gaming solutions at ICE, February 7-9 at booth N1-510. NYX holds a Silver Level membership with AGEM. Visit the website at www.nyxgg.com or follow them on LinkedIn and Twitter. 18

Global Gaming Business FEBRUARY 2017

JANUARY 2017 KEY BOARD OF DIRECTORS ACTIONS • The 2017 Election of AGEM officers took place at the January meeting. The new president is Tom Nieman, who takes up the position for the next two years. He takes over from Tom Jingoli, who has been at the helm for the past seven years. The other officers voted in are First Vice President Dan Savage, Scientific Games; Second Vice President David Lucchese, Everi; Vice President of Government Relations Steve DiMasi, IGT; Secretary Mark Dunn, Aristocrat; Treasurer Tom Jingoli, Konami Gaming; Co-General Counsel Harper Ko, Scientific Games; and Co-General Counsel Daron Dorsey, Ainsworth. • The U.S. Internal Revenue Service had been considering lowering the tax reporting threshold on jackpot wins from $1,200 to $600 and also looked at tracking play using player loyalty cards. The American Gaming Association had been leading the fight to oppose these efforts, assisted by AGEM. It was announced recently that the IRS has chosen not to move forward with any changes that were perceived as negative for the gaming industry overall. • Kate Chambers, managing director of Clarion Events, organizer of ICE Totally Gaming, gave a short presentation in the runup to the show. The 2017 show will be approximately 9.5 percent bigger than last year, opening up an additional two halls with 112 new exhibitors. Pre-show registration is up 50 percent on the same time last year. There will be a new format for the conferences, branded ICE Vox, which will include more panels, roundtables and learning sessions. • In Japan, the first stage of the gaming bill was passed, which has cleared the way for the parliament to debate a separate bill that will lay out laws that will govern the way casino licenses are awarded. The government effort at the moment seems focused on problem gambling, and is looking to Singapore as aAssociation possible model. it is unlikelyManufacturers any casinos will open before 2024. ClarionDecember will be hosting of Realistically, Gaming Equipment 2016 the JapanheGaming Congress in Tokyo in May, which will assist in bringing international and in AGEM Index ended 2016 on a positive note The broader stock markets reported operators positive results the gains during December 2016 the first full month following the election. The S&P 500 suppliers with together withreported Japanese counterparts.

largely offsetting losses experienced during reported a month-to-month increase of 1.8 percent, November 2016. The composite index stood at rising to 2,238.83 at year-end. Additionally, the Dow 321.28 points at the close of 2016, which represents an Jones Industrial Average increased 3.3 percent to increase of 13.14 points, or 4.26 percent, when 19,7652.60, while the NASDAQ increased 1.1 percent to November AGEM Index during the periodwill to 5,383.12. •compared ICE Totally Gaming 2016. 2017,The February 7-9 atreported ExceL London. AGEM have a presence at the show a year-over-year increase for the 15th consecutive asmonth, usual,rising and will look forward to welcoming all members and potential new members to the stand. 2016 123.96 points, or 62.8 percent, when Selected positive contributors to the December compared to December 2015. AGEM Index included the following:

UPCOMING EVENTS

AGEMindex

Konami Corp (TYO:9766) contributed 14.05 points During the latest period, seven of the 13 global gaming due to a 21.32 percent increase in stock price to equipment manufacturers reported month-to-month ¥4,695. increases in stock price, with two up by more than 10 The AGEM Index ended 2016 on a positive note with the gains reported during December 2016 largely offsetting percent. Six manufacturers reported decreases in stock losses experienced during November 2016. The composite index stood at 321.28 at the close of 2016, which Ainsworth Gamingpoints Technology (AGI) reported a stock price during the month. price ofto AU$2.11 (+16.57 andIndex contributed represents an increase of 13.14 points, or 4.26 percent, when compared November 2016.percent) The AGEM re0.87 points. On the year, positive performances were posted by the ported a year-over-year increase forGalaxy the 15th consecutive majority of equipment suppliers. Gaming (GLXZ) month, rising 123.96 points, or 62.8 percent, when comSelected negative contributors included the following: posted largest percentage by seven more of the pared tothe December 2015. Duringgain, the increasing latest period, 13 global gaming equipment manufacturers than 200month-to-month percent. A handful of players posted impressive reported increases in stock price, with two up byWith morea than 10 percent. Six manufacturers reported stock price of $72.12 (-1.86 percent), Crane 50-percent-plus gains during 2016, including the Co (CR) contributed negative points. of equipdecreases stock price the month. OnTechnology the year, positive performances were posted by0.98 the majority following: in Konami Corp.,during International Game

PLC, suppliers. Scientific Games Aristocrat ment Galaxy Gaming Corporation, (GLXZ) posted the largest percentage gain, increasing by more than 200 percent. A Scientific Games Corporation (SGMS) contributed Technologies (ALL) and Crane Co. handful of players posted impressive 50-percent-plus gains duringnegative 2016, including the following: Konami 0.78 points to the index dueCorp., to a In5.08 decline in stock (ALL) price and to $14.00. ternational Game Technology Plc., Scientific Games Corporation,percent Aristocrat Technologies Crane Co.

Exchange: Symbol (Currency)

Stock Price At Month End Percent Change Dec-16 Nov-16 Dec-15 Prior Period Prior Year

Index Contribution

Nasdaq: AGYS (US$)

10.36

10.21

9.99

1.47

3.70

0.04

Ainsworth Game Technology

ASX: AGI (AU$)

2.11

1.81

2.29

16.57

(7.86)

0.87

Aristocrat Technologies

ASX: ALL (AU$)

15.50

15.00

10.21

3.33

51.81

0.75

Taiwan: 3064 (NT$)

27.20

29.60

18.20

(8.11)

49.45

(0.07) (0.98)

Agilysys

Astro Corp. Crane Co. Everi Holdings Inc. Galaxy Gaming Inc. Gaming Partners International International Game Technology PLC @ &$ D

$G % D%

Konami Corp. Scientific Games Corporation Transact Technologies

NYSE: CR (US$)

72.12

73.49

47.84

(1.86)

50.75

NYSE: EVRI (US$)

2.17

2.16

4.39

0.46

(50.57)

0.01

OTCMKTS: GLXZ (US$)

0.58

0.61

0.19

(4.92)

205.26

(0.01)

Nasdaq: GPIC (US$)

11.82

11.62

8.96

NYSE: IGT (US$)

25.52

25.78

16.18

D$ B

G@&

: %; :

1.72

31.92

0.02

(1.01)

57.73

(0.65)

(6.48)

(13.68)

62.57

1.08

1.17

TYO: 9766 ( )

4,695

3,870

2,888

Nasdaq: SGMS (US$)

14.00

14.75

8.97

(5.08)

56.08

Nasdaq: TACT (US$)

6.60

6.35

8.59

3.94

(23.17)

21.32

(0.14) 14.05 (0.78) 0.02

Change in Index Value

13.14

AGEM Index Value: November 2016

308.14

AGEM Index Value: December 2016

321.28

ww.AGEM.or AGEM is an international trade association representing manufacturers of electronic gamThe AGEM Index is published monthly ing by Association of Gaminglotteries Equipment Manufacturers (AGEM) andgaming Applied Analysis © 2017 and components for the industry.| Copyright The association devices, systems, 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.

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p. 20 agilysys :Layout 1 1/12/17 5:24 PM Page 20

Number

Crunching

=Better Service

Agilysys dominates the data analytics business in the gaming industry by creating superior products and crafting innovative partnerships By Roger Gros

he gaming industry has been late to recognize the power of data analytics. Although hospitality-based, the industry is so unique that executives at first didn’t believe that data could determine the impact of a casino player. Yes, it worked well for the hotel business, but when you comp rooms to real gamblers, how do you account for that? It’s been a long, slow process, but the professionals at Agilysys have developed systems to plug in neatly to gaming systems and give operators a better idea of how their gaming customers interact with the casino, and how they differ from non-gaming customers. Agilysys is an international company that trades in hospitality systems and data analytics. In addition to gaming, the company is active in the hotel, restaurant, food service, cruise, university, stadium and healthcare industries. But it’s been in the gaming industry where Agilysys has most recently made its mark. As if to cement that commitment, the company recently announced the appointment of former Bally Technologies CEO Ramesh Srinivasan as the company’s new president and chief executive officer. Srinivasan’s early agenda will include the implementation of the company’s accelerated investments in its products, sales and services. He will lead the development and execution of go-to-market strategies that better align Agilysys’ products and organizational capabilities with the company’s near-term opportunities to aggressively expand the business with large-scale and international customers. Jim Walker, senior vice president of global revenue for Agilysys, likes

the Srinivasan appointment. “As part of our selection process, we looked for a leader with a track record of strategic agility, business acumen and vision, with the proven ability to accelerate innovative product delivery,” says Walker. “Ramesh is a great fit with our growth objectives and our team. We’re delighted that he’s accepted the position.”

Gaming Numbers Even before Srinivasan’s appointment, Agilysys was in an aggressive growth mode in gaming. Walker says that is a result of the company’s long history in the industry. “We bring a huge breadth of experience to the gaming business,” he says. “And we’ve organized ourselves into key product groups anchored by core products we refer to as planets that are orbited by complementary products. We have anchor products in the point-of-sale arena, property management arena and the payments Former Bally Technologies CEO Ramesh Srinivasan has been named as the new president and chief executive officer of Agilysys.

Agilysys is an international company that trades in hospitality systems and data analytics. In addition to gaming, the company is active in the hotel, restaurant, food service, cruise, university, stadium and health-care industries. But it’s been in the gaming industry where Agilysys has most recently made its mark. 20

Global Gaming Business FEBRUARY 2017

p. 20 agilysys :Layout 1 1/12/17 5:24 PM Page 21

“You are going to see Agilysys grow in some other areas of hospitality. Just because we grow in other areas of hospitality doesn’t mean gaming is any less important to us. It is the top item on our agenda.” —Jim Walker, senior vice president of global revenue, Agilysys

services part of the business, as well as inventory and procurement. “One of the things that’s happened in hospitality over the years is all of those systems have tended to operate in silos. You didn’t have access to all of the information you needed. You couldn’t build a complete view of what your guest was doing, their likes and their dislikes, what offers you might want to extend them. So, the whole purpose of our next-generation system, the rGuest platform, is to take those silos and draw them together, and then be able to give to our customers in the gaming business actionable information about their guests so they can make offers that are relevant to them. Everybody likes a personalized offer. Nobody likes an impersonal one.” Walker recognizes that Agilysys can’t be the single complete system provider across all casino operations, but it can aggregate information that comes in from all the diverse systems within a casino resort. “Let’s go back to the platform idea,” he says. “As many great products as we have, we can never be a single-source provider to any one of our customers. One of the things that we feel is key going forward is putting together an offering that allows different data to be brought in to a single source. So if we provide a platform with open APIs (application program interfaces), that gives our customers the ability to bring data into that platform, and augment data from the systems that we provide them. That provides a single collection point for the data.” Gathering the data, while not easy, is only the first step. Interpreting it is the goal, says Walker. “One of the things that we do, that a lot of companies we compete against don’t do quite as well, I feel, is provide a level of what we call whiteglove service and training. We are constantly training and supporting our customers, to help their people understand what they’re looking at, at any point in time.”

Non-Gaming Focus As gaming revenues remain flat or even start to decline, it’s more important to operators to understand how to drive non-gaming revenues, through rooms, foodand-beverage, entertainment, retail and more. The Agilysys rGuest platform is designed to

break out data and show operators the most profitable guests in the most profitable segments of their businesses. “That’s the whole thought process behind the rGuest platform,” Walker says. “We are able to bring that data to our platform, draw it together, turn it around and make it actionable at that point. “For example, we have a seat management system. Our application is integrated to our point-of-sale system. If a patron makes a reservation in that seat management platform, you’ve got data about that patron. You’ve got their visit history, you’ve got the things that they like, you’ve got their allergies, and you’ve also got a quick score—a numerical score, from 1 to 100, that tells you whether they’re a good patron or one of your best patrons. “Now you can make that information available to the folks that are out there serving the guests, at the point of service, at the time it’s needed most. So, when our best patron walks in, we can immediately see he or she has a score of 93, so this is a very good customer. This patron likes red wine, so we deliver a great bottle of Chimney Rock, that we might recommend.” Walker admits there’s a fine line here, where a guest might view these things as intrusive, so you have to be careful. “We don’t want to predict what they want, but what we’d like to do is be able to provide enough information that you can make a relevant offer.” And that extends to email or social media offerings. “We all get thousands of offers via emails each day,” he says. “Most of them are irrelevant; I don’t like them. I delete them. But the ones that are relevant, I like all of those. And that’s what we’re trying to do.” But Walker says the Agilysys rGuest platform won’t tell the operators how they should respond; it suggests options. “We want to give them the The Agilysys rGuest platform is designed data to make that decision on to break out data to their own, because that’s how and show operators they’re going to separate themthe most profitable selves,” he says. guests in the most Another application of the profitable segments of their businesses. rGuest system would be upselling a guest once they’re on

FEBRUARY 2017 www.ggbmagazine.com

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“Casinos need better tools to manage integrated and complex resorts, and Agilysys has been an innovator in providing solutions that drive guest satisfaction and maximize revenue. Our goals are well-aligned, and this strategic partnership allows us to further our mission of helping casinos attract and retain their most profitable customers.” —Marco Benvenuti, co-founder and chief product officer, Duetto

property by understanding their preferences. “We call it cycle of consumption,” Walker explains. “The most expensive thing that our clients do is get that guest on the property. That’s where all the money goes—we have to get them from wherever they are, onto the property. Then, once they get on the property, probably the single most profitable thing they can do, from an ROI perspective, is sell them more stuff. That’s what we’re trying to enable. We want to, first of all, help them get the guest to the property. Second of all, we want to help them maximize that spend once they’re on the property.” Getting them to return to the property is also important, but Walker says that’s a different approach. “The whole concept of loyalty has changed an awful lot,” he says. “Loyalty today is driven not only by the experience you have, but also by the experience that others have had at the same property. “For example, when I go into a new location or city, I go to TripAdvisor or Yelp to find a good place for dinner. I check out the hotel. And I think everybody else is doing that. So, I think part of the loyalty today is coming up with a methodology to engage the guest and have them become a participant in that form of social media. You’d like for them to post their impressions of the property and you’d like their experience to be a positive one; you’d like them to tell somebody about it. So, to the extent that you can foster that behavior, you can continue to increase your brand loyalty.”

Head in the Clouds The cloud is a huge part of the future plans for Agilysys. Walker says it takes some of the sting out of the “upgrade” process that often turned into nightmares for operators. “If you’re in an on-premises environment, everybody’s had the experience of the vendors going from one version of the product to another version of the product,” he says. “It’s called a forklift upgrade, where you come in and you take what you’ve got in there out, and you’ve got to put something else in. Inevitably, there’s some incompatibility.” 22

Global Gaming Business FEBRUARY 2017

InfoGenesis allows hospitality and gaming companies to lower IT costs and increase their ROI. Today, it includes a wide range of payment options, and creates business intelligence on a real-time basis.

The cloud makes that process much smoother, he says. “We’d like to make that a thing of the past,” he says. “So instead of focusing our business around those big, incremental upgrades, we can now focus it around small, reoccurring upgrades over time, so the system evolves more than it’s upgraded. This gets you out of that upgrade process. You still have to refresh your hardware, and manage the basic maintenance, but the upgrades come on a consistent basis.” Walker says the cloud can also reduce costs and boost ROI for operators. “It helps from an infrastructure standpoint. You certainly don’t have to buy and maintain the server infrastructure that you had to in the past. The other thing you don’t have to do is pay the people who are managing that. I think those two things go a long way toward reducing costs. It lets the people in the hospitality business focus on hospitality, rather than run an IT system.” With the cloud, however, comes some vulnerability to the dreaded hackers. But Walker says there are advances in that area, too. “The companies that make hosting and delivering software-as-a-service the focal point of their business are able to attract and keep better resources, particularly in the security arena,” Walker explains. “I’m not going to suggest that nobody’s vulnerable, because everybody is in today’s environment, but they’re only vulnerable to the point that they can spend resources to keep themselves protected. Security is one of the key differentiators that putting your data in the cloud brings. It offers an ability to focus on your

p. 20 agilysys :Layout 1 1/12/17 5:25 PM Page 23

“Our seamless integration with Agilysys makes the data collection process fast and efficient, and includes guest stay and property-spend history as part of the pricing analysis, helping to maximize profitability property-wide.” —Tammy Farley, president, Rainmaker Group

core competencies, rather than on-premises technology issues you have to manage along with every other thing that happens on a daily basis.”

Purchases and Partnerships Agilysys has expanded down through the years by buying innovative companies that have developed unique products. Probably the most important acquisition for gaming operators came in 2007 with the purchase of the InfoGenesis system that is the heart of the company’s point-of-sale operations. InfoGenesis allows hospitality and gaming companies to lower IT costs and increase their ROI. Today, it includes a wide range of payment options, and creates business intelligence on a real-time basis.

Partnerships are also important to Agilysys, especially when it comes to maximizing room revenue. The company has created partnerships with analytics leaders like Rainmaker and Duetto, says Walker. And the partnership with Duetto just got deeper, he explains. “We are going to be offering Duetto’s product from a reseller perspective, and more tightly integrating that into our solutions, to address the competitive issue so hotels and casinos using our system can be sure they are getting the best rate available,” he says. Duetto, a revenue strategy technology company serving the hotel and casino industries, has worked closely with Agilysys through the years, and the two companies recently expanded their relationship. Duetto’s revenue

p. 20 agilysys :Layout 1 1/12/17 5:25 PM Page 24

“We’ve had a couple of clients that have used them (tablets) around pools this past year, and you’ve seen revenue bumps in the 60 percent to 70 percent range. That is a huge advantage, but it did come with some operational challenges.” —Jim Walker, senior vice president of global revenue, Agilysys

strategy platform is now available with Agilysys’ Lodging Management System (LMS) and Visual One PMS, and the new integration with LMS enables casino hotels to take full advantage of personalized loyalty pricing with dynamic offers based on a customer’s total worth. “Agilysys is the rare technology company that understands the true challenge today’s casino owner and operator faces,” says Marco Benvenuti, Duetto co-founder and chief product officer. “Casinos need better tools to manage integrated and complex resorts, and Agilysys has been an innovator in providing solutions that drive guest satisfaction and maximize revenue. Our goals are well-aligned, and this strategic partnership allows us to further our mission of helping casinos attract and retain their most profitable customers through advanced analytics and optimal pricing decisions.” Agilysys and Rainmaker have collaborated since 2004 to ensure that their many mutual casino hotel customers around the globe have access to the most advanced and proven property management and revenue management solutions available. Rainmaker is a longstanding integration partner with Agilysys, and provides seamless system integration between its guestRev solution and Agilysys’ LMS and Visual One PMS. Rainmaker’s ability to integrate seamlessly with the Agilysys PMS provides hoteliers with a deep understanding of demand by various customer segments. This highly granular insight allows revenue managers to make the most informed decisions when optimizing profitability and revenue. “Gaming properties, in particular, require a keen and detailed understanding of the enterprise value of every guest when optimizing the hotel,” says Tammy Farley, president of the Rainmaker Group. “Revenue managers need to be able to identify and manage their most profitable revenue sources by forecasting demand by expected guest value and pro24

Global Gaming Business FEBRUARY 2017

ducing recommendations that ensure rooms will always be available for the property’s most valuable guests. Our seamless integration with Agilysys makes the data collection process fast and efficient, and includes guest stay and property-spend history as part of the pricing analysis, helping to maximize profitability property-wide.” Another “silent” partner in the Agilysys gaming business is the regulator. When you’re talking about business intelligence or player information, regulators get very concerned. Walker is not. “We’ve been doing this for so long, it’s just baked in at this point,” he says. “It is just a normal process of our doing business. I don’t know how we’d do it any other way. And particularly, as we expand the business geographically, we run into different regulations in Europe and in parts of Asia, so we put a huge effort around regulatory compliance.”

Going Mobile One of the fastest-moving developments in gaming is the use of mobile devices. Agilysys addresses this phenomenon in two ways. “There are guest-facing and staff-facing solutions to this issue,” he says. “Let’s talk about staff-facing first. We’ve taken our entire InfoGenesis point-of-sale solution and we’ve made it available on either an eightinch or a 10-inch tablet. One of the things that we’ve seen with several of our customers is that with the eight-inch device, as you walk around and bring the point of service to the guest at the point of need, you get a revenue bump. We’ve had a couple of clients that have used them around pools this past year, and you’ve seen revenue bumps in the 60 percent to 70 percent range. That is a huge advantage, but it did come with some operational challenges. “Especially here in Vegas, you’ve got a heat problem in the summer, and it was hard to keep the devices cool and usable. We’ve even had one

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2 0 0 0 AT T O R N E Y S | 3 8 L O C AT I O N S W O R L D W I D E˚

client keep the darn things in the refrigerator; but it worked. And the sunglasses the staff wore are polarized, so if you’ve got a wait staff wearing polarized glasses, they don’t see the screen as well. So, polarized lenses were out. There were a couple of minor operational changes, but the payoff has been huge.” For the guest-facing applications, there are other operational challenges: bring your own device or use a device provided by the hotel. “On the other side, we have come out with some guest-facing kiosk solutions,” Walker explains. “They’re in the food services management part of our business today, but they’re going to be coming into the gaming part of our business sometime this year, where the guest can self-serve. The guest places an order; the order fires off to the kitchen. If you’re in the buffet and you’ve checked yourself in, this allows the guest to provide their own point of service.” Unfortunately, it gets even more complicated when it comes to guests using their own devices. “There’s no way we could possibly ever bring enough applications to meet the needs of our customers,” he says. “So, our job, as we see it, is provide the integration points for our customers to be able to integrate those solutions into our systems. “We’ve found our clients want to use their own apps, for branding reasons, and we’re completely fine with that.” For a company active in many industries and businesses, Walker says there is not one that gets more priority than gaming. “Gaming has been a very important part of our business in the past,” he says, “and it continues to be a very important part of our business today. You are going to see Agilysys grow in some other areas of hospitality. Just because we grow in other areas of hospitality doesn’t mean gaming is any less important to us. It is the top item on our agenda.”

We Have the Team to Meet Your Japan Integrated Resorts Needs Martha Sabol and Koji Ishikawa lead a multidisciplinary team of Greenberg Traurig attorneys who are able to assist gaming companies seeking to enter the Japanese gaming market. Our Tokyo office is comprised of an award-winning team of attorneys and professionals, who provide multinational and Japanese clients with innovative, strategic advice and legal services in a market known as a gateway to international business opportunities. In regards to Japanese Integrated Resorts, the gaming practice will supplement the Tokyo office. Utilizing our understanding of the local culture and practical aspects of Japanese business, our multidimensional team offers custom strategies to fulfill our clients’ needs. > Martha, Global Gaming Practice Co-chair, focuses her practice on gaming regulatory and business law, representing national and international casino operators and suppliers in the areas of regulatory compliance, acquisition, licensure, internal investigation matters and corporate counseling. > Koji, Tokyo Managing Shareholder, focuses his practice on corporate finance and capital market matters. He is experienced in handling cross-border transactions and advising clients in the technology sector. Greenberg Traurig is focused on the impending Japanese Integrated Resorts market.

Martha A. Sabol

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Global Gaming Practice Acquisitions | Financing | IP | Labor | Litigation | Operations | Real Estate | Regulatory Learn more at gtlaw.com/gaming GREENBERG TR AURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM The hiring of a lawyer is an important decision and should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and our experience. Prior results do not guarantee a similar outcome. Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2016 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. °These numbers are subject to fluctuation. 28494

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Security& Surveillance

The Age of

Insecurity Awareness, vigilance and ongoing network upgrades can help keep cyber thieves at bay. But these days, total impenetrability may be an illusion. By Marjorie Preston

ackers are a fact of life. From lone wolves to boiler-room scammers to sophisticated criminal networks and even governments, they pose a threat to every enterprise that does business online. No one knows better than Sheldon Adelson. In February 2014, hackers successfully penetrated the computer systems of Adelson’s Las Vegas Sands Corp., causing the serial shutdown of systems in both Las Vegas and Bethlehem, Pennsylvania. By all accounts, the hackers didn’t want credit card numbers or other customer data, but revenge for inflammatory remarks the CEO made about Iran. “They were bent on causing as much destruction, harm and embarrassment to Las Vegas Sands as possible,” says Gus Fritschie, director of Washington, D.C.-based SeNet International Gaming Labs and a specialist in online gaming security. And the “hacktivists” succeeded, wreaking a reported $40 million in damage. In a more recent example, last June hackers wormholed their way into the networks of the Hard Rock Las Vegas. The motivation this time wasn’t politics but good, old-fashioned greed. Hackers used card-scraping malware to access internal systems, stealing credit and debit card numbers and CVV codes but not PIN numbers. It was the second time Hard Rock was successfully compromised in as many years. In both instances, system users were alerted. The extent of the losses has not been disclosed.

Cyber Uncertainty These examples—and the blaring headlines that accompany them—have motivated gaming operators to beef up security, but total impenetrability may be a myth. “It’s all about risk management, not 100 percent security— that doesn’t exist,” says Fritschie. “For total security, you’d have to unplug completely from the internet and not do business.” Gaming operators—Fritschie rightly calls them “defenders”—have the tougher job here. “They have to secure a massively complex enterprise, while the attacker has to find just one mistake,” he says. “It could be as simple as a missed network patch or a missed configuration in the code, but that one mistake can allow an attacker to gain access. And the impact can be pretty devastating.” In another example—this one sounds like something out of the Oceans 11 movie—in 2013, a high roller and his cronies cracked a CCTV system in the poker room at Crown Melbourne. The player, who was fed information on the table through a wireless earpiece, took Crown for $33 million in bogus winnings—despite 24/7 surveillance and a security system noted for its sophistication. Hacking has become so unabashed that websites openly sell hacking equipment and serve up detailed manuals on how to use them. The most common attack vectors are external systems that are exposed to the internet, “like websites, gaming applications or anything that’s accessible for users to interface with,” says Fritschie. “There are vulnerabilities in external systems

Perhaps the most prevalent (and successful) hacking approach is spear phishing, in which hackers send seemingly benign emails that ask users to click on a link. If they do, it opens a hole in the firewall and lets the attackers in.

Global Gaming Business FEBRUARY 2017

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For total security, you’d have to unplug completely from the internet and not do business.

“

”

—Gus Fritschie, director, SeNet International Gaming Labs

Rules of Network Engagement A List of Best Practices for Network Security • Create a culture of vigilance. It’s important to foster a work en-

vironment where everybody is protective of security and will take extra steps to safeguard it. • Seal off sensitive networks. The surveillance network should

never touch the front desk network, or the network that runs the slot floor, or the network that compiles player ratings. In this case, building silos is a plus. Needless to add, keep customer free Wi-Fi separate from your business network. that can potentially be exploited to gain access to the underlying operating system. Then the hackers pivot to other parts of the network” to do their dirty work.

Go Phish Perhaps the most prevalent (and successful) hacking approach is spear phishing, in which hackers send seemingly benign emails that ask users to click on a link. If they do, it opens a hole in the firewall and lets the attackers in. To assess an organization’s security awareness, you’ve got to think like a hacker. SeNet does it with phishing emails, saying the IT department is testing password strength. If users don’t respond within a certain period of time, the email continues, their accounts will be disabled. “You’d be surprised how many people actually enter in their passwords,” says Fritschie. “Usually, we’re above a 50 percent success rate.” While most people are wise to blatant phishing, like the prince from Nigeria who wants you to wire money, some hackers are better than that. “When you get something that matches the emails typically sent from your IT staff, that matches the font, the header and footer, the graphics and the logo, it can look pretty legitimate,” says Fritschie. “Obviously there are some pretty easy ways to tell if the address is fake or not, but sometimes people just click on links and get on with their jobs. “That’s why users are always the organization’s weakest link.” So how can an organization safeguard against cyber attacks? Network segmentation, for one thing—barricading individual computer networks so they are accessible only to privileged users. This creates a series of more secure “locked doors” that can help to foil hackers. “A highly secure network will have multiple network segments so you can’t get from one to another,” says Fritschie. “In the iGaming infrastructure, for example, if the corporate network is compromised, there should be controls in place to ensure the hackers cannot leap over that to the gaming network.”

• Don’t click on that link! A recent study from the U.S. Depart-

ment of Homeland Security indicated that some 90 percent of major security intrusions start with spear phishing emails. • Establish a blanket protocol for reporting breaches.

“Sometimes these things will be compartmentalized, and the IT department will contain it without telling anyone, so the information doesn’t get to the CEO or CFO who has greater resources to solve the problem,” says Rob Prady of Axis Communications. “It’s a balancing act between being Chicken Little and a mid-level manager not sending it up the chain of command,” sometimes for fear of reprimand. • Avoid free Wi-Fi. Traveling executives should always use a virtual

private network to conduct business. And be aware that hackers launch man-in-the-middle attacks in public places, typically hotels and coffee shops. Sweep the premises on a periodic basis to identify and dismantle rogue wireless access points. • Keep an eye out for anomalies. “Computers are designed to

do the same thing over and over and get the exact same results,” says American Enterprise Institute’s Shane Tews. “If you get one blip, whatever it is, latch onto it. You have to see if it’s a quirk, or if someone is starting to chip away at something inside your system.” • Back it up. By periodically backing up your data, you can mitigate the threat of ransomware attacks. “Ransomware is rampant right now, and it’s really big on small and medium enterprises,” warns Tews. “If you don’t back up on a regular basis, they can take over all your client information, internal HR information and banking information, and make you pay to get it back. Has your smartphone ever crashed? It sucks and you may lose a couple hours of data, but if you programmed it to regularly back up, you can walk into the iPhone store, get a new phone and be back in business in 20 minutes.”

FEBRUARY 2017 www.ggbmagazine.com

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“

You can equate security to a fire alarm system, or business insurance—you don’t need it until you need it. But by the time you do, it could be catastrophic. —Rob Prady, field sales engineer, Axis Communications

Show Me the Money While the need for better security is clear, some operators may resist, just because they don’t see an immediate return on investment. “In iGaming specifically, until recently there weren’t that many sites making decent profits, so it can be hard to force them to do testing at a certain level,” says Fritschie. “It’s much easier to justify slot floor optimization that will make X amount of more money.” It’s an unfortunate but common mindset, says Rob Prady, field sales engineer for security firm Axis Communications, based in Washington state. “You can equate it to a fire alarm system in the building, or business insurance— you don’t need it until you need it. But by the time you do,

Beware of Cute Kittens

n a notorious hacking case in 2015, Twitter Chief Financial Officer Anthony Noto’s account was briefly compromised (very briefly—less than 10 minutes). But in that time, hundreds of tweets, purportedly from the CFO, led with messages like, “OMG, when did you do this?” and “This is too funny”—followed by links to another URL. It cannot be stressed enough: Never click on anything from somebody you don’t know. That includes emailed invites from professional social media networks. They could be a way to get users to get to open a portal for malware. If you want to respond, open your account and accept requests that way. In a way, hackers are students of human nature. They know how to spur people to action. Rob Prady of Axis Communications recalls a hacking case in which a batch of emails went to workers at an East Coast hospital. The emails enticed recipients to view photos of— what else?—cute kittens. It worked. And as employees smiled at the warm fuzzies, malicious hackers installed ransomware, stole the hospital’s data and demanded payment for its return.

Global Gaming Business FEBRUARY 2017

”

it could be catastrophic.” Fritschie says bricks-and-mortar operations are “a little bit behind the iGaming side, but also have a little less exposure from an external perspective.” He gives high marks to the iGaming industry in New Jersey. “The Division of Gaming Enforcement came out with specific guidelines of what needs to be tested on an annual basis. The mandatory testing makes sure the basic requirements are met—segmentation, strong application security, firewalls, patches on systems. I’m happy the DGE went the direction it did, because to be honest, if they didn’t require it, some operators might not do it. “But the track record speaks for itself. At this point, there hasn’t been a major security breach of any big live iGaming sites in regulated environments in New Jersey—or Nevada or Delaware, for that matter—compared to what we’ve seen in unregulated environments.” The fallout from high-profile security breaches is not just financial, Prady says. “The businesses that are affected will write off those transactions, and the customers hit with charges will see them reversed. But all of us in the economy end up paying with higher rate charges.” The more dramatic impact, he says, is the effect on the customers themselves, victims of cyber crimes who must clean up the collateral damage, report violations, combat fraudulent charges, cancel and reorder credit cards and in some cases even fight identity theft. “It leaves them feeling violated,” says Prady. “If a business is attached and I suffer because of it, that makes me think less favorably of the business. It’s a huge reputation issue.”

The Enemy Within Cybersecurity expert Shane Tews, a visiting fellow at the American Enterprise Institute’s Center for Internet, Communications and Technology Policy, likens network security to the moat that guards a castle—but with a twist. “The moat makes you feel protected from the enemy outside,” she says. “But the challenge now is inside. Casinos know that on a physical level. They have security in the elevators and on the floor, they have pit bosses and other layers of security to make sure nobody’s on the take. But the cyber version is just as important.” After a breach, the first response is penetration testing. “Going back to the castle analogy, they run around and see how easy it is to get to the crown jewels. You figure out the weak links in your system and start to man those up, and at the same time you completely change out systems,” says Tews.

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Casinos have security in the elevators and on the floor, they have pit bosses and other layers of security to make sure nobody’s on the take. But the cyber version is just as important.

“

”

—Shane Tews, American Enterprise Institute Center for Internet, Communications and Technology Policy

Again, this is where IT departments or security advisers may meet with some pushback from the money people. “One of the biggest challenges is that people feel they already have a big front cost in their hardware equipment, or they might have paid for a software license that they continue to maintain,” says Tews. “They don’t want to change because they’ve made that investment.” Even so, and despite notable cases like the Sands and Hard Rock, she says gaming industry operators are taking security seriously. “They’re spending a commensurate amount of money for the risk they have. They’re investing in a very sophisticated, professional way that you don’t see retailers doing. They’re getting

better. But they’re still patching,” which carries its own risk. “Say you’ve got 10-year-old systems that are running on three-year-old upgraded software that you just keep patching,” says Tews. “You’ve got layers of layers of patches, when what you really need to do is just gut it all and start over. “Sophisticated network operations are always rebuilding their systems. Say you go in and see a row of 100 servers. Well, they’re replacing them the whole time. By the time they get to row 99, they’re ready to go back to row one. They’re constantly updating their systems. “If you have enough risk, that’s what you do.”

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Security& Surveillance

Running the Risk

RNG

How computers are taking the luck out of gambling

By Willy Allison

n the late ’80s, a real game-changer took place in casinos that would forever change the landscape and opportunities in the gambling industry. Slot machines went from being mechanical devices to being electronic devices. In order to provide randomness and bigger payouts, a new computerized process was introduced that utilized a random number generator (RNG). The RNG is an algorithm programmed into the machine that is designed to generate a large sequence of numbers or symbols that cannot be reasonably predicted. The use of computers and RNGs is now common in the gambling industry as a means of providing randomness for various games. In casinos, RNGs are used to determine results on slot machines, keno ball drawings and card dispersion from automatic shuffle machines. RNGs are also used in online gaming and state lottery operations. Arguably, RNGs are a big reason for the continued success and growth of the gambling industry worldwide, and the reliance on them does not appear to be waning with the increased demand for computerized and hybrid electronic table games.

So What’s The Problem? Random number generators are not random. They’re “pseudo random number generators,” or PRNGs. The outcomes generated by a PRNG are deterministic. The PRNG constantly generates a sequence of simulated

random numbers at high speeds. As soon as the “Play” button is pressed, the most recent random number is used to determine the result. This means that the result varies depending on exactly when the game is played. All PRNGs must eventually repeat their number sequence, so in theory, if players had access to the PRNG code and seed value, they could possibly predict future results. And that’s exactly what has happened. Incidents of players using RNG prediction techniques started to surface not long after computerized slot machines entered the casino market. In 1993, computer engineer Leo Weeks was caught in the Horizon Casino in Lake Tahoe using a wearable computer he designed to predict royal flushes on IGT Fortune I video poker machines. Weeks obtained a Fortune I machine and reverse-engineered how the random number generator worked to create his device. It is not known how Weeks obtained the Fortune I, but it is possible he just purchased one, because the Fortune I was an extremely common type of machine at the time. The Fortune I used a system which many modern video poker and slot machines still use. The internal random number generator in the machine cycles constantly, so the player’s results depend on exactly when the player presses the button on the machine. To use his device, Weeks would play a Fortune I machine and enter the values of the cards dealt to him into the device. This enabled the

In 1993, computer engineer Leo Weeks was caught in the Horizon Casino in Lake Tahoe using a wearable computer he designed to predict royal flushes on IGT Fortune I video poker machines. Weeks obtained a Fortune I machine and reverse-engineered how the random number generator worked to create his device. 30

Global Gaming Business FEBRUARY 2017

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All PRNGs must eventually repeat their number sequence, so in theory, if players had access to the PRNG code and seed value, they could possibly predict future results. And that’s exactly what has happened.

device to synchronize with the cycles of the random number generator in the Fortune I machine. Weeks’ device would then beep through a hidden earphone to tell him exactly when to push the button on the machine to get a royal flush. When Weeks was caught, an electronics engineer/computer programmer working for the Nevada Gaming Control Board, Ron Harris, was able to reverse-engineer Weeks’ device and show how it worked. Based partially on Harris’ demonstration, Weeks pleaded guilty. Weeks received no jail time, and only had to serve 200 hours of community service in addition to paying back the money he won. Harris was responsible for finding flaws and gaffes in software that runs computerized casino games. It turns out that he took advantage of his own expertise, reputation and access to source codes to illegally modify certain slot machines to pay out large sums of money when a specific sequence and number of coins were inserted. From 1993 to 1995, Harris and an accomplice stole thousands of dollars from Las Vegas casinos, accomplishing one of the most successful and undetected scams in casino history. Toward the end of his stint, Harris shifted his focus to keno, for which he developed a program that would determine which numbers the game’s pseudo random number generator would select. In January 1995, Harris used a program to enable an accomplice to win $100,000 on an Imagineering Systems electronic keno game in Atlantic City. This was a traditional keno game with paper slips, but used a computer to select the numbers. His accomplice went into the casino to play the game while Harris stayed upstairs in a hotel room where he could read the keno numbers on the TV and enter them into his computer. Once Harris had entered around 10 numbers, he ran his program to predict the next likely set of numbers the keno computer would pick. However, Harris could only predict the outcome with 3 percent accuracy. Harris relayed these numbers to his accomplice, who used an algorithm they had worked out to put possible permutations of the numbers on 10 different keno slips, raising chances of selecting the correct number to 30 percent. Unfortunately for Harris and his accomplice, they hit the top jackpot the very first time he played, which had never been done before. The resulting attention caused the authorities to become suspicious, and eventually they arrested Harris and his accomplice.

Pie in the Sky Another team of unnamed players used similar devices and purportedly won around $1 million from various Las Vegas casinos in the early 1990s. The team, inspired by a book published in 1985 about a roulette prediction computer team called the Eudaemonic Pie, started their reverse-engineering efforts by copying object code (compiled computer code) from patents for various slot machines. However, the team eventually found it was easier to just buy a used machine to reverse-engineer instead. The team created devices using essentially the same principles Weeks used for his device. Their first device was a computer program that ran on a PC. To use it in the field, one player would phone in the initial data and synchronize a precise Casio timer which would later alert him when to press the button on the machine. This method of communicating information by telephone was a little clumsy, but it provided the team with a degree of protection they were probably not even aware of. Though the first system worked, the team found it cumbersome and FEBRUARY 2017 www.ggbmagazine.com

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decided to improve it. Once again, inspired by the Eudaemonic Pie, they decided to create a wearable version of their computer. Their new computer communicated with them using vibrators they pulled out of old pagers, but otherwise functioned very much like Weeks’ device. To avoid detection, the team adjusted the device to avoid the biggest jackpots and instead win “a series of smaller, less suspicious amounts.” The new devices worked well and the team reported that they used them successfully for three years before they decided they had won enough money and it was time to stop pushing their luck. As a result, this team was never arrested. In the 2005 book The Art of Intrusion by Kevin Mitnick and William Simon, the story of this team is chronicled in Chapter 1: “Hacking the Casinos for a Million Bucks.” This chapter is a must-read for all game protection professionals, and gives great insight into RNG timing. For me, the key takeaway from the book that sums up the scam is: buy a secondhand machine with outdated technology, reverse-engineer it and crack the RNG cycle. The book also offers interesting insight into how the team was able to achieve success: “Two of us had spent some time as musicians. If you’re a musician and you have a reasonable sense of rhythm, you can hit a button within plus or minus five milliseconds.”

Russia to cheat specific slot machines from certain manufacturers before he was then sent to perform jobs in casinos in Europe and Macau. The Singapore sting revealed how he and other syndicate members used devices to record the play patterns of specific slot machines. They would then upload the information to a computer for analysis and decoding. The decoded data was distributed to players who would return to the slot machine with devices that would alert the player of the next large payout. For industry insiders, the stories of teams popping up around the world using devices and winning jackpots have been out there for a few years now. In July 2014, a great reference guide was circulated to members of a casino surveillance network that brought the activity of the syndicates to light. In December 2014, the FBI arrested four Russians for cheating slot machines in the U.S. Their investigation revealed they had used sophisticated technology to beat 10 casinos in Missouri, California and Illinois. In February 2015, I wrote an article for Global Gaming Business magazine called “Slot Machines Under Attack,” and followed it up the next month by making it a focal point of the 2015 World Game Protection Conference. Despite the attention placed on these scoundrels by surveillance intelligence networks, industry publications and conferences, casino operators around the world are still falling victim to the these high-tech cheats. Even after the Singapore arrests, intelligence shared among casino insiders confirms the cheats continue to be active around the world. The most recent attack took place in South America in December 2016.

In theory, the fix is simple. It starts with improving the security and quality of the RNG. The good news is that in September 2016, Gaming Laboratories International (GLI), one of the major gaming machine testing labs, upgraded its RNG standards.

It’s Going On Right Now In May 2016, six people were arrested in Singapore for cheating slot machines in the country’s two casinos. The group was part of a highly organized global syndicate that used sophisticated technology to play and cheat slot machines. One of the culprits was sentenced to 22 months in jail. He joined the syndicate in 2012 and was trained in

In May 2016, six people were arrested in Singapore for cheating slot machines in the country’s two casinos. The group was part of a highly organized global syndicate that used sophisticated technology to play and cheat slot machines.

Global Gaming Business FEBRUARY 2017

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Fixing The Problem In theory, the fix is simple. It starts with improving the security and quality of the RNG. The good news is that in September 2016, Gaming Laboratories International (GLI), one of the major gaming machine testing labs, upgraded its RNG standards. Among other things, the new standards suggest using a “cryptographic RNG.” A cryptographic RNG is one that cannot be feasibly compromised by a skilled attacker with knowledge of the source code. The bad news is that the standard is an optional requirement at the discretion of regulatory bodies. My hope is that moving forward, all regulatory bodies will adopt the standard. However, questions remain on what to do with existing and older machines. The reality is that the Russians have exposed flaws in slot machine technology that have been known for a while. The difference is that unlike Leo, Ron and a small group of computer geeks from the ’90s, the Russians run a highly organized global syndicate that has been cheating casinos for

millions. Casino insiders estimate the syndicate has over 40 team members worldwide. This may be the largest casino scam of all time. This is a problem that won’t go away unless there is decisive action taken by all interested stakeholders: manufacturers, regulators and casino operators. The attack on random number generators highlights the need for managers of gambling operations to develop a better understanding of computer-based gaming equipment. This important subject will be featured in an exclusive three-hour symposium at the World Game Protection Conference in Las Vegas February 21-23. The focus will be on raising awareness of the problem and understanding how to detect RNG attacks.

Willy Allison is a game protection consultant/trainer and founder of the annual World Game Protection Conference. Allison’s website is willyallison.com. The conference website is worldgameprotection.com.

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Security& Surveillance

Safe at Any Speed A security check for parking and casinos By Alan W. Zajic, CPP, CSP, ICPS

s the parking plans in casinos along the Strip in Las Vegas change to paid services, the associated overall risks in parking environments should be re-evaluated. The move to paid parking will migrate into other markets as the casinos in Las Vegas work through the operational challenges of this new concept to customers and the changes in team member parking processes and inconveniences. The risks to gaming enterprises as it relates to parking lot incidents and crimes is high for both surface parking lots and parking garages, regardless if it is pay parking or not. Past studies by Liability Consultants, Inc. indicate that the highest risk for security litigation is in parking areas and hotel environments, as opposed to the casino complex itself. This is especially true in free self-parking environments where people can come and go at will. The conversions to pay parking have not typically included strict ingress/egress controls or secured perimeters. Only time will tell if the conversion to paid parking and what security measures are implemented will be enough to reduce the risk of crimes and incidents occurring in parking areas. The immediate effect demonstrates a reduced crime rate along the Strip. Although larger facilities are using third-party parking vendors, it does not absolve them from claims and liability based on the non-delegable legal duty of the land owner. The majority of casinos in the U.S. are still free parking with a valet component. Managing player incentive parking access, cash collection locations and basic enforcement creates unique challenges for a full paid parking casino property. Parking security should be designed in layers and combine multiple proven crime deterrent measures in a reasonable, practical and cost-effec-

tive manner. Payroll costs, energy, maintenance and security should overlap to present the highest possible security footprint to both the legitimate user and the bad guys.

Crimes in Parking Areas Generally, crimes occur in parking areas regardless of whether the lot is a paid or free self-parking facility. Because parking areas are difficult to harden or fence in to prohibit unauthorized access, crimes will occur as a result of spillover from the casino or customers who wander through the parking areas becoming a victim to a criminal event. Urban paid parking lots historically experience criminal incidents as frequently as free parking facilities across the U.S., absent strict ingress/egress controls including security personnel. Criminals are very good at adapting to the environment

Past studies by Liability Consultants, Inc. indicate that the highest risk for security litigation is in parking areas and hotel environments, as opposed to the casino complex itself. 36

Global Gaming Business FEBRUARY 2017

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valet area is well aware of the risk and exposure to these large-value property crimes. Casino properties typically have a high self-insured retention, and are obligated to pay claims and associated costs directly out of the profits. Just because a casino is using a third-party parking vendor does not mean that their employees are not capable of committing crimes or exposing the property to liability. The common crimes that occur in parking areas range from the armed robbery of a customer or parking booth attendant to the burglary and break-in of a vehicle while either in or out of the casinoâ&#x20AC;&#x2122;s control and custody. Homicides do occur frequently in parking areas across the U.S. The property should obtain statistical data internally on parking-area incidents and from the local police on an annual basis to measure effectiveness of security measures and to monitor crime trends. You can be assured that in the event of a lawsuit, the plaintiff will obtain these records in an attempt to prove an ongoing risk to customers.

Uniformed Security Patrol

and finding a weakness to exploit over time. If a casino successfully is able to maintain a secure perimeter and prohibit unauthorized access to that parking facility, they should be successful in reducing the risks of violent crime. In the FBIâ&#x20AC;&#x2122;s Uniform Crime Reporting (UCR) Program, violent crime is composed of four offenses: murder and non-negligent manslaughter, forcible rape, robbery and aggravated assault. Violent crimes are defined in the UCR Program as those offenses which involve force or threat of force. These crimes present the highest risk to a parking facility. If a customer who won money in the casino is able to wander into the parking area, be followed and robbed by a third party and be injured or killed, the liability exposure is still the same. Property crimes such as theft, burglary and grand theft auto occur in both secured and unsecured environments daily across the U.S. Depending on the jurisdiction, legal responsibility is typically limited based on decadesold innkeeper statutes and other laws, and very well may change when converting to a paid parking process where the expectation of the customer increases when they are paying for the pleasure of parking and they are victimized during that business arrangement. Recent experience has resulted in increased customer dissatisfaction when they have paid for parking and their vehicle is damaged or burglarized. Local laws and case law should also be evaluated. Any casino executive who has had to pay a claim for the theft of a vehicle from the propertyâ&#x20AC;&#x2122;s

As many casinos along the Strip quickly realized, payroll costs increase for security to monitor and assure paid parking is being managed and the desired revenue is collected. They also realized a decrease in incidents as a result of the mere increase in security presence, even if the security officer was just posted at the drive entrance to a parking area. Careful evaluation of specific functions required to manage a paid parking facility should be evaluated to determine if it should be a security function or if it should fall under facilities. Cashiers, ticket management and other positional functions that are not directly related to a security purpose should not be assigned to security if they cannot perform traditional security functions or respond to an incident. As in any public environment, the security of a parking area should be reasonable and appropriate for the environment. The most common security deterrent is still the presence of a uniformed, identifiable security officer

FEBRUARY 2017 www.ggbmagazine.com

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Video camera systems were originally designed as a measure to reduce the number of uniformed security officers in an environment. They have evolved, largely because of casinos, into a necessary and valuable tool to monitor, to record and to have some deterrent value. present at sufficient intervals. Each property should evaluate what they believe is a reasonable presence when it comes to the patrol of parking areas. Many security experts opine that the presence of a uniformed security officer should occur at every part of a parking lot at least every 6090 minutes. If there is a history of violent crimes, the frequency should increase accordingly. The presence of a clearly visible security vehicle, including bicycles, with flashing lights is also quite common and effective in demonstrating reasonable security. The new LED lights designed for vehicles and bicycles flashing throughout the parking areas is not only a visible deterrent; it promotes a safer environment to the customers or legitimate users of the facility. Most major gaming markets utilize the bright yellow uniforms with the word security boldly printed across the front and back. This is a proven uniform that not only identifies the officer at great distances, but makes it obvious to responding police who is security. The combination of flashing lights, bright yellow uniforms and moving security personnel are at least reasonable, and fare well in a courtroom in the event of a civil or criminal trial. They also are easily identifiable through cameras being monitored by security or surveillance personnel. Proof of patrol by security personnel or by camera should be logged to demonstrate presence and compliance to self-imposed standards. The desirable parking environment should present a security footprint to the observer that includes multiple security measures with a primary focus on patrol. Anytime anyone looks at the parking areas, they should be able to observe a security officer, vehicle, camera dome or other device which provides reasonable security to users and demonstrates an effective security footprint regardless of the time of day or night.

All-Employee Security Participation Regardless of the employee classification or duties, there should be a written protocol located within that job description that provides for the concept that security is every employeeâ&#x20AC;&#x2122;s job and responsibility. A cleaning employee can provide a presence and ability to report an observation of unusual or suspicious activity, which provides an additional set of eyes and ears. This includes parking employees, shuttle drivers, maintenance workers and any team member who has duties in the parking areas. When combined and managed, the overall employee cooperation and involvement in reporting incidents and observations to security can be very powerful in deterring crime, creating a safer environment and proving beneficial in a civil trial when being sued. Although this practice gets lip service, it does not always make it to the written protocols to prove in the event of a claim.

Electronic Patrol Systems There are numerous electronic patrol systems that can be installed throughout a parking facility that assist in assurance of adequate security patrol and presence. These systems are simplistic in that a button or bar code is read 38

Global Gaming Business FEBRUARY 2017

through a reader or proximity device and records the security presence at a location, by a particular security officer at a particular time and date. This is a management tool that can be very useful to monitor self-imposed security patrol standards in place. The device is either downloaded or transmits each predesigned location into the dispatching software or onto a PC with a record of security presence throughout a facility. When considering these systems, it should be emphasized that once installed, it should be mandated that it be used as dictated by the policies and procedures, and that activity of the security officer be reviewed, monitored and enforced through appropriate discipline if warranted. Adding this component also creates an additional layer of security oversight to the parking environment, and is simplistic proof of security presence in the event of a robbery or assault.

Closed-Circuit Television (CCTV) Cameras are found in almost every business environment. Casinos have typically dominated the standard for cameras based on the casino requirements and regulatory requirements inside the casino. What the regulations rarely address is the exterior parking areas, which, again, have a higher risk for violent crime and as a result become issues during civil lawsuits. Video camera systems were originally designed as a measure to reduce the number of uniformed security officers in an environment. They have evolved, largely because of casinos, into a necessary and valuable tool to monitor, to record and to have some deterrent value. As each property evolves, the function of who monitors parking areas also makes major changes at the property level depending on property philosophy, general manager philosophy and operational conditions. Regardless of which department is charged with monitoring parking areas, there should be some form of audit or assurance that the parking lots are being watched, cars are monitored, persons in the environment are monitored and the equipment is being used for what it was designed for. Logs are typically the best practice for assurance of monitoring in casino parking environments. In some larger facilities, specific security control dispatchers are assigned just parking areas and have a constant direct communication via radio, which proves very effective in reducing and keeping criminal incidents to a minimum. Each property should again determine how often a camera patrol (PTZ Patrol) of a parking area should be accomplished during work shifts. Regardless of who is charged with camera observation, they should be in communication with security dispatch or command and control on a regular basis to communicate suspicious observations and monitor uniformed response. Installation of cameras in parking areas is quite diverse from property to property. Installing cameras in a parking area becomes problematic and expensive when placing weather-proof cameras on light poles or inside of a parking structure with limited placement locations. Every new property or properties replacing surface lot asphalt should consider running conduit to each pole in addition to electrical for future CCTV use. When planning parking structures, additional conduit should also be planned for future CCTV use. Pan-tilt-and-zoom (PTZ) cameras are highly useful in all outdoor

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be at least 1.0 footcandles and identification should be at least 2.0 footcandles. Most jurisdictions require 1.0 footcandles. A parking lot that is too bright may actually violate local ordinances if the casino is adjacent to residential neighborhoods. Whatever the lighting system deployed, it should be useful, provide adequate illumination of customers and employees and provide sufficient illumination for local police Lighting is a principle of basic crime patrolling the perimeters. New casino conprevention, and is a staple for struction is installing LED lighting in parkarchitects when designing parking ing areas similar to that found in a new and areas. With the improvements in LED used car lot to display the optimum visibility. The best example of this is when you fly on a lighting over the last decade, a plane at night and look down you see certain casino property can retrofit or install lots brightly illuminated as compared to other locations. brighter, longer-lasting and more In parking structures, the color of the cecost-effective lighting over a parking ment walls and ceilings becomes valuable in lot or inside of a parking structure. reflective quality, which enhances the existing lighting deployed. The whiter the interior, Emergency Parking Kiosks the greater the reflective quality. This does inWhat started out in hospital and retail encrease the temptation for the graffiti artist, yet will prove beneficial overall. vironments is slowly making its way into newer casino facilities. The kiosk Also important is the quick replacement of burned-out light devices with an intercom, flashing blue light and signs is an additional measure through a contract lighting company or internal reporting. There have been for security in parking lots that is relatively inexpensive in application deseveral high-profile lawsuits that involved a light that was out for extended pependent on wiring restrictions and equipment. The strategic placement of riods of time before a major criminal incident occurred. these devices has proven effective in litigation as an additional device provided to customers or employees in the layered security measure process. Internal and External Review What should be considered is where the kiosk communications are A meeting and discussion between all the stakeholders at an interval of every wired to and who will answer the intercom or telephone connections. The three to six months will also prove beneficial in planning security strategy and logical termination point is the security dispatch or command and control reducing the risks of crime and incidents. Using the historical data, combined location, which can easily dispatch security personnel to the location of with review of all of the security layers in the environment, will help provide the flashing blue light on the activated kiosk. Certain digital CCTV sysbeyond what is reasonable legally and, more importantly, present the best postems can also be programmed to swing a camera to view the location sible security footprint for the property. through an automated alarm to document the activity.

areas, and give flexibility for monitoring. Camera resting positions can be programmed and implemented to always return the camera to a desired view when not being actively moved. The advances in license plate recognition (LPR) cameras and software and strategic placement has also proven to catch criminals through this technology. This is also being used in some markets to identify self-excluded patrons or those that have been banned from the property if their vehicle information is known. Additional consideration of video retention should be made regarding parking lot incidents during the post investigation. Proof of security presence on video in the parking areas in the hours leading up to the criminal event may just be enough for a dismissal of a cause of action or lawsuit.

Lighting

Have a Plan

With the improvements in LED lighting over the last decade, a casino property can retrofit or install brighter, longer-lasting and more cost-effective lighting over a parking lot or inside of a parking structure. Care should be given when combining lighting with CCTV cameras to maximize visibility and installed equipment. Lighting is a principle of basic crime prevention, and is a staple for architects when designing parking areas. The older the property, the more difficult the conversion to LED lighting based on existing power and fixtures. The local power company will typically supply a consumer consultant to assist in these conversions. Local ordinances and building codes will provide minimum standards for lighting installation, and brighter illumination is typically above local codes. A lighting consultant should be used when planning and designing a parking lot or garage lighting plan. In simplistic terms and from a security perspective, footcandles are used for planning. Lighting for detection of persons or activity should be at least 0.5 footcandles, recognition should

Designate someone to come up with a written plan that is easy to comply with and that assures that all of your designed security measures are in place and being monitored on a regular basis. It is not enough to just do business as usual when incidents are occurring at higher frequencies or become chronic in the parking lots. This article can be used as an outline for the security parking lot plan. In conclusion, can you evaluate your property parking security plan and be comfortable that if you were called to testify about it, feel able to demonstrate your property did what was reasonable, within the common industry practices and provide that reasonably safe environment? Do you feel comfortable that any member of your own family can park at your casino without an elevated risk of a crime or incident occurring?

Global Gaming Business FEBRUARY 2017

Alan W. Zajic is an independent security consultant specializing in gaming and nightclub environments throughout North America. Contact him via casinosecurityexpert.com.

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TABLE GAMES

Shape Shifting The new blackjack games demonstrate that nothing ever stays the same

n the nightcap of a doubleheader in July 1946, Boston Red Sox outfielder Ted Williams—aka The Kid, aka the Splendid Splinter, aka the Greatest Hitter Who Ever Lived—dug his spikes into the batter’s box at Fenway Park and saw something between third base and second base that must have freaked him out. He saw nothing. No shortstop. No third baseman. No, well, anybody. Williams, it bears mentioning, was in the midst of a tear that could only be described as, well, Williamsian. He had already doubled in his first at-bat; this after belting out four hits and driving in eight runs in the opener. Now Williams, by preference, was an inveterate pull hitter. He generated ungodly amounts of power and torque from his Icabod Crane frame by getting out in front of the ball and yanking it to the right side of the field. So when Williams strode to the plate again, Cleveland Indians manager Lou Boudreau decided it was time to pull the plug on all this pulling. They say necessity is the mother of invention, but tell Maury Povich to get the DNA test ready, because desperation may be its Baby Daddy. Boudreau flushed 50 years of positioning precedent down the clubhouse toilet and stationed six of his defenders to Williams’ pull side. The only Indian on the left side of the field was, un-ironically enough, the left fielder. The Boudreau Shift, as it was immediately and eponymously dubbed, was so visually outrageous that even a blind man—or if you prefer, a baseball umpire—could have seen it. But what about the Blackjack Shift? Well, that takes more of a learned eye to detect. But it’s just as real, and it’s just as pronounced. As most people know, the history of proprietary table games is largely a history of poker games: Caribbean Stud, Fortune Pai Gow Poker, Let it Ride, Three Card Poker, Casino Hold’em Poker, Casino War (aka one-card poker), Four Card Poker, Crazy 4 Poker, Flop Poker, Texas Hold’em Bonus, Ultimate Texas Hold’em, Missis-

By Roger Snow

sippi Stud, and High Card Flush. The list goes on and on, or at least it would if this column wasn’t subject to a strict word count. And there’s still plenty of new poker titles coming out. You’ve got DJ Wild and Wild, Criss Cross and Double Draw, Match ‘em Hi-Lo and 7-Up Pai Gow. So, the time will not come for poker to surrender its preeminence anytime soon. But those times, however, are a’changing. And a’changing a’quickly. More and more, the axis of proprietary table games is tilting away from poker and towards blackjack. “Players today love blackjack with all the bells and whistles,” a casino executive on the Las Vegas Strip told me recently. “They love these new games with different rules or progressive bets. The blackjack game we all grew up on is going away, and it’s because the market wants something different. Something new. Something exciting.” He’s right, you know. That old-school blackjack game that pays three-to-one on naturals and has the dealer stand on all 17s is harder to find nowadays in a casino than a keno lounge. Or a slot machine that accepts coins. Or a clock. This movement is already afoot. Actually, it’s afoot about a mile. Just look at the fastest-growing titles in the industry right now: 6-to-5 Blackjack: Lots of industry experts chuckled when casino executive Bill Zimmer introduced this to the Las Vegas Strip 10 years ago. But it’s the casinos themselves who are having the last laugh, as 6-to-5 (and its massive house edge over 3-to-2) has migrated from Las Vegas to much of the blackjack-playing world. Blazing 7s Blackjack Progressive: In the past 18 months, this has become the most successful blackjack progressive in history. Blazing 7s just cracked the 500-install mark and will soon go live on a wide-area network in Delaware. Super 4 Blackjack Progressive: Super 4 ushered in this new era of blackjack progressives with its 100-unit placement at Mohegan Sun in Connecticut two years ago. Super 4 and its sister prod-

uct, Super Match, are played in markets throughout North America. You’re also seeing a surge of electronic blackjack bonuses hitting the market, including Bonus Spin and Count’s Kustoms. Dealer Envy Bonus: Occam’s Razor, as known to anyone that ever took a philosophy course in college—or who did a Google search, like, five seconds ago—says the simplest explanation is usually the correct one. Well, a corollary to that would be the simplest solution is usually the optimal one. And that’s where Dealer Envy comes in. These side bets automatically toke the dealer when players get premium hands, turning them from disinterested game administrators into commissioned salespeople for the house. Buster Blackjack: Since the dawn of humanity—OK, since the early 1990s—most, if not all, blackjack side bets were based on the player’s first two cards and perhaps the dealer’s up card. Super 7s, Royal Match, Perfect Pairs, Lucky Ladies, 21+3, and so on and so forth. But Buster? He don’t play that game. This side bet wins if the dealer busts; the more cards he took to bust, the more they win. Buster Blackjack has been around for many years, but it more than doubled its install base in 2016. The Geoff Hall Collection: Geoff Hall may not be the greatest blackjack visionary in history, but he’s definitely, as the old joke goes, in the group photo. Just look at his (abridged) list of accomplishments: Blackjack Switch, Free Bet Blackjack, Burn 20 Blackjack, Zappit Blackjack, Deal & Reveal Blackjack, and Zombie Blackjack. How good and how prolific is Geoff? Put it this way: If you’re in a casino and you come across a blackjack derivative not named Spanish 21, it’s likely to be one of his. Roger Snow is a senior vice president with Scientific Games. 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.

FEBRUARY 2017 www.ggbmagazine.com

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How will gambling on your device or the casino’s device impact the true gaming resort experience? By Steve Ruddock

A Casino In EVERY POCKET

n 1971, the Who’s Pete Townshend—not Roger Daltrey—sang about “Going Mobile.” Some 46 years, later the casino industry appears to finally be ready to join him. The entire millennial generation is now over the age of 21, and casinos are trying to figure out how they can reach these potential customers that have so far vexed their marketing departments. The answer is likely in your pocket right now. These are customers whose formative years revolved around a small mobile device that performs virtually every service imaginable, from communication to information to entertainment. Millennials are reliant on mobile phones (aren’t we all at this point?) and casinos are hoping these mobile devices will be a conduit between millennials and their properties. But it wasn’t always this way…

Casinos Slow To Accept Online Gaming When online gambling sites first sprang into being in the mid 1990s, they were initially viewed by land-based casino operators as a direct competitor. Despite the casino industry’s best efforts to torpedo the “cannibalistic” online gambling industry, online gambling sites proliferated, as did their lineup of games and products. Try as they might, the casino industry couldn’t beat back online gambling. Ultimately, casinos came to the realization that the toothpaste wasn’t going back in the tube. After two decades of fearing the online gambling industry, the land-based casino industry eventually accepted the existence of the online gaming industry. As time wore on, and the cannibalism fears were laid to rest, casinos began to view online gambling as beneficial to their 42

Global Gaming Business FEBRUARY 2017

own interests and embraced online gaming. However, a few stragglers are still trying to put the toothpaste back in the tube. As they attempt to reach out to millennials, casinos are now turning to the industry they once attempted to censure and tear down. Land-based casinos are now integrating different forms of online gaming into their suite of offerings, and as people become more reliant on the supercomputers we all carry in our pockets, mobile gaming has become a top priority for casinos. In 2017, desktop is good, but mobile is better.

Mobile Gaming Overtakes Desktop The importance of developing mobile gaming products and platforms cannot be overstated. According to eMarketer’s U.S. Digital Users: Q1 2015 Complete Forecast, 106 million play on desktop or laptops, whereas 134 million people played mobile games in the United States over the course of 2015. According to eMarketer’s analysis, the number of mobile gaming users in the United States is expected to increase to 185 million by 2019. Less than a decade after it became a viable product (the Apple iPhone store launched in 2008), mobile has supplanted desktops and laptops as the No. 1 choice for online gamers. In the past few years, the percentage of online gaming users logging in from a mobile device has gone from a plurality to a majority, and by all accounts, the percentage of online gaming users choosing mobile over desktop will continue to grow for the foreseeable future.

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The Many Hats of Mobile Gaming Forward-thinking casinos have been integrating mobile gaming products for several years, and these early converts quickly discovered mobile gaming isn’t a singular product with a singular use. What they found was mobile can be unleashed in a variety of ways, each reaping its own benefits for the casino. Newcomers to mobile are often surprised at the scope of products available and their many uses. A casino can use mobile as an extension of existing product already offered in the casino, such as placing wagers through a casino’s sports betting app. In this sense, mobile allows the casino to offer their customers more ways, and more convenient ways to wager on- or off-property. Virtually every Las Vegas mega-casino, including the anti-online gambling Las Vegas Sands Corp. casinos, now offers a downloadable online sports betting app that allows customers to place bets—provided they are within Nevada’s borders—from their phones. A casino can also use mobile as a separate revenue stream, such as a realmoney online gambling platform, but like sports betting—which is limited to the state of Nevada—the opportunities for real-money online gambling are few and far between at the moment. In the United States, only Nevada, New Jersey and Delaware have legalized online gaming. Cut off from sports betting and real-money online gambling, most casinos have found another way to use mobile to their advantage.

Acquisition, Marketing and Retention Casinos across the United States, big and small, tribal and commercial, have launched branded social gaming sites. Most have also taken the next logical step, as they’re increasingly becoming dual-platform, available as a desktop application or on mobile devices. Social casinos allow existing customers to log on and continue playing their favorite games in a free-to-play online environment, often receiving land-based rewards for their online play. This allows casinos to gain greater insight into the playing habits of their customers and keep them engaged after they leave the property. Social casinos have also proven to be an effective way to reach new customers, allowing timid players a chance to learn the mechanics of different games from the privacy of their homes before heading to a casino, with real money in their pockets. A social casino is as important as a casino’s rewards program. It’s the foundation of a casino’s online offerings, and in 2017, that means offering a social casino available on both desktop and mobile platforms.

Two Casinos, One Result Penn National Gaming, a commercial casino corporation that runs 20 landbased casinos, was a late arrival to the social casino scene, first launching a social casino site at the tail end of 2015. On the other hand, Foxwoods was an earlier adopter of social gaming—the

tribal casino located in Connecticut launched a social site in May 2014. Despite their different approaches, both casinos have been very pleased with the results of their social casinos. Penn National was so impressed with the early returns they purchased social casino company Rocket Games for $60 million in August 2016, with an eye towards launching a mobile platform. Penn National Gaming President and CEO Timothy J. Wilmott said at the time that the early performance of its social casino led to the acquisition of Rocket Games. “Launched last year, Penn National’s Hollywoodcasino.com and Hollywoodslots.com social casino offerings have been very well-received by players, are profitable and serve as effective customer acquisition tools for our operations,” Wilmott said in a press release. In addition to social’s worth as an acquisition tool, casinos like Penn National and Foxwoods are discovering brick-and-mortar customers like to play social casino games online. Internal research conducted by IGT’s DoubleDown Interactive, one of the largest social casino providers in the world, supports Foxwoods’ and Penn National’s findings. According to data from IGT, 88 percent of DoubleDown’s social casino users visit a land-based casino at least twice a year. “Based on our internal analysis, a significant segment of Penn National’s database customers actively participate in social and online gaming, and we believe there are meaningful operating and revenue synergies between Penn National’s operations, our Hollywoodcasino.com and Hollywoodslots.com social casino offerings and Rocket’s operations that will drive near- and long-term growth for our shareholders,” Wilmott said. Foxwoods Resort Casino has come to the same conclusions about its social casino, FoxwoodsOnline, which is available as a mobile app or through a traditional desktop platform. According to Seth Young, director of online gambling at Foxwoods, “We are seeing an increased level of engagement at Foxwoods Resort Casino from guests that are also enjoying FoxwoodsOnline, and this is data that we continue to analyze as our online gaming program matures.” Young goes on to explain how Foxwoods incorporates the free-to-play FoxwoodsOnline games with its land-based rewards program.

Social casinos have also proven to be an effective way to reach new customers, allowing timid players a chance to learn the mechanics of different games from the privacy of their homes before heading to a casino, with real money in their pockets. FEBRUARY 2017 www.ggbmagazine.com

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“In addition to providing a fun way for our guests to enjoy their favorite Foxwoods games when they are not on the property, FoxwoodsOnline players may earn real Foxwoods rewards, including bingo vouchers, gas cards, free bets and more, through the FoxwoodsOnline loyalty program,” Young says. This integration leads to three favorable outcomes for the casino: Online players must be enrolled in Foxwoods rewards program to receive rewards; Foxwoods is able to track their player patterns and personalize offers and promotions; and, Players can earn rewards online, but these rewards must be redeemed at Foxwoods. Penn National is also planning on linking its land-based rewards program with its social and mobile casinos. “After our customers visit any of our 20 land-based casinos, we want them to have the option of continuing the fun of playing our exciting playfor-fun social slot games from the comfort of their own homes,” Chris Sheffield, senior vice president and managing director of iGaming at Penn National, said in a press release announcing the acquisition of Rocket Games. “In addition, with Hollywood Classic Slots, we have plans to incorporate our loyalty program, Marquee Rewards, so customers can earn rewards to use at their favorite casino.” Bottom line: There is significant crossover between social/mobile casino users and brick-and-mortar patrons, and multiple ways for land-based casinos to increase visitation through social gaming websites, which are rapidly shifting towards mobile platforms.

Tip of The Iceberg A social casino may be the bedrock of a casino’s online offerings, but in 2017, with mobile technology advancing at an incredible clip—parts of this article will probably be outdated by the time it goes to print—casinos are only limited by their imagination. As stated by Young, whose background is in the daily fantasy sports industry, “There are many exciting ways that FoxwoodsOnline can be integrated with the Foxwoods Resort Casino experience, and we are just beginning to scratch the surface of its potential. “We are actively working on new and innovative ways to grow our online gaming program both on and off property, and view the opportunities as significant.” And when it comes to mobile gaming options, casinos have plenty of cutting-edge products. New fast-paced online poker products are being designed specifically with mobile users in mind. There’s PokerStars’ Zoom Poker tables, where players are instantly moved to a new seat the moment they fold their hand. PokerStars and several other online poker providers also offer lottery-style Spin & Go tournaments that randomly apply a prize-pool multiplier, which at PokerStars ranges from 2X to 12,000X, the buy-in of the three-person

Global Gaming Business FEBRUARY 2017

PokerStars’ Zoom Poker tables instantly move players to a new seat the moment they fold their hand.

tournaments. Several casinos are also delving into the world of virtual sports. Virtual sports are computer-generated matches or contests that allow viewers to wager on the outcome. Golden Nugget and Resorts in Atlantic City have plans to launch on-property virtual sports this year, and Pala Interactive has added virtual sports to the tribe’s social casino platform, which happens to be available on mobile devices. And expect even more mobile innovation down the road. One company that is sitting at the intersection of two dynamic verticals that have captured the attention of the casino industry, eSports and mobile gaming, is a company called Leet. Leet’s focus is to provide an eSports tournament platform for casinos that was “built from the ground up with casinos in mind,” according to Leet co-founder Kingsley Edwards. But the tournament platform, which has in-game analytics and other features, is only one of Leet’s products. One of the products in Leet’s pipeline is an auto-generated, in-game eSports bingo card. The cards would be made available to attendees (likely through a mobile device) at eSports tournaments. Where it gets innovative is, instead of letters and numbers, Leet’s eSports bingo cards use in-game events—a head shot, knife kill, or bomb diffuse for Counterstrike or a fumble, interception, or rushing touchdown for Madden. The products to attract millennials are out there. Now, it’s time for the casino industry to follow Townshend’s lead and go mobile.

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INTERACTIVE

Virtual Reality, a Looming Game-Changer Forget eSports, social casinos or skill games. Virtual reality and augmented reality could be the future of the gaming industry. By Bruce Merati

ith slot revenues declining by about 20 percent from the glory days, the industry’s reaction has been the addition of skill-based elements to their bonus rounds to attract the millennials. The problem with this approach is that the younger generations are used to highly interactive games, and will not get excited with a typical slot machine on today’s casino floor. Furthermore, as millennials are becoming a larger percentage of the population, the current downtrend most likely will continue. To attract the new generation, the industry has to be more innovative and learn from its past successes. When the computer industry invented EPROM about 40 years ago, gaming manufacturers were quick to take advantage of the new invention. The casino industry’s pursuit for the next stimulus should include virtual reality and augmented reality (VR/AR). Even though they seem futuristic, these technologies have already proved to be viable products, and are becoming mainstream a lot sooner than we think. The question now is when and how quickly they will explode into multibillion-dollar businesses. Estimates are that by year 2020, VR/AR gaming will disrupt mobile gaming, and in the near future will be one of the most dominant forms of gaming. As the hardware and software landscapes for VR/AR keep evolving, it is important to understand the VR/AR capabilities and to know which companies are behind them. Several major tech powerhouses such as Google, Facebook, Samsung, HTC, Sony and Microsoft have entered into VR/AR space, creating proprietary platforms and headsets. Today’s VR/AR headsets come in different prices, with some using iPhones and Galaxy phones as their core components. Currently, there are distinct differences between VR and AR, but indications are that in future they will blend together to be indistinguishable. As of now, the main difference between the two is that VR is an interactive digital

re-creation of a real-life situation, and AR is an overlay of digital images and graphics to a realworld setting or event. Another notable difference is that some AR applications may not need headsets, especially if they use mobile devices. As an example, Pokémon Go, which within the first three months of its launch generated 500 million downloads and $350 million in revenues, is defined as an AR game. However, the game runs on Apple and Google operating systems. Overall, both VR and AR headsets provide 3D high-definition videos and audios with the main difference that VR provides a closed and fully immersive experience, versus AR, which delivers a partly immersive experience allowing a user to see through and around the headset. As of now, VR and AR headsets are cumbersome devices, but in the future they will be less bulky and more stylish. Regardless of the brand, VR headsets are designed to trick human brains into thinking they are teleported to an interactive virtual environment, a sensation that will be the foundation for new and innovative forms of gaming and entertainment. Similar to the EPROM that revolutionized gaming, VR/AR will be the next catalyst for gaming. The arcade and video game manufacturers have already started creating new VR/AR games of skill. Likewise, slot manufacturers will do the same. Skill-based games that have no chance elements will not be viable replacements to slots. At best, they will occupy a small section of a casino’s floor, only attracting a small subset of the market. Moreover, since most millennials have low disposable income and have access to video games at home or in an arcade store, games of skill will not be a major component of a casino’s business. Having said this, casinos have the opportunity to become venues for eSport tournaments, and if legally permissible, they could facilitate wagers on eSports by offering pre-match and in-game odds similar to those offered on sports such as football. The next generation of casino games most

probably will be a variation or a blend of: 1) popular social games, 2) slot games that require player decisions such as a video poker game, and, 3) eSports such as a first-person shooter game. To avoid cannibalizing revenues from the current players and attract the millennials, the next generation of casino games must have a delicate balance between chance and skill. Also, similar to 3D movies that are available in both 3D and 2D versions, the next generation of games may be offered in both 3D and 2D formats. All the major elements are currently in place for offering commercially viable VR and AR games. For example, operators may produce virtual casinos that closely resemble their properties and offer VR users to play the same electronic and table games offered in their land-based casinos. Alternatively, operators may offer an AR version of existing live-dealer online casinos and teleport players to their properties to remotely play at their baccarat and roulette tables along with those who are physically present at the property. These types of solutions will appeal to U.S. operators who have invested heavily in their properties and are looking to leverage their brands as virtual casinos, as well as those looking to generate additional revenues from remote players teleported to their tables within their properties. Another potential AR application is sports wagering that has enhanced features, such as display of odds as digital layers on headsets that receive broadcast of a sporting event in 3D, or alternatively, a more immersive version, where headset users are teleported to a live match. It is now time for casinos to recognize making minor enhancements to the current slot machines will no longer be effective, and their quest for generating new revenues and gaining the business of the millennials should include new types of content delivery technologies such as VR/AR. Bruce Merati is the founder of Uplay1, a gaming IP company, and inventor of Hybrid RNG and Hybrid Blackjack.

FEBRUARY 2017 www.ggbmagazine.com

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Socially Acceptable Or Dangerous Challenge? Tribes taking slow, cautious steps to online gambling and social casinos By Dave Palermo Meanwhile, in Indian Country, a handful of tribes in Connecticut, Oklaoughly a decade after enactment of a 1988 federal law recognizing homa, California and elsewhere are now offering free play on their casino webthe right of American Indians to operate casinos on tribal trust sites and launching social gaming platforms, most in partnership with online lands, indigenous leaders grew alarmed at congressional efforts to software companies. legalize, tax and regulate internet gambling. They are tapping into what SuperData Research says is a $1.7 billion Tribes viewed wagering in cyberspace as a threat to their landNorth American social gambling industry. The worldwide market may reach based casinos, the first viable funding source for indigenous governments since $4.4 billion in the coming year. European settlement of North America. of as a segue to real-money online gambling, tribes are Once thought Unlike commercial casinos filling the pockets of shareholders and business grasping the notion that internet platforms selling time on casino games withpartners, the $30 billion tribal government casino industry is intended to supout offering prizes can, indeed, be profitable, without the regulatory and legplement poorly funded health care, education and other social services for islative hurdles. largely impoverished Indian communities. “Originally, the idea was to develop a social gaming website and transpose “The recent drive by members of Congress to legalize internet casino gaminto real-money gaming,” says Ken Perez, former casino regulator and councilbling nationwide represents the greatest threat to Indian gaming in the last 20 man for the Pechanga Band of Luiseño Indians in California. “But social gamyears,” Chairman Danny Tucker of the Sycuan Band of the Kumeyaay Nation ing and social media is not the wave of the future. It’s here. said in assuming leadership in 2010 of the California Nations Indian Gaming “It would be narrow-minded to look at social gaming as a pathway to realAssociation. money gaming,” Perez says. “It’s a huge market unto itself.” Internet gambling “is a direct threat to the economic growth in Indian Tribes are also buying into the concept that online digital marketing to soCountry,” Glen Gobin, vice chairman of the Tulalip Tribes of Washington state, cial gamers—when integrated into a casino loyalty program and customer told a November 2011 hearing by the Senate Committee on Indian Affairs. database—can be more effective in getting people through the door than the “We do not support legislation that legalizes internet gambling,” he said. traditional direct (snail) mail and even email methods. Tribal attitudes toward iGaming are changing, albeit at a slow pace. Indige“The idea, in its purist form, is for free play, social gaming and a tribe’s nous governments have not been nearly as quick in embracing online technolomarketing program for its land-based casino to work together to increase the gies as commercial casino companies and slot machine manufacturers. revenue pie,” says Knute Knudson, IGT vice president of business developPredictions that real-money online gambling would sweep the country have ment and tribal relations. thus far failed to materialize, its growth limited to Nevada, New Jersey and “The more progressive and wealthier Delaware. casino operations are going to work toward that goal.” Different Permutations Social games “fit into the portfolio of a But tribes are finally entering the booming social gaming sector of the legal casino operation,” Knudson says, “even gambling industry, and at least exploring rapidly emerging technologies such as though it’s not truly gaming, even though daily fantasy sports, eSports and skill-based games. there is no prize.” Because they largely operate single, small-market casinos, tribes have not matched the multimillion-dollar investment of commercial operators MGM, Churchill Downs and Caesars Entertainment, which last summer sold its interactive online games unit, Playtika, to a Chinese group for $4.4 billion. As far back as 2010, then-chairman of The nation’s major slot manufacturers such as International Game Techthe California Nations Indian Gaming nology (IGT), Scientific Games and Aristocrat have emerged as leaders in proAssociation Danny Tucker called iGaming viding online social gaming content. the “greatest threat” to Indian gaming

Global Gaming Business FEBRUARY 2017

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Connecticut’s Mohegan Sun offers a legal iGaming site in New Jersey via its operation of Atlantic City’s Resorts Casino Hotel

Southern California’s Pala casino has a social casino site, as well as a legal online gambling site in New Jersey, PalaCasino.com

IGT’s DoubleDown social casino is being used by more than 20 tribes as their social gaming presence

In a related development, the Iipay Nation of Santa Ysabel in California is planning to argue to the 9th Circuit Court of Appeals for permission to offer real-money online bingo. Santa Ysabel believes it has the legal right under the landmark Indian Gaming Regulatory Act (IGRA) of 1988 to offer online Class II games such as bingo and poker outside of state regulations and taxation. Courts thus far have refused to allow this kind of wager. And the Iowa Tribe of Oklahoma says it will soon launch a real-money version of its social gambling platform, PokerTribe.com, targeting foreign and outof-state gamblers.

Tribal Landscape Is Problematic The legal and political landscape for Indian gambling has made it difficult for the approximately 243 casino tribes in the lower 48 states to develop a cohesive approach to the rapidly evolving online gambling industry. “There hasn’t been a lot of strategic thinking about how we can get into it as a group, as an industry,” says Joe Valandra, CEO of Great Luck LLC, partner with Santa Ysabel in an online bingo enterprise. “The news—if there is news—is that tribes continue to wait,” Valandra says, particularly when it comes to stretching the legal and regulatory envelope surrounding real-money gambling. “There hasn’t been any overall direction from a strategic, political or economic standpoint. “Tribes seem to be waiting for something to happen—either for a state like California to act on online poker or, I don’t know what,” Valandra says. “There’s a lot of waiting while the internet gaming world is continuing to grow at phenomenal rates, depending on what segment you’re talking about: sports betting or other kinds of wagering.” Unlike commercial casinos, tribal government operations are subject to myriad federal and state laws and regulations—primarily IGRA, which was drafted to apply to casinos on Indian trust lands. The ability of tribes to accept wagers from outside reservation boundaries remains an unresolved legal issue. Fluctuating congressional policy on iGaming and Department of Justice interpretation of the Interstate Federal Wire Act of 1961 and Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 also leaves a cloud over the future of online social and real-money gaming. The National Indian Gaming Commission (NIGC) oversees the tribal casino industry. While IGRA allows tribes to operate Class II games such as bingo and poker without state oversight, those with Class III casinos equipped with Ne-

vada-style slot machines and table games must enter into tribal-state regulatory agreements, or compacts, with state officials. “Some tribes are into some sort of social gaming, but for many tribes it’s a very complex issue,” says Sheila Morago, executive director of the Oklahoma Indian Gaming Association. “It depends on where you’re located. “It’s going to depend on your compacts. Some are very explicit when it comes to the internet. Some don’t even contemplate it. “Unless iGaming becomes legal nationally, which would mean an even playing field (with commercial casinos), there is just going to be a lot of hits and misses depending on what each state wants to do.” California tribes and card rooms have for a decade been lobbying state legislators to legalize iPoker, an effort that will continue this year. Pressure to enact an iPoker bill also is expected to emerge in Michigan and Florida. “We’re now seeing in Michigan tribal governments having to consider the prospect of online gaming,” says CEO James Ryan of Pala Interactive, an online enterprise of the Pala Band of Mission Indians in California. “We’re also seeing in Florida tribal governments trying to understand how they can get into that marketplace. “It ultimately comes down to state governments embracing this sector.”

Tribal Movement on the Internet is Slow A few tribes have invested in online platforms. The Pala Band of Mission Indians in California operates both PalaCasino.com, a real-money website licensed in New Jersey, and MyPalaCasino, a social gaming free-play site. The Mohegan Tribe of Connecticut, which owns Mohegan Sun Casino and Mohegan Sun Pocono in Pennsylvania and manages Resorts Casino Hotel in Atlantic City, operates real-money MoheganSunCasino.com and social website Play4Fun Network with Scientific Games. Mohegan Tribal Gaming Association (MTGA) President Bobby Soper said the internet operations enable the tribe “to be a leading force within the online gaming space. “Both platforms demonstrate MTGA’s all-encompassing dominance in the gaming industry by building a presence beyond its brick-and-mortar casinos,” Soper says. The Mashantucket Pequots of Connecticut operate the social website FoxwoodsOnline in partnership with Greentube Pro, which also is rolling out a free-play platform for Treasure Island Resort and Casino in Minnesota, owned by the Prairie Island Indian Community. FEBRUARY 2017 www.ggbmagazine.com

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Pechanga Chairman Mark Macarro once said iGaming “is a greater threat than an opportunity”

GAN’s Dana Takrudtong says social gaming is designed to make your customers more brand-loyal

Fantasy Springs Casino, owned by the Cabazon Band of Mission Indians, has partnered with Scientific Games on a free-play social casino using the Play4Fun Network. And the Pechanga Band in November launched BestBetCasino.com, a social gaming mobile app operated in partnership with Ruby Seven Studios of Reno, Nevada. “Pechanga is committed to offering the best digital experience, just like our brick-and-mortar offerings, and this is just the first step in that long-term initiative,” tribal Chairman Mark Macarro said in a press release. The Chickasaw Nation of Oklahoma, operators of 20 casinos throughout the state, last summer inked a deal with London-based software provider GAN to build out a social gaming platform. “By combining traditional casino marketing with a multimillion-dollar digital marketing commitment, we believe the Chickasaw Nation will quickly secure significant market share online in the region already well-served by their landbased gaming enterprise,” GAN CEO Dermot Smurfit says. GAN also has a partnership with the San Manuel Band of Serrano Mission Indians in California. Casino Del Sol, an enterprise of the Pascua Yaqui Tribe of Southern Arizona, and the Campo Band of Mission Indians in California are among more than 20 tribes that offer IGT’s DoubleDown Casino, the world’s largest virtual casino. Meanwhile, the Twenty-Nine Palms Band of Mission Indians in California and the Mille Lacs Band of Ojibwe in Minnesota recently launched eSports websites, the latter linking 11 states.

The Pace May Quicken “Many brick-and-mortar operations just don’t fully appreciate what social can do for them,” Dana Takrudtong, vice president of sales and marketing for GAN, says of the hesitancy some tribal and commercial casino operators have in getting into the social gaming space. “Most tribes are afraid that if they give the consumer a vehicle to play at home, they won’t come to the casino. Without data, social is a hard business to understand, and they’ve been reticent. “The social casino, based on statistics, is a tool to make your customer think of you more, spend more money with you and be more brand-loyal,” she says. “We see social players spending significantly more time in the casino than players who do not play the social games.” “The tribes are a bit behind the curve,” says attorney Tony Cabot, an internet gambling authority and author. “I’m surprised they aren’t using it more, in 48

Global Gaming Business FEBRUARY 2017

terms of maintaining control of their customer base.” “The tribes have definitely not adopted social gaming as much as the commercial segment of the gambling industry,” says Gene Johnson, executive vice president of Victor-Strategies. “But you’ve seen a lot of movement in the last year and a half, two years. Things are accelerating. “I think it’s dawning on tribes that they need to engage the customer in other ways. And waiting for real-money gaming could take forever.” Aviram Alroy, MTGA vice president of interactive games, says the Mohegan Tribe views social gaming platforms as “a companion piece to our overall product,” which includes commercial and tribal casinos, parimutuel racing and real-money online gambling. “It’s a doorway to real-money gaming. That’s definitely a possibility,” Alroy says of social platforms. “But even if you have real-money gaming, some people will also continue to pursue the social aspects and play for free. “The U.K. is a great example. They have real-money gaming there, and it’s a very crowded market. But social gaming is also thriving there, perhaps not as much as in North America.” Roughly 70 of the approximately 480 Indian casinos in 28 states generate about 75 percent of the nation’s $30 billion tribal gambling revenues. About $8 billion is generated from 60 California tribes, a dozen of which are lobbying to legalize online poker. That is the segment of the tribal casino industry that has been greasing the skids to online gambling. “From what I’m seeing, I think the larger and more successful casino tribes understand there’s an opportunity here,” Alroy says. The smaller, marginal and more remote tribes “aren’t interested in it at the moment because they think this is out of reach for them,” Alroy says. “That’s not necessarily the case,” he says. “If they dig one or two rows deeper they can find there is an opportunity for them to engage with their players.” GAN’s Takrudtong says remote tribal operations with as few as 1,200 machines likely have the resources and can benefit from social gaming. The key is developing a strategy prior to making an investment.

Weighing Risks and Rewards Internet social gambling—both the profit and digital marketing components— pose a challenge to both tribal and commercial casino operators, particularly those in rural areas not too unlike tribal reservations. “It’s the same with Northern Nevada casino operators,” Cabot says. “It’s very difficult to change what you’ve always been doing for 20, 25 years. You see that a lot.” The challenge needs to be met, however, because of the changing dynamics tied to mobile gambling and millennial disinterest in slot machines. In an online interview with GAN, Victor Rocha, founder and editor of Pechanga.net news service, expressed frustration at what he called the “overarching complacency” tribes have toward social gaming and other emerging online technologies. “In a certain sense, I think there is almost an emotional attachment to the brick-and-mortar space, because of the success and revenue that has been provided through them,” says Rocha, principal of the newly formed Victor-Strategies. His tribal chairman and cousin expressed a similar sentiment at a 2014 iGaming legislative symposium in Sacramento. “We don’t want to be here,” Pechanga Chairman Macarro told delegates. “We are talking about possibly destabilizing the one and only thing that’s ever really worked for tribal governments. It’s hard to really overemphasize how key that is.” Internet gambling, he said, “is a greater threat than an opportunity.” But with advancing technology and internet wagering, Macarro said, “We can’t afford not to be ready.” “I think you’re going to see social gaming continue to grow, at a significant pace,” Ryan says.

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iGaming Back on Table in Pennsylvania

Baazov Ends Amaya Bid

avid Baazov is walking away from talks on his $4.1 billion bid for Amaya Inc., the company he founded and the owner of PokerStars. Baazov said some shareholders of Amaya were asking too high a price for the company. David Baazov “It became evident that the share price premium demanded by certain shareholders exceeded the price at which my investors and I would be willing to complete a transaction,” Baazov said in a press statement. Baazov’s bid was for C$24 a share, but was dogged by uncertainty over who was backing the bid. Last month, a Dubai-based investor initially named as a backer said a commitment to the deal’s financing was given without the firm’s knowledge or consent. Baazov then said in regulatory filings

that two Hong Kong funds—Head and Shoulders Global Investment Fund SPC and Goldenway Capital SPC—had agreed to increase their support for the bid. The bid had also been criticized by Amaya investor SpringOwl Asset Management and its CEO Jason Ader, who charged the bid lacked transparency. Ader also urged the Amaya board to escape “the undue influence” of Baazov on the company. News of Baazov’s backing off the bid saw Amaya stock fall 5.3 percent initially, lowering the company’s market value to about $2 billion, according to Bloomberg News. Baazov stepped down as CEO of the company earlier this year in the midst of insider trading charges brought against him by Canadian regulators stemming from the company’s purchase of PokerStars. Baazov is Amaya’s second-largest shareholder, with a 17 percent stake, according to data compiled by Bloomberg.

New Jersey Considers Expanding Online Gaming to Racetracks

the show, according to NJ.com. “We just ew Jersey legislators have put a referendum on to have casino gamhit on yet another way ing in other parts of the state, and it lost to expand gambling in the with 80 percent of the vote. Jay, the peostate by proposing on-site onple have spoken.” New Jersey’s Meadowlands line gambling at the state’s In November, New Jersey voters overracetrack racetracks. whelmingly rejected a plan to build new casinos in A new bill introduced in the state Assembly the state outside of Atlantic City. A small portion of would allow racetracks to offer online facilities—in that plan would have dedicated new casino revenue the vein of internet cafes—to customers. to help the state’s struggling horse-racing industry. New Jersey already allows online gambling Proponents of the new bill say racetrack custhrough sites linked or partnered with Atlantic City tomers can already legally access the state’s online casinos. Those sites, however, can be accessed anysites on their phones or devices—as they can anywhere in the state. The new bill would allow those where in the state—and the bill simply allows the online providers to partner with the Monmouth racetracks to set aside online gambling areas. They Park Racetrack in Oceanport and Meadowlands feel that the bill would not require voter approval. Racing & Entertainment in East Rutherford. The Critics, however, say the move is simply trying to tracks would then create online gambling areas. find a way around the defeat of the casino referenThe new plan has already drawn opposition of dum. sorts from Governor Chris Christie. Speaking on Assemblyman Ralph Caputo, a co-sponsor of New York radio, Christie said the new plan wasn’t the bill, told NJ.com that the bill isn’t “circumventlikely to succeed in an exchange with Oceanport, ing the public.” New Jersey Mayor Jay Coffey. “Internet gaming exists,” said Caputo. “We’re “It’s not going to happen, Jay,” Christie said on now finding a location for it.”

ust one week into the 2017 legislative session, online gaming was back for consideration in the Pennsylvania legislature. State Senator Jay Costa introduced a bill last month, picking up from where the state House of Representatives left off last year, passing a bill, but waiting fruitlessly for action in the Senate. Costa’s bill would regulate, legalize and tax online gaming and daily fantasy sports. But Pennsylvania he’s unlikely to get support from DFS participants, because it Senator Jay Costa envisions a licensing fee of $2.5 million and a 25 percent tax rate, far higher than any other state that has legalized DFS. The highest rates—New York (15.5 percent) and Missouri (11.5 percent)—don’t even come close. For online gaming, Costa’s bill envisions a $10 million licensing fee for land-based casinos, and a $5 million fee for vendors wanting to offer games via those casinos. The tax rate would be 25 percent. Land-based casinos are taxed at 54 percent (slot machines) and 16 percent (table games). The bill would also allow the lottery to sell tickets online and permit “tablet gaming” at Pennsylvania airports. It would also reinstate the gaming local-share provision that the state Supreme Court struck down as unconstitutional last year. Costa says the bill would raise $137 million for the state in this fiscal year, more than plugging an existing $100 million budget gap. Meanwhile, the Poker Players Alliance and other pro-iGaming groups are criticizing Pennsylvania state Senator Robert Tomlinson for a letter just made public that he sent to the state Assembly concerning potential internet gaming passage, saying Tomlinson repeated misconceptions about iGaming which may have contributed to the issue being pushed to this year’s legislative session. As state lawmakers convened for a post-election lame-duck session, a bill to legalize online gaming was before both chambers, and many thought the measure—which provided for state regulation of iGaming but left out the details—would pass. Tomlinson’s letter raised long-debunked myths about iGaming that could have convinced Assembly members to delay the issue until 2017. The letter suggested it would be difficult to prevent underage gambling, and that iGaming would cannibalize the land-based industry. In a rebuke to Tomlinson, John Pappas, executive chairman of the Poker Players Alliance, wrote that Tomlinson’s letter ignored 30 hearings and three years of debate on iGaming by Pennsylvania lawmakers.

FEBRUARY 2017 www.ggbmagazine.com

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Par t y Hearty

Konami’s Crystal Cyclone community game gives players their own slot station, and multiple participants can be entered to compete in the same bonus round

Community gaming brings players together with a common goal—winning By Dave Bontempo Konami’s For tune Cup horse-racing game

trike the match—community gaming lights a casino fire. Sparks ignite from varied sources, like multi-player slots encouraging team competition. Or when bonus rounds and screens on mammoth-sized games like Batman Slots let customers race through Gotham City together. It’s a party, a blast, and a casino wild card. Consumers want results that resonate on more than a TITO ticket or new bank balance. They want to feel it, celebrate, unleash high-fives and victory yells. Operators embrace the magic. No numbers crunch, ROI formula or reward-tier analysis can forecast the impact of shared gaming events. Yet, there is an expectation of good social-gaming results, based either on previous years or the flood of new products raising the bar. Players may proclaim “We Are The Champions,” in the midst of excitement, while operators gain a financial and loyalty prize, when gamblers return. They can indeed pitch players to get away to it all.

‘Titan’ic Encore New offerings Crystal Cyclone and Fortune Cup carry Konami Gaming’s community banner this year. The Las Vegas outfit has long enjoyed a multi-station niche in the com50

Global Gaming Business FEBRUARY 2017

munity gaming sector. Its social footprint began in 2013 with the Titan 360, featuring six to eight individual slot station configurations surrounding an enormous, nearly 12-foot-tall central bonusing unit. Players work toward the center progressive, and when it triggers, the gigantic circular ring rotates to face the winning player. A big metal ball spins around the wheel into a random prize slot before a captive audience. Fast-forward to G2E 2016, when Konami introduced the follow-up Crystal Cyclone. This game also gives players their own slot station, and multiple participants can be entered to compete in the same bonus round. Crystal Cyclone’s

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Bonus Spin is a customizable, digital prize wheel that connects to a blackjack table or any other table game, including poker derivatives. It offers players a spin on the wheel for hitting a specific hand.

bonus feature includes a colorfully glowing roulette-style wheel that shoots as many as 60 balls into the ring. Fortune Cup, the horse-racing game, brings the Sport of Kings to the lineup. Its mechanical track allows horse figures to move side-to-side and change direction on the course. Their actions are mirrored through LCD displays with pristine digital demonstration of the game as it occurs. Casinos have the flexibility to connect satellite terminals and displays for an arena participation environment. The products will be released this year, amid high expectations. “Crystal Cyclone and Fortune Cup each exemplify the development and engineering expertise we have available with our parent company (Konami Holdings) in Japan,” says Steve Walther, senior director of marketing and product management for Konami Gaming. “Crystal Cyclone is most similar to Titan 360—comprised of personal video slot stations that interact through a central mechanical bonusing experience. Fortune Cup is a multi-station horse racing concept that uses realistic mechanical detail and powerful digital interaction through LCD software displays. Fortune Cup also carries an innate element of instant social gratification with each win as the horses cross the finish line and top awards tally up.” Walther says community gaming has largely evolved from linked progressives—jackpot bonuses that span multiple machines and allow players to simultaneously contribute and potentially trigger a central tier of metered jackpots. Demand continues to grow, he asserts. Patrons are not only in the game, they are the game. “Whether it’s online, mobile, console or on-site gaming, there is a big consumer demographic that is hungry for games that include smart elements of social interaction,” Walther indicates. “That’s what we’re aiming to cultivate with our next-generation product—spanning multi-station and skill-based machines. We debuted a skill-based game at G2E last fall called Beat Square, similar to Konami’s Dance Dance Revolution. It challenges players to compete in hitting a lighted game pad in a rhythmic series, with a modification that the music pad exists as a hand-tap dashboard. This game has a clear social connection by putting top players in the spotlight and allowing them to compete.” Walther considers community gaming a “hugely promising” product segment.

Bonus Party Las Vegas-based AGS, with roots in the Class II Native American market, continues expanding slot games for the Class III commercial marketplace. The core of its operation, one could say, is power to the people. Prolific games like Colossal Diamonds and Bonus Spin fare well, socially and financially, according to Andrew Burke, the vice president of slot products for AGS.

“Large-format slots—like our Colossal Diamonds game on Big Red (as the super-sized red cabinet is known)—have become a type of community gaming,” Burke says. “Their bench seats draw multiple people into the game—like couples or friends—where they enjoy the game play together. Their size and the excitement they create draw big crowds around them, an attraction itself. Customers have sent us videos of the crowds that form around Big Red. It’s incredible to see the community feeling that’s created.” And now, in the words of the late American actor and casino pitch man Telly Savalas, it’s bonus time, baby. “Slot operators have used bonus wheels for decades to entice play and create more excitement on the slot floor,” Burke says. “Unfortunately, their table gamefocused counterparts have never had a similar option for their pits, and have been left to watch the advancements of these slot wheels and the revenue they bring in with a fair amount of envy. But now, with Bonus Spin technology—in a whitelabel, fully customizable format—table game operators can leverage the thrill, anticipation and sense of community that bonus prize wheels add to the table game experience. “By adding Bonus Spin to any of their table games in the pit, operators can instantly be more effective at marketing their games by offering customizable prizes that target specific player segments, resulting in more player excitement, interaction, and a potential increase in revenues and visits.” Bonus Spin is a customizable, digital prize wheel that connects to a blackjack table or any other table game, including poker derivatives. It offers players a spin on the wheel for hitting a specific hand. Casinos can choose what to offer on the wheel—including anything from a progressive top prize to a fixed top prize, or an experience-based prize as the top award, allowing each operator the ability to target their preferred player segments. Casinos can customize the virtual wheel to award property-specific prizes like a weekend stay in their finest suite, VIP bottle service, a cabana at the day club, event tickets, or a night of fine dining at their hottest restaurant. “This first-of-its-kind progressive table game technology is sure to catapult table games into new revenue arenas with its interactivity, customizable features, and ease of play and operation like no other product before it,” says John Hemberger, senior vice president, table products for AGS. Nearly 100 new Bonus Spin installs are scheduled to go live in the first quarter of 2017, he says. Operators can easily add Bonus Spin to their existing table games. Consisting of an optional side bet, it enables players to simply bet on the Bonus Spin along with their standard wager. If they receive one of the hands that trigger the chance to spin—such as a 21 if they are playing blackjack—they can hit the Bonus Spin button that automatically triggers a random spin on the bonus wheel. FEBRUARY 2017 www.ggbmagazine.com

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Scientific Games’ Prizm Game Table is set up as four player positions, each with bill validator, ticketing and player tracking

New Game, Same Success Community gaming is an appropriate concept for Scientific Games, the Nevada-based lottery, interactive and gaming powerhouse. Its portfolio includes the powerful Bally, Shuffle Master and WMS brands, enabling the company to reach numerous industry niches. Community gaming is a valued sector. “The concept is changing into more of a shared gaming experience allowing multiple players to participate in the same game at the same time,” says Greg Colella, the company’s vice president of product marketing, gaming. “Previous products tried to share a common bonus pool with players that left many players feeling disappointed.” The Reel Deal Into that space goes the Prizm Game Table. It offers a revolutionary gaming Novomatic Americas, established five years ago in Illinois to help the Austrianexperience across slot and electronic table game content, Colella says. The based company service the North American and Caribbean markets, offers slot award-winning innovation was a hit at G2E 2016. machines for Class III and VLT/VGT markets, electronic table games, casino “With four individual player stations, a stunning 65-inch 4K community management systems and ancillary services. display, and the power of Scientific Games’ CPU4X, the Prizm Game Table ofThe company has taken a plethora of new steps to embrace community fers compelling hardware and titles like Lightning Launch Roulette, all of gaming. One of them indicates a “reel” love for this which will attract table game and slot players alike,” Colella asserts. “By dynamic. It’s the Reel Championship line, software featuring an integrated discreet player sound system and integrated that enables competition and tournaments on a signifilighting, it is the ultimate social gaming table. Coupled with its optional cant number of Novomatic machines. overhead sign packages, this new platform supports the versatility of “We offer several lead products in North America, being a featured game on a casino floor, as well as an exciting addition to including Reel Championship line, which goes a step a gaming lounge or bar area. This platform will help evolve the way beyond the standard slot tournaments in the market,” people think about community gaming.” says Rick Meitzler, president and CEO of Novomatic Colella says the fact that Prizm is set up as four player positions, Americas. “Customers enjoy the competition aspect, each with bill validator, ticketing and player tracking, allows operators to and with targeted marketing initiatives, it broadens the place this product as easily as any slot machine, and then provide a demographic reach of the bricks-and-mortar experiunique player experience. The 65-inch display is a headline-grabber, he ence. says. It draws players to sit down and experience the product in an envi“We have taken that aspect and are in the process ronment where they can interact with other players. of also creating (in partnership with Greentube) a Reel The product has been well-received. Championship social site, which is a constantly evolvScientific Games took the highest honors in the 2016 GGB Gaming opportunity for customers to play in a competition ing & Technology Awards, winning Gold in the “Best Slot Product” any time, engage with our customer’s brand and qualcategory for its Space Invaders skill-based slot game and in the “Best ify for different promotional offers and jurisdictionally Table Game Product or Innovation” category for its Prizm Game approved prizes based on competition outcomes. It’s Table. all competitions, all of the time.” It is the only company to win two awards at the prestigious New company products include the Dominator event, sponsored by GGB and judged by a panel of accomplished Curve cabinet as well as the V.I.P. Lounge. The Domiindustry experts. nator Curve features a 40-inch seamless touch-screen. “These top honors for Best Slot Game and Best Table Game The sleek V.I.P. Lounge offers a top experience in a Product or Innovation are a tribute to our talented innovation space-optimized lounge format that has a smaller footteams across the globe,” says Derik Mooberry, Scientific Games’ print and gives players an upright alternative while group chief executive, gaming. “Both Space Invaders and the Prizm keeping the VIP experience intact. Game Table reflect our unwavering commitment to develop indusNovomatic’s new progressives, including the Jacktry-altering firsts for our customers, helping to drive casino revenue pot Edition, will have a revenue-generating impact on and create exciting and engaging new experiences for players.” the North American Market, Meitzler asserts. So will Novomatic’s Dominator Curve 52

Global Gaming Business FEBRUARY 2017

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its relatively new Novo Unity Community Roulette in Gatineau, Quebec, Canada, at Casino du Lac-Leamy. This product enables groups to play in a party ambiance, absorb the game energy and see the outcome displayed on giant screens. It’s a social, immersive gaming experience. While community gaming was launched as a brick-and-mortar phenomenon, its concept has evolved into a shared realm with online play, according to Kathleen McLaughlin, the marketing head of Novomatic Americas. The company has converted customer preference into a multifaceted product line, influenced both by customer preference and jurisdictional rules. “Our casino customers helped create our Reel Championship site,” McLaughlin indicates. “Every casino we spoke with was looking for a way to drive guests in a more hip and social way. We took their feedback and are using that to create value-added tools that will allow them to have a customizable differentiator provided both in bricks and mortar and online.” The industry remains full of nuance, with implications. McLaughlin says regulations restrict and slow innovation in the brick-and-mortar setting, but tribal gaming has more flexibility and can react faster with marketing and development innovations. Class II indeed has its privileges. And companies are ready to serve the sector. While regs affect how quickly products come to market, one belief resonates in this area. Gaming is about more than numbers. It’s the look and feel of victory, for a live audience. FEBRUARY 2017 www.ggbmagazine.com

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NEW GAME REVIEW by Frank Legato

Fantastic Jackpots Aristocrat Technologies

his is a stylish new game family from Aristocrat that uses bright colors, graphics and carousel-style merchandising to celebrate Las Vegas. It is available in three of the slot-maker’s most popular new cabinets—Arc Single, Helix and the new Helix+. In the Arc Single (pictured), carousels are designed with the games separated by the Fantastic Jackpots logo—styled after the famous “Welcome to Fabulous Las Vegas” sign at the south end of the Las Vegas Strip. The new game family is part of Aristocrat’s J*Series of slots featuring progressive jackpots. In this case, it is a five-level progressive, with jackpots triggered by five-of-a-kind hands and resetting at $25, $40, $50, $100 and $1,000. The games also feature a prize ladder triggered by three- and four-of-a-kind wins, as well as frequent low-level jackpots and

bonus prizes. The Fantastic Jackpots series is being launched with two initial base games—Fantastic Fantasy and Fantastic Fortunes. Manufacturer: Aristocrat Technologies Platform: J*Series Format: Five-reel, multi-line video slot Denomination: .01-10.00 Max Bet: 150, 300, 450 Top Award: Progressive; $1,000 reset Hit Frequency: Approximately 50% Theoretical Hold: 4%-15%

Dreamscape Everi

his new game on Everi’s Core HDX cabinet features an expansive reel array with six rows of symbols on five reels in an 80-reel game. Topping the oversized reel array on the 40-inch vertical monitor is a five-level progressive jackpot display. The 80-line base game uses eye-catching graphics to create what the company calls a “whimsical gaming experience” with multiple ways to win. A random “Mystery Wilds” feature can add three to 10 wild symbols to a spin. There also are Mystery Symbol Upgrades that transform winning spins into higher payouts, and random Mystery Symbol Bursts that replicate symbols on additional reels to create wins. The main bonus event is a free-spin round, triggered when five to 10 bonus symbols land scattered on the reels, resulting in from seven to a maximum 97 free games. The feature re-triggers frequently. The progressive awards are symbol-driven, triggered by six or more scattered Jackpot symbols, with the maximum bet. Jackpots reset at $8, $16, $80, $200 and the maximum $1,000, for landing 13 or more Jackpot symbols.

Global Gaming Business FEBRUARY 2017

Manufacturer: Everi Holdings Platform: HDX Format: Five-reel, 80-line video slot Denomination: .01, .02, .05 Max Bet: 200 Top Award: Progressive; $1,000 reset Hit Frequency: 37.93%-43.8% Theoretical Hold: 2%-15%

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Heidi’s Bier Haus Scientific Games

ith this slot, Scientific Games brings a classic WMS theme to the TwinStar J43 cabinet, the new format featuring a curved LCD monitor in the shape of a “J.” Heidi’s Bier Haus is one of the first group of titles designed exclusively for the TwinStar J43, one of the manufacturer’s new cabinets designed to present content from the game groups of the former WMS or Bally game groups. The theme of a Bavarian beer garden, and its voluptuous barmaid Heidi, is played out here in fun animation in several different bonus events triggered through a basic free-spin event. The base game is a six-reel, 50-line video slot, with mystery wild symbols possible on any spin. A collection of bonus events is available through the basic free-spin bonus, triggered by five or more scattered red, green or purple Heidi symbols. The number of free spins depends on the number of Heidi symbols—it can range from five free games to a maximum of 100. Any purple Heidi symbol in the bonus combination is replaced with a locked wild symbol that remains in place for the entire free-spin round. A red Heidi symbol in the triggering combination enacts a wheel feature on an oversize wheel depicted on the vertical monitor. Slices on the wheel include one of three other bonus events applied to the free spins, extra free spins, an extra spin of the wheel or one of four progressive jackpots. The progressives reset at 800, 3,000, 15,000 and 100,000 times the denomination. (In the common penny version, that’s $8, $30, $150 and $1,000.) They’re marked, respectively, as the Pretzel, Accordion, Hans and

Heidi jackpots. If the wheel lands on the symbol depicting two beer mugs, it triggers the Hans Wild feature. Hans places wild symbols randomly on the free-game reels. If it lands on the Tapper symbol, the beer taps on top of the reels come into play as Heidi pours beer into random reels to transform them into wild reels for the current free spin. Manufacturer: Scientific Games Platform: TwinStar Format: Six-reel, 50-line video slot Denomination: .01-100.00 (multi-denomination) Max Bet: 600 Top Award: Progressive; resets at 100,000 times denomination Hit Frequency: 30.7% Theoretical Hold: 4.56%-13.93%

Legend of Chang’e

International Game Technology

his new game in IGT’s MultiWay Xtra game group features high volatility and intricate artwork in a well-designed Asian theme. Legend of Chang’e builds on the success of the player-favorite MultiWay Xtra game family which features a four-byfive reel set (four rows of symbols in each of five reels) in a ways-to-win format—no paylines, with wins through adjacent symbols. In this setup, there are 1,024 possible ways to win on every spin. The game is featured on the company’s new CrystalSlant and CrystalDual cabinets. Developed for high-volatility game play, the Legend of Chang’e base game enables players to replace the arrow symbols with new symbols that are randomly chosen from one of three independent reels. Arrow symbols trigger a random number of free games up to a maximum of 81. More free games can be triggered with two or more bonus symbols on a free spin.

Manufacturer: International Game Technology Platform: MultiWay Xtra Format: Five-reel, 1,024-ways-to-win video slot Denomination: multi-denomination Max Bet: 2,500 Top Award: 20,000 Hit Frequency: 39% Theoretical Hold: 2%-10.1%

FEBRUARY 2017 www.ggbmagazine.com

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CUTTING EDGE by Frank Legato

Spinning for Gold Product: Bonus Spin Manufacturer: AGS

ith Bonus Spin, AGS is bringing excitement to table games that formerly was reserved for just the slot floor. This white-label progressive technology lets operators add a customizable, virtual prize wheel to any table game, and players get to spin the wheel when a predetermined hand or event occurs. Operators can customize the virtual Bonus Spin wheel to include a top progressive award, fixed cash, or an experience-based prize like a weekend getaway or VIP bottle service. In the blackjack version, the Bonus Spin side bet pays off in two ways: If one of the playerâ&#x20AC;&#x2122;s first two cards is an Ace, the bet pays even money. However, if dealt a blackjack, the player presses a button to spin the virtual wheel for a chance at various money denominations, including the top award the operator has set. Bonus Spin will soon be offered on proprietary AGS table games as well, like Chase the Flush, in which players and dealers compete head-tohead using three hole cards and four community cards to create the longest possible flush; and Criss Cross Poker, in which players try to make a pair of

sixes or better using five cards. Part of the appeal of Bonus Spin is that unlike typical side-bet progressives, which pay off on very rare hands like a natural straight flush, the wheel spin for a chance at a progressive occurs on muchmore-attainable hands like a pair or a blackjack. Thus, there is excitement across the table as frequent bonus spins occur. For more information, visit playags.com.

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EMERGING LEADERS The Big Picture

Hard Work is the Name of the Game

Melanie Gross Head of Caesars Interactive

DeJuna Frye

eJuna Frye, a gaming agent supervisor for the Cherokee Nation Gaming Commission, has worked for the Cherokee Nation for 15 years. She has worked in all facets of the commission over the past decade, giving her vast experience and knowledge of the gaming industry. The path to success is different for everyone, and Frye’s is as inspiring as any, having had an early life that was filled with personal struggles. As a young mother of three children, two with disabilities, she struggled to keep a job and take care of her family. However, determined to have a better life for herself and her children, she entered college in 1999 while continuing to be her family’s bread-winner. After persevering through numerous obstacles, she emerged 11 years later with a degree in business administration from Northeastern State University in Tahlequah, Oklahoma—an accomplishment of which she is particularly proud, since she is the first in her family to graduate from college. As a truly self-made, successful woman, she reflects on how she was able to accomplish as much as she did, and it all came down to one thing: hard work. Hard work is a constant for all successful people, but Frye is hard work embodied. As she puts it, “When something needs to be done, I make sure it gets done.” It is as simple as that. She does not have a single mentor to credit for assistance, but instead has tried to emulate the best in each person she has encountered. “Everyone around us has something to offer if we just pay attention,” she says. In turn, she goes out of her way to help others achieve their goals, whether personal or professional. Reflecting on which decision has most impacted her career, Frye again credits hard work. “The decision to just be a good employee and a hard worker shows people who I am and what

hen it comes to the global gaming industry, Melanie Gross has a 360-degree view. The former communications major and web designer has worked both in the real-money gaming world and on the social side (Farmville, anyone?). That breadth of experience comes in handy in her current role, as head of Caesars Interactive Entertainment. Looking back, the Bayonne, New Jersey native says her path seems predetermined. “My family would visit Atlantic City and stay at Caesars, so in some ways I grew up with the Caesars brand. Games were just part of our life—board games, card games—we monetized them and reinvented the rules. I should have realized this is what I was meant to do.” After graduating from Boston College, Gross studied in London, and “just by happenstance” landed at Cambridge Interactive Development Corp., later Everest Gaming. “I started as a frontend engineer, using my web design background,” she says. “I loved the fact that I could marry technology with gaming. But over time I realized I wanted to be closer to the business side.” She switched to a product and marketing role, and “never looked back.” From Everest, she moved to Zynga, then Tapjoy, and in 2013, joined CIE, making a full circle from real-money gaming to social gaming and back. Today, her days are as diverse as her background. “A typical day can run the gamut from looking at KPIs to looking at our roadmap and making sure the promotions we’re planning and the new games we’re launching all go smoothly. I work with our legal teams or compliance teams, and with the graphic design team to approve graphics or brainstorm new ideas. I work with the IT team, Service Operations and third-party vendors. It’s really touching every department in the business.” She firmly believes customers can have just as much fun playing online as they do in a landbased property—and vice versa. “To me, interactive gaming and real-money online gaming is not a separate casino company or a separate brand. It’s an extension of the Caesars brand and business. Our Total Rewards loy-

Gaming Agent Supervisor, Cherokee Nation Gaming Commission

“The decision to just be a good employee and a hard worker shows people who I am and what I can do. And that has put me where I am today.” I can do. And that has put me where I am today.” She likewise has the same advice for other young professionals looking to advance, saying, “Show up when you’re needed, and do what needs to be done.” A few of Frye’s proudest professional moments to date have occurred in her current position, along with being recognized as a Top 40 Under 40 in the gaming industry. “It was such an unexpected honor,” she says. “I am honestly just proud that other people see the things that I’ve been doing. Sometimes we get up and go to work and we think that’s all it’s ever going to be, and then something like this happens and you realize that what we’re doing really matters.” —Christopher Irwin, The Innovation Group

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Game Changer Alex White Game Developer, International Game Technology lex White reflects the ideal that teamwork makes a dream work. The game developer for International Game Technology Plc., who split time growing up between Boston, Dallas and Reno, found a perfect outlet for his talent. White’s creativity, merged with relationship skills and mammoth corporate support, has produced a well-oiled game machine for IGT. The three-year company veteran authored initial success stories like Golden Eagle and Oceans of Gold. He puts Elephant King and Wolf Ridge into the mix this year, along with other projects set to premier at Indian Gaming 2017 and G2E. White brings projects from formation to deployment and then has the joy of watching them being played. “I love connecting with people through a game,” he indicates. “An interesting part of casino game development unique from other types of game development is that we’re able to observe people interacting with the games we build, because they’re in a regulated environment in a casino. That’s great.” But no resting upon one’s laurels. White says the best game developers constantly challenge themselves. “Creativity doesn’t exist in a vacuum— you have to be proactive in searching for things that catch your eye, or evoke a feeling, perhaps like an experience one would get from a film or game, for example,” he says. “Good game developers know that inspiration can be drawn from many places, and they are skilled in applying those observations to their craft.” IGT caught, and cultivated, a rising star in Reno. Although individually skilled, White enjoys the group success concept of all project efforts moving together. “I am most proud of the team that worked on these games,” he says. “We worked very collaboratively, and one can sense that team camaraderie in the final products. All aspects of those games feel tightly woven together, resulting in the creation of a cohesive and polished gaming experience. “The team here is particularly close. IGT also offers an amazing amount of support. We’re a global company, and I love that the products we build in Reno, Nevada are played not only in the U.S., but also in Latin America, Australia, Europe, Africa and Asia.” White got his gaming start at Bob Luciano’s company Sierra Design Group in 1999, working on Washington VLT products and Class II slots, as well as new Class III products. The experience made an indelible mark on him regarding how companies can foster a strong, productive corporate culture. —Dave Bontempo

“Games were just part of our life—board games, card games—we monetized them and reinvented the rules. I should have realized this is what I was meant to do.” alty program is integrated on our online sites. As people play on HarrahsCasino.com and CaesarsCasino.com, they earn the same Tier Credits and Reward Credits they have offline, and they can use those credits for a trip to Atlantic City, a room in Vegas or an ice cream cone at Harrah’s New Orleans.” In 2017, says Gross, CIE is committed to seeing continued growth in New Jersey and beyond. “I’d love to see all 50 states be legal for online real-money games, but we’ll take one at a time. Pennsylvania will probably be our next step, because that’s the state with the most traction. It’s too soon to tell when it will happen, but I think it’s inevitable.” Meanwhile, she enjoys the view from both sides. “If you’re truly passionate about your work, you’ll always go the extra mile. You use that passion and trust in your team to get you through the highs and lows, the successes and failures. I have faith in our team, and a passion for what we’re doing. “We like to say we’re a startup backed by an empire.” —Marjorie Preston

“Good game developers know that inspiration can be drawn from many places, and they are skilled in applying those observations to their craft.”

FEBRUARY 2017 www.ggbmagazine.com

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GOODS&SERVICES along with highly integrated, game-synchronized emotive lighting and the latest stereo surround sound, among numerous other features. The game adds exciting visual features, a freegames bonus, and the chance to win a mystery progressive jackpot to an iconic brand that has been a player favorite across the globe for more than 32 years, the company said in a press release. Level Up

MGM GRAND OPENS ‘LEVEL UP’

GM Grand opened a social lounge on December 29 that will feature both gaming and non-gaming activities expected to appeal to a young demographic. Called Level Up, the new space—operated by the Hakkassan Group—features two areas. One will feature a gaming arena with stadium seating for hybrid electronic table games by Interblock, including blackjack, poker, keno and roulette. The stadium setup accommodates 40 gamblers at a time who can participate in live feeds of the table games. The other area will feature traditional bar games including pool, foosball, ping-pong, air hockey and arcade-style games including Bubble Hockey Sigma Derby, Giant Pac-Man and Connect Four. “Level Up will be a popular, high-energy gaming lounge that will offer our guests and visitors the newest entertainment experience to see and be seen,” said Scott Sibella, president and COO of MGM Grand. “Our goal is to create a fun, social atmosphere featuring a variety of traditional games, as well as games of skill, that showcase the industry’s leading technology.”

SCIENTIFIC GAMES LAUNCHES TETRIS SLOT

eading gaming supplier Scientific Games Corporation announced the launch of a slot game based on Tetris, the best-selling video game of all time, on the new TwinStar J43 cabinet, which features a vertical monitor curved toward the player (in the shape of a “J”). Tetris Super Jackpot is the first-ever slot based on Tetris, the 1980s arcade game centered on a tile-matching puzzle. The TwinStar J43 features a cinematic, “4K Ultra High-Definition” game-play experience, 60

IGT SIGNS SYSTEM CONTRACT WITH PALMS CASINO

nternational Game Technology Plc. last month announced an agreement with Station Casinos LLC to provide the Palms Resort Casino in Las Vegas with its IGT Advantage casino management system, including the IGT Universal Game Adaptor and Service Window solutions. By installing the IGT casino management system, Palms will be able to offer premium guest experiences through customized promotions and incentives through Service Window marketing, bonusing and guest communications solutions and applications across the property’s slot floor. In other IGT news, the company announced that it has captured more than 40 percent of gaming machine floor share at the recently opened Black Spade Casino at Aloft Hotel Panamá. The installation is comprised of 148 IGT slot machines, including 30 premium titles, the largest single-site installation of the company’s premium games in Central America.

GLI PERFORMS AUDIT FOR MEXICAN LOTTERY

aming Laboratories International has performed the World Lottery Association Security Control Standard (WLA-SCS) audit for the Loteria Nacional para la Asistencia Pública (Lotenal), Mexico’s national lottery. As an associate member of the World Lottery Association and official WLA certification service entity, GLI deploys experienced WLA-SCS auditors, accredited by the WLA Security and Risk Management Committee, in continued support of the lottery industry. The WLA-SCS certificate was granted to Mexico’s Loteria Nacional para la Asistencia Pública at the World Lottery Summit 2016 in Singapore. WLA-SCS is the lottery sector’s only internationally recognized security standard that allows for lottery entities to adhere to a set of guidelines that are considered best industry practice. While ISO27001 is a prerequisite for the certification, the WLA-SCS standards are specific to the lottery

Global Gaming Business FEBRUARY 2017

industry and are audited and evaluated by a separate scope.

AINSWORTH GETS COLORADO, KANSAS LICENSES

insworth Game Technology last month announced it has been licensed in Colorado and Kansas. The Colorado Division of Gaming gave its approval for Ainsworth as a Manufacturer/Distributor/Operator-Type 2 licensee. The license permits Ainsworth to sell and distribute its slot games and other products to commercial casino operators throughout the state. Previously, Ainsworth had been providing slot games to those properties through a temporary license. Ainsworth now holds over 230 gaming licenses in North America, covering nearly every major gaming jurisdiction on the continent. “The approval by the Kansas Racing and Gaming Commission, along with our recent approval by the Colorado Division of Gaming, gives Ainsworth even more opportunities to grow across the country,” said Ainsworth President-North America Mike Dreitzer.

WIN SYSTEMS ACQUIRES GOLD CLUB

in Systems, a leading technology supplier for the casino and lottery industries, announced it has acquired Gold Club, one of the leading Slovenian-based suppliers of electronic table games to European casinos, for an undisclosed amount. Backed by Metric Capital Partners, a Londonbased private capital firm, Win Systems has completed the purchase of the Slovenian-headquartered global developer, which has market presence in over 50 countries worldwide. The combination of the two companies will create an emerging leader in the gaming industry, capable of offering both lottery and casino clients end-to-end solutions including casino management systems, VLTs, electronic gaming machines and electronic table games. Following the acquisition, the group will have a significant footprint in Europe, South Africa and the Americas. The acquisition comes after a period of substantial organic growth for Win Systems, with the company’s innovative casino management system WIGOS now installed in over 260 casinos in 17 countries worldwide, providing connectivity to over 60,000 machines.

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Product Showcase

Can’t-Miss Stands at ICE Totally Gaming— ExCeL London, February 7-9

ith a growth of almost 10 percent in 2017, stopping at every stand at ICE Totally Gaming, February 7-9 at ExCeL London, is impossible. So here are a few products that fall into the “can’tmiss” category:

KONAMI GAMING’S NEW APPROACH Concerto Slant

For the first time at ICE 2017, proven signature elements of Konami’s topperforming Concerto cabinet are expanding to a complete lineup of video slot offerings, beginning with Concerto Slant. Consistent to the original upright machine, Concerto Slant carries dual 27-inch HD game screens, but with a lower profile and relaxed-angle posture for player comfort and convenience. Concerto Slant supports any game content found on Concerto upright, and is also backward-compatible with proven KP3 platform titles such as Dragon’s Law, Lotus Land, China Shores and many more.

INTERBLOCK CHANGING OPERATORS’ VISIONS OF A SUCCESSFUL FLOOR Luxury gaming manufacturer and electronic table game market leader Interblock presents a diverse profile of new products, side bets, features and functionalities at stand S4-210. Interblock Global CEO John Connelly said, “2016 has been a year dedicated to investing in all sectors of the business in order to build an infrastructure for the future. We introduced new, innovative technology designed to enhance the player experience and expanded our product portfolio, which has allowed any casino to place an Interblock product on its floor. “Our objective at ICE this year will be to show our commitment to our customers by showcasing our most demanded products for the market, by intro-

major installations in the U.K. and Asia. “The introduction of Qorex has provided our customers with the opportunity to have a fully integrated hybrid gaming terminal that delivers innovative design, an intuitive easy-to-navigate interface, and because it’s modular, it’s extremely flexible and can be configured to suit any gaming environment,” said Tristan Sjöberg, executive chairman of TCSJohnHuxley. “With the added benefits of increased security and customized game content, Qorex is proving to be a must-have product for any gaming floor.”

ARISTOCRAT PASSION Slot supplier Aristocrat Technologies has previewed its display of games and systems for its stand at ICE Totally Gaming. The display, on stand S3-250, is themed “Passion for Gaming.” “A strong portfolio combining exciting con-

Concerto SeleXion

Konami’s popular SeleXion multi-game is now bringing the industry’s fastest game change speed to Concerto for the first time. With expanded memory and processing power, up to 10 different games themes can be featured on a single machine, as well as a progressive bonus. Concerto SeleXion is available for both standard Concerto upright and Concerto Slant. During ICE, Konami will demonstrate the flexibility of Concerto SeleXion to highlight either KP3 platform games or new KP3+ titles, with stand-alone or linked progressives. Pharaoh’s Fury

Filled with a fascinatingly mysterious Egyptian theme, Pharaoh’s Fury is another 7-8-8-8-7 debut game for Concerto Crescent and Concerto Stack. Pharaoh’s Fury also carries a free-game feature with bursts of extra wilds across the reel sets according to the number of trigger symbols.

ducing our newest products and features, and by sharing our data-driven information illustrating that ETGs should no longer be directly compared with the slot business.” At this year’s exhibition, Interblock will showcase its wide range of automated, video and dealer-assist advanced multi-player electronic table games, methodologically enhanced based on customer and player feedback, including the Big Six wheel, StarBar, Stadium, MiniStar Roulette, Trio, Pulse Arena, Dual Roulette and more. The MiniStar Roulette offers a smaller footprint than Interblock’s Diamond Roulette product line to accommodate any casino floor.

TCSJOHNHUXLEY TO FEATURE QOREX AT ICE ICE Totally Gaming will provide a major showcase for TCSJohnHuxley’s Qorex electronic gaming solutions. First debuted at G2E in September, the innovative Qorex terminals—part of configurations ranging from automated table games to stadium-style electronic table game setups—are already preparing for

Game of Thrones will be on display in the Aristocrat stand

tent, segmented product lines and popular licensed themes have been the key business driver over the last 12 months,” said James Boje, managing directorEMEA for Aristocrat. “A significant proportion of our stand space at ExCeL will incorporate premium licensed brands, demonstrating Aristocrat’s ongoing commitment to this extremely important segment.” At ICE 2017, Aristocrat will also expand its range of licensed formats, with Zorro and Sharknado being released on the Arc Single platform, both packed with a broad variety of features and proven mechanics for extended entertainment value.

FEBRUARY 2017 www.ggbmagazine.com

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FRANKLY SPEAKING by Frank Legato

Rock On, Alexa

Global Gaming Business FEBRUARY 2017

RINALDO

put her fist through a machine like a normal person? Instead, she’s charged with 25 counts of harassment and stalking, and three counts of making terroristic threats. It says here that at the end of her profanity-laced tirades over the phone, she would sign off as Gus the Groundhog from the Pennsylvania Lottery commercials—you know, the “second-most famous groundhog in Pennsylvania.” After threatening to take off someone’s head, she would say, “Keep on scratchin’!” At press time, she was scratchin’ at the jailhouse wall. Finally, the Las Vegas Weekly reports that Wynn Resorts properties will soon offer something called Alexa, which is a female computer like that one on Star Trek that you can ask to calculate distances to the next star base, for tricorder readings on the surrounding environment, or to scan for any life forms in the immediate area. OK, maybe it can’t do all that, but you will be able to shout out instructions to a voice-controlled system to get weather updates, compare restaurants, find the best place for sushi in Las Vegas, connect to Bluetooth to play your favorite streamed music, or of course, order a hooker. OK, kidding on the last one. It’s not in Pahrump yet. Presumably, you’ll also be able to shout for help if you wake up to find a tiger in the bathroom of your high-roller suite. You know, I’m all for technological advancements like voice-controlled commands you can give to a computer, but in the final analysis, I’d rather have a butler. Preferably, one who looks like Mr. French from Family Affair. Or better yet, like Gene Simmons from KISS. VICT OR

ans of the rock band KISS who also like to gamble in casinos are in for a big party to be thrown by the Kaw Nation in Oklahoma. According to Tulsa World, the tribe’s next casino and resort project will carry the Rock & Brews theme owned by KISS members Gene Simmons and Paul Stanley. That means, by extension, it will carry the theme of the KISS band. There are more than a dozen Rock & Brews restaurants around Texas and Oklahoma, a fact with which I’m very familiar, since around 10:30 this morning. Evidently, they serve first-rate chili, and feature a full bar with a premium wine list, local craft beers, and—according to their website—“dog-friendly heated patios, and a kids’ play area, all in an atmosphere reminiscent of a family-friendly concert featuring concert lighting, multiple flat-screen televisions and classic rock music.” Yes, KISS. The family-friendly rock band. “Daddy, why is that man’s tongue hanging down to his chest and wagging around?” “Never mind, Princess. Watch the fire-breathing and blood-spitting guy instead. Uh-oh! Here’s a hanky.” My apologies to the KISS faithful. I was never a fan. I know the live performances were a spectacle and all that, but if I want clown makeup and pyrotechnics, I prefer a Cirque show, or some other form of entertainment that doesn’t include, you know, bad rock music. But hey, that’s just me. I wish the Kaw Nation all the success in the world. I do have a couple of questions, though. Will the KISS theme at the property take into account that the brand is owned by only half of the band? Will Peter Criss and Ace Frehley get their props in the theme? Catman Café? Space Ace Bar & Grill? Will litigation force awkward bar names because they’re owned by only half the band? “The Half-KISS Lounge! Where you can rock ‘n’ roll half the night and party every other day!” Moving on, a woman has been harassing employees at the headquarters of the Pennsylvania Lottery. According to police, the woman has made repeated obscene and violent threats in calls to lottery headquarters—because she can’t win. According to the Penn Live website, the 47year-old woman buys gangs of instant lottery tickets at a time, and after hours of futile scratching, calls and threatens to kill lottery employees, while hurling “sexually explicit insults.” At one point, she told employees she has looked up where they live and hired hit men to kill their families. Wow. I’m glad we don’t have to put up with that kind of behavior in casinos. Right? OK, we’ve seen rage erupt here and there. But mostly, casino slot floors and pits have been free of death threats. Certainly, no one’s jacking a pit boss or slot supervisor up against a wall or threatening to rub out his family. The worst that normally ensues is some minor property damage, and maybe a night in the slammer. Why doesn’t this woman in Pennsylvania just go into a casino and

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