Global Gaming Business, January 2017 by Global Gaming Business

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Global Gaming Business Magazine

SLOT SYSTEMS AGA AMICUS GAMING AML ADVANCES ICE PREVIEW January 2017 • Vol. 16 • No. 1 $10

People to Watch for 2017

Kevin Sheehan builds a new Scientific Games Off Rez, High

Risk

Ho Chunk bids for another Wisconsin casino

Playing Platform

How online games impact the slot machine Official Publication of the American Gaming Association

Association of Gaming Equipment Manufacturers

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CONTENTS

Vol. 16 • No. 1

january

Global Gaming Business Magazine

24 COVER STORY

COLUMNS

Into the Future

12 AGA Supreme Challenge

As he settles into his new role as president and CEO of Scientific Games, Kevin Sheehan relates how he will help mold the future of one of the world’s leading gaming and lottery technology suppliers.

Geoff Freeman

14 Global Gaming Women Lean On Me Virginia McDowell

16 Fantini’s Finance Crystal Ball Gazing

By Roger Gros

Frank Fantini

66 Table Games And the Answer Is...

Cover Photo by Erin O’Boyle Photographics 2016

FEATURES

24 People to Watch 2017 Scientific Games’ Sheehan heads our annual list of 25 People to Watch, highlighting the executives most likely to lead the industry to new heights in the coming year.

Roger Snow

56 Totally Gaming An expanded exhibit floor and a revamped education program are among the new features for attendees at next month’s ICE Totally Gaming trade show.

By Dave Bontempo, Roger Gros, Frank Legato, Marjorie Preston, Patrick Roberts, James Rutherford, William Sokolic and Aaron Stanley

By Dave Palermo

52 Evolving Systems Slot accounting and player tracking systems have evolved with technology in general, and these days, that means mobile technology and instant funds access. By Dave Bontempo

Global Gaming Business JANUARY 2017

Steve Rittvo

DEPARTMENTS 6

The Agenda

By the Numbers

10 5 Questions 12 News Roundup

48 Conflict in Wisconsin The plan of Wisconsin’s Ho-Chunk Indian Nation for another casino resort is meeting strong opposition from other tribes.

64 Reflection A Life Well Lived

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

Feature 20 Slot Synergies When gauging the attraction of online slot games, developers look to the same factors that have made land-based slots popular. By Steve Ruddock

18 AGEM Page 58 Emerging Leaders With the Cosmopolitan’s Patrick Nichols, Marina Bay Sands’ Miki Yeo, and Penn National Gaming’s Jeff Morris

60 Frankly Speaking 61 New Game Review 62 Goods & Services 65 People 66 Casino Communications With Joe DeSimone, Owner, Railroad Pass Hotel & Casino

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THE AGENDA

Funny Situation Roger Gros, Publisher

hen I was working at the Golden Nugget in Atlantic City in the early 1980s, I was convinced that the baccarat pit crew would have made the perfect blueprint for a situation comedy. Remember that during this period, the prototypical ensemble sitcoms ruled the television airwaves: Cheers, Taxi, WKPR in Cincinnati and many others. The formula was pretty simple. Invent some quirky characters, throw in some zany customers and stir it together with unlikely plots, and you’ve got a hit TV show. The great thing about the Golden Nugget baccarat pit in those days was that you didn’t have to make up anything; it was all there just by observation. The one problem, however, might have been the character of the casino owner. I’m pretty sure Steve Wynn wouldn’t have allowed himself to be portrayed on a sitcom, and we probably couldn’t have called it the “Golden Nugget” because of obvious copyright reasons, but I’m sure a good writer could have come up with something. I was never a comedy writer (I leave that particular talent to our editor Frank Legato), so I don’t have any answer, but because there was a Steve Wynn (and his rival in those days, Donald Trump), any literary license taken by the writers in inventing a casino owner would likely have been accepted. But the cast itself didn’t need to change at all. Starting with Bruce, the Birkenstock-wearing casino manager, and Tom, the fatherly soft-spoken pit boss, the list of characters was impressive. And the dealers were a hoot: Irene, the strong single woman always looking to find solid husband material, but failing; Mary Jean, the gritty Filipina with a Brooklyn accent, who was always tardy; John, the foppish gay Italian—really Italian, complete with the accent; Eric, the lady’s man, who thinks he’s the center of the universe; Gail, the conflicted married woman with a heart of gold; George, the entrepreneur who always has a scheme; and Jack, the moody but devastatingly handsome dude who just wanted to be left alone. And of course myself, I was very normal. I wrote for a casino magazine on the side, but dreamed of being a rock ‘n’ roll star. There were a dozen other dealers who could do cameos in various scenes and had equally quirky personalities. The supervisors were equally interesting, and

Global Gaming Business JANUARY 2017

could be used as foils in any situation: Martina, the unlikely high-brow working woman who owned a ladies’ shoe store with her husband; Bill, whose nickname (which I will not recount here) only hinted of the depths of his depravity; Deborah, the impossibly beautiful new-age hippie with the serious side; Kenny, who took brown-nosing the bosses to Olympic levels; and Amy, the girl-next-door who was everyone’s friend. But the cast only got better when you added the players: Rocco, the Boardwalk pizza parlor owner; Bobby, the degenerate horse player who was the ringleader of the players; Harry, the happy-go-lucky retired gentleman who played simply for the entertainment; Si, the grumpy friend of the casino owner who tortured the employees with his unreasonable orders (get Charles Laughton to play him; they looked exactly alike). And let’s not forget the set. No need to build a new one, just use the actual baccarat pit. At the Golden Nugget, they had two games (the big ones, thank you; ran like a craps game with two base dealers and a stickman). The tables had seven chairs on each side (no number “13,” so 14 spots). At the end of each side was a “ladder chair” up on a pedestal to allow the supervisors a better view of the game. There were also four high-limit blackjack tables, and if you were scheduled to deal there, you hated it. Oh, the possibilities for funny situations were endless. And when you come to the plots, there’s a million stories in the baccarat pit: The one where John laments he can’t marry the love of his life (remember, this is the 1980s); the one where George almost makes a million but the scheme falls apart at the last minute; the one where the casino owner brings in the crooner to film a TV commercial in the pit; the one where the big high roller comes in and loses several $10,000 cash bets in a row and the casino manager tells me to drop the money without counting it. Yeah, every episode is a scream. Of course, this sitcom was never written or produced. But if anyone who has the necessary TV connections thinks it’s a great idea, I can be your highpaid consultant. And by the way, all the names or the plots were not changed to protect the innocent, so I apologize if I wasn’t able to flesh out your real character in approximately 700 words. Those who were there will immediately know the depth of every personality in the pit.

Vol. 16 • No. 1 • January 2017 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | cooley7@sunflower.com 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 Virginia McDowell | Steve Rittvo | Roger Snow Contributing Editors Dave Bontempo | Dave Palermo twitter: @DavePalermo4 Marjorie Preston | Patrick Roberts Steve Ruddock twitter: @SteveRuddock | James Rutherford William Sokolice | Michael Soll | Aaron Stanley Michael Vanaskie| Michael Zhu

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

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

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

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

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

• Dean Macomber, President, Macomber International, Inc.

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

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Steven M. Rittvo, Chairman/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

WHERE WiNNERS PLAY S

lot hold percentage, or the casino “win” on slots, varies rather dramatically in Nevada, depending upon where you play. In destination regions like the Las Vegas Strip and Downtown, Laughlin and the Lake Tahoe area, slot hold is solidly over 6 percent. In “locals” markets, it doesn’t dent the 6 percent level. The information in the chart and graph were provided by the Center for Gaming Research at the University of Nevada, Las Vegas. For detailed revenue reports for Nevada and the entire U.S., visit gaming.unlv.edu.

Nevada Slot Hold by Reporting Area, January 2004 – October 2016 (Average) Reporting Area Las Vegas Strip Laughlin South Shore Lake Tahoe Downtown Las Vegas Statewide Elko North Las Vegas Mesquite North Shore Lake Tahoe Boulder Strip Reno

Average Hold % 7.21% 7.01 6.61 6.52 6.22 5.95 5.87 5.76 5.64 5.31 5.06

GOOD YEAR iN iNDiAN COuNTRY

ribal casinos posted a spectacular year in 2015, with total revenue increasing by more than 14 percent. California and Oklahoma posted the largest gains. The data shown was compiled by Joseph Eve and Associates in the company’s 2016 annual report “Indian Gaming: The Cost of Doing Business.” In the report, High Profit casinos are defined as the top 50 percent in operating profit margin, while the Non-High Profit casinos fall below that threshold. To get a copy of the full report, visit JosephEve.com.

Average Total Revenue High Profit Non High Profit

Global Gaming JANUARY Business 2017

2015 $110,303,277 $32,057,151

2014 $96,695,030 $39,254,171

% Change 14.07% (18.33%)

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© 2016 Scientific Games Corporation. Third party content used with permission. All rights reserved. This product may be covered by one or more U.S. patents or pending patent applications listed at http://www.gamingipnotice.com/patents.

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NUTSHELL

5Questions

Kahlil Ashanti

Founder, Developer and Lead Strategist, SpendSight Technologies, Inc.

ahlil Ashanti has blazed a unique path to the gaming industry. An entertainer, Ashanti spent some of his time with the U.S. Air Force at Nellis Airbase in North Las Vegas. There, he got to know the Strip and gambling, eventually getting a role in a Cirque du Soleil show in Vegas. He got to know casino entertainment bookers who were constantly trying to learn more about their customers. So, Ashanti put himself through a coding class and learned how to develop a program that would break down the habits of both gaming and non-gaming customers, with the help of other experts in his company. He spoke with GGB Publisher Roger Gros at G2E in October. To hear a full podcast of the interview, visit GGBMagazine.com.

1 2 3 4 5

Tell us a little about SpendSight and how you got where you are today. SpendSight is software that gives casino operators a 360-degree view of their player. We do that by providing them with seamless access to the non-gaming spending behavior of each one of their players. We give them a profile so you can tell which one of your players is vegetarian based on their purchase patterns. Do they shop on weekends and pay with ApplePay? Do they have a social footprint and post reviews on Yelp? SpendSight helps casinos grow along with their customer base.

“They

Said It”

“In the long run, Cambodia is a reasonable cost destination. It cannot just be gaming or a normal integrated resort, so our master plan will include non-gaming attractions that will draw a large number of people from the surrounding region.” —Tim McNally, chairman, NagaCorp, on the expansion of the company’s NagaWorld casino in Cambodia, which may include a theme park

CALENDAR January 6-8: NCLGS Winter Meeting, Hotel Valley Ho, Scottsdale, Arizona. Produced by the National Council for Legislators from Gaming States and Spectrum Gaming. For more information, visit NCLGS.org.

Do you rate the players and turn that information over to the casinos? We don’t actually rate them. We just provide the casino with the methods to be able to segment that behavior. So, if a casino wants to know who their most valuable players are for a certain time of year for their coffee shops, or their spa, or their steakhouse, or even their showroom, we allow the casino to rate them based on their own criteria. We create a custom interface for each casino to view this information.

January 17-19: Oi Summit 2017, Orleans Hotel Casino, Las Vegas. Produced by VizExplorer. For more information, visit www.vizexplorer.com/oisummit.

How did you build the SpendSight system? I had the idea, and was looking for someone to build it for me but couldn’t find an exact fit, so I went to coding school and learned how to do it myself. So, being guided by people who were smarter than me, I built it myself. There’s no hardware at all. It’s all done in the cloud, so all casinos need to get the system is access to the internet.

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.

Doing non-gaming ratings is much more difficult than simply rating the gambling of the player. Each different non-gaming offering has different profit margins. How do you balance that out? We use measurements like lifetime value. How much has this person spent with you since they signed up for the player’s club? When you run a gaming promotion, for example, you can see side-by-side analysis of who spends the most at your restaurants or in your showroom. It’s never as clear and defined as the gambling rating, but when you compare them side-by-side you get a better idea of a player’s non-gaming value. What we’ve found is that players want experiences, and the more we can tailor those experiences to their expectations, the more loyal the player becomes.

How do you make the data understandable to a casino executive who may not be very computer literate? The SpendSight system is designed for people who don’t have a Ph.D in computers. Even before we introduced it, I spoke with casino operators who told me there was a lack of user-friendly, engaging options for them. The amount of training required to use some of this software is prohibitive. Our system is very intuitive and easy to use, and was built by listening to the operators tell us how they wanted the system to respond.

7Global Gaming Business JANUARY 2017

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.

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AMERICAN GAMING ASSOCIATION

Supreme Challenge AGA challenges sports betting ban with amicus brief

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THE AD AGENCY FOR SMART CASINO BRANDS.

Global Gaming Business JANUARY 2017

By Geoff Freeman, President & CEO, American Gaming Association

n November, the American Gaming Association, through an amicus brief filed to the United States Supreme Court, argued that the failed federal ban on sports betting is driving a $150 billion illegal market, and detailed its support of New Jersey’s push for legalized sports betting. The brief argues that the Professional and Amateur Sports Protection Act (PASPA) is unconstitutional and should be overturned in favor of statewide regulations on whether to legalize sports betting. New Jersey appealed to the Supreme Court last month challenging the legality of PASPA, which currently limits legal sports betting to four states. In September, AGA released two reports on sports betting. “The Key to Sports Integrity in the United States: Legalized, Regulated Sports Betting” details how the United States would benefit from adopting an approach similar to that in the United Kingdom to allow legal, regulated sports betting in an open and transparent market to protect the integrity of sports. The second report, “Law Enforcement Summit on Illegal Sports Betting: After-Action Report,” authored by former law enforcement officials such as former Deputy Director of the FBI Tim Murphy and former Boston Police Commissioner Ed Davis, found that PASPA is fueling a massive underground betting market and should be repealed. The 24-year-old failed federal ban—which is breathing life into a $150 billion illegal sports betting market—threatens the integrity of games, presents fundamental questions about states’ sovereignty to define their own laws and combat crime within their borders, and prevents fans from engaging with the sports they enjoy in a safe, legal way. Since President George H.W. Bush signed PASPA into law in 1992, trillions of dollars have been bet on sports illegally. AGA estimates fans across the country will bet $90 billion on NFL and college football games this season. However, $88 billion—or 98 percent—of all bets will be

made illegally thanks to the federal government ban. Fans also agree that it’s time for a new approach. A recent survey by leading public opinion researcher Mark Mellman found that 80 percent of NFL fans want to change current law. Further, a change in law would boost sports leagues and the media companies that pay billions for the rights to broadcast games. Seventy percent of fans are more likely to watch a game if they’ve wagered on it; nearly two in three say they follow teams more closely if they’ve placed a bet. Perhaps most significant is that professional sports leagues are taking a different approach to sports betting. The long-outdated myth is that sports betting would threaten the integrity of games. However, it’s an illegal market that threatens games. At Global Gaming Expo 2016 in September, the premier casino industry trade show, former NBA commissioner David Stern said, “Over time I’ve come to accept the notion that a properly run gambling operation is protective, and not deleterious, to the health of sports.” Current NBA Commissioner Adam Silver offered his support in 2014 when he said, “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.” AGA will continue to drive the national conversation on sports betting in 2017, engaging key stakeholders and empowering sports fans to let decision-makers know that the time has come to make a change to PASPA. Influential organizations such as the National Conference of State Legislatures and the U.S. Conference of Mayors have already indicated a willingness to examine whether a fresh approach to sports betting is warranted. The AGA plans to build on the momentum and create a broad coalition of interested parties to effectively educate members of Congress and the general public next year. Our industry is aligned—from Nevada casinos to regional operators—and the AGA will continue the effort to change this outdated law.

Follow Geoff Freeman on Twitter at @GeoffFreemanAGA.

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GLOBAL GAMING WOMEN

Lean On Me GGW has created a peer support network to encourage the advancement of women in gaming By Virginia McDowell

ave you ever wished that you had your own personal board of directors to provide guidance and advice in order to expand your influence and help boost your resume? Mentors and sponsors are critical components of building the strong foundation of a successful career, but there are some issues that are better discussed with peers at similar stages in life or who have shared goals. Research has shown that women gain confidence and are able to learn and accomplish more in small groups, and the latest initiative of Global Gaming Women is designed to provide a peer support network for women in the gaming industry. Lean In Circles grew out of Facebook Chief Operating Officer Sheryl Sandberg’s 2010 TEDTalk “Too Few Women Leaders.” Her inpiring message about the ways that women are both held back and hold themselves back resonated with women globally, and led to Sandberg’s best-selling book Lean In: Women, Work and the Will to Lead and the Lean In Foundation, a 501(c)(3) nonprofit organization dedicated to providing women with inspiration and the support to reach their goals. The Lean In website (leanin.org) highlights three primary objectives: establishing an active support community; providing online educational opportunities; and support for Lean In Circles—small groups of women who meet regularly to “encourage and support each other in an atmosphere of confidentiality and trust.” There are currently more than 30,000 Circles in 154 countries, and the number grows every day. The Circles can be whatever works for the members, from an informal gathering at lunch to a virtual meeting with Circle members

from around the globe. And among the newest Circles are the 11 that are being launched by Global Gaming Women that are specific to the gaming industry and will provide women in gaming with opportunities to learn, grow their careers and build strategic relationships. The discussions at Circles vary widely, but generally include topics such as effective workplace communication, personal branding, work-life balance and strategies for personal growth. According to the Lean In Foundation, 85 percent of Circle members credit their participation for positive change in their life and the willingness to take on a new challenge or opportunity as a result of lessons learned while leaning in.

“The Lean In website (leanin.org) highlights three primary objectives: establishing an active support community; providing online educational opportunities; and support for Lean In Circles— small groups of women who meet regularly to ‘encourage and support each other in an atmosphere of confidentiality and trust.’”

Global Gaming Business JANUARY 2017

The Global Gaming Women Lean In program is being co-chaired by two GGW Board members who are passionate about how the power of peer mentoring positively influenced their careers—Eileen Moore, regional president of Caesars Entertainment Corporation; and Holly Gagnon, CEO of Chumash Enterprises for the Santa Ynez Band of Chumash Indians. Both women received significant awards for their professional accomplishments in 2016— Moore was recently named Executive of the Year by the Silver State Awards, and earlier in the year, Gagnon was recognized as Executive

of the Year by the Native American Finance Officers Association. “It’s important to recognize that Circles provide a safe environment to learn, listen and share experiences in an absolutely confidential environment,” Gagnon explains. “Circle members have the opportunity to share the most important things in a group of professionals made up of true peers who provide mutual support.” In keeping with the Global Gaming Women commitment to regional programming, the GGW Lean In Circles have a target launch date of early 2017, and will be located across the United States, with Circles in Las Vegas, the Midwest and East Coast, and one Virtual Circle with participants across the country who will meet online and through conference calls. Consistent with nearly all GGW programming, participation in the Circles is free, and GGW will also pay for the training for Circle members selected as moderators. The addition of new GGW Lean In Circles will be based on demand, but is anticipated to occur on an annual basis, and Circle leaders will have the ability to add new members as space allows. Interested participants should visit the GGW website for more information on Lean In Circles and all other educational programming and events at globalgamingwomen.org. “Participating in my own Circle and helping to launch 11 new Circles has been one of the most rewarding aspects of my career in gaming,” Moore observes. “I have seen tremendous growth in myself and other women leaders through this peer mentoring process, and it has been truly empowering. On behalf of Global Gaming Women, Holly and I are looking forward to bringing this important initiative to the gaming industry.”

Virginia McDowell retired as president and CEO of Isle of Capri Casinos in April 2016, after a 35-year career in the gaming industry. She currently serves as president and board chair of Global Gaming Women.

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FANTINI’S FINANCE

Crystal Ball Gazing 2016 was a good year for gaming; what’s on tap for 2017?

he past year has been pretty healthy for the gaming industry. Stock prices of both casino and supplier companies rebounded. Companies continued to improve their balance sheets. And business trends were basically healthy. There wasn’t much excitement, as the big mergers on the supplier side had already occurred. The REIT experiment continued with MGM Resorts spinning many properties off into a majorityowned REIT. There were no mega-mergers among casino companies, though Eldorado offering to buy Isle of Capri is a significant regional shake-up. Internet, sports betting and new forms of gaming like eSports and daily fantasy sports made more headlines than headway. Social gaming showed signs of maturing. New jurisdictions were few and small, such as Cyprus and a few Russian locales, like the former Winter Olympics host city of Sochi. And, as of this writing, legalizing casinos in Japan and Brazil were still more promise than reality. The biggest excitement came across the pond, where mergers of companies with heavy online operations formed giant new entities such as Paddy Power Betfair and Ladbrokes Coral. So, where does that leave us heading into 2017? Here are some thoughts: • U.S. regional casinos. The recent spate of gaming expansions is mostly behind, which should lead to a continuance of companies improving their profitability through efficiencies of various kinds—cost controls, more focused marketing, debt reduction and refinancing. There will be opportunities for more property sales, including purchases by REITs, though the creation of REITs might have run its course for now. • Las Vegas. For nearly 100 years, the big demographic story in America has been the migration to the Sun Belt. There is no reason to expect that trend to end. As such, the Las Vegas Strip and Las Vegas locals markets should continue to grow. • The Strip is now controlled by basically two companies—MGM Resorts and Caesars. Perhaps the most telling development of 2016 16

By Frank Fantini

was the decision by those two companies to charge customers to park their cars. Those decisions tell us two things: MGM and Caesars are acting like the near-monopolies that they are, and, the Strip continues to morph into more of a tourist destination and less of a gambling town, so customers are being treated like tourists, not gamblers. So, whether it’s upscale shopping malls, uber nightclubs, ever-larger convention facilities, fourstar restaurants, or charging customers to park, this is the new Las Vegas. • Locals market and Downtown. Three companies to watch—Red Rock Resorts (formerly Station Casinos), Boyd Gaming and Golden Entertainment. There also are two things true about the rest of the Las Vegas Valley—the business base will continue to grow, fueled by population growth and the Sun Belt Effect, and gambling is the primary business of locals properties. Don’t want to pay to park or not interested in $10,000 bottle service? Boyd, Red Rock Resorts and South Point properties will be glad to have you. These three public companies stand to benefit from population growth and Las Vegas’ prosperity. Red Rock has long been known as the dominant player in the locals market, and has perfected the formula. Boyd, with about 30 percent of the locals market and over 40 percent of Downtown, is poised to ride those growing markets. Boyd also is strengthening its locals hold with acquisitions. Golden is almost a pure play on southern Nevada’s population growth. It operates the slot routes in places like taverns, grocery stores and pharmacies and has its own chain of mostly upscale taverns, and is adding more through construction and acquisition. • Northern Nevada. For a long time, the Reno area has been the sick man of the U.S. casino industry. No more. The town is booming thanks to high-tech companies coming to town, and, just like Las Vegas, that boom is translating into more gambling revenue. Among public companies, Eldorado and Monarch have their biggest stakes in Reno. Golden also benefits from the growth through slot routes.

Global Gaming Business JANUARY 2017

• Macau and the Far East. Macau gaming revenue has been growing again as new resorts like Wynn Palace and Las Vegas Sands’ Parisian have opened, the city continues to broaden its customer base, and most of the government policies to attack corruption and money laundering have played themselves out. Indeed, there is even some cause for optimism about government policy as compliant Macau can be held up by the national government as a model in comparison to politically rambunctious Hong Kong. One threat to Macau has been the increasingly ambitious plans of casino developers in Australia, the Philippines, South Korea, Southeast Asia and Far East Russia to build resorts based on attracting Chinese high rollers. We’ll see in the coming year whether the mainland government’s recent crackdown on foreign companies poaching Chinese gamblers becomes a broad and effective policy. If it does, Macau just might continue to grow substantially in 2017 and beyond as mainland China’s favored gambling locale. • New gambling—the internet, sports betting, daily fantasy sports, eSports. It isn’t clear that any state will out-and-out legalize internet gaming in the coming year, but it would not be surprising to see state lotteries continue to enter the space. And with New Jersey and Delaware online revenues now growing by double digits, a New York or Pennsylvania just might make the leap. Daily fantasy sports made some progress in being specifically legalized in a number of states last year, and that should continue, though for investors there are few ways to play trend. The big question for 2017 might be whether sports betting is legalized outside of Nevada and grandfathered states. The legislative and judicial cracks are growing, and a breakthrough could cause a deluge. We would not be surprised to see the dam break in 2017, or no later than 2018. Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.fantiniresearch.com.

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p. 18 AGEM:Layout 1 12/15/16 3:19 PM Page 18

AGEMupdate DECEMBER 2016 KEY BOARD OF DIRECTORS ACTIONS

AGEM MEMBER PROFILE

Sega Sammy Creation is one of the companies in Sega Sammy Group, a comprehensive entertainment entity that provides people around the world with various forms of entertainment, such as games, pachislot and pachinko, animation and toys. Sega Sammy Creation utilizes the group’s wealth of creativity, entertainment experience and technology to produce products, and offers a new and exciting experience to the global gaming market. Over the past three years, Sega Sammy has developed two original gaming machines—SicBo Bonus Jackpot and Exciting Baccarat. Their unique features are the striking visual and massive scale of the main cabinet. These never-before-seen designs will catch players’ attention and lure guests from the entire floor. Sega Sammy Creation focuses on the Macau market, but in the near feature the company will expand its market all over the world, including the U.S. In 2016, Sega Sammy Creation launched Exciting Baccarat, an EGM inspired by the baccarat game, one of the most popular card games in Macau and all of Asia. Along with the standard game, the player can also play a side bet, Exciting Reward, which allows the player to obtain even higher payouts, including the progressive jackpot. Baccarat’s most charming feature, “the squeeze effect,” is completely re-created by a proprietary algorithm that adapts to user tendencies. The game ramps up expectations with perfectly timed suspense. Sega Sammy Creation games are installed at casino floors in Macau, including Studio City, Wynn Palace, Sands Cotai Central and others. The slogan of Sega Sammy Creation is “More Fun! More Excitement!” The company understands that the entertainment aspect is growing in casinos, and Sega Sammy Creation will contribute to this trend. For more information, visit www.segasammycreation.co.jp/en/ or contact Shunsuke Nakamura at +81-3-5957-2754, or email info@segasammycreation.co.jp.

Global Gaming Business JANUARY 2017

• Reed Exhibitions and the American Gaming Association gave a short presentation at the December meeting. The new senior vice president of G2E Melissa Ashley was introduced to the group, as she will be taking over from Ed Several and will be the day-to-day contact going forward for both the Las Vegas and Macau shows. Reed shared some key post-show statistics that showed attendance increasing by 7 percent to 26,900, of which there was a 10 percent growth in international visitors (mainly Latin America). There was also an 18 percent increase of visitors to the show on the last day, which resulted in a Thursday that was much busier than usual. Reed and AGA will continue their focus to grow and improve the event for 2017. • AGEM approved to continue its support of key industry trade shows and conferences going into 2017. Members voted to approve a total of $85,000 in contributions to the following events: NIGA Indian Gaming Tradeshow & Convention, April 10-13, San Diego, sponsorship of $50,000, the bulk of which will be used for an on-floor show reception; Canadian Gaming Summit, June 19-21, Vancouver, sponsorship of $15,000; Southern Gaming Summit, May 2-4, Biloxi, sponsorship of $15,000 for the welcome reception; and finally, in its 21st year, the East Coast Gaming Congress and NextGen Forum, May 24-25, Harrah’s Atlantic City, sponsorship of $5,000. • The New Jersey Division of Gaming Enforcement recently contacted a select group of AGEM members with a request for comments regarding the review of current regulations and language in this market. A similar process has been under way in Nevada and has proved to be a very beneficial initiative for all involved. •Association Five new members were voted in at the December meeting, bringing the new total to a record 157 of Gaming Equipment Manufacturers November 2016 members. Universal Gaming Resources, based in Golden, Colorado, was approved as a Bronze memhe AGEM Index posted a modest decrease in Selected positive contributors to the November 2016 ber, whileNovember the others2016 consisted of Associate in Cincinnati, after gaining 15.04 members—AVUITY, points in AGEM Indexbased included the following:Ohio; TraffGen, October 2016. The composite index stood at based in Highland Park, Illinois; Patir Casino Seating, based in Munich, Germany; and EFCOtec Cor Crane Co. (CR) contributed 4.69 points due to an 308.14 points at the close of the month, which 8.06 percent increase in stock price to $73.49. representsbased a decrease of 13.76 or negative 4.27 poration, in Taipei City,points, Taiwan.

percent, when compared to October 2016. The AGEM Index reported a year-over-year increase for the 14th consecutive month, rising 113.81 points, or 58.6 percent, when compared to November 2015.

UPCOMING EVENTS

Scientific Games (SGMS) reported a stock price of

$14.75 (+18.95 percent) and contributed 3.31 points.

• ICE Totally Gaming, February 7-9 at ExCeL London. AGEM will have a presence at the show as Selected negative contributors included the following: During the latest period, eight of the 13 global gaming usual, and looks forward to reported welcoming all members and potential new members to the stand. equipment manufacturers month-to-month increases in stock price, with three up by more than 10 percent. Five manufacturers reported decreases in stock price during the month, with three reporting double-digit drops.

AGEMindex

With a stock price of $25.78 (-10.24 percent),

International Game Technology (IGT) contributed negative 7.17 points.

Konami (TYO:9766) contributed negative 9.85 The AGEM Index posted a modest decrease in November 2016 afterCorp. gaining 15.04 points in October 2016. points to the index due to a 6.63 percent decline in Thecomposite broader stock markets in The index stood reported at 308.14positive points results at the close of the month, which represents a decrease of 13.76 stock price to ¥3,870. November 2016. The S&P 500 reported a month-topoints, 4.27 percent, compared to October month or increase of 3.4when percent, rising to 2,198.81.2016. The AGEM Index reported a year-over-year in Aristocrat Technologies reported a stock price of Additionally, Dow Jones Industrial Average crease for thethe 14th consecutive month, risingincreased 113.81 points, or 58.6 percent, when compared to November AU$15.00 (-2.22 percent) and contributed negative 5.4 percent 19,123.58, whileeight the NASDAQ increased 2015. Duringtothe latest period, of the 13 global gaming4.79 equipment points. manufacturers reported month-to2.6 percent during the period to 5,323.68. month increases in stock price, with three up by more than 10 percent. Five manufacturers reported decreases in stock price during the month, with three reporting double-digit drops.

Agilysys Ainsworth Game Technology

Exchange: Symbol

Stock Price At Month End

Percent Change

Nov-15 Prior Period

Index

(Currency)

Nov-16

Oct-16

Prior Year

Contribution

Nasdaq: AGYS (US$)

10.21

9.65

11.10

5.80

(8.02)

0.19

ASX: AGI (AU$)

1.81

1.78

2.40

1.69

(24.58)

(0.08)

(2.22)

ASX: ALL (AU$)

15.00

15.34

9.49

58.06

(4.79)

Taiwan: 3064 (NT$)

29.60

27.85

20.00

6.28

48.00

0.05

NYSE: CR (US$)

73.49

68.01

52.02

8.06

41.27

4.69

Everi Holdings Inc.

NYSE: EVRI (US$)

2.16

2.01

3.82

7.46

(43.46)

0.14

Galaxy Gaming Inc.

OTCMKTS: GLXZ (US$)

0.61

0.52

0.20

17.31

205.00

0.06

Nasdaq: GPIC (US$)

11.62

10.39

8.86

11.84

31.15

0.15

NYSE: IGT (US$)

25.78

28.72

15.53

(10.24)

66.00

(7.17)

(21.74)

(0.37) (9.85)

Aristocrat Technologies Astro Corp. Crane Co.

Gaming Partners International International Game Technology PLC @ 3& D ' &G )D) Konami Corp. Scientific Games Corporation Transact Technologies

. )/ $

1.23

1.38

(12.20)

TYO: 9766 (¥)

3,870

4,145

2,881

(6.63)

34.33

Nasdaq: SGMS (US$)

14.75

12.40

9.22

18.95

59.98

3.31

Nasdaq: TACT (US$)

6.35

7.20

8.85

(11.81)

(28.25)

(0.07)

D& B

G@3 ' &G

Change in Index Value

(13.76)

AGEM Index Value: October 2016

321.90

AGEM Index Value: November 2016

308.14

AGEM is an international trade association representing manufacturers of electronic gamww.AGEM.or ing devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment. The AGEM Index is published monthly by Association of Gaming Equipment Manufacturers (AGEM) and Applied Analysis | Copyright © 2016

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The Reel Future Of Slot Machines The coalescing of online and land-based slot machines By Steve Ruddock

he slot machine has come a long way since Charles ber of new innovations, from second screens and bonus Fey designed the Liberty Bell in his San Francisco rounds to touch screens and skill-based elements. workshop in 1898. Liberty Bell—believed to be the With continued advancements in computer technolfirst true slot machine—is crude by today’s standards, ogy, the constraints that originally necessitated the simplistic but it was crude by the standards of the day. The genius of Libdesign used by Charles Fey have been removed, and the sky is erty Bell was its simplicity, as it allowed the three-reel, fivethe limit for slot machine designers. symbol machine to be a game changer. Liberty Bell was interesting enough to appeal to the general public, and more importantly, simple enough to allow for automatic cash payForty years ago, asking 10,000 people to envision a “slot maCharles Fey invented the outs. chine” would cause them to conjure up a very specific and first automatic pay slot It was the automatic payouts that distinguished Liberty Bell machine, the Liberty Bell similar image. Like pinball machines of the same era, slot from its peers and predecessors, most of which were based on machines really only varied by branding—there was little difpoker hands and therefore too complex for the machine to boast ferentiation from one slot machine to another when it came an internal payout structure. One such machine, created by the Brooklynto size, shape or even sounds, let alone the mechanics of the game. based company Sittman and Pitt, used five reels of 10 cards each, creating an This is no longer the case. Nowadays, the term “slot machine” is someunwieldy-for-the-time 100,000 unique combinations of cards. Because these thing of a catch-all, as slot machines now come in all shapes and sizes, from other machines couldn’t be programmed to pay the customer, it was left up to the behemoth banks of machines in land-based casinos to online content the business owner where the slot machine was placed to determine the paythat fits on a phone. outs for different hands, and the payouts were The diversity of modern slot machines is endless. There are traditional usually something along the lines of a free drink. reel machines, video slots, touch-screen slots, progressives, 3D slots, coin-op Fey’s design was so good it served as the machines, online slots, online social slots, and competitive and cooperative basic model for every slot machine for 60games. plus years, before technology allowed slot But as noted Steve Walther, senior director of marketing and manufacturers to push the envelope. product management at Konami, the game remains essentially the Beginning in the 1960s, mechanical same. It’s only a matter of where the game is played that differs. reels starting giving way to servomech“The mechanics of the game are the same; the platform is really anisms, and later, to random number genwhere the main differences are,” Walther says of the differences between erators. land-based slots and online slots. “Whether it’s a mobile device or a In 1963, Bally debuted Money Honey, desktop computer, it’s quite a bit of a different experience from playing the first fully electro-mechanical slot main a casino with all of the lights and sounds and entertainment elements chine. In 1976, the first video slot machine that are associated with it.” was introduced by Fortune Coin Co., and Going back to the pinball analogy, the ramps and bumpers may be difin 1984, Inge Telnaus was awarded the ferent, but in the end, you launch a ball and try to keep it in play with two patent for the first electronic, RNG-conflippers. trolled slot-machine payout system. In 1994, the industry ventured into the online world, when the first online One of the challenges slot manufacturers and operators are dealing with is casino was created by Microgaming balancing the features favored by the core slot demographic—which skews Bally’s Money Honey was the first Software Systems. And in the ensuing older—with new elements that might have a stronger appeal to younger years, the industry has unveiled a num- fully electro-mechanical slot machine players, the elusive millennials.

Changing Face of the Slot Machine

Good Content Works Everywhere

Global Gaming Business JANUARY 2017

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Slot manufacturers have discovered what works in land-based casinos also works online, where the demographic is a bit broader, but still mainly overlaps with the core demographics that play traditional slot machines. But slot manufacturers have discovered what works in land-based casinos also works online, where the demographic is a bit broader, but still mainly overlaps with the core demographics that play traditional slot machines. The ambient elements may not be as prevalent in the online space, but the content itself is quite similar. Kent Young, president and founder of Spin Games, breaks online content into two distinct categories—“landbased content that can be replicated as close as possible to what you see in landbased slots, and content developed specifically for the interactive space.” And in terms of what works, it seems to be the former and not the latter. “We’re seeing more and more landbased content coming into the iGaming space, with very good results,” Young says of his company’s real-money gaming and social slot products. “The crossover of brand recognition and brand loyalty in the land-based arena is definitely translating very well into the iGaming arena.” Young points out that this should be expected, since traditional land-based table games like blackjack and roulette do just as well online. Konami has come to the same realization. “What we found from some research is that games that do well in four-walled casinos do well in the online space,” says Walther, “so there’s a natural attraction to casino games that people are familiar with. What works in land works better online than what was designed for online.” Walther also notes that it’s not necessarily the brands from four-walled casinos that resonate and do well online, but rather it’s the similarity in game play and game play types that resonates with traditional slot players when they play online. “Konami launched games on social that aren’t in four-walled casinos that

have done well because they’re designed like the games in the venues in mind,” he says.

Is the Slot Demographic Changing? The question then becomes, what about non-slot players? Is it possible for slot manufacturers, both traditional and online, to create content that appeals to a broader player base? To engage with millennials, Walther indicates that the game has to be packaged and marketed in a different way. “Non-slot players prefer some type of conquest, a test, a wrapper around it,” Walther says, “whereas land-based slot players will gravitate towards the content they’re used to online.” The long and short of it seems to be that millennials and non-slot players need to be enticed by a social aspect to the game. Young concurs: “Generally speaking, the younger millennial-type player is looking for different types of content in the interactive space than the traditional 60-year-old female player at Parx Casino in Pennsylvania.” But Young also cautions that this targeting of the millennial player isn’t at the extreme point some in the industry believe it to be. “It’s not at the point yet,” he says.

Developing and Testing New Games When it comes to research and development, the slot industry has a solid, proven base to build from, so there doesn’t seem to be the need for the paradigm shift aimed at a younger player. The basic recipe seems simple enough: Start with what works and continue to improve and enhance it. Says Young, “We look at what works well in the market and we look at different things—demographic profiles, and what they want, whether it’s a more JANUARY 2017 www.ggbmagazine.com

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“Twenty or 30 years ago, the best, highest-volume slot players were hiding in the dark in the back corners of the casino. People played slots to escape and be alone. But now, part of the escapism is social recognition, and you can see that starting to bleed between the two platforms.” —Steve Walther, senior director of marketing and product management, Konami Gaming volatile gaming experience or entertainment-based experience, and then we brainstorm and do some initial development to see how it performs. “The beauty of our business is we can deploy content onto social very quickly, which gives us a really good test market with access to millions of players.” This is an advantage social content has over traditional land-based slots, as social operators can test new content without having to get the game approved by regulators or worry about finding a spot for it on the casino floor. At Konami, they take a similar approach, building upon their proven products, and as Walther puts it, “leveraging the science behind how we build games,” before following up with field testing. Walther says Konami’s experience with focus groups “is mixed.” Walther analogizes letting someone test a slot machine with the proverbial free lunch: “If you give someone a free sandwich, it’s always going to taste good.”

bridge to broadening the player base, noting how the social aspect of the games online has made some inroads in attracting younger players and appealing to a wider demographic—although it’s not expected to be a panacea. “I think you’re seeing some people do some really good things that are attracting people on the fringes of the demographics because of those social aspects,” Walther says. Walther also believes that the social elements found online is helping tear down the notion that slots are a lone-wolf activity. “Twenty or 30 years ago, the best, highest-volume slot players were hiding in the dark in the back corners of the casino,” he says. “People played slots to escape and be alone. But now, part of the escapism is social recognition, and you can see that starting to bleed between the two platforms.”

Skill-Based Games and Social Elements

On the online front, Young says he is excited about the possibilities to develop new online content using HTML5, which will allow online and social slot providers to add all the bells and whistles the land-based slot manufacturers use. “The land-based experience has been enhanced because they’ve had proprietary platforms that allowed them to do enhanced content deployment like 3D and multiple screens,” Young says. “Over time, online will get to the point of having a similar experience. “In the iGaming space, we’re going to be seeing a lot more enhanced technology available. I look over the last two years and what we can do now with HTML5 technology, and we’re going to see a lot more in terms of features and functions on mobile devices and responsiveness of content deployment. We can do more with the content in terms of features, animations, second-string bonuses, all the stuff in which, even a few years ago, there were a lot of restrictions.” Beginning with Charles Fey, this is the type of player experience slot designers have been trying to re-create and build upon for over 100 years. Fey would have a hard time believing modern slot machines, with their constant barrage of lights and sounds, some with interactive components from video game controls to steering wheels, are the offspring of his Liberty Bell machine, and one can only imagine what Fey would think of the fully immersive augmented reality slots of the future. But at the end of the day, it’s still just a slot machine, based on Fey’s simple design.

It certainly appears the door linking online and land-based slots is currently swinging in one direction. With everyone and their grandmother versed in using the internet and in possession of a smartphone, you’re far more likely to find traditional slot players supplementing their land-based play with online play than you are to find online players metamorphosing into land-based slot players. However, this could be starting to change, thanks to technological enhancements in the industry, and changing attitudes toward slot machines. One of the current trends in the casino industry is skill-based gaming, but as Young notes, skill-based content isn’t particularly new; it’s just new in land-based casinos. “Online skill-based games have been around in Europe for 10 years, so it’s not a new product,” Young says. Over time, Young says he expects the exclusive iGaming content with skill elements to continue to cross over to the land-based arena—something we are starting to see early signs of in New Jersey, with the launch of GameCo’s Danger Arena skill-based slot machines, and on a wider scale with the embrace of eSports. But as eSports aficionados have warned casinos, it’s not just about the game; the experience has to be right, too. Or, as Walther says, you have to put the right wrapper on it. And that wrapper is repackaging slots as a social game. Walther sees a continued move toward making slots more social as the 22

Global Gaming Business JANUARY 2017

Can Online Slots Catch Up To Land-Based Technology?

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NEW YEAR, NEW

OPPORTUNITIES GGB’S ANNUAL

25 PEOPLE TO WATCH

ith 2017 upon us, the changes that impacted the gaming industry in the past several years will intensify. The effects of consolidation, the search for millennials, skill games, eSports, non-gaming revenue, political winds and possible gaming expansion are just a few of the topics that will be at the front of the minds of gaming executives around the world. And, in GGB’s annual “25 People to Watch,” these are some of the people who are going to develop solutions for many of these issues, answering the challenges and opportunities with strategic business decisions, well-thought-out positions, and amazing talent. Chosen by the Editorial Advisory Board of GGB, these important people demonstrate the long-term viability of the gaming industry as a major tool in economic development in jurisdictions around the world.

One Leader, One Company Kevin Sheehan begins to make his mark as CEO and president of Scientific Games By Roger Gros

conglomerate of real estate and travel organizat was a surprise, last August, when Scientific Games announced that fortions and other enterprises. mer Norwegian Cruise Line CEO and President Kevin Sheehan would His challenge at Scientific Games isn’t take the same positions at one of the world’s leading gaming and lottery much different. With the company still putting technology suppliers. Previous President and CEO Gavin Isaacs would be together the merger of lottery giant Scientific moved up to vice chairman of the company. Games with slot manufacturers WMS Gaming Scientific Games Chairman Ronald O. Perelman explained the logic. and Bally Technologies (not to mention SHFL “With the company fully integrated, it is the right time to expand our entertainment, which Bally Technologies leadership team so we can take full advantage of the new and growing opporacquired in 2013), the promise of a tunities open to a company with our global scale and broad expertise,” he streamlined, efficient and profitable sinsaid. “Kevin’s intellect and experience will be an invaluable asset as we move forward as one company.” Sheehan’s expertise has been well-documented. Prior to joining Norwegian Cruise Line, the comWe’ve got great products in the pany had an unenviable reputation as a low-end portfolio, and we want to make sure cruise line. New York native Sheehan engineered a move to the luxury level, helped by a $3 billion acwe’re optimizing those innovations quisition of two other luxury cruise lines. He then across the different businesses. spent time and effort merging the cultures of the The sum of the parts exceeds the disparate parts to create a truly profitable and disindividual pieces. tinguished operation as one solid company. He did similar things at Avis Rent A Car and Cendent, a

“

”

Global Gaming Business JANUARY 2017

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gle company is coming together. Although Sheehan was familiar with gaming operations through Norwegian Cruise Line’s Casinos At Sea program, Sheehan says his relatively limited experience in gaming gives him a fresh perspective on the business and the industry. “When I went into Norwegian, I had never been on a cruise ship. My joke was the only cruise I ever took was on the Staten Island Ferry after my high school prom. The same thing with Avis; I’d never rented cars other than when I was on vacation. “So, here’s another one; a new industry to me. But what happens when you come into a new industry is you’re looking at it from a completely different perspective. Everybody here has either been here, or at IGT, or Konami, or Aristocrat, so they move around within the industry. So, I believe the opportunity I have here is to step back and say, ‘OK, I get it. But why don’t we look at it and try it this way; is there another way to achieve the same result in a smarter way?’”

Smooth Transition Sheehan says the expected benefits and synergies from the mergers are still being realized. “We’ve done some work, but we have more work to do,” he says. “It is a journey. To be realistic, it will take us two or three years to continue to position the company for long-term success.” He says there was still some disconnect between the various divisions when he came on board. “When you look at the overall organization, we still have a bit of a silo mentality. Each of our teams should be working together towards the best outcome for Scientific Games. We work for our shareholders—I want us always keeping that top of mind,” Sheehan says. The collection of brands and talent under one umbrella is what excited Sheehan. “We have some of the best brands in the industry, both licensed and internally developed, that we can implement across our gaming, lottery and interactive channels, coupled with more than 3,000 people focused on innovation and driving where we’re going to be as a company,” he says. “When you have that power, you make sure we’re using it across all of our platforms. We’ve got great products in the portfolio, and we want to make sure we’re optimizing those innovations across the different businesses. The sum of the parts exceeds the individual pieces. We want to encourage our people to want to work together and to create that incremental value.” Sheehan says he values employees above all, and tells a story about how early on in his time at Norwegian he visited the crew’s quarters on one of the ships. “I couldn’t believe how they lived,” he says. “There were four bunks to one tiny room. They had no privacy. I saw one woman had draped a towel down from the upper berth just to get a little privacy. So from then on, every ship built while I was at Norwegian had private cabins for each employee, and then we incrementally implemented lifestyle improvements for them while living on the ship.”

Diamond in the Rough One of the first things that changed after Sheehan’s arrival at Scientific Games was to separate the social gaming interactive division into an unrestricted subsidiary. Just last quarter, the company’s social gaming business had an 81 per-

cent increase in revenue, higher than any other part of the company. “When you look at a massive business like we have, and you have this little jewel inside of it, it gets kind of buried inside the big business,” he says. “So we thought that by taking it and pulling it outside, people would be able to better see our growth rates and the incredible potential of that business. “Our interactive division is still part of the consolidated business, so all the value that’s being accreted resides inside the entire entity. However, we want our investors and the marketplace in general to better see our continuing momentum.”

Stronger Together Synergy was one of the main reasons for the merger of the various companies under the Scientific Games brand. Sheehan says that can be accomplished by taking the best of all of them. “Maybe the biggest realization I’ve had, early on, has been the similarities, differences and synergies in both the gaming and the lottery divisions,” he says. “First, they’re both very regulated and competitive businesses. Also, both rely on innovation and exciting game content to help our customers and our company grow the bottom lines. And having them married within our organization, if you think about it, makes a lot of sense. “Yes, there are differences, but those differences provide more consistent revenue. With lottery, government organizations sign long-term contracts, so there is a lot more consistency from a recurring-revenue standpoint. And to me, the opportunity is there. Most government-controlled jurisdictions are seeking more tax money to help fund important social programs. We need to make sure we are reaching the right people within lottery organizations and governments to demonstrate our ideas and technologies that can help them drive incremental revenue and deliver new ways to engage lottery players—to benefit the states, retailers, beneficiaries and players. And as we know, gaming contracts tend to have shorter life spans, making it critical to drive technology innovation and develop engaging games players love. “When you take that as the premise and the base, we do have tie-ins between all of our businesses. There are plenty of things that we can do together: leverage our technology and content across all platforms, streamline management oversight and share ideas and technology, along with taking advantage of the different processes that we have.”

Customers Come First As a B2B business, Scientific Games differs quite markedly from Norwegian or Avis in that there is a relatively small customer base around the globe. Sheehan says he has spent his first several months as Scientific Games’ CEO meeting and talking to customers. “I was out and about throughout G2E, meeting with everybody,” he says. “And then I flew to the NASPL lottery show in Atlanta, and I had dinner with all of the lottery directors in a very informal setting, so I got a chance to really spend quality time with our customers. Then I flew to Singapore for the World Lottery Summit and another great chance to meet with our customers.” Sheehan says Isaacs has been instrumental in helping him succeed in a new industry. “Gavin is a great guy, and has been very helpful introducing me to many of our best customers and partners. So I think the comfortable and respectful relationship between Gavin and I has alleviated any of the concerns that people might have had about the transition.” JANUARY 2017 www.ggbmagazine.com

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Celebrating Gamesmanship Without giving too much away, Sheehan says he is confident in the direction the company is going. “On the interactive social gaming side, we’ve got a number of games that are highly successful and are fueling today’s growth rate,” he says. “And then we’ve got more engaging games coming out in the next couple of quarters, so that will propel further growth, with a steady pipeline of new games—many of which have already been very successful in land-based casinos and some of which were developed specifically for the online gaming environment. So, we’ve got a whole inventory of games that will keep driving our interactive momentum, and we have a great marketing strategy on how we attract new players. I think that our business is going to continue to have a very powerful growth rate. “The other two businesses (gaming and lottery) are very innovation-driven. Our portfolio in gaming is the industry’s broadest. Casino operators can literally come to Scientific Games for everything they need, including cabinets, game content, table games, chip sorters and shufflers, electronic table systems, casino-management systems, and even mobile solutions with systems integration. “We are known for our cabinet innovation, and it is exciting to see the rollout of our new TwinStar J43 curved, portrait-style slot cabinet, as well as our new PRIZM GameTable, which is a new form factor that encourages social and community play. “The success of our Lottery Division lies in our ability to help lotteries manage their growth challenges in the face of government gaming regulations, procurement processes and limited R&D budgets. That’s where we come in, with instant games and other innovative solutions that can truly drive growth for our lottery partners. We have a program called Cooperative Services that works with our lottery partners and focuses on things like instant-game retail marketing and promotional services—a win for us, for lotteries, and for social programs. “I think we have a fantastic opportunity at Scientific Games. We have been successful, and we’re going to be even more successful thanks to our great momentum, our innovation, and the best employees in the business.”

Global Gaming Business JANUARY 2017

Andy Choy • Chief Gaming Officer, Melco International Development

s chief gaming officer for Lawrence Ho’s Melco International Development, Andy Choy plays a key role in running one of Asia’s largest developers and operators of resort casinos—a glittering string of assets that includes City of Dreams, Studio City and Altira in Macau, City of Dreams Manila in the Philippines and Tigre de Cristal in Russia’s emerging Far East market— and has ambitions that extend from the Yellow Sea and the Sea of Japan to the warm blue waters of the Mediterranean. It’s a portfolio unique for its diversity, too. Melco owns Macau’s only operator of machine gaming arcades, Mocha Clubs, and holds a majority stake in Entertainment Gaming Asia, a Nasdaq-listed company with a casino on Cambodia’s busy border with Thailand and slot operations in Cambodia and the Philippines. Melco also owns 40 percent of a Hong Kong-listed provider of services and technologies to China’s booming lottery market. It keeps Choy plenty busy. Yet, it’s nothing like the career he envisioned when as a young Stanford MBA he first entered the business world as a turnaround specialist for Carl Icahn. “I took a rather fortuitous route to the gaming industry,” he says. “My background is actually in manufacturing and supply-chain management.” That fortuitousness led him to Icahn’s American Casino and Entertainment and from there to Riviera Holdings Corp., where he served as chief executive officer. He came to Macau with Las Vegas Sands as a senior vice president of operations overseeing Sands Macao and the Four Seasons Macao. When he and Stanley Ho’s son met in 2010, the latter’s own gaming empire was beginning to take shape in partnership with James Packer. Melco’s sole integrated resort at the time, City of Dreams, had just opened on the Cotai Strip the year before. But Melco had big plans, and Ho suggested there could be a place in them for Choy. “I figured he was just being polite,” Choy says. But in 2014, with Studio City and Tigre de

Cristal well under construction and City of Dreams Manila about to open, Lawrence sought him out. “My role is to provide an operator’s point of view to decisions made at the Melco corporate level,” Choy explains. “Additionally, I assist the business development efforts by providing operational input early in the process.” Choy is the point man for the all-important gaming side of an aggressive global growth strategy. Melco is slated to break ground this spring on a 500-room integrated resort on the island of Cyprus in partnership with Hard Rock International. The company also has the inside track on a planned IR on South Korea’s popular Jeju island as part of an agreement concluded last year with a fledgling developer called New Silkroad Culturaltainment. The company has a foothold in Spain as part of a partnership to develop an IR with a casino in the planned Barcelona World Project, an expansive enclave of hotels, leisure and entertainment attractions and luxury residences. In Macau, a new hotel is coming to City of Dreams. A major expansion of Tigre de Cristal is in the works: two more hotels, more shops and restaurants and meetings-and-convention facilities at a total projected cost of US$500 million. Choy also is deeply involved in helping to develop a social gaming platform for Entertainment Gaming Asia. And look for him in Japan, too, where Melco figures to be on the A-list of prospective developers if legalization becomes a reality there. —James Rutherford

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Jack of All Trades Kevin Brady • Vice President of Casino Operations/ Internet Gaming, Resorts Casino Hotel

ou won’t be reading much about Kevin Brady in 2017, but you’ll be seeing quite a lot of his ideas and expertise. Those will be very much on display in places like the new $500 million ilani Casino Resort coming to Washington state this spring, in a newly remodeled and reimagined Paragon Casino Resort in Louisiana and in the planning of the multibillion-dollar Inspired integrated resort taking shape at South Korea’s Incheon International Airport. Brady is part of the brain trust mapping the growth and expansion of Mohegan Tribal Gaming Authority, the operating arm of Connecticut’s Mohegan Indian Tribe and one of the most dynamic development and management companies in the industry today. His day job is vice president of casino operations/internet gaming at Atlantic City’s Resorts Casino Hotel, which was on everybody’s mostlikely-to-die list amid the seaside destination’s plunging fortunes when MTGA took over management in 2012 and engineered one of the great turnarounds in gaming in the Northeastern U.S. Brady has been in charge of the casino at Resorts since July 2014, when MTGA President and CEO Bobby Soper lured him back into the fold after seven years as vice president of operations at Pennsylvania’s table games leader, Sands Bethlehem. Brady had been a key player in regional casino operations and player development for Harrah’s Entertainment and Boyd Gaming when Soper recruited him in 2005 to open the slot floor at Mohegan Sun at Pocono Downs, Pennsylvania’s first casino and MTGA’s first foray outside its native Connecticut. The two hit it off immediately and have been friends and colleagues ever since. Brady has amply repaid Soper’s confidence at Resorts, whose revenue growth in percentage terms has been the best in Atlantic City two years running. The property turned double-digit losses into a $3 million profit in 2014, tripled that performance in 2015, and this year, Brady expects net income to surpass $18 million.

Global Gaming Business JANUARY 2017

“I think the thing we’ve done right is we’re always looking for the recipe for success,” Brady says. “It starts with the people. We’ve got great team members who give great customer service. Every casino here has the same stuff. At the end of the day, when a consumer or guest makes a decision to go to a restaurant or casino, it’s the service experience they get that shifts the numbers our way.” The success has given Resorts the flexibility to innovate with things like the iGaming Lounge, the land-based industry’s first dedicated online gaming space, which is being expanded with a bar and a virtual sports offering in support of a partnership with PokerStars that has captured a healthy 18 percent of New Jersey’s internet gaming market. Brady also points to the “guidance, leadership and operational expertise” he’s gotten from the top. Soper and Tom Burke, MTGA’s chief operating officer, “have been omnipresent at the property here,” he says. “Mohegan Sun is one of the most, if not the most successful casino on the East Coast. Any time you can partner with a brand like that, it helps you.” The brand, in turn, has called on him for input on the design, layout and operation of the 160,000-square-foot gaming floor at ilani, which promises to be a category-killer in the Pacific Northwest for the Cowlitz Indian Tribe when it opens in the next few months under MTGA’s development and management. At Paragon, which MTGA is remodeling under a management agreement with the Tunica-Biloxi Tribe, he is providing operational support and expertise in design and capital purchasing. No doubt he’ll be amassing some frequentflier miles, too, as the first phase of the $5 billion Inspired takes shape 30 miles west of Seoul and just a hop across the Yellow Sea from the massive China market. Brady is taking it all in stride. “I specifically work for Resorts, but Tom Burke has asked me to help out with different properties across the brand. It has been a unique experience.” —James Rutherford

Start Spreading the News Cynthia Kiser Murphey • President and COO, New York-New York Hotel & Casino

t’s one of the Las Vegas Strip’s most iconic—and photographed—properties. New York-New York has the faux skyline, complete with the Statue of Liberty and the Brooklyn Bridge in the foreground, where visitors can meet to watch a fireboat spray a cooling sheet of water. But when Cindy Kiser Murphey arrived as the leader of the property six years ago, she knew changes had to be made. “Yes, people would come and snap some pictures, but then they would leave because there was nothing else there,” she says. “So we did a study of the lowest-performing real estate inside of New York-New York, and we found it was the entire Strip frontage. Behind that beautiful façade, there wasn’t activity. So we designed a master plan that would open up to the Strip. There used to be just two ways get into the building. Now there are 12

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right from the front. “We have bars, restaurants and shopping that open up to the outdoors. That’s been the biggest change since we’ve been here. We’ve really activated the pedestrian traffic. We knew there were 22 million people walking by our property, so we made it easier to get in and then gave them some fun things to do that are fresh. We gave them the ability to discover something different.” Murphey was a corporate vice president for human resources before joining New York-New York. She says she had always wanted to be in operations. “I started my career in food-and-beverage,” she says, “and I always wanted to operate hotels. I knew it when I was 16, and decided to go to UNLV, that I wanted to see the world. I still live in Las Vegas, but I did get to see the world.” There are now plenty of different things to do in and around New York-New York now that the Park is open, which connects the Strip with the new T-Mobile Center, Las Vegas’ first 18,000-seat arena, the future home of the NHL’s Vegas Golden Knights. New York-New York is connected to the Park via yet another entrance. “This used to be our tour bus entrance, where our guests would get dropped off and enter the casino,” explains Murphey. “It was very much a back-of-house entrance, so we had to convert it to the front of the house. We added several restaurants and photo ops, park benches and bicycles.” Since the Park also is adjacent to the Monte Carlo hotel (soon to be the Park hotel), Murphey says there’s lots of coordination between the properties. “The leadership, marketing, security and food-and-beverage teams are working very closely together on a day-to-day basis,” she says. “You want the guests to have different experiences. You don’t want to duplicate each other; you want to complement each other.” In addition to T-Mobile, the Park hotel will include a 5,000-seat theater that will serve MGM Resorts the same way the Colosseum at Caesars Palace services that parent company. “It’s a beautiful theater and will bring a new kind of customer to the neighborhood,” she says. And it’s those new customers who are staying in the New York-New York hotel, she says. “We’ve always been blessed with a high occupancy rate, but now we’re able to introduce new people to the property because of the new venues surrounding us.” Murphey says the kinds of events being offered at T-Mobile have also made a difference. “We’ve found that country music is a little more beneficial to us at this time than rock, and the fights are amazing. (UFC superstar) Colin McGregor is our friend because his fans hang out in our Irish pub, Nine Fine Irishmen, prior to his fights. We’re very, very active whenever he fights.” With the new hockey team slated to take the ice next September, Murphey says planning is under way. “We know the hockey fans will hang around all day prior to the game, so we’re figuring out how to keep them occupied and provide unique experiences,” she says. “And if they don’t go to the event, they’ll come to the sports bars or sports books.” —Roger Gros

Born to Betting Chad Beynon • Senior Vice President and Equity Analyst, Macquarie Securities

hould a group of scientists ever so desire to clone a Wall Street casino gaming analyst, they might want to consider using Chad Beynon as a prototype. Coming from a family of math teachers, the number-crunching and projection side of the job comes naturally to him. But his family was also heavily involved in horse racing and wagering in upstate New York, thus instilling in him from a young age a foundational knowledge and interest in gambling, betting and oddsmaking. He recalls his frequent childhood visits to racetracks, where his grandmother would give him small amounts of money to study the odds and bet on the races. This evolved into an interest in poker, and eventually visits to more than 50 casinos worldwide during his college travels. His Wall Street career began in 2005 after interviewing for a position at Prudential’s now-defunct equity research arm. “The analyst called me and said, ‘If you can move to New York in two weeks you have the job,’” Beynon recalls. After bouncing around telecommunications and a hodgepodge of other sectors, he was hardly at a loss for words when Macquarie Securities called and asked him, “What do you know about casinos?” In the decade since, Beynon has fused financial wizardry with his passion and personal interest in gaming to become a respected equity analyst in the space. As he has worked his way up the Macquarie ladder, he has also helped improve the firm’s branding and visibility within the gaming community. In addition to covering the big-hitter casino companies, Beynon goes out of his way to write on newer and sometimes less-publicized verticals of the industry like regional gaming operators, social gaming and the global online gaming giant Amaya. Beynon credits his blue-collar Pittsburgh upbringing as another key driver behind his personal interest in gaming. Having worked in small businesses and restaurants during his younger years, he relates personally to the work being performed and the intricacies involved in running such an operation. He also holds the jobs and economic contributions that casino properties bring to their communities in high esteem. Pointing to Steve Wynn’s tendency of always deferring credit for success to his team members at the service level, Beynon says the most rewarding part of his job is the shoe-leather work. He takes pride in visiting properties and hearing from the team members on the ground—the servers, bartenders, cage managers, table game managers, etc., who are ultimately responsible for making any property a success. “I really think that the differences are made at those levels,” he says. This organic interest in gaming has proven to be the catalyst that keeps him getting out of bed each morning and avoiding the burnout that others in the analyst community frequently encounter. “I still have the passion and the fire that I had on day one. A lot of people in this position after a few years no longer have interest in visiting casinos,” he explains. “If I was in another business of equity research, I don’t think I’d still be on Wall Street.” —Aaron Stanley

JANUARY 2017 www.ggbmagazine.com

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Extending the Legacy Charlie Vig • Chairman, Shakopee Mdewakanton Sioux Community

n Indian Country, there are few people in recent memory who have had bigger shoes to fill than Charlie Vig, who became chairman of the Shakopee Mdewakanton Sioux Community in Minnesota following the passing of tribal gaming legend Stanley Crooks in 2012. By any estimation, the SMSC under Crooks’ 20-year tenure has epitomized the notion of punching above one’s weight. A century and a half prior, the tribe’s members were being hunted down by the United States military and rounded up into concentration camps. Trapped in poverty over the ensuing decades, the remaining band of less than 500 members finally became a federally recognized tribe in 1969 and first dipped their toe in gaming in 1982 with the opening of a bingo hall. Under Crooks’ leadership, the band in 1992 opened Mystic Lake Casino, which—due to strong leadership and optimal location just southwest of Minneapolis—soon became one of the largest and highest-grossing Indian casinos in the country. Gaming has made the tribe one of the nation’s wealthiest, with gross annual revenues estimated to top $1 billion and each tribal member reportedly receiving payouts in excess of $1 million per year. But with Crooks’ passing in 2012, the leadership mantle was passed to Vig—a little-known personality outside the Shakopee Mdewakanton ranks who had previously served as vice chairman after a career helping to build Mystic Lake. In 1992, Vig got his start in the casino business as a project manager at the SMSC’s newly minted Mystic Lake Casino—the closest casino to the Twin Cities. Within three years, he had worked his way up to vice president of the property and was elected to the tribe’s board of gambling directors, where he served seven terms. In January 2012, Vig was elected vice chairman of the SMSC. But when Crooks—who had served as chairman for 20 years—passed away just eight months later, Vig found himself atop one of the nation’s wealthiest and most influential gaming tribes. For the past four years, Vig has been making the transition from a virtually unknown figure outside of the SMSC confines to one of the most important and influential personalities in all of Indian Country. Vig’s task has not just been enhancing the tribe’s

Global Gaming Business JANUARY 2017

wealth, sovereignty and self-sufficiency through casino gaming, but also through the diversification of hen local its economic base,opposition forging new arose last year to Novocommunity partnerships and conmatic’s planned US$500 miltinuing the SMSC’s long-standing lion purchase of a 52 percent tradition of extending financial asstake in to Ainsworth Game Techsistance other tribes in Minnology, it was CEO Harald nesota and around the country. Neumann and Chief TechnolSince 1992, the SMSC has ogy Officer Thomas Graf whoin given more than $500 million got onand a plane to Sydney to grants economic development seal the deal with Ainsworth’s loans to other tribes. board.“Anytime a tribe is in need They were able other and on their last leg,toit point seemsup, likeamong the Shakopee things, that by hitching its future to a company Mdewakanton come through,” says one observer. the size oflike Novomatic, Ainsworth gain “They’re these guardian angelswould of Indian access to a team of 2,000 R&D experts, an imCountry.” measurable competitive boost, as Graf knows Vig also is overseeing ongoing efforts to conbetter than anyone. tinue investment in both the tribe’s gaming and In the end, the deal as went and Novonon-gaming businesses, wellahead, as its community matic came away with control of Australia’s outreach and lending programs—all of which are No. and one of to theeconomic premier diversifimanseen2asslot-maker necessary ingredients ufacturers of EGMs in the world, with cation. A$285.5 million in sales in fiscal 2016point $204to Because of these efforts, observers million of it from outside its home country SMSC as a prototype example of how a tribe can and 65 percent thatgaming from North andbecoming South become wealthyoffrom without America, where Ainsworth’s installed base unhealthily dependent on it—particularly asex-comceeds 4,500 units in both thegrows Classnationwide III and and petition in the gaming space Class II markets. local competitors like the Minnesota Lottery look “With their so much consolidation, we all know to expand offerings. it becomes more and more aSMSC numbers game With 4,200 employees, is the largest going forward,” Graf told the Australian press. employer in the Scott County, the fastest-growing Of course, the numbers were stacked county in Minnesota. It has also given out high more at Novomatic well in before thedonations acquisition. In than $325 million charity to organifact, viewed from a global perspective, the zations and causes. the horse company really haswith no peer in terms of Park A partnership the Canterbury scale and diversity of its reach. racetrack clean energy projects, a new hotel develMoreatthan 235,000 Novomatic gaming in opment the Mall of America, investments machines are played in more than 1,600 casipublic safety and infrastructure and a Harvard nos, slot halls and sports betting venues in University-praised community involvement80 effort countries on sixtocontinents. Therelations companywith is adthat has helped assuage shaky one of communities, Europe’s largest operators casinos and jacent form the glueofthat is expected other gaming venues and a major operator and to ensure the tribe’s welfare in the coming years. supplier to Vig the isn’t continent’s massive lottery inWhile as immersed in the day-to-day dustry. It spans the globe with facilities in more gaming operations today as earlier in his career, the countries forhis developing, than tribe’s10mantra under watch has producing been the conand distributing innovative machineand games and tinuation of the stellar management corporate content, state-of-the-art gaming systems and citizenship principles that have made the Shakopee supporting technologies. company Mdewakanton the envy ofThe gaming tribesalso nationmoved early and aggressively into the online wide. and mobile sectors via subsidiaries in its home —Aaron Stanley base of Austria (Greentube) and in Great

The Good Fight Connie Jones • Director of Responsible Gaming, Association of Gaming Equipment Manufacturers

onnie Jones spent nearly 20 years at the major slot manufacturer IGT. Her charge was to keep the company informed and up to date about issues related to responsible gaming, and to make sure that the products produced by the company do not encourage or worsen problem gambling. She says she jumped at the opportunity to take a similar position at the Association of Gaming Equipment Manufacturers (AGEM) because it meant she was speaking for the entire industry, which includes all the major suppliers. “This was very fortuitous for me and for AGEM,” she says. “It’s been a great opportunity for me to be able to spread the word more widely about how we need to approach responsible gaming as an industry and as individual companies.” Jones says that her new role, however, should not be interpreted as allowing companies to abdicate their responsible gaming responsibilities to AGEM alone. “My role at AGEM cannot give companies formal RG programs, does not provide training, does not recommend how to work with clients on RG initiatives, or build solid in-house efforts to battle problem gambling,” she says. “Those are the things that my role, through AGEM, cannot give the suppliers. I can’t interface with their marketing people to flag RG issues in ad campaigns, communications or government and public relations. You don’t get that just through an AGEM membership. They need a point person to sort through all these RG issues.” With AGEM, Jones doesn’t only watch over gaming, she’s involved in government markets with lotteries. Particularly since the mergers of Scientific Games and Bally/WMS, as well as IGT and GTECH, Jones says companies have to be extra cautious about harm minimization.

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“To get the lottery contracts,” she explains, “companies have to submit RFPs. And often, those contracts have entire sections devoted to responsible gaming and corporate social responsibility. So you have to explain in detail what you are doing in these areas. A lottery is accountable to the governor, so a company needs to have complete information on RG and CSR. In the past, companies were not asked to provide consumer protection information about their technology in their RFP. Those days have changed. Outside the United States—Canada, Australia and elsewhere—it is crucial to provide that information.” Jones also makes a distinction between “gaming” and “gambling.” When talking about gaming, she’s referencing the play-for-fun social games that can have an equally devastating effect on problem gamblers. “There are no protections for people who ‘buy’ those worthless chips in social casinos,” she says. “And sometimes the speed and depth of those games get quite heated, so there needs to be some kind of reaction from the industry if we are to avoid any problems there.” Jones is also an advocate of pre-commitment, a technology that allows players to set limits on their slot or table play, with one caveat. “It has to be totally voluntary for the players,” she says. “Pre-commitment on a machine is simply technology that allows players to set limits on time and money, and it doesn’t materially affect the revenue. But once it is mandatory, revenues plummet, players are unhappy, operators are unhappy, and the government is unhappy because tax revenues fall.” Jones points to the GameSense program in Massachusetts as being a potentially game-changing program for casinos. “They’re calling it the ‘gold standard’ for responsible gaming,” she says. “And the early results are pretty impressive. It’s only being offered at one casino in the state—the only one operating— but it will be expanded as more casinos open. It’s the first state in the U.S. to implement a program like this, and it’s a step in the right direction.” —Roger Gros

Focusing on Your UK Gaming Needs Martha Sabol and Lisa Navarro lead a multidisciplinary team of Greenberg Traurig attorneys who assist gaming companies in the UK. Given London’s standing as a leading global financial centre and the business, finance and legal hub of Europe, the Middle East and Africa, the Greenberg Traurig lawyers in London are well placed to provide an important service to our global client base. >

Martha, Global Gaming Practice Co-chair, focuses her practice on gaming regulatory and business law, representing national and international casino owners, operators and suppliers in the areas of regulatory compliance, acquisition, licensure, internal investigation matters and corporate counseling.

Lisa advises on the application of UK and EU competition and regulatory law, supporting clients in relation to compliance, commercial arrangements, supply chain management, and dispute resolution. Lisa also advises on international merger control issues, having helped clients to obtain clearances for transactions in various jurisdictions worldwide, including the UK.

The Greenberg Traurig UK team is prepared to focus on you.

Martha A. Sabol

Lisa Navarro

312.456.8400 sabolm@gtlaw.com

+44 (0) 203 349 8700 navarrol@gtlaw.com

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. 28435

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Premium Player Dallas Orchard • Senior Vice President, Global Premium Products, International Game Technology

Hard Act to Follow Catherine Cortez Masto • U.S. Senator

y virtue of being the newly elected senator from Nevada and Harry Reid’s hand-picked successor, Catherine Cortez Masto automatically earns herself a spot atop any gaming industry watch list for 2017. The first-ever female Hispanic to be elected to the United States Senate, she inherits the office vacated by the legendary Reid, who has served as the champion of the gaming industry in Congress for the past three decades. But because her views on casinos and gaming sparsely arose during her bitterly fought election contest against Republican Congressman Joe Heck, she remains somewhat enigmatic to industry observers who are eager to know what they should be expecting out of her. After all, she devoted far more resources during her two-term stint as Nevada attorney general to fighting predatory lenders and foreclosure fraudsters and protecting vulnerable groups like children, minorities and seniors than to gaming issues. For its part, the gaming industry remained officially neutral in the race between Masto and Heck, though she did earn the endorsement of Heather Murren, spouse of MGM Resorts CEO Jim Murren, in a Spanish-language op-ed in the Las Vegas-based El Mundo newspaper. But the casino business need not fear or question her commitment to their industry, her aides emphasize. They say she will work to champion Nevada’s gaming industry and advance the national interests of the sector in the same manner and with the same zeal as Reid. Masto, her aides say, understands as well as anyone the vital role that gaming and tourism plays in the Nevada economy. Her father, Manny Cortez, began his career parking cars at a Las Vegas hotel before working his way up to become president of the Las Vegas Convention and Visitors Authority. Before passing away in 2006, Cortez had become one of the pre-eminent figures in building Vegas and southern Nevada into a worldwide tourist destination and a visionary with regards to diversifying the region’s economic base. As a result of this upbringing and familial influence, Masto is embedded with a strong appreciation of how gaming and the tourism industry more broadly affect economic growth and middle-class job creation in southern Nevada. But walking in the footsteps of Reid, unquestionably one of the gaming industry’s patron saints, will be no easy task. Reid had worked his way to the very top of the Democratic Party food chain over his three decades in the Senate, and thus enjoyed tremendous power and influence in crafting the party’s agenda, as well as discretion to block and advance legislation. Masto, on the other hand, will begin her Senate career at the bottom of the ladder among the party’s rank and file. She and her fellow newcomers will be generally expected to keep silent, raise money and go along with advancing the party platform. But new senators who do their jobs well have the opportunity to move up the party ranks quickly. Also, as a Latina, Masto will likely punch above her weight in a Democratic caucus that is keen to expand its appeal to both women and Hispanic voters. —Aaron Stanley

Global Gaming Business JANUARY 2017

eading slot manufacturer International Game Technology is on a mission to recapture its former dominance of the worldwide slot market—a dominance that once saw the company in command of more than three-quarters of all slot machine sales. IGT still owns the market for some categories—mechanical reels and video poker are just two examples. However, over the past decade, competitors have captured a significant share of the premium market, including recurring-revenue slots in the gaming operations category. Late in 2015, IGT named Dallas Orchard senior vice president of global premium products, and charged him with returning IGT’s dominance of the category. Few could imagine a more logical choice for the role. Orchard had been a key force in one of those competitors chipping away at IGT’s premium market share—Aristocrat Leisure Limited. In his eight years at Aristocrat, Orchard—who was vice president of gaming operations—was central in building up that company’s North American recurring-revenue business, the main result of which was Aristocrat’s market capitalization growing from AUD1.7 billion (US$1.3 billion) to an all-time high of approximately AUD10.6 billion. For the past year, Orchard has been busy working toward the same kind of transformation for IGT’s recurringrevenue portfolio, a category in which the company once was the undisputed champion. In fact, he says one strong draw when the IGT job was offered was the ability to work with a new toolkit that included the one game that invented the gaming operations business. “I was competing with IGT for a long time, and of course, I was always jealous of Wheel of Fortune,” Orchard says, “and of mechanical reels in general. My world was always video, so being able to get my hands on that S3000 and that Wheel of Fortune product line—which has not been ignored, but innovated upon over the years as much as it should be—was appealing to me. “But the mechanical reel portfolio as a whole is what I was excited to get my hands on, to really grow that strategy.” Global Gaming Expo 2016 provided Orchard the first showcase of his premium-game strategy—and Wheel of Fortune was, as usual, center-stage. Vanna White, co-star of TV’s Wheel of Fortune, was on hand at IGT’s booth to help celebrate the game’s 20th anniversary, and to help launch Wheel of Fortune MegaTower, the first giant-format version of the iconic game. “Last year, we displayed Wheel of Fortune 3D, which

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Food for Thought Steve Weitman • Chief Operating Officer, Wynn & Encore Las Vegas was the most highly anticipated product of that show,” Orchard says. “That’s in the market now, and being able to just expand upon the segmentation models inside of Wheel of Fortune has been important to us.” Wheel of Fortune is only the beginning—and only one of the new kinds of slots now in Orchard’s wheelhouse. Prominent among them is the True 3D line, which came to IGT with its merger with GTECH. “Our 3D product is still blowing customers away, and there still is no competition our there for it,” he says. “It’s not really a niche product anymore; there are well above 2,000 units installed, and we’ve got seven games. We just kicked off aggressive promotion because we want to get more games out there—because we’re not seeing any type of dilution or saturation in the category.” One new game in that category launches a new format the company calls “4D.” Sphinx 4D takes the True 3D effect, which is the most realistic 3D anywhere without the aid of glasses, and adds gesture and haptic control. “In 3D, people always reach out to grab the objects,” Orchard explains. “With the haptic feature, we’re giving them that opportunity. You literally can feel things within the game.” The True 3D/4D category joins new cabinets such as the CrystalDual+ Stepper and the CrystalCurve Ultra in pumping new life into IGT’s premium game category. “I’ve tried to bring strategic rationale back to IGT’s premium business,” Orchard says. “So, we’ve established ourselves again with a physical presence. We’ve got six new cabinets with dedicated game mechanics and product strategy, and a deep, 12-month rolling strategy to deliver that content and make sure there are no gaps.” Inside that strategy, Orchard says IGT will remain dedicated to introducing at least one new premium product every quarter. The company is also doubling down on its licensed brands, launching Haley-Davidson, Betty White, The Goonies, The Voice, new versions of Ellen and more. Orchard says his effort this year will benefit from the fact that the integration of IGT’s former companies is complete. “We went through merger last year, but it was hard work. As a product team, sales team and executive team, we owned this year’s G2E. “The proof will be in the pudding, but I think we’ve demonstrated our progress as a company. We’ve been listening to our customers, we’ve delivered upon our commitments, and we can’t wait to get these new products into the marketplace.” In other words, IGT is now running on all cylinders, and at the front of that journey is the new focus on premium product. “We’re already preparing for next year’s G2E,” Orchard says. “Once you show this type of progress, it’s got to get bigger and better every year.” —Frank Legato

rom the employee dining room to the buffet to the finest gourmet restaurant in the property, Steve Weitman stands behind every meal served at Wynn and Encore Las Vegas. With almost 10 years under his belt at the property—he was recently promoted from senior vice president of food and beverage to chief operating officer—his discerning eye spots a guest favorite every time. “When our guests walk in,” he explains, “there’s such a high expectation of seeing that Wynn name on the brand, that they arrive with the highest level of expectation, whether it’s Zoozacrackers, our deli, or the Drugstore Café, or Wing Lei, whichever restaurant or outlet they’re going into. And our job is always to exceed that expectation.” While the food is obviously important at Wynn, Weitman strives for much more. “At the end of the day, it has to be a memorable experience,” he says. “The focus is on three buckets: the environment, the quality of our food and beverage, the excellence of our service. And my job and responsibility is to make sure all three of those buckets are continuously full, and everybody is on board in terms of those three areas.” Weitman measures the success of his efforts by some traditional methods and some not so traditional. “I think the one area that I’m most proud of is the consistency that we’ve been able to maintain across all of our outlets,” he says. “All of our fine dining outlets last year were given four stars by Forbes, so it’s really the expectation of our guests coming in that their experience is consistent in terms of how we interact with them from a service standpoint, the quality of the food and beverage at the price point that’s being delivered, and their overall environment.” But there are more immediate and urgent ways to get feedback in these days of social media. “When a guest leaves there, there’s no question in their mind that the next time they’re back in Vegas, that they want to return to that restaurant,” he says. “And that’s really our measurement of success. Social media has been very interesting. Everybody now takes their phone out, and they want take a picture of the meal or their surroundings. I wouldn’t say that’s solely one of the definitions of our success, but I don’t think there is anything better than when you go to our website, and the guest has posted a picture there, or on their own website or app. But it’s sort of a defining factor now, in terms of wanting to take the experience with them.” In the near future, Weitman says the property is renovating the Drugstore Café and the Parasol Bar, as well as starting to think about the experiences that will be provided at the new theme park/water park that Steve Wynn has proposed behind Wynn and Encore (although he stresses it’s not yet approved by the board of directors). “It’s really an evolutionary process,” he says. “It doesn’t ever stop. One of the greatest things about working here is we’re always pushing ourselves to the limit—through the menus, through the physical changes, to really come back and evolve over time.” —Roger Gros

JANUARY 2017 www.ggbmagazine.com

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2017 25 PEOPLE TO WATCH

Developing the Rebound

Cash Isn’t King

Mike Salzman • Senior Vice President, Development,

Kirk Sanford • Co-founder and

Caesars Entertainment Corporation

pending the first five years of his career as a consultant living out of hotel rooms gave Mike Salzman a keen awareness of what a compelling and intriguing guest experience should look like. It was this backdrop that propelled him toward the hospitality end of the spectrum after completing a real estate-focused MBA in 2009. He took his first job thereafter with Caesars Entertainment in Las Vegas and hasn’t looked back. “I really enjoy the service and placemaking aspect of hospitality projects,” he explains. “There’s a real opportunity to delight the customers in a way that in certain other asset classes you certainly wouldn’t have.” While working his way up through the Caesars development division, Salzman cut his teeth working on the company’s three projects in Ohio before spearheading its bid for the Boston casino license. While the project was ultimately unsuccessful, it proved to be just the experience he needed in shepherding the logistics involved in putting together a major casino bid. When Caesars’ longtime head of development Greg Miller left the company in the summer of 2016, Salzman became the man to lead the company’s development efforts in the Americas. Concurrently, Caesars’ bankruptcy proceedings and restructuring—including the spinoff of certain property assets into a real-estate investment trust— have largely been resolved and will be in the rearview mirror as of early 2017. “As it relates to the period of time when we were going through the restructuring, we made the best of a challenging situation,” he says. While the two-year process made potential expansion efforts tricky due to financial and reputational limitations, the company drew a bit of luck because few such opportunities actually presented themselves. This allowed Caesars to significantly reinvest in its properties in Las Vegas and elsewhere—pumping roughly $420 million into renovating 7,000 hotel rooms throughout the enterprise while continuing to deliver strong operating results. “We were fortunate that we’ve been able to do that in spite of the restructuring process,” he says. Looking ahead, Salzman and his team have a much healthier balance sheet as they move into 2017. He maintains that the brand remains healthy and that customer confidence in the company is sound. “I don’t perceive that the bankruptcy damaged our brand with customers,” he says. “I still think Caesars is the best-known gaming brand in the world.” So, what comes next? He says he is eyeing new potential markets for expansion, such as Toronto, Atlanta and Brazil, while thinking about ways to reshape the company’s business to better appeal to younger players who are more averse to slot play than older demographics. But overall, he emphasizes the importance of taking the long view as the company looks to expand its brand. “We’re at a bit of an inflection point as a company,” he says, adding that he sees tremendous future opportunity for his team as they navigate the ongoing convergence between the gaming, hospitality and non-gaming amenity components of the business. —Aaron Stanley 34

Global Gaming Business JANUARY 2017

CEO, Sightline

irk Sanford had a clear vision. Or was it a Sightline? The 49-year-old Napa, California native has showcased a wealth of cutting-edge skills as the founder and CEO of Las Vegasbased Sightline. Stanford, along with several colleagues he brought on board from Global Cash Access, unfurled a revolutionary cash-dispersal process in recent years. “The industry has talked about or attempted to go cashless for the past 15 years, and for a variety of reasons, it has failed,” he says. “Our team set out on a mission to solve this problem, and we think we have done that with Play+ as the first truly cashless solution that benefits both gaming operators and gaming players. “There is $2.5 trillion in cash being used for gambling in the worldwide gaming industry. Of that, $750 billion is being used for gambling in the United States.” Sanford says cash is disappearing in the general retail economy, with only 14 percent of transactions being conducted with it. “However, just the opposite is happening when it comes to the gaming industry, with 95 percent of all gaming activity being done with cash (the 5 percent of non-cash in gaming is related to those that have casino credit markers). The Play+ vision is to displace green paper with cashless transactions.” Sanford’s company prospered in another unconventional way. Rather than build up to a certain point and then be acquired by a bigger outfit, Sightline embraced larger businesses. It obtained partnerships with Discover and Vantiv (which did buy a small portion of Sightline) to fortify the operation. “Discover is our network partner that allows the patron to spend their Play+ money for non-gaming purchases such as dining and shopping either on the casino property or off the casino property,” Sanford says. “Vantiv is our processing partner that facilitates the credit and debit card loads (aka, top up) for a patron to put money into their Play+ prepaid account.” Sightline fashioned a major breakthrough in Nevada with the Play+ card in 2016. An in-state patron can play from a home, a tablet, mobile device, even by phone and move funds in and out. It’s more user-friendly than the classic method of going to the property, funding your account and then traveling there to collect money. Sanford says Play+ completed a very successful trial run at Mohegan Sun in Connecticut, and is now used for remote funding cash-out at MGM properties, Station casinos, William Hill, Wynn sometime this month, and several more to be announced early in 2017. Sightline also figures to make a lottery entrance, underscoring Sanford’s role as an innovator. Sanford masters small details and thinks big. His entrepreneurial leadership took Global Cash Access from a privately held startup company to a public company with more than $1.5 billion market cap, $650 million in annualized revenues and 400 employees around the world. He has completed various M&A, leverage recapitalization, high yield financings, private equity, and initial public offerings and was featured by Business Week in 2006 as one of the Top 100 CEOs Under 40. —Dave Bontempo

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A Great Track Record Ryan Eller • President, Resorts World New York; Senior Vice President of Development, Genting America

he name Genting may not ring a bell for most Americans, but that’s all changing with the success of the Malaysian firm’s gaming projects in New York and Las Vegas. Since opening in October 2011, Resorts World Casino New York City at Aqueduct Race Track has become the most successful slot hall in the United States, with 5,550 video gaming machines that draw 10 million visitors a year. The racino’s tax rate—the highest in the nation at 70 percent—has also made it a very generous community partner; in five years of operations, Resorts World has contributed $1.6 billion to the state education fund. Based on that track record, Resorts World will add 750,000 square feet and 1,000 gaming terminals to the property. At the reins is Ryan Eller, the former Resorts World CFO who became president in 2014. With more than 10 years of experience in commercial and tribal gaming, the former Marine is also overseeing the development of Resorts World Las Vegas. The scope of the New York investment—up to $500 million—is justified by the numbers, says Eller. “This year we expect revenues approaching $870 million of gross gaming win—it’s really unparalleled in the country.” The project is also a hedge against future competition. New York City’s only casino dodged a bullet when New Jersey voters vetoed a plan to bring mammoth gaming halls to the northern part of the state, “on the doorstep of Manhattan,”

Eller says. “The investment we’re contemplating is not only a way to protect our current asset, base and position; it’s intended to better position us to ultimately be a fully integrated resort in the future.” A graduate of the U.S. Naval Academy in Annapolis, Eller spent eight years in the Marine Corps before heading to Harvard Business School. On the advice of a fellow veteran, he joined Caesars Entertainment as part of its President’s Associate program. Surprisingly, he says the two occupations—military and gaming—have a lot in common. “Both are people businesses,” he says. “We have more than 1,000 employees at Resorts World who have thousands of interactions with customers every day. In the military, though one person is accountable, everyone works toward a common goal. And if they believe in that goal, they are ultimately capable of extraordinary things.” As senior vice president of development for Genting Americas, Eller is also deeply involved in development of the 3,000-room Las Vegas property, which will be the first new integrated resort to open on the Strip since before the recession. “We have a comprehensive, appropriately scaled and designed project that will transform the market,” says Eller. “The cranes are going up, and you’ll see an extraordinary level of construction in the first quarter of next year. It’s like moving a gigantic ship, and I’m frankly happy to be able to steer that ship.” The resort is projected to open in late 2018 or early 2019. But New York is Eller’s primary focus, and the benchmark for Genting’s performance in Nevada. “It’s our anchor in the Americas, our bellwether of success,” he says. “My focus is here, to try to ensure we grow on the success we’ve built as Genting’s first foray in the Americas.” —Marjorie Preston

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2017 25 PEOPLE TO WATCH

Digital Dreams David Chang • Founder

West Meets East

and CEO, Betcade

Kevin Kelley • Chief Operating Officer, Galaxy Entertainment Group

pple is cool and all, but it’s Google’s Android OS that rules the global smartphone market, powering around 80 percent of all handsets and 65 percent of tablets, which for the world’s mobile gamers means Google Play Store, now in its eighth year, has pretty much become the go-to shopping mall. This should translate to stupendous access for remote gambling operators. Only Google doesn’t allow real-money gambling apps on Play Store. It’s a real problem. Enter David Chang, whose California-based startup Betcade has launched the first dedicated Android app store for gamblers. Betcade, which went public with its platform in the U.K. in November, was developed in collaboration with design company Fantasy to deliver the look and feel of a traditional app store with easily navigable categories for different game verticals, plenty of visuals, and extras like star-based reviews and actual promotions, which Apple’s App Store doesn’t provide. An integrated payment system is in the pipeline for the first quarter, so users will be able to deposit funds with Betcade for wagering on any RMG app they choose to download, similar to the way Apple and Google handle app store payments—and plans are in the works to round out the offering with messaging and a real-time news feed, data and analytics tools for operators and regulators, even safeguards and controls to promote responsible gambling. “There are lots of things, lots of touch points we want to accomplish,” says Chang, whose aim for Betcade is to be a vehicle for helping the industry reap the same benefits everyone else has enjoyed in the migration over the last decade to mobile. “For example, take integrated payments,” he says. “It’s very common everywhere you look. But it’s novel to gambling. Everybody else has been living with this for the last seven years.” It’s very much an outsider’s perspective, one for which Chang’s experience uniquely suits him. He was an entertainment lawyer who got involved in the tech side of things working with a number of Silicon Valley marketing companies. It piqued his interest in the wider world of non-gambling games, and he launched and grew two mo-

bile games companies, both still in business, before being approached by the founders of Gamblit Gaming, an innovative developer of wagering applications for skill-based and video games, also California-based. He became chief marketing officer and head of industry relations for the company not out of any particular attraction to gambling, he says. “What attracted me to that role—I didn’t find gambling games that interesting—was developing games that non-gambling gamers, millennials and Gen-Xers would enjoy. That interested me.” Betcade was born out of much the same thought process, from looking at the bigger picture from enough distance to be able to see where a lot of different pieces fit. “It was basically me looking at the whole ecosystem,” he says, “looking at what was out there in terms of what the industry was doing to get out there, the challenges the industry faced that other digital entertainment didn’t face.” The gambling industry, he says, “is sort of what the games industry was like five years ago, in the transition that took it from land-based to online and from an online experience to a mobile experience.” Betcade’s mission is to normalize the transition. “The genesis of it was I just wanted to make the consumption of gambling conceptually the same as anything else,” he says. “If you look at it from the customer experience and what they prefer, it’s really about bringing gambling in line with the consumption of other products.” The company is directing a major marketing push in Britain. Big-time operators the likes of William Hill and Betsson are already on board, and Chang and his team are talking to global leaders in every sector, from casino and sports betting to poker, bingo, lottery and daily fantasy sports. “As a startup guy, it’s nice to see your value proposition embraced,” he says. “We don’t have to do a lot of selling. It’s more like explaining it. And when you do, they say, ‘Yeah, that’s great.’” —James Rutherford

Global Gaming Business JANUARY 2017

hen you’ve worked for some of the most innovative companies in gaming, you have a choice about where you want to live and work. So when Kevin Kelley left his job as COO of Station Casinos in 2012, he thought long and hard about where he wanted to work. “I took some time off, and when I decided to come back, I had to consider whether I wanted to play in the major leagues or not,” he says. “And there is no doubt that Macau is the major leagues. There’s no place like it in the entire world. It’s such a robust market and it’s such an interesting time in that market. It makes coming to work fun!” So when Galaxy Entertainment, which is one of the major players in Macau, offered him the position of chief operating officer, he grabbed it. Kelley had previous experience in Macau with Las Vegas Sands properties prior to taking the Station Casinos position, so he liked the complexity of the Macau market. “It’s sometimes a daunting task getting your arms around all the different pieces, but that’s what makes it exciting,” he says. But Kelley arrived in Macau at a time when the booming market had ground to a dead stop. Revenues fell dramatically for two years as China cracked down on corruption and the flow of money in and out of the country, making it sometimes risky to even travel to Macau. But Galaxy wasn’t hit as hard as its competitors, and Kelley credits the philosophy of Galaxy Chairman Dr. Lui Che Woo and his son, Vice Chairman Francis Lui. “The company has always had a long-term vision for the market,” says Kelley. “We believe very strongly that Macau is a great destination with loads of potential. But like every market, we go through cycles. So we pulled in the reins of managing what we could manage and controlling what we could control. We reduced a lot of operating costs out of the business that were not necessary. At the same time, we were very focused on the fundamentals of our business.” He says that starts with the excellent guest service provided by Galaxy employees. “We made sure our team members felt supported and remained motivated to deliver a great experience for our customers,” he says. “That was a

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SIMPLY S IMPLY BRILLIANT... B RILLIANT... very important part of our success as we went through this trough.” The “Asian Heart” service, says Kelley, isn’t just a slogan or a tagline; it’s a very real measure of the warmth provided by Galaxy employees. “It comes from our chairman and vice chairman and it gets pushed all the way down. We walk the walk every single day. “We’re blessed to have a great team of people from top to bottom,” he points out. “It starts with hiring right, and I have to give a lot of credit to Eileen Lui, who does a great job in hiring people who have the ‘Asian Heart’ spirit inside of them. The company works very hard to make sure we support and treat everyone with dignity and respect so they feel really good about coming to work.” In addition, the opening of phase II of Galaxy Macau before the downturn made a big difference in the company being able to ride out difficult times. “The customers really appreciated the facilities we added just prior to the downturn that are aligned with our long-term vision,” he says. “It was the right choice, with the right product that showed our commitment to the future of the market. “Being first in was a good thing. I think people now realize that these properties take some time to ramp up as the market starts to shift and mature in its new form. At one time it was all about the VIP. Now it’s about the mass market and the many different segments inside that mass market. “We have a very diversified resort experience here that allows us to capture the best of the various segments of the mass market, as well as the VIP business. So when you put it all together, it allows us to push forward a little faster, harder and higher than the other properties that may have a more narrow product offering.” —Roger Gros

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2017 25 PEOPLE TO WATCH

Virtual Realities Luisa Woods • Vice President, Online and Internet Marketing, Tropicana Entertainment Inc.

t’s a matter of routine for Luisa Woods. Every morning when she wakes up, she reaches for her mobile phone to check TropicanaCasino.com. “It’s literally the first thing I do when I open my eyes—before I get out of bed, before I have my first cup of coffee, I check my numbers,” says Tropicana’s vice president of online and internet marketing. At a glance, those numbers tell Woods how many people are playing online, how many are new to the site and other key performance indicators including the pace of revenues (online revenues in the state topped $16.7 million in October, up almost 30 percent year-on-year, with Tropicana bringing in more than $3 million of the total). Woods came to Atlantic City in late 2013, tapped by Tropicana shortly before New Jersey officially launched legal online gaming. Her job: to deliver, in a virtual environment, the same dynamic experience guests enjoy at the bricks-and-mortar casino. “There are technical hurdles that we all face in the industry,” Woods says, “but I want playing online to be as easy for our customers as strolling in off the Boardwalk.” Like many in the industry, the Canadian native discovered her career almost by accident. She began during graduate school as a researcher “at the intersection of culture and technology,” studying the use of multimedia games in the education field. In 1997, she founded Toronto-based Internet Presence Inc., which outsourced online marketing services for ecommerce clients and specialized in the online gaming and software sectors. “I spent my early career building a startup agency in a startup industry,” says Woods. “At that time, gaming software platforms were extremely pared down—essentially a random number generator and downloaded graphics files.” As CEO, Woods provided her clients broad marketing support: “creative, strategic, acquisition, retention, campaign tracking and optimization, customer service and beyond. I gained a diverse base of experience with product, operations and marketing. As the industry has matured, this range has been invaluable both in working across disciplines and bridging functions and in allocating and organizing resources.” The nature of online gaming eliminates much of the opportunity for direct customer contact that exists at Tropicana Atlantic City, but Woods values talking by phone with her customers, and makes it a point to do so at every opportunity. “It’s helpful to see our product and the user experience from their perspective, and we’re always reaching out, inviting them to come down and get to know Tropicana in person. Just as we’re here to entertain them and welcome them when they come to Atlantic City, we focus very much on extending that experience online.” As online gaming proliferates—from 10 virtual casinos in 2013, New Jersey now has 14— Woods refutes the perception that technology must make interactions impersonal. In fact, she says, the opposite may be true. “In customer retention, I see a kind of reversion to high-touch service emerging. In the early days, it was all about creating the infrastructure. But as communication tools become more sophisticated, less time is spent on the work of managing execution. That actually allows us to step back, let the tools to do their work, and interact with our players person-to-person once again. “Ultimately, our customers don’t care about the technology,” she adds. “They don’t want to hear about our back-office system or what software we’re using. For them, it’s all Tropicana. We’re in the entertainment business, and people don’t have to play with us if it’s not fun.” The winners in online gaming, Woods says, “will be the ones who make it easy and fun for our customers.” —Marjorie Preston

Global Gaming Business JANUARY 2017

Affinity for Recovery Michael Silberling • Chief Executive Officer, Affinity Gaming

hink of Michael Silberling as a kind of “Mr. Fixit.” His career has consisted of working for “challenged” properties or markets, starting with his introduction to the industry with the Promus Corporation, later to be Harrah’s and then Caesars Entertainment. After working as a president’s associate—leadership training in that company—he was assigned to the Laughlin casino, which had been underperforming. After Laughlin, he got his first general manager role at Harrah’s Lake Tahoe, then being pummeled by tribal gaming expansion in Northern California. After a stop in the Midwest, Caesars sent him to Europe, where the London Clubs acquisition had lost $100 million the previous year. He immediately turned it around to a $50 million profit in his first year, and spent seven years overseeing all the international locations for Caesars. His current challenge came when Z Capital Partners, a large investor in Affinity Gaming, brought him in to run the company, a collection of casinos in Nevada, Colorado, Missouri and Iowa that had been underperforming. Since then, Z has obtained the entire company and is taking it private, which Silberling is eagerly anticipating. The core of Affinity, however, is in Nevada, where in Primm, it owns the recently renovated Whiskey Pete’s, the Primm Valley Resort and Casino, and Buffalo Bill’s. “Our flagship is clearly our Stateline properties both in terms of number of hotel rooms and revenue produced,” says Silberling. “We also have the highestgrossing lottery store in all of America, along with one of the highest-volume gas stations in the U.S., along with the casinos, the roller coaster, the outlet mall and

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all the rest.” Like the Caesars London casinos, Silberling and his team have turned Affinity around quickly. EBITDA increased by 33 percent in the third quarter of 2016 versus the same quarter a year earlier. He explains it was just plain hard work that accomplished that feat. “It was back to basics,” he says. “We built a very strong management team, so I give them a lot of credit. I’m very sensitive about being called a ‘cost-cutter,’ because that is not my approach at all. No one gets a memo from me telling them to take 10 percent off their budget. We’re focusing on profitably influencing customer behavior. We started from a blank sheet of paper when we decided how we were going to market this business. As a result, when you look at efficiency and productivity and return on investment, using data analytics, we were able to take a massive amount of expense out of our business without impacting our revenue at all.” As an example, Silberling explains how Affinity improved a basic guest service. “When I got here, we took seven minutes to check in a guest, and consequently, we had long lines,” he says. “Today, we’ve got it down to two minutes. We just made sure the printers were in the right place, the necessary forms were all available and the employees had everything they needed. So the customers are happier and the employees are happier. And we’re more productive and efficient.” He says employing yielding technology for hotel rooms has dramatically improved occupancy and room rates at company hotels. Instead of just deploying a raft of promotions, he says the marketing of the properties is done in a more scientific manner. “We have better sense of what our customers want by test and control, where

one group of customers gets an offer and another group does not,” he explains. “We’ve become much more of a data-driven company in how we approach business decisions.” One of the more interesting of Affinity properties is the Silver Sevens Hotel & Casino on Paradise at Flamingo, just a long block from the Strip. It’s a hybrid locals/visitor property. “When we map our casino,” he says, “the majority of our customers are between one and three miles from the property. But if you walk by the pool in the middle of the summer, you’ll hear a wide variety of accents and languages from all over the world. We’ve got a great price, we’re very near the airport with free shuttle service and access to the Strip. We’re mixing a locals market with the international hotel guest. “But it’s back to basics there, as well. We spent a lot of time on the food there. Our top sellers are burgers and fried chicken, but I didn’t think we offered a great burger or fried chicken. Again, we’ve gone back and looked at the products—no more hockey-puck burgers or skinny chickens. We make a great pancake mix. We said we want to have amazing food, and I think we do now. I’ll put our Double Up Burger against any burger in America.” While things are looking up for Affinity, Silberling cautions that more changes are coming. “We still have a way to go,” he says. “Our margins have gone from some of the lowest in the industry to approaching industry norms. So I’m excited that there is still room for improvement.” —Patrick Roberts

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2017 25 PEOPLE TO WATCH

Coast to Coast Darren Student • Director of Gaming Sales, Agilysys

t’s surprising to find Darren Student at home. As director of gaming sales for the hospitality software firm Agilysys, Student is always on the go, crisscrossing the U.S. to visit clients in markets large and small— from the global operators of Las Vegas to tribal ventures in remote regions around the country. His job, he says, is deceptively simple: “to help our customers enhance the guest experience, which in turn enhances operations. If you take care of your customer, you not only create important, lasting connections but also increase brand loyalty, which increases the guest wallet share. It all trickles down.” By tracking and analyzing guest behaviors and preferences, solutions like the firm’s rGuest Analyze platform enable resort operators to offer better, more personalized service from check-in to check-out and beyond. “We encompass most of the touch points that affect non-gaming spend and integrate it with the gaming systems,” says Student. “We can enhance and positively influence the complete 360 life cycle of the guest experience.” As the son of Roy Student, the industry pioneer who automated the casino floor at the original MGM Grand, Darren Student’s career path almost seems foregone. “I grew up in Queens, New York, but I always looked forward to tagging along with my dad on business trips to Las Vegas and Atlantic City. In those days, deals were done over a meal in a steak house. I would listen as my father talked about slots, keno, sports book and all the gaming applications around the casino.” But Student was more intrigued by what went on behind the scenes. “When I was only 13, I got the chance to tour the back of the house at the original MGM. To me, the technical part on the non-gaming side was kind of the unsung hero of the operation—nobody talked about it, but it was just as important. I guess that’s what led me to where I am today, with 20 years on the non-gaming side.” In fact, in one of his first jobs, working the front desk at the old Aladdin Hotel on the Strip while attending the University of Nevada, Las Vegas, Student used a product he now represents—LMS by Agilysys, which automates and streamlines hotel operations so staff can focus on guest service. It always comes back to service for Student, who predicts that emerging technologies will create even more opportunities to heighten the guest experience. “Mobility is transforming guest engagement,” he says. “Smartphones and tablets are easy to carry, easy to use and wearable, so casinos will be interacting with guests on a variety of devices more than they ever have before.” With expectations ever higher, resorts must provide service that’s “fluid and seamless,” he says. As the new year progresses, Student looks forward to racking up some more frequent-flier miles. “My favorite part of the job is talking with my customers,” he says. “We’re so fortunate to have an intelligent customer base that’s really engaged with the business. We’re always looking ahead together to best meet the needs of the industry.” —Marjorie Preston

Global Gaming Business JANUARY 2017

No Limit LuAnn Pappas • President and CEO, Scarlet Pearl Casino Resort

ho says a woman can’t be president? In December 2015, when the Scarlet Pearl Casino Resort opened in D’Iberville, Mississippi, the corner office was reserved for LuAnn Pappas—a gaming industry veteran, New Jersey native and marketing whiz who ascended through the ranks over more than 30 years at Harrah’s/Caesars Entertainment. Unlike some industries, gaming is well-known as a meritocracy, where drive and tenacity can shatter glass ceilings. Pappas, for example, started out on the graveyard shift in a casino gift shop, and with persistence, grit and talent rose to the C-suite. But she’s still pushing to see more women at her level in the business. “We cannot afford for another century to go by without recognizing the value of more female leaders in gaming,” Pappas has said. For those following in her footsteps, Pappas provides an exceptional role model. Prior to joining Scarlet Pearl, she had worked her way up to become regional vice president of casino marketing at Caesars Atlantic City. Pappas was so revered in the market that, when she was tapped for the top job down south, Caesars posted her photo on Harrah’s Resort’s famous exterior wall, a 500-foot animated video screen that illuminates the night sky and can be seen for miles around. The tribute included the farewell message, “Thanks for 30 years.” Pappas still enjoys a water view: the $290 million, privately owned Scarlet Pearl, which joined 11 other gaming halls on Mississippi’s Gulf Coast, attests to the resilience of the Old Town neighborhood ravaged by Hurricane Katrina in 2005. The resort includes a 60,000-square-foot casino, 300-room hotel, restaurants, an event center, a pool and a popular 36-hole miniature golf course, Lava Links, complete with waterfalls and an erupting volcano. Fittingly for someone in her job, Pappas’ office directly overlooks the volcano. In the past year, the resort has become an economic driver for the area. On its opening, local Councilman Joey Bosarge said Scarlet Pearl “puts us on a whole other level. D’Iberville’s a destination city now.” The property has added 1,200 jobs, and Pappas will do her part to see that many pivotal roles are held by women. The crusade makes sense, she says. Who better to understand, communicate with and market to the 52 percent of casino patrons who are female? As for her personal and professional creed, Pappas has often cited her father’s motto, which she’s clearly followed throughout a distinguished career: “Be fair, be firm, be disciplined and never, ever quit what you start.” —Marjorie Preston

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Games People Play Aron Ezra • Founder and CEO, OfferCraft

ron Ezra took a unique axiom to a new level. If a task appears unexciting, make it a game. The 39-year-old New York native brought a creative zeal to the OfferCraft company he formed last year. Ezra’s Las Vegas outfit highlights “gamification,” enticing increased customer response to offers by making them interactive. “One of the biggest challenges for all marketers is that the vast majority of the offers don’t work,” he says. “Most people who see a given offer don’t pay attention, and while the casino industry does better than others, the majority of people are not going to utilize it.” But if they play for it, or win the award, the feeling is different, he asserts. “We can turn normal promotions into a game,” Ezra indicates. “It can be utilized on our hotel booking page, for instance, in which they can win things. Say the price of the hotel room is listed. You can figure ‘Let me play this game to see what kind of discount I can get off the room.’ You win a discount and you can apply it to that room. You are enticed to use it because you won that discount.” Casinos purchase the OfferCraft software and can utilize it through varied forms of social media or inside their properties. Redemption of the awards identifies player preferences regarding future market offers. OfferCraft takes gamesmanship to another level, internally. Employees can benefit from it, Ezra indicates. “You can teach employees about food safety, security measures or sexual harassment concerns,” he says. “You turn it into a game. People are much more likely to remember a message if it comes in the form of a game or a video. It forces you to engage more. This is a great tool during orientation, and it’s nice for someone who just got promoted to a new role. “You can win prizes. In some casinos they have a leaderboard to see who is best at playing these games.” From a career standpoint, Ezra has excelled. He was previously the CEO of MacroView Labs, a San Francisco-based mobile software startup that served the hospitality, travel, event, retail and entertainment markets. MacroView was acquired in 2011 by Bally Technologies. Ezra then spent three years leading Bally’s global interactive initiatives. The OfferCraft founder has given more than 800 presentations on technology and marketing issues at conferences around the world. The Innovation Group named him one of the 2016 Top Six Emerging Gaming Leaders. Ezra looks to connect the best of two worlds in 2017. “We are expanding outside of gaming,” he says. “We would like to bring the expertise of the gaming world to non-gaming entities, like health care, say setting up a game in which patients gain points for taking their medication on time or win prizes by paying their bill on time.” That’s the success blueprint. Make it a game. Everybody wins. —Dave Bontempo

The Winning Team John Hemberger • Senior Vice President of Table Products, AGS

ports writer Grantland Rice said, “It’s not whether you win or lose; it’s how you play the game.” John Hemberger isn’t a big fan of such sentiment. A sports enthusiast since his youth in Long Island, he prefers former UCLA football coach Red Sanders’ quote: “Winning isn’t everything. It’s the only thing.” “Sports were a huge part of my upbringing,” says Hemberger, senior vice president of table products at AGS. “The pace of the Northeast, coupled with the competition sports offered, shaped me into someone who loves winning but hates losing even more.” It’s the kind of attitude that has served him well in his career. “I’ve always been interested in gaming, the psychology of winning and losing, and analyzing risk versus reward,” says Hemberger, who moved to Las Vegas after college, where he got a part-time job at a local casino. He joined Shuffle Master in 2007, handling product submissions. He transitioned into table games product management. “Shuffle Master had a structure that was a bit unique, because product management was the quarterback or CEO of that business. You were empowered to own your products from infancy to the grave. Every facet of the business ultimately was your responsibility,” Hemberger says. In 2014, Hemberger moved to AGS, where he helped build a table business from the ground up. In his current position, he’s responsible for creating a successful table games team. “Luckily, I’m working with an unbelievably passionate group that’s focused on giving table customers the best experience in the industry,” he says. “We had a blank canvas, and it’s been exciting to develop the AGS table game brand. “AGS is a family-type environment where everyone works towards a common goal,” Hemberger says. “I’ve known CEO David Lopez for 10 years, and he’s someone I connected with early on and watched and learned from. It’s the way David motivates a group of people, whether they directly report to him or not.” Hemberger also cites his wife, Julia Boguslawski, AGS marketing vice president, as a mentor. “She’s able to view situations and people through a completely different lens than I do. She provides me such a thoughtful perspective on situations.” To Hemberger, passion is the driving force to success. “You have the choice to select any industry to work in; if you pick gaming, you should love it. It’s a lot easier getting up each morning when it doesn’t feel like work, and the gaming industry is a field that gives people that chance.” In the future, community gaming will focus more on player interaction, Hemberger says. “It’s important that platforms and content are designed with this in mind,” he says. “The tricky part is avoiding player confusion; simplicity will always be key. It’s also important to make sure players have a chance to win. If the focus is solely on games with higher and higher house advantages, we will ultimately lose players who have a choice on how to spend their entertainment dollars. We must keep the fun in gaming, and in the end, winning is fun.” —William Sokolic

JANUARY 2017 www.ggbmagazine.com

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2017 25 PEOPLE TO WATCH

RENO 411 Gary Carano • Chairman and CEO, Eldorado Resorts

t’s been an adrenaline-fueled two years for Gary Carano, chairman and CEO of Eldorado Resorts. In that time, he has taken his company public, increased its property holdings sixfold and transformed it from a small, Reno-based family casino outfit into one of the largest regional gaming empires in the United States. First founded in 1973 as a single Reno hotel by Gary’s father, Don, Eldorado operated for four decades as a mom-and-pop company with a pair of properties in Reno and eventually a riverboat casino in Louisiana. But starting in 2014, Carano has led the company through an audacious growth-by-acquisition strategy that began with the purchase of MTR Gaming and culminated in September 2016 with a deal to buy Isle of Capri for $1.7 billion. Once the deal closes in mid-2017, the new and improved Eldorado Resorts will feature 20 properties across 10 states, which combined would have generated upwards of $2 billion in annual revenue for fiscal year 2016. The company also will have doubled its annual net revenue and adjusted EBITDA draws, and doubled its slot machines, table games and hotel rooms while tripling its property holdings. In the process, the company has leapfrogged competitors like Pinnacle Entertainment, Penn National Gaming, Full House Resorts and others in the battle for what’s seen as a still-profitable yet tightening regional gaming market. Once the transactional dust settles, Carano’s task will be to integrate the new properties under the Eldorado brand while discerning where the company fits among the other big-hitter gaming operators. “The niche that we think Eldorado has in the public gaming sector is a little bit different than the other corporate giants that are larger than us,” he explains, adding that the company culture is based on the Jack Binion model of customer engagement and hospitality. “That’s allowing our managers to operate their properties without overly intrusive corporate guidance, and also the culture of the team members and management to be on the floor with the players versus in their offices reviewing spreadsheets,” he continues. “That’s how we grew up.” Carano asserts that he is proud of how the company his father started now spans the country. Personally, even though he’s taken an enormous jump from heading a family-owned casino business to the boardroom of a publicly traded company, he insists that because of his upbringing he still feels more at home on the casino floor. “I’m a more hands-on CEO because I came up through operations,” he says. “I’m not a Wall Street finance guy, I’m an operations guy.” One of the key selling points of the Isle of Capri deal for Carano was the cultural similarities between the two companies—particularly their familyowned, sweat-equity backgrounds—that figure to help smoothen out the transition. “We’re very excited, because Isle is a very well-run company with a great culture for players and team members,” he says. “Our plate is going to be pretty full this next year molding these two great companies into one efficient team.” —Aaron Stanley

Global Gaming Business JANUARY 2017

Everyone In the Data Pool Anthony “AJ” Mason • Principal Consultant for Prospect Analytics, Innovation Analytics

J Mason likes the one word that scares people in most businesses: merge. The Orlando, Florida resident has joined with the Innovation Group as principal consultant for prospect analytics to form Innovation Analytics. Mason’s new company blends his gaming and non-gaming background with the Innovation Group’s large casino-contact network. It should be a powerful synergy, rolling out in 2017. “The reason there is an opportunity here is that for a lot of smart people, analytics gets pulled in so many directions,” he says. “You are putting out a fire with water and everybody grabs a bucket. The companies can use people with strong analytical skills that can help them get to the big problems they can’t get to.” Properties can see this in an illuminating way. Let a specialist grind data for you. Let someone else perform the legwork to provide the basis for important decisions. “What drives my passion in this: What creates the real excitement is combining the best practices of the gaming and non-gaming industries,” Mason indicates. “Whatever you pick up from one you can bring back to the other. It’s going to be an exciting time.” Mason brings a recent wealth of casino experience to this position. He held marketing roles at Las Vegas Sands, Ameristar, Pinnacle and Foxwoods prior to launching a consulting journey. Mason’s specialty will be helping casinos leverage data with return on investment. “It’s important for operators to get a real good understanding about optimizing their baseline investment in marketing,” he says. “What you should be giving away, how you are targeting the customer, etc. This does not replace traditional operating experience in any way, but it helps you in finding the money you couldn’t find otherwise if you didn’t use math. “We want to take the guesswork away,” he adds. “We can actually get the solution, and give you a clear answer one way or another to what you are doing. We can go back, look at certain cases and determine that this is how much money we made with offer A versus offer B.” The 37-year-old Bloomington, Indiana native obtained a B.A. at Indiana University and a master’s at the University of Nevada, Las Vegas, both in economics. He won the Economic Alumni Award at UNLV’s Lee Business School in 2012. Mason considers being part of the Las Vegas Sands team that built a centralized digital marketing team, along with testing platforms to provide ROI blueprints, his top gaming achievements. Mentors also helped. Mason says Rom Hendler at Las Vegas Sands and Dave Clark at Ameristar taught him to build strong relationships to obtain buy-in for new projects. John Celona at Las Vegas Sands showed him that developing appropriate organizational structure leads to happier and more productive teams, because responsibilities are clearly defined. Now it’s his turn to teach, or at least advise, in this new gamingworld role. —Dave Bontempo

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2017 25 PEOPLE TO WATCH

Most Valuable Player World Aweigh Ian Hughes • General Managing Director, GLI Asia

an Hughes brings gaming a passionate blend of compliance and reliance. The personable 45-year-old native of Adelaide, Australia plays a major role for the increasingly prominent Gaming Laboratories International. The company issues annual certifications on about 220,000 items to a gaming industry rooted in competition, change and quick innovations. The GLI seal of approval lets operators and regulators know that a new product will work. Hughes is the managing director and CEO of Sydney-based GLI Asia and the vice president of global services for GLI via its Las Vegas office. He has been actively engaged in the areas of compliance and gaming equipment globally for the past 20 years, “I love the gaming industry,” he says. “I know a lot of people whom I can call friends, whether that means regulators, manufacturers, casino operators— you name it. They are great, interesting people. Everybody is passionate about their work. Through good times and bad, we are all in this together. I love that side of the industry.” Hughes has long understood the mechanics of this business. A few years back, he established a central monitoring system in New South Wales, testing and approving a system that brought the jurisdiction from the paper to the electronic age. He has led the development of many of GLI’s innovative and value-added tools, including GLI Link, Point Click Transfer and GLI Scale. Hughes holds a bachelor’s degree in electronic engineering and a master’s in business administration. Gaming is always trying to enter an upgraded age. As it speeds through uncharted waters, GLI keeps the industry on course. Most of its efforts help manufacturers obtain the blessing on a new product or technology. GLI sees its role with the gaming industry as amicable. “With the thousands of new game titles, we usually can find two or three issues (often regarding math) that we can alert the manufacturers to and they normally get it right the second time,” he says. “With new technology, there could be perhaps 60-70 issues and again, they will soon get it right. We want to be of great value to them. The manufacturers spend a lot of money and quite a bit of time internally supporting the lab process. If they have to adjust products multiple times, they have a bigger internal cost. We work hard on getting the manufacturers to as many markets as they can possible be in. “This reduces the cost for them of going into new markets. If you have received GLI approval on a particular item and you want to later bring it to another jurisdiction, say Brazil, we will try to have this set up so that you don’t need to re-test anything.” One of GLI’s new gifts to the gaming industry is hacking. That’s right. A new wrinkle of this company is its ability to attempt hacking a property’s security system, often after a new product has been implemented, at the operator’s request. That’s taking gaming trust to a new level. —Dave Bontempo 44

Global Gaming Business JANUARY 2017

Tammy Farley • President, Rainmaker Group

n business, a “rainmaker” is someone who bags big clients and big paydays. It’s an apt name for the Atlanta-based Rainmaker Group, cofounded in 1998 by Tammy Farley and Bruce Barfield. As pioneers in revenue management and optimization, Farley and Barfield help clients in the gaming, hospitality and multi-family housing industries boost profits while building extraordinary customer relationships. The firm’s clients—including Caesars Entertainment, MGM Resorts International and Wynn Las Vegas—have helped land Rainmaker on the Inc. 5000 list of the nation’s fastest-growing private companies for five years running. Born in a suburb of Detroit, Farley took pre-med at University of Michigan. But after failing chemistry and passing out on her first day at the hospital, she knew a career change was in order. Today, at the helm of a globally influential firm with 230 employees, she’s confident she made the right choice. “The thing I like best about my job is interacting with and listening to both clients and prospects, finding out what we’re doing well and what we could do better,” she says. Gaming and hospitality comprise about a third of the company’s portfolio. As the casino industry expands—there are currently some 1,500 bricksand-mortar casinos in the U.S., with more to come—demand is strong for Rainmaker’s software solutions, which use customer data to identify the most valuable players, so resorts can bring them back, again and again. “You want to fill your rooms with guests of the highest value for the casino operator,” says Farley. “That value doesn’t come from the cash rate paid for a room; it comes from money spent on the gaming floor. We seek to optimize the guest in the room, not the rate they pay.” Determining the value of a potential guest enables casinos to not only set the right rate but add comps, upgrades and other perquisites. The system factors in reinvestment costs, “so you’re really looking at profit, not just revenue,” says Farley. It also generates daily forecasts that inform a hotel management team when VIPs are coming in. “Typically, the people with the highest value have the shortest booking window,” observes Farley. “So if you sell out too soon, you’re turning away your most valuable players.” The assessments “can be nearly real-time,” she adds. “At the time of booking, we look up your value and base our determination on what you did the last time you were here. We also do some post-departure analysis.” As a company, Rainmaker has “a very well-defined set of core values, and they’re far more than words on a plaque in our lobby,” says Farley. “We live and breathe them every day.” Those values include respect, teamwork, compassion and authenticity, as well as a customer-centric attitude that puts client success first. “At Rainmaker, we talk a lot about our ‘say-do ratio,’” she says. “When we engage with customers, we’re clear and direct about what we can and will do, and what’s best done by others. And then we do what we say we’ll do.” Another key value is the willingness to embrace change—a must in the casino industry, which continues to morph at a rapid pace. With increasing competition, and with non-gaming becoming a bigger piece of the pie, “we’re making sure our models adapt,” says Farley. “We’re hyper-focused on helping our customers capture the true value of their guests and optimize that, because it’s not just about the casino anymore.” —Marjorie Preston

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TABLE GAMES

And the Answer Is... A game-show-style table trivia quiz

roviding the answers before posing the questions is part of our cultural fabric, from that infamous quiz show Twenty One of the 1950s to Johnny Carson’s Carnac the Magnificent of the ’60s, ’70s, ’80s and ’90s, to the Democratic National Committee of the, well, present. And let us not forget Jeopardy, which, although hosted by a Canadian, perhaps best exemplifies this American obsession with—and bass-ackwards approach to—the pursuit of trivia. Therefore, in the spirit of the favorite TV game show of Dustin Hoffman’s autistic character in the 1988 Academy Award-winning film Rain Man, here’s a little table test, Trebek-style. Just remember to phrase your responses in the form of a question.

ROUND ONE “Who (Who, Ooh) Wrote the Book, for $200” His 1962 book, “Beat the Dealer” proved that players could, by keeping track of cards dealt during a round of blackjack, potentially gain a mathematical advantage over the house. “Math Madness, for $400” The house advantage on double-zero roulette to the second decimal place, or 5:55 on your watch. “Hold Me Now, for $600” While slot machine hold percentage is calculated by dividing win into handle, table games hold is calculated by dividing win into this. “Daily Double” An anagram of this simple table game spells out, “Orca Was In.”

Global Gaming Business JANUARY 2017

By Roger Snow

“Dice, Dice Baby, for $800”

“A Little Alliteration, for $2,000”

Only a few casinos accept these bets on a craps game because they can lead to scams between players and dealers.

When it was first commercialized in England, Three Card Poker was originally called this.

“Name that Game, for $1,000”

FINAL JEOPARDY

Created by Englishman Geoff Hall, this blackjack derivative features gold coins and a pot-ofgold side bet.

“Russian Roulette”

DOUBLE JEOPARDY

Not only was his 19th century novella The Gambler inspired by his own addiction to roulette, but his completion of it was further motived by his need to pay off casino debts.

“Living on the Edge, for $400” This mechanism puts players at a mathematical disadvantage in the base game of Three Card Poker, Caribbean Stud and High Card Flush, among others. “The Lingo Ate My Baby, for $800” You get 27 of these in baseball, but often in poker, you may be down to one or two. “Daily Double” In a standard deck of playing cards, these are the two Jacks that only have one eye. “Banned at Barona, for $1,200” Or at any California casino for that matter, these two traditional table games are ubiquitous in most every other market in the United States.

ANSWERS: ROUND ONE

Who is Edward Thorp? What is 5.26%? (aka five-to-six.) What is drop? What is Casino War? What are call bets? What is Free Bet Blackjack? DOUBLE JEOPARDY

What is dealer qualifying? What are outs? What are spades and hearts? What are craps and roulette? What is a ladderman? What is Britt Brag? FINAL JEOPARDY

Who is Fyodor Dostoyevsky? “Going, Going, Gone, for $1,600” This once-common supervisory job in baccarat, which required sitting atop an elevated platform, has gone the way of the dodo bird and the bolo tie.

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.

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Brother . Brother reD taPe vs.

vs.

Plans of the Ho-Chunk Indian Nation for another Wisconsin casino resort have pitted it against some formidable opponents— and some odd allies By Dave Palermo

The Ho-Chunk Indian Nation operates six casinos, including this one in Wisconsin Dells

merican Indian opposition to a planned casino resort in rural Wisconsin illustrates the complexities facing federal, state and tribal regulators as tribes nationwide confront one another over new and expanded casino projects in an increasingly competitive market. Wisconsin tribes are angry at the HoChunk Indian Nation’s plans to build an upscale casino resort in Whittenberg, on land designated by state gambling regulators as an “ancillary” site normally limited to slot parlors and convenience stores. The tribes contend the project violates Ho-Chunk’s tribal-state regulatory compact, its gaming ordinances and federal law on the eligibility of trust lands for casinos. At least two of the tribes—the Stockbridge-Munsee Band of Mohicans and the Menominee Nation—will see a significant drop in business at their tribal casinos as a result of the Ho-Chunk project, which will siphon customers from the Wausau market. Other tribes fear a broad interpretation of the “ancillary” clause in the tribal-state compact will result in a dramatic expansion of gambling in the state. 48

Global Gaming Business JANUARY 2017

Ho-Chunk President Wilfrid Cleveland says the nation is staying within the bounds of its compact in building a new casino in Whittenberg Wisconsin Governor Scott Walker says he has no authority to intervene because the amended tribal-state compact was negotiated under his predecessor

As is the case with tribes facing potential casino competition in Washington, California, Arizona and elsewhere, Stockbridge-Munsee, Menominee, the Oneida Nation of Wisconsin and other Wisconsin tribes are lashing out at what they perceive to be ineffective, inconsistent and non-transparent state and federal gambling regulations. Unlike commercial casinos, tribal operations are government enterprises intended to fund health, education, housing and other services for their citizens. Tribal casinos largely operate in accordance with the Indian Gambling Regulatory Act (IGRA) of 1988, which for Class III casino-style gambling requires a tribal-state regulatory agreement, or compact. They are also subject to a myriad of complex federal and state regulations and often-vague federal Indian policies molded by political interests on Capitol Hill.

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“The state does not feel that there is a sufficient basis at this time to litigate this question.” —Letter from Scott Neitzel, secretary of the Wisconsin Department of Administration, to Stockbridge-Munsee President Shannon Holsey New and expanded Indian casinos on existing reservations and newly established trust lands often create competition for other indigenous communities dependent on gambling revenues, resulting in a clash between federal, state and tribal governments. Navigating the regulatory and political landscape is often long, expensive and frustrating for tribes seeking to get into the business and others trying to put a stop to additional gambling. “You’re talking about complexities in the land-trust laws. You’re talking about complexities with regulations. And you’re talking about complexities with politics—tribal and state and federal politics,” says an Indian law attorney who requested anonymity. “If you’re tribe A and tribe B comes into your market, are you going to say, ‘No fair; you’re going to create competition for us?’ Or are you going to say, ‘No fair; what you’re doing violates the law?’ You’re going to challenge the legality of the project. “That’s happening more and more.”

Bad Bureaucracy? Such is apparently the case in Wisconsin, where at least five of the state’s 11 federally recognized tribes are opposing plans by Ho-Chunk to build a $33 million, 86-room hotel and casino with 770 slot machines and 10 table games on a 10acre parcel in Whittenberg. The tribes are critical of Department of the Interior/Bureau of Indian Affairs policies and IGRA regulations on placing land in trust for gambling. And they are angry at state regulators and the National Indian Gaming Commission (NIGC), a federal agency with limited oversight of Indian casinos, which are primarily regulated by tribal governments. Tribes accuse the state and NIGC of lacking transparency and failing to consistently enforce gambling regulations. “Enforcement of IGRA relies on the regulators,” says Bryan Newland, attorney for Stockbridge-Munsee and a former senior policy adviser with Interior’s Assistant Secretary for Indian Affairs. “We have a violation of Ho-Chunk’s gaming ordinance. We have a violation of the tribal-state gaming compact between Ho-Chunk and the state, on which other tribes depend for compliance. And we have—at least according to what’s available in the public record—a violation of IGRA’s Indian lands requirement. “Ho-Chunk’s tribal gaming commission has not stepped forward to enforce its laws. The state has not stepped forward to enforce its compact. And the NIGC and Department of the Interior have not stepped forward to enforce the law.” Ho-Chunk scoffs at the accusations, which it claims are fueled by competitive fears. “We know what’s in our compact, and the state knows that we’re staying within the limits of our compact,” Ho-Chunk President Wilfrid Cleveland told FOX 11 News. “This project is just to fulfill what we planned for from the beginning,” Cleveland says of a compact signed in 1993 and amended 10 years later. State officials acknowledge vague wording in the compact of what constitutes an “ancillary facility” is causing much of the controversy. Ho-Chunk’s compact allows the tribe to operate four site-specific “gaming

facilities”—described as a business with the primary purpose of gambling—and five “ancillary facilities.” “Ancillary facilities” in 1993 compacts were described as businesses generating more than 50 percent of their revenue from non-gambling sales. The 2003 amended compact references the percentage of land devoted to casino and nongambling enterprises. Ho-Chunk spokesman Collin Price says he is not totally familiar with terms of the compact, and tribal attorneys did not respond to requests for comment. State officials also declined comment. “We definitely feel we are within the scope of our agreement with the state,” Price says. Federal and state officials apparently believe the project adheres to the tribalstate compact and federal land-trust laws. Governor Scott Walker contends he has no authority to act because the amended tribal-state compact was negotiated under former Governor Jim Doyle, who left office in 2011. Stockbridge-Munsee and Menominee threaten to pursue the matter in the federal courts, confident a judge will agree “ancillary” does not mean a hotel, 800 slot machines and high-end table games. “They’re trying to call that an ancillary facility,” Stockbridge-Munsee attorney Dennis Puzz says. “That’s bigger than their gaming facility at their tribal headquarters in Black River Falls,” designated in the compact as a full-scale “gaming” facility. Meanwhile, both the U.S. House Resources Committee and Senate Committee on Indian Affairs have been made aware of the Wisconsin Indian wars. Members of both committees have previously questioned Interior policy on placing land in trust, for casinos or otherwise. And Senators John Barrasso (RWyoming) and John McCain (R-Arizona) are critical of NIGC enforcement of Indian casinos.

Tribes vs. Tribes The Indian wars in The Dairy State mirror tribal confrontations elsewhere. There are more than 480 Indian gambling facilities operated by roughly 240 tribes in 28 states, a $29.9 billion casino industry that boomed with congressional passage of IGRA. The facilities range from slot machines at traffic plazas to upscale gambling resorts. With market saturation and increasing competition, established tribes seeking trust land for off-reservation casinos and restored, landless and newly recognized tribes seeking to get into the casino business for the first time often face opposition from state and local officials and, increasingly, other tribes. New casinos in Washington state, California, Arizona, Wisconsin and elsewhere have resulted in long and expensive legal and political wars between competing tribes. The Spokane Tribe of Washington, seeking an off-reservation casino, met resistance from the nearby Kalispel Indian Community. The downstate Cowlitz Indian Tribe, recognized in 2010, fought a legal battle with the Confederated Tribes of Grand Ronde. Tohono O’odham Nation won a multimillion-dollar lobby war with local tribes in developing a suburban Phoenix casino on property obtained in a federal lands claim. And the North Fork and Enterprises Rancheria fought with nearby tribes in seeking casinos on newly acquired trust lands. Menominee got federal approval for an off-reservation casino in downstate Kenosha, only to be rejected by Governor Walker. The project was opposed by the nearby Forest County Potawatomi Indians. And Stockbridge-Munsee was spurned by state regulations in attempting to install slot machines at a tribal golf course. “You are seeing more instances of tribes opposing other tribes,” says economist Alan Meister with Nathan Associates, author of the annual Indian Gaming Industry Report. “In certain cases, growth has slowed. Markets have matured. “When you expand or introduce a new gaming facility, it’s more likely to canJANUARY 2017 www.ggbmagazine.com

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Brother vs. Brother vs. red tape nibalize than create new market growth, although it’s likely to do both. Every situation is so very different.” Some Indian gaming experts contend the competitive flames burned even in the early era of compacted casinos, when the market was new and relatively open. “When it comes to gaming issues, it’s always been contentious among the tribes,” says a tribal consultant who requested anonymity. “You have your haves and have-nots. It was contentious 10 years ago, and it’s still contentious today.” Much of the controversy stems from Interior policy and IGRA regulations on placing new lands in federal trust for Indian casinos. There are different regulations for placing non-gaming lands into trust under the Indian Reorganization Act of 1934 and casino lands under IGRA. IGRA generally limits gambling to tribes established when the act was passed in 1988. But IGRA allows exceptions for existing tribes seeking offreservation casinos that get approval from the state governor and can show the projects will not be “detrimental” to surrounding Indian and non-Indian communities. It also takes casino land-trust applications from newly recognized and restored tribes, landless tribes and tribes acquiring property through a federal lands claim. Federal regulatory criteria for determining the need and impact of gambling on newly acquired trust land is both vague and subjective, fluctuating from one presidential administration to the next. President George W. Bush imposed a virtual moratorium on placing land in trust for Indian casinos, creating a logjam of applications eliminated by Interior under the Obama administration. “The agency has a lot of flexibility,” attorney George Skibine, onetime deputy assistant secretary for Indian affairs, says of Interior bureaucrats. “They can say yes, they can say no.” State and local officials as well as tribes contend the land-trust process under IGRA is unpredictable and lacks transparency—a situation Skibine says can only be rectified by amending the act to more clearly define criteria for making decisions. “The solution would be to amend the regulations to provide criteria on which to base those decisions,” Skibine says. “It would have to be a more objective test.” A number of Indian tribes, primarily in California, have discussed that solution with the National Indian Gaming Association, a lobby and trade association, which has for years opposed amending IGRA. The tribes claim inconsistent federal Indian policy and land-trust regulations exacerbate tensions between tribes seeking casinos and those looking to halt the projects.

The Debate in Dairyland Tribes opposed to the Ho-Chunk project contend the 10-acre site, a portion of a larger tract of land deeded to the nation by the Native American Church and placed in trust by Interior in 1969, fell out of trust five years later when it was not developed for housing, a condition of the transfer. But Alison Grigones, senior policy adviser to Interior’s assistant secretary for Indian affairs, says the property has maintained its federal trust status since 1969, prior to passage of IGRA, making it automatically eligible for gambling. “It’s been in trust since the ’60s and has never come out,” Grigones says. Because the review was not part of a fee-to-trust application under IGRA, documents and other investigatory evidence is considered private under attorney-client privilege, she says. The trust status of the property also was part of a 2008 compliance check by NIGC, but it was not made public, as are most land determinations for gambling under IGRA. “This review is internal, and the results are not posted on our website,” 50

Global Gaming Business JANUARY 2017

NIGC Chief of Staff Shannon O’Loughlin says. Meanwhile, NIGC General Counsel Michael Hoenig says once Interior has found a newly signed tribal-state compact to be in compliance with IGRA, his agency has no authority to investigate possible violations of the agreement. That authority rests with the tribes and the state. “The issue Stockbridge has put forth is that Ho-Chunk and the state are not in compliance with their own compact,” Hoenig says. “That’s not for us to determine. We’re not a party to the compact and we don’t enforce compacts.” Meanwhile, the Ho-Chunk ordinance simply states the tribe will comply with the agreement. “The ordinance has a sentence that Ho-Chunk will conduct Class III gaming pursuant to the gaming compact,” Hoenig says. “Their (Stockbridge-Munsee and Menominee) theory is that because the compact is being violated, the ordinance is being violated.” Newland expresses frustration at the lack of transparency by the state, Interior and NIGC. “The BIA and Ho-Chunk are saying, ‘Yes, this is eligible for gaming, but we are not going to share our reasoning for this,’” Newland says. “This gets my rabbit ears up. “They’re not going to take action on this and they are not going to explain why it is eligible for gaming. It’s unusual for the NIGC and the bureau to make a determination and not share the information. “Why is everybody being secretive?” “It is unfortunate the federal government has not shared the reasoning for the conclusion regarding the uninterrupted trust status of the land,” Scott Neitzel, secretary of the Wisconsin Department of Administration, said in a September 27 letter to Stockbridge-Munsee President Shannon Holsey. “However, the state does not feel that there is a sufficient basis at this time to litigate this question.” Amendments to the Ho-Chunk compact, Neitzel says, preserve the terms “ancillary” and “gaming facility.” But the distinction under the 2003 amendments “now depends not upon comparative levels of revenue or facility size, but upon the dimensions of the required multi-use development on the parcel.”

Government Funding at Stake When commercial casinos compete, the shareholders and business partners are the winners and losers. With tribal government casinos, services to tribal citizens are at stake. That’s what contributes to the volatility of gaming in an increasingly competitive Indian casino market. “Now we have rich tribes and poor tribes,” a tribal lawyer says. “The rich tribes want to stay rich. But if they’re doing it at the expense of the poor tribes, it gets pretty ugly.” Ho-Chunk is a dominant player among the 11 Wisconsin tribes and the state and local communities, generating millions of dollars in shared revenue and employing some 3,400 workers, most of them not citizens of Ho-Chunk. “The tribes are all concerned with the destabilizing effect of not enforcing the compact,” Puzz says of the Ho-Chunk situation. “We all depend on gaming revenues to fund our governments. It’s the economic driver of our governments. Any threat to gaming is serious.” Ho-Chunk contends it is concerned with the welfare of all indigenous people, in and outside the state. “All we’re trying to do is up the entertainment level at our casino and provide more jobs,” Ho-Chunk spokesman Price says. “Whenever you have 11 federally recognized tribes in the state of Wisconsin, we’re not always going to see eye-to-eye. “I know a lot of tribal leaders. They’re great people. This doesn’t jeopardize those relationships. They tend to go deeper than one gaming issue. “Overall, we want to strengthen our working relationship with other tribes,” Price says. “We’re a friend to Indian Country, to the tribes of Wisconsin.”

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d l i W Wild Card How slot systems have evolved along with technology By Dave Bontempo

lot systems, two simple words, denote a complex world for casino operators. They affect the course of valued player relationships as patron preferences change. Operators witness a two-sided customer coin. An increasing number of gamblers want instant funds access, fast action and a painless exit from the gaming arena. They wager through computers, bankroll their bets on phones and avoid the numbing gridlock of a brickand-mortar casino. Others want added gambling menus: larger-than-life community tournaments, linked jackpots, the sounds of a slot-machine win and the pulsating feel of a live gaming floor. Casinos address both sides. Their innovations steadily occur on gaming machines, through marketing offers to the players who use them or by flexible mobile solutions for tech-savvy young gamblers. Players enjoy machines with increased functionality, ranging from ticket-ordering capabilities to TITO and community tournaments. Operators, meanwhile, view slot system enhancements through the marketing lens. They obtain more hardware for storage, better software to communicate messages and upgraded marketing tools to know the player. Knowledge is, indeed, financial power. Casinos have powerful groups at their disposal—big companies that provide big solutions. As player preference diversifies, so do the products.

Phone It In Lottery, gaming and interactive giant International Game Technology Plc. also grasps the small details. Especially the mobile ones. The London-based powerhouse with a Las Vegas office annexed MGM as a high-profile vehicle for its new Cardless Connect tool. The software essentially turns the phone into a banker. Players can transfer funds to and from gaming machines via their mobile phones. They can utilize the integrated technology embedded into a casino mobile app and use smartphones rather than a physical loyalty card. The time-saving element is significant. A player sits down and points the phone at the gaming machine. A display shows the patron’s name and point balance. When the player 52

Global Gaming Business JANUARY 2017

leaves, the app automatically cards him out. Cardless Connect is a vital component of IGT’s casino management systems portfolio, according to Sina Miri, vice president of casino systems for IGT. “Cardless Connect technology works with IGT’s EZ Pay, a complete ticketing and scalable cashless systems solution,” Miri says. “It also enables the phone to function as a player loyalty card. Cardless Connect technology is compatible with iOS and Android, and thus provides an extremely familiar and easy experience. “In this day and age, the mobile platform is so viable for entertainment and commerce that we recognize the need to deliver gaming experiences to players via their personal mobile devices,” Miri adds. “From our sports betting PlaySpot solution in use at MGM in Nevada to Cardless Connect, which we are rolling out in a number of casinos, we are delivering the convenience and perks associated with player loyalty.” The Cardless Connect transfer functionality is secure, because funds are never on the phone, company officials say. The EZ Pay software does the heavy lifting of transferring funds from the player’s account to the EGM. Cardless Connect was introduced to customers in 2015 and placed with them in 2016. Between various trade shows and its own advisory board, IGT refined the solution and unveiled a well-received product. “We think the idea of cashless transactions is exciting, and so is the ability to replace the physical loyalty card with a digital one,” Miri indicates. “Just by its nature of being a simple-to-use mobile solution, Cardless Connect technology is well-positioned to engage a wide player demo-

“From our sports betting PlaySpot solution in use at MGM in Nevada to Cardless Connect, which we are rolling out in a number of casinos, we are delivering the convenience and perks associated with player loyalty.” —Sina Miri, VP of Casino Systems, IGT

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Synkros Dashboards figures to make the next big splash. Developed for the Synkros systems environment, it can interpret structured data to identify trends across the business. graphic. Millennials, like the rest of us, use their smartphones for a wide range of activities including payment and gaming, so Cardless Connect technology caters nicely to them.” While demographics are unique, principles are timeless. The connection between funds access, gaming convenience and customer loyalty remains fervent. Everyone wants to bypass long lines. “This is more about expanding the value proposition for the player and the operator,” Miri says. “For the player, there is no more standing in line at a kiosk or having to remember to bring the loyalty card. For operators, Cardless Connect technology improves the customer experience while creating new real-time, location-aware marketing opportunities. It can help further solidify relationships with existing customers and improve new customer acquisition. Cardless Connect can improve player interactions, enrich the value of the property’s brand and extend usability of its mobile application.”

Everything in ‘Synk’ Konami Gaming, the Las Vegas-based subsidiary of Tokyo-based Konami Holdings Corporation, continues to thrive as a leading designer and manufacturer of slot machines and casino management systems. Highly regarded Synkros, its casino management system, has allowed properties to make real-time offers on slot machines, based on significant data. The company that was already renowned for popular video games advances the method of facilitating the playing of those top games in the gaming world. The system features several elements. From the in-machine hardware perspective, its Synk Box and True-Time Windowing technology allows players to access account and property information directly on any video slot machine. It also enables synchronized and on-demand tournament bonusing, with True-Time Tournaments, so operators can reward players with on-demand tournament bonus games and/or simultaneous tournament events. The system continues to expand for the people who serve gamblers. “One of our latest enhancements in terms of marketing and player loyalty is Synkros Offers Management, which empowers operators to reach, incen-

tivize and reward players uniquely to their demographic and spend,” says Steve Walther, senior director of marketing and product management for Konami Gaming. “In addition to advanced targeting capabilities for the property, players have the benefit of selecting from multiple available bonus awards—such as comp vouchers, free play, drawing tickets, tournament entries and extra point prizes— and receiving personalized notifications across a variety of touch points including kiosk machines, SMS, email, direct mail and EGM displays. “Offers can either be non-contingent or require targeted action, and can be configured for specified time periods of activation, selection and expiration. This latest enhancement to our marketing suite gives operators the utmost flexibility and control to configure promotions and maximize their results—with seamless, real-time tracking across their player base.” Synkros Dashboards figures to make the next big splash. Developed for the Synkros systems environment, it can interpret structured data to identify trends across the business. “Synkros Dashboards was designed by operators for operators, to generate the most accurate and actionable data-points on which to build operational business strategies—both long-term and real-time,” Walther says. “We displayed it for the first time at G2E 2016, and our customers expressed strong interest. They were especially encouraged by the intuitive design and dynamic interaction, which unlocks a depth of insight across all areas of business with true analytical independence. “These and many other updates are made available to our Synkros customers at least once a year.” Walther asserts that systems technology becomes more prominent in helping a casino advance its position as world markets become more competitive. The daily data, analytics, targeting and technical support are more relevant than ever, he says. Synkros helps casinos maintain top player relationships. “It provides the ultimate flexibility for our casino customers to develop their own marketing programs that drive incremental play on their gaming floor and across their entire venue,” Walther says. “The Synkros environment is a marketing powerhouse, allowing properties to differentiate the gaming experience on JANUARY 2017 www.ggbmagazine.com

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their floor, while also providing the stable and reliable core infrastructure that is synonymous with Konami. Whether it’s a SuperSeries floor-wide bonus, True-Time Tournaments or individually customized player incentives, Synkros can provide the right reward at the right time.” And the hits keep coming. Late in 2016, Konami and Acres 4.0 announced their partnership to create more interactive player experiences by delivering industry-leading Kai mobile solutions driven through powerful Synkros data interfaces. This collaboration brings the core strength of Konami’s casino enterprise management system to Kai’s intuitive employee mobile app, giving on-site staff robust player loyalty and service information. Under this partnership, interfaces between Acres and Konami result in a tight coupling of Kai and Synkros to support a new generation of incentives and bonuses. These interfaces allow casinos to uniquely reinforce behavioral objectives and attract new players, while retaining cost efficiency.

released first with support for managing content on iVIEW devices, and will then be enhanced to manage content on kiosk and mobile devices. “Finally, casino operators will have one centralized management console for content at all the various player touch points—slot machines, kiosks and mobile. iVIEW 4 is designed to run the content that can be managed remotely and can also run on other device types as well.” Once that takes hold, new games will be developed to utilize the enhanced hardware capabilities, he says. Skill-based bonusing and collectible-style games to drive player loyalty will have improved graphics and animations not possible with other in-game hardware. iVIEW 4 was field-tested extensively beginning last March. Production units were first installed at a Northern Nevada casino across the entire slot floor in October 2016. New casino openings and system conversions use this latest version of hardware, Keenan says. Many properties with older hardware will be upgrading partial or full floors. Several casino departments can utilize the new product. Marketers can create a proA Winning View motion, advertisement, offer, game directory or other content a player can interact with Scientific Games is a leading innovator on an iVIEW or on a kiosk mobile device, in the global lottery and regulated gamKeenan indicates. Having content that works ing industries. It has become a premier across multiple devices enables a marketer to gaming player, and, via the Bally sysdecide when and how to communicate with tems portfolio, unveils a score with a player. iVIEW 4, the latest version of the “A marketer may, for instance, make a groundbreaking interactive display albonus game playable on a mobile device, but lowing casinos to reward loyal players the award only redeemable on-property at a with bonus games, virtual races and slot machine,” Keenan says. “Having a cenother perks without interrupting nortral point from which to manage marketing mal game play. content empowers a marketer to optimize The new product will prosper by customer experiences and communicate with making marketing more effective, slot the customer seamlessly across the multiple operations more efficient, and player devices used by a player.” experiences more compelling, according Slot operations are more efficient with to Ted Keenan, senior director of prodeasier installation procedures, automation of uct management for Scientific Games. routine tasks, and faster startup procedures, “Logically, iVIEW 4 is updated Keenan adds. Most notably, the startup prohardware with a faster processor, more Marketers can create a promotion, cedures, or reboots, have been reduced to memory, more storage and a modern advertisement, offer, game directory or less than 90 seconds, he says. This means operating system,” Keenan says. “It is a other content a player can interact with normal floor operations, including ticketing, more capable platform for delivering the best user experiences. The magic is on an iVIEW or on a kiosk mobile device. resume more swiftly even after a complete power-down scenario. If the power-down the software that runs on the new platscenario is initiated by floor personnel, the form. reduced time means the employee is on to “The first magical software will be the web content management sysother tasks much more quickly, he says. tem being released in March 2017. The web content management soluFor players, the improved hardware is capable of higher-resolution graphtion enables a casino marketing team to update their own iVIEW content ics, more complex animations and faster load times. as easily as they update their website pages. The same web developers that This is the continuation of a long, successful trend. iVIEW has become a manage a casino website will now be able to manage the content on the pay-per-view element of the company lineup in recent years. Under the Bally iVIEW devices. They can create new content, change the look and feel of systems banner, iVIEW forged new areas of customer engagement, from drink existing themes, customize the content for specific player segments, and and show-ticket-ordering capability to display manager and messaging servset publishing schedules. ices. What began as a means to increase time-on-device and expand the play“Suppose an operator wants to use the iVIEW to display an ad for ing menu evolves into a sophisticated marketing tool. show tickets to one group of players and a happy hour special to another For companies supplying the operators, this theme remains paramount. group,” he continues. “Now, casino marketing teams will be free to create Bring gamblers more play options, and marketing specialists more knowledge and publish their own customized and targeted content—no costly enof what drives them. gagements, no scheduling conflicts with IT teams, and no lengthy downSlot systems—two simple words—are anything but. loading processes. The web content management solution is being

Global Gaming Business JANUARY 2017

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Bigger & Better ICE Totally Gaming brings its ‘A’ Game to London in February

Clarion also announced that the 2017 edition of the show will feature a new area dedicated to suppliers in the land-based bingo sector. Working in partnership with the Bingo Association, Clarion is creating a marketing and networking space in a 220-square-meter (2,368-square-foot) dedicated ICE Bingo Pavilion, situated in S9 at London’s ExCeL. “The Bingo Association’s members have been regular attendees of ICE Totally Gaming for many years,” said Miles Baron, chief executive of the Bingo Association. “Building on the success of last year, the Bingo Association has worked with Clarion Events to create a more formal space at the 2017 show for members and those working in the sector, creating the Bingo Pavilion: a space for business and networking. “Securing a focal point for land-based operators has given new impetus for our members and others involved in the land-based sector to attend the show, and marks a resurgence for land-based bingo. As an industry, we have a long history, and while the leisure landscape and technology keep evolving, there is, and I think there will always be, a need and space for community-based activities that bring people together.” Baron added that the association’s team will be available throughout the show to connect with members, including a planned social the second day of the show.

ICE VOX Program Garners Industry Support

ICE Organizers Announce Transport Plan

Clarion reports that ICE VOX, the knowledge exchange and educational platform that will replace the ICE Conferences program, has attracted wide support in the industry. Clarion reports that the new platform has the support of organizations including the American Gaming Association, AAMS, Caesars Entertainment, National Crime Agency, Ladbrokes, SAZKA Group, New Scotland Yard, Michigan Lottery, FIFA, William Hill, PokerStars and Unibet. Commercial partners to have endorsed the ICE VOX vision include Iovation, Betcade LLC, Kount, VASCO Data Security, RSA Fraud & Risk Intelligence, Bounce Exchange and UltraPlay. “We have invested considerable resources creating the ICE VOX brand, which is a radical and contemporary reinterpretation of the learning experience,” said Greg Saint, event director responsible for ICE Totally Gaming and ICE VOX. “Our aim is to provide our customers and broader stakeholder community with a truly engaging experience which puts attendees at the center of learning, courtesy of a program of highvalue learning and networking modules. Our streams for 2017 include: International Casino Conference; World Regulatory Briefing; Cross-Platform & Multi-Channel Gaming; Modernizing Lotteries; Data Science & Personalization; BetMarkets; Cybercrime, Security and Regulatory Compliance in Gaming; and Game Design and Development.” 56

ICE to Feature Expanded Bingo Area

larion Events, organizer of the ICE Totally Gaming trade show, which takes place at London’s ExCeL London February 7-9, announced an expansion of the exhibit floor and several new features for the 2017 edition of the show. The ICE organizing team has secured an additional hall at ExCeL, enabling new exhibitors to have their own designated home and identity. The new hall will be supported by a dedicated pre-show and in-venue marketing and promotional program. “Despite the continued program of mergers and acquisitions taking place in the industry, ICE continues to grow both in terms of the net floor space it occupies and the number of exhibiting companies which choose London as the place to launch products and services to an international audience, which in 2016 comprised over 28,000 visitors drawn from 150 nations,” said Kate Chambers, managing director of Clarion’s gaming division. “We know from our research that one of the most popular features of ICE is the opportunity the show delivers for visitors to meet new, fledgling suppliers with fresh and invigorating ideas. The additional space we have invested in means that all first-time and returning exhibitors can be hosted in what we are describing as an ‘innovation quarter,’ enabling them to demonstrate their products and services and represent their brand personality in what is gaming’s most popular and prominent shop window. “The most frequently asked question at any B2B event is, ‘What’s new?’—and having a quarter dedicated to new companies allows us to provide a straightforward answer and, quite literally, point people in the right direction.”

Global Gaming Business JANUARY 2017

To accommodate attendees arriving by rail at the House Docklands Light Railway station, which will be shut down for 12 months as part of the London Crossrail development project, Clarion Events announced a plan. Attendees will be able to use the Royal Victoria stop, which is 650 meters from ExCeL. Organizers will provide a fleet of buses and coaches throughout each of the three days of the show to transport visitors to the main ExCeL registration entrance. “We have apportioned a separate and ring-fenced budget to provide free transportation and appoint a team, which will be responsible for organizing the logistics and for communicating the changes to our loyal community of visitors throughout the world,” said Chambers. “In 2012-13, we handled the move from west London to ExCeL, and we will be using the same skill set and attention to detail to ensure the smooth and trouble-free movement of visitors from Royal Victoria to ExCeL. “My team has been in close contact with their counterparts working for both ExCeL and Transport for London. We have agreed that liaison staff will be on hand at key points en route and, for those not wanting to use the coach service, there will be a sign-posted walk which brings visitors up the approach to the very front of ExCeL. We have timed the walk at seven minutes. We will be keeping the industry fully informed of these changes and working with our exhibitors to ensure we transport ICE attendees to ExCeL as quickly and as efficiently as possible.”

ExCeL, London 7-9 February 2017

the world theatre of gaming

To join the world at ICE visit icetotallygaming.com

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EMERGING LEADERS Ending Paralysis by Analysis Patrick Nichols Senior Vice President of Strategy and Business Development, Cosmopolitan of Las Vegas

Perseverance, Empowerment, and Success Miki Yeo Assistant Casino Manager, Marina Bay Sands n her current managerial role at Marina Bay Sands, Miki Yeo not only embraces challenges every day; she also empowers her team members to achieve success in their own ways. “I am a firm believer in the power of positive coaching. I try to make this a part of my everyday practice at work,” says Miki, who credits her mentors for her success. Her mentorship not only saw her gain valuable insights and a solid head start into the business; it is also a contributing factor towards her growth as a leader. Yeo’s mentors also recognize her potential, and are always providing opportunities for her to go above and beyond. In 2014, Yeo organized the Venetian Macao’s first “SCL Dealer Championship” and executed the event from start to finish. She says it was most rewarding to witness the success of the event and the positive effect it had on her fellow team members. Yeo holds a strong tie to Macau. The two years (2013-14) experience at the Venetian Macao as quality and process improvement manager has benefited Yeo from many perspectives. Not only did she pick up Cantonese as a powerful tool to effectively communicate with local staff, but she also had the chance to thoroughly analyze gaming operating processes and procedures, empowering her to think outside of the box for better solutions and practice. As the Macau government increasingly encourages promotion of local talents, Yeo believes the local talents now have more opportunities to establish themselves in this industry in the next few years. “Localization is an important trend, as it aligns young leaders with strong communication skills and cultural awareness,” says Yeo. Localization is also evident in Singapore, Yeo’s hometown. As one of the largest workforces in the hospitality industry, Marina Bay Sands not only creates unique jobs to offer employees a head start in the sector, but it also continuously reinvests in their professional growth.

atrick Nichols’ role as senior vice president of strategy and business development at the Cosmopolitan of Las Vegas is a fitting reflection of his life experience in hospitality. Having grown up in Minnesota in the hospitality business, working in family-owned hotels, Nichols has witnessed firsthand the monumental shift in the ethos of the industry. Reinforced by a Cornell University degree in hotel administration with a concentration in finance and information systems, he is a perfect fit at one of the most recent, modern and technologically and generationally savvy resorts on the Las Vegas Strip. Nichols currently leads development, construction, retail and entertainment operations for the Cosmopolitan. As distinguishing features of the property, this role requires a global view of the gaming and hospitality sector, and intimate knowledge of the Las Vegas customer. And as if that is not totally consuming, Nichols also heads the financial planning and analysis initiatives for the company and takes on strategic capital planning efforts. Nichols moved to Las Vegas in 2008 straight out of college. He began working at Las Vegas Sands Corporation in financial planning, ultimately as a manager. His focus within the Las Vegas Sands portfolio was the Venetian-Palazzo complex on the Las Vegas Strip. Although Nichols initially believed his time in Las Vegas and in gaming would be limited—a bridge to another industry of residence—he instead made the industry a destination. Nichols stayed on as a member of the pre-

opening teams for Sands Casino Resort Bethlehem in Pennsylvania and Marina Bay Sands in Singapore, where he was responsible for implementing all financial planning tools and reports for the resort. This added international exposure in gaming further reinforces the diversity of experience brought to the Cosmopolitan by Nichols today. Nichols cites Jeff Burge, who he worked for during the opening of Marina Bay Sands, as a great leader and as one of his mentors. He worked for Burge in 2008 and opened a property at a time when the global economy was in a tailspin. This exposed Nichols to some of the most difficult operating scenarios imaginable, but fortified his experience in ways that contribute substantially to the lens he sees the industry through today. Given the prominence of innovation in the Cosmopolitan business model, it is not surprising that Nichols has a forward-looking view of the gaming industry. The focus on cutting-edge amenities and content at the property is inspired by Nichols. Although he believes that traditional casinos will maintain their relevance perpetually, Nichols is an astute observer of and a participant in the convergence of bricks-and-mortar and internet-driven gaming platforms. His willingness to experiment with the latest technologies on the casino floor, such as newer skill-based games, is a testament to his progressive outlook. With an absorptive schedule, Nichols still finds time for sailing, playing golf, scuba diving and spending time with family. —Michael Soll, The Innovation Group

Global Gaming Business JANUARY 2017

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The Power of Listening and Learning Jeff Morris Vice President of Public Affairs, Penn National Gaming s many industry insiders are aware, the gaming industry is filled with tight-knit, family-like companies. This camaraderie-filled atmosphere is what originally enticed Jeff Morris, vice president of public affairs for Penn National Gaming, to join the industry five years ago. “I was excited for the opportunity to work for a growing company,” says Morris. “Despite being the largest regional gaming operator in the country, Penn National really feels like working for a small business.” While Morris did not have direct experience in the industry prior to joining Penn National, he hit the ground running. As one colleague notes, “Jeff cut his teeth in the gaming industry working on behalf of Penn National Gaming in Massachusetts, traversing the commonwealth for three years on the company’s behalf in a successful effort to win one of four coveted gaming licenses.” Prior to joining Penn National, Morris honed his political and corporate public affairs skills in Washington, D.C. Here, he held positions ranging from a constituent services director for a U.S. senator to his most recent position as vice president for a D.C.-based PR and communications firm. After being with Penn National for five years and with no end to his tenure in sight, Morris be“Introducing the lieves his decision to move to Wyomissing, Pennsylgaming industry to new vania and join the company has been the most impactful career decision he has made to date. jurisdictions is both “I went from being a public affairs consultant for enjoyable and the various industries to working in-house for a specific challenging. You get to company in one industry,” says Morris. “This move has allowed me to become more specialized but also share the incredible learn about all facets of the business, where as a conbenefits gaming brings sultant you rarely get the opportunity to see the entire picture.” to a new community, Aside from the challenges of learning a new busibut also have to dispel ness within a new industry, Morris has enjoyed the challenges he faces in helping Penn National expand. the old stereotypes and “Introducing the gaming industry to new jurismyths about our dictions is both enjoyable and challenging,” explains industry.” Morris. “You get to share the incredible benefits gaming brings to a new community, but also have to dispel the old stereotypes and myths about our industry.” Reflecting on his experiences in both his professional and personal life, Morris believes his most important mentor, without a doubt, has been his father. “He taught me about the importance of work ethic and to never be satisfied with the status quo,” says Morris. The characteristics that his father helped to instill have undoubtedly aided Morris in his rapid career development within gaming. For young professionals looking to advance within the gaming industry, Morris’ advice is straightforward, but often overlooked. “Spend most of your time listening and learning from your coworkers and executives,” he says. Sage advice from an emerging leader for both young and senior professionals alike. —Michael Vanaskie, The Innovation Group

The company’s learning and development strategy serves to empower young professionals and emerging leaders through continued education and training, such as professional courses approved by the Singapore Workforce Development Agency, which ensures that employees’ skill sets and competencies remain responsive to the ever-evolving market dynamics and conditions. The company is a place where team members who perform exceptionally are well-recognized through robust rewards and recognition programs, resulting in a positive working environment that motivates employees to constantly strive for excellence. As Yeo continues to develop her professional career, she will always abide by her work ethos— perseverance, determination, and grooming the next generation of talents like herself. For young professionals in the industry, Yeo’s advice is to be agile, hard-working and dedicated. “Do not take shortcuts,” she says. “Always seek out new challenges and opportunities to learn.” —Michael Zhu, The Innovation Group

JANUARY 2017 www.ggbmagazine.com

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FRANKLY SPEAKING by Frank Legato

Trump Cards

Global Gaming Business JANUARY 2017

RINALDO

out to find a poledancing Bill Clinton look-a-like. (Now, I’ll spend the rest of the afternoon trying to erase that image from my brain.) In any event, the manager said the club “has extended a VIP invitation to President-elect Donald Trump to attend” the January 6 performance. I’m guessing he’s going to have more pressing—and dare I say, touchy—matters crowding his pre-inauguration schedule. And speaking of respecting women, Hustler publisher Larry Flynt is suing California, where he owns the Hustler Casino and Larry Flynt’s Lady Luck Casino—both cardrooms—to challenge a state law that prohibits him from opening casinos in Las Vegas and Mississippi. You know, nothing says “classy” and “upscale” like a Hustler theme for a casino resort. In fact, my friends and I ran a Hustler-themed casino when we were around 14. It consisted of a bunch of magazines in a hollowed-out log in the woods, where we sometimes played cards. In other news, the new Las Vegas professional hockey team will be called the Vegas Golden Knights, which disappoints me. I liked some of the other names being tossed around much more—particularly the Las Vegas Nighthawks. (No one even considered my suggestion, the Las Vegas BlearyEyed Drunken Gamblers.) Will Ferrell is making a movie about eSports, applying his Talladega Nights approach to what is one of the newest spectator sports and potential moneymakers in the casinos. We already know sSports is exciting. Now it will be unfunny as well. Finally, Wynn and Sheldon Adelson are planning Mr. Trump’s inauguration party. No, pole-dancing fake Melania will not be jumping out of a cake. Although that would be really cool. VICT OR

appy New Year! As usual, the annual change of calendar brings with it a wealth of quirky casino-industry news— not the least of which is the fact that a former casino owner is taking the oath of office as president of the United States. Oh, didn’t you hear? Our old industry pal, Donald Trump, becomes president this month. No word yet on whether President Trump will take the advice I offered last year, when he was considering bringing in our other industry pals, Steve Wynn and Carl Icahn, as advisers. (Wynn has publicly said he’s not interested in any role in the new administration, and no word yet on any real offer to Icahn.) As you recall, I offered sound policy advice on China—I suggested using casino executives as liaisons, and offering the Chinese the opportunity to double down on the close to $1 trillion the U.S. owes the People’s Republic. We’d offer one cut of a deck for high card, for double or nothing on our debt. Of course, we’d supply the cards. (What, you don’t trust us?) Anyway, there is no lack of entrepreneurs close to the casino industry looking to capitalize on the coming of the new administration. One of the first is Little Darlings, the “World Famous, Fully Nude” Las Vegas strip club. On January 6 and 7, Little Darlings is featuring “Melania Trump, Performing Live!” OK, it’s not the actual incoming First Lady, but the “World’s Only Melania Trump Look-a-Like,” presumably nude and performing exotic dances. The club’s manager, Ron Nady, explains it like this on the strip club’s website: “Even though we’re known worldwide as the unparalleled leader in live adult entertainment, this might be our biggest feature performance of the year. With all of the media hype surrounding Donald Trump’s inauguration, we just couldn’t help but notice how ridiculously hot his wife is. I mean, her body is absolutely stunning, and here at Little Darlings, we admire and respect women instead of insulting them. In that vein, we worked tirelessly to find the sexiest Melania Trump look-alike we could, and I think we found one who’s spot on.” Ah, yes. Nothing says “respect” like a crowd of leering men watching a naked woman slithering up and down a pole. Now, I’ve never spent a dime in a strip club, so I’m not up on where Little Darlings stands with respect to the strip-club industry in general. However, if you go by the website, it evidently is quite the classy joint. According to the website, Little Darlings features “200-plus totally nude dancers nightly, along with monthly porn stars.” Wow. Hundreds of nude dancers and porn stars, all in that little room. It must be quite a spectacle. Oh, come on. Whether or not you voted for him or support him, you’ve got to admit the president-elect is providing great fodder for columnists like myself. I mean, had Hillary Clinton won the election, we’d be talking about environmental issues, trade policy and other stuff that’s no fun. And I’m guessing that Little Darlings wouldn’t have gone

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NEW GAME REVIEW by Frank Legato

King Kong

Ainsworth Game Technology

his game takes one of the rare licensed brands that Ainsworth has released and places it on the sleek, new A640 cabinet. That format features dual 24inch LCD monitors framed by a matte black finish that lends a cinematic feel, which is particularly appropriate for this theme based on the 2005 remake of the classic King Kong film directed by Peter Jackson. The base game is a five-reel video slot available in 30-line, 40-line or 50-line configurations. A mystery event in the primary game multiplies winnings for certain combinations. When the “Woman,” “Man” or “Empire” symbols appear in all positions on the third, fourth and fifth reels, all wins are randomly multiplied by two, three or five. Three or more scattered logo symbols trigger a free-spin event on an expanded reel array. Reels expand to nine rows high for the event, increasing the number of paylines for the free-spin round. During the free-spin round, landing two or more scattered logo symbols triggers and additional five free games.

Manufacturer: Ainsworth Game Technology Platform: A640 Format: Five-reel, 30-, 40- or 50-line video slot Denomination: .01-10.00 Max Bet: 150, 200, 250 Top Award: 75,000, 100,000, 125,000 Hit Frequency: Approximately 50% Theoretical Hold: 4%-15%

Wealth of Dynasty Konami Gaming

his latest Asian-themed entry from Konami, featured on the new Concerto cabinet, features beautiful artwork, a four-level progressive jackpot and a free-spin feature with a unique twist. The base game is a five-reel, 243-ways-to-win video slot with wild symbols that randomly trigger a second-screen progressive bonus event, in both the primary game and in free-spin events. When the progressive bonus is triggered, the screen displays 12 flowers, and the player picks until matching three with one of the corresponding progressives—a Mini, a Major, a Maxi or the Mega jackpot, which resets at 1 million credits ($10,000 in the penny version of the game). Any scattered three, four or five gold ingot symbols trigger six, nine or 18 free games respectively. Before the initial free games begin, the player is directed to “Select Your Gold,” in which one of five gold icons is selected for bonus payments during the free-spin round. If the player’s chosen gold symbol appears during a free spin, the symbol expands to fill the entire reel—or reels, if more than one lands on separate reels—and all pays are doubled. There also is a “non-fixed” version of the game that allows the player to “buy” additional gold symbols for the bonus event, for a minimum of eight credits.

Manufacturer: Konami Gaming Platform: KP3 Format: Five-reel, 243-ways-to-win video slot Denomination: .01, .02, .05, .10, .25, .50, 1.00, 2.00, 5.00 Max Bet: 3,400 Top Award: Progressive; 1 millioncredit reset Hit Frequency: 30% Theoretical Hold: 4%-18%

JANUARY 2017 www.ggbmagazine.com

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GOODS&SERVICES GAMING’S AML EFFORTS RECOGNIZED BY INTERNATIONAL GROUP

he influential international body that grades countries’ efforts to prevent money laundering has recognized casino gaming companies’ significant investment in anti-money laundering (AML) efforts, reporting that the industry “has a good understanding of risks and obligations,” puts in place “mitigating measures above the requirements” of the Bank Secrecy Act (BSA) and has shown “an increased focus on raising awareness and improving compliance.” The Financial Action Task Force (FATF) released its mutual evaluation report for the United States last Geoff Freeman, AGA president and CEO, says month. FATF releases a partnership with the such reports once every federal government has 10 years, and its 2016 led to AML improvements report found, “The gaming industry has taken significant steps to comply with AML/CFT (combatting the financing of terrorism) requirements. Casinos have not only increased their compliance spending but have also put in place mitigating measures above the requirements of the BSA based on their risk.” Ten years prior, FATF was critical of casino gaming. For example, it said, “Regulators and casinos should work to further harmonize the Nevada Gaming Commission’s regulatory requirements with the Bank Secrecy Act and this should occur as rapidly as possible.” “It’s no accident that FATF’s evaluation of the casino gaming industry greatly improved from 2006 to 2016,” said Geoff Freeman, president and CEO of the American Gaming Association. “We’re proud of the incredible strides the industry has made not only since FATF’s report of the gaming industry 10 years ago, but in the last three years as we’ve built a partnership with the federal government that serves as a model for other industries.” In advance of the FATF evaluation, gaming companies took aggressive action to improve AML compliance, and the AGA demonstrated these improvements through a groundbreaking report earlier this year. In 2014, AGA also released a first-ever Best Practices for AML Compliance, which it updates annually.

FATF praised both reports by name in its evaluation, saying AGA “works to assist the sector by putting out useful best practices guidance, and the recent study on Investing in America’s Financial Security: Casinos’ Commitment to Anti-Money Laundering Compliance commissioned by the AGA provides a good picture of the understanding of the casino sector and the mitigating measures they have put in place.”

INTERBLOCK STADIUM OPENS IN GREEKTOWN

asino operator Jack Entertainment and luxury electronic-table-game manufacturer Interblock announced a partnership to bring Interblock’s Pulse Arena stadium-style ETG experience to Detroit’s Greektown Casino-Hotel. Interblock’s Pulse Arena

The Pulse Arena places hybrid table games—live tables with video feeds to individual player terminals sometimes numbering in the hundreds—in a stadium configuration that is housed within a pulsing light show and club atmosphere. According to Interblock, under the multi-year deal, the Pulse Arena product will be integrated into Greektown’s Synergy Table Games hybrid gaming space to provide the Detroit casino with the ability to select different configurations and gambling-enhancing moods via the simple press of a button. “The executive management team of Jack Entertainment challenged us to provide a unique gaming experience with the objective of driving incremental revenue to its casino floor,” said John Connelly, CEO of Interblock. “The partnership we have formed and the resources dedicated to this project will truly give the market something to take notice of.” Connelly said the Pulse Arena installation will combine the energy of its electronic table games with “an elevated level of interactivity and entertainment” to give the Michigan casino the flexibility to select environments running from a club-like setting

Global Gaming Business JANUARY 2017

to a more educational mode for beginning players. For its part, Jack Entertainment declared that the Synergy Table Games area at its Greektown Casino-Hotel features 48 connected stations and utilizes a range of automated, video and dealer-assisted generators to offer players the chance to enjoy up to four simultaneous games of roulette and craps as well as single- and multi-hand blackjack and baccarat. Located next to the property’s Fringe bar, the innovation additionally comes complete with a DJ booth, custom lighting equipment and a video wall.

SCIENTIFIC GAMES POWERS PUERTO RICO LOTTERY, LAUNCHES NEW CABINET

ntegrated gaming supplier Scientific Games Corporation announced two groundbreaking developments recently. The company revealed that its next-generation AEGIS gaming system installation has been completed, and that the system is now powering Lotería Electrónica de Puerto Rico (Lotería Electrónica) after a successful systems conversion in November. The technology conversion took place in just four months as part of the company’s new, eightyear systems contract, which began July 1. The contract was awarded by the Lotería Electrónica following a competitive procurement process, and includes sales and marketing services. Along with the new, advanced systems technology in Puerto Rico, Scientific Games also launched the lottery industry’s first single ticket accounting program for instant games in the U.S. as well as a new retail keno game. To support Lotería Electrónica’s continued revenue growth, Scientific Games launched its global market-leading Cooperative Services Program (CSP) for instant game management. Integrating game portfolio planning, analytics, inside sales, packaging, warehousing and retail distribution, CSP is used by more than 20 lotteries globally, including nine of the top 15 lotteries in the world for instant game per capita sales, according to La Fleur’s Almanac. The company also announced the launch of its new TwinStar J43 curved, portrait-style slot platform. The cabinet debuted in locations on the Las Vegas Strip and will be rolled out globally over the coming months. The TwinStar J43 is currently approved in multiple jurisdictions across North America and will launch internationally during the 2017 calendar year.

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The slot cabinet, the second in Scientific Games’ TwinStar family, delivers a portrait monitor presentation with a 43-inch J-style curved 4K monitor, sleek new styling, and an eyecatching lighting package with animated attraction sequences. The larger iDeck touch-screen button deck provides enhanced player interaction, and the multiTwinStar J43 channel custom sound package with a 5.25-inch subwoofer delivers extraordinary surround sound, engrossing the player in the game. The TwinStar J43 supports game content from Bally, Shuffle Master and WMS. The new cabinet launched with the Asianthemed game title Dancing Drums, a follow-on title to Scientific Games’ high-performing 88 Fortunes. Dancing Drums delivers the player-favorite pick-em Fu Fly Feature, the popular Fu Babies four-level neararea progressive jackpot, and a free games bonus with an re-trigger feature—all featuring dazzling Asian imagery evoking luck and fortune. Scientific Games is designing a portfolio of TwinStar J43 game titles planned to roll out during 2017.

IGT SIGNS NEW SYSTEM CONTRACTS WITH MASSACHUSETTS LOTTERY

nternational Game Technology Plc. announced that its subsidiary, IGT Global Solutions Corporation, has signed a contract with the Massachusetts State Lottery Commission to provide a new central gaming system, terminal software applications, and an integrated website to display general lottery information, as well as for marketing and player convenience purposes, following a competitive procurement. IGT provided the lottery’s existing central gaming system and lottery terminals in 1996. Over the years, IGT has installed self-service vending machines and currently prints a portion of the lottery’s instant tickets. Under the terms of the product sale with the Massachusetts Lottery, IGT will provide project management and system integration responsibilities for all aspects of the lottery’s gaming system conversion. The supplier will convert the lottery’s existing central gaming and back-office systems to IGT’s latest systems solutions, including a comprehensive business intelligence and analytics tool that provides insights across all sales channels. JANUARY 2017 www.ggbmagazine.com

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REFLECTION

A Life Well Lived On not crapping out in in 25 years

ccording to the in-flight map, I am about 650 miles southeast of Greenland. This is my fifth overseas trip this year, and I am guessing I will make two more before I leave at the end of the month, when I will formally retire from the Innovation Group, the gaming consulting company I started almost 25 years ago. Dinner was served two hours ago, and I think I have seen almost every movie available. With the quiet and the lights out, I have had time to process the concept of my experiences and upcoming life change. After almost a quarter of a century being involved in really all aspects of the gaming industry, I realize I have spent more than 4,000 hours in airplanes, flying over 2 million miles, visiting 68

By Steve Rittvo

construction, ski in a blizzard in Lake Tahoe, watch the Buddhist monks do their daily alms walk in Laos, take the second flight from Israel to Jordan as the only passenger on the plane with four security guards, two from each country, physically be removed from a casino in Nicaragua, and visit the shtetl where my grandmother grew up in Latvia, as well as innumerable other big and small adventures I will never forget. Life has not been boring. The gaming industry, at least in my experience, has been a magnet to famous and creative people from all walks of life. I have had the opportunity to work with A-list movie stars, celebrity chefs, prime ministers, hall-of-fame athletes from four sports and three team owners, world-renowned entrepreneurs, rock stars and rap impresarios, governors

As interesting as the travel, adventures and “famous—perhaps infamous—people, the best

part of my professional life has been watching the gaming industry evolve, as well as really getting to learn from and know outstanding people in the myriad aspects of what we do.” countries on six continents while personally participating in almost 2,500 gaming-related projects. Not bad for a kid from Brooklyn. Over the course of these activities, working with some of the most creative and enthusiastic colleagues from all sectors of the industry—company execs, investment bankers and analysts, architects and planners, government officials and gaming regulators, my competitors, and, most importantly, my partners and company colleagues— I, at times, felt like a somewhat low-key Indiana Jones having unrivaled adventures. As part of the research and site visit activities I did, as well as passing social hours with the people I worked with on projects, I had the opportunity to swelter in a ghost town on an abandoned air force base in the Philippines, fish the boundary waters in Minnesota, celebrate a Jewish holiday in Marrakesh, Morocco, dine on a 13-course frogcentric banquet in China, ride the roller coaster on the Stratosphere while the building was under 64

Global Gaming Business JANUARY 2017

and mayors, Asian tycoons and tribal chiefs, the King of the Delta Blues, the executor of the Elvis Presley estate, an alligator wrestler, 31 billionaires and the owner of the oldest bar in New Orleans, and not the least of gaming company CEOs. Every one of them was fascinated by our industry, its nuances and the excitement it generates. As interesting as the travel, adventures and famous—perhaps infamous—people, the best part of my professional life has been watching the gaming industry evolve, as well as really getting to learn from and know outstanding people in the myriad aspects of what we do. Personally, I am strongly looking forward to beginning the next phase of my professional life. Hopefully, it will not require quite as many miles or hours of work. Over the course of the last 25 years, I have often reinvented myself, and came into the gaming industry doing traffic and urban studies. With some awesome partners and mentors, we were able to build what I believe was a cutting-

edge, well-respected and broad-based consulting firm. With superstar partners, we added Innovation Capital, a mid-market investment bank that developed a meaningful place in the financial sector of the gaming and leisure industry. Subsequently, with another industry superstar, we formed Innovation Project Development, our project and construction management arm. Individually, I had the opportunity to participate in the ownership and development of three casinos—one each in Louisiana, Mississippi and Las Vegas—a route operation throughout Louisiana, and a fullservice, 300-room hotel in New Orleans. As I have gotten older, I have found my heart lies here, in the development and ownership of gaming and leisure facilities and businesses, and it is in this area I see myself going forward, albeit at a less intense pace, through a refocusing of our Innovation Project Development work. I look forward to spending some quiet time with my wife, Lee, the most amazing person I know, to spoiling my 9month-old grandson Zeph, and to skiing 50 days a year. The Innovation Group, I am certain, will continue to be at the forefront of creative thinking for leaders of the gaming industry as it evolves and grows. It will take the individuals like my remaining partners and colleagues—led by my very longterm friend who has been with me since the beginning, Michael Soll—to take gaming to its next step. I look forward to watching them grow. Finally, I would first like to thank my son David for giving me the awesome opportunity to work, travel and share good times together. Then, I’d sincerely like to thank all of you for giving me more than two decades of friendship, advice and opportunity. You pushed me, whether you were a client or a competitor, to work harder and smarter, and to learn to respect the power and benefits of the industry we’ve built together. However I go forward, I know it will not be as much fun or as exciting as it has been. You are truly all great, and I look forward to sharing my future with you.

Steve Rittvo is the outgoing chairman of the Innovation Group of Companies.

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PEOPLE AGILYSYS NAMES SRINIVASAN AS CEO

gilysys last month announced the appointment of Ramesh Srinivasan as the company’s new president and chief executive officer. Srinivasan, who most recently served as CEO of Ramesh Srinivasan Ooyala, a provider of video publishing, analytics and monetization services, will also serve as a member of Agilysys’ board of directors. Srinivasan was also president and CEO of Bally Technologies, where he started as executive vicepresident, systems in 2005 before being promoted to president and COO in 2011 and then to president and CEO in 2012. The company grew its annual revenue from approximately $500 million in 2005 to approximately $1.2 billion in 2014 and saw a stock price increase of about 700 percent during the same time period. 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.

GAMECO NAMES COMELLA TO HEAD COMPLIANCE COMMITTEE

ameCo, Inc. last month announced the appointment of Marc Comella as an independent member and chairman of the compliance committee. Based in Las Vegas, Comella has 35 years of diverse gaming expeMarc Comella rience in the areas of regulatory compliance, product compliance, sales and service, and product development. Previously, Comella served in a number of executive positions at Bally Technologies, including vice president of regulatory compliance, vice president of product management, senior vice president and general manager of the systems division, and vice president of projects and product compliance. As the company’s vice president of regulatory compliance, Comella ensured compliance with gaming laws applicable to business operations of the com-

pany in more than 300 global gaming jurisdictions. In addition, Comella was appointed as a member of the Integration Management Office, where he was responsible for key integration projects resulting from the Bally’s acquisition of SHFL entertainment, Inc. in November 2013 and Scientific Games’ acquisition of Bally Technologies, Inc. in November 2014.

on standardization committees to develop Mexican standards related to software and gaming device testing. Pozo Villar began his career with Electronica Clarion, S.A. de C.V. as head of design and development in Mexico. He moved up to project leader in Argentina, where he coordinated and provided technical supervision for electric materials production. Later he was named manager of new products.

CIPOLLINI LEAVES ATLANTIC CITY’S BORGATA FOR HARD ROCK

GOLDEN ENTERTAINMENT ANNOUNCES APPOINTMENTS

wo senior vice presidents of Borgata Hotel Casino & Spa in Atlantic City are leaving the casino to take new positions at Hard Rock International. Auggie Cipollini and Joe Auggie Cipollini Lupo, both senior vice presidents of operations for Borgata Atlantic City, will leave the property. “First and foremost, I will miss them both,” said Tom Balance, president and chief operating officer of the Borgata.“We started together durJoe Lupo ing the pre-opening phase of Borgata; they have become my colleagues, advisers and, most importantly, my friends. I’m forever thankful to them for their endless contributions to developing our property, our culture and our success.” The announcement comes three months after MGM Resorts International bought out Boyd Gaming’s 50 percent stake of Borgata Hotel Casino & Spa for $900 million.

GLI NAMES POZO VILLAR TO LATIN AMERICA TEAM

aming Laboratories International announced that Gerardo Pozo Villar has been hired as Latin America government relations and business development representative. Pozo Villar will be based in Mexico City to provide personalized service to GLI’s increasing client base in the Latin American region. Prior to joining GLI, Pozo Villar worked at NYCE in Mexico as a quality process auditor for software developGerardo Pozo Villar ment companies. He served

as Vegas-based Golden Entertainment announced three appointments last month. Charles Protell will be named executive vice president, chief strategy officer and chief financial officer of the comBrent Edlund pany. Gary Vecchiarelli will be joining Golden Entertainment as senior vice president of finance and accounting. Finally, PT’s Entertainment Group, a division of Golden Entertainment, has promoted Brent Edlund to director of the company’s tavern operations. Protell has had nearly a 20-year career in corporate advisory and investment banking, most recently as a managing director of investment banking for Macquarie Capital covering the gaming, lodging and leisure sectors.

GGB

January 2017 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Agilysys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 CountR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . . . .63 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 G2E Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Gaming Support . . . . . . . . . . . . . . . . . . . . . . . . .37 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Greenberg Traurig . . . . . . . . . . . . . . . . . . . . . . . .31 ICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Innovation Group . . . . . . . . . . . . . . . . . . . . . . . . . .3 Interblock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Konami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 Merkur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 NIGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Red Square Gaming . . . . . . . . . . . . . . . . . . . . . . .12 Scientific Games . . . . . . . . . . . . . . . . . . . . . . . . . . .9 VizExplorer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 World Game Protection . . . . . . . . . . . . . . . . . . . .51

JANUARY 2017 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Joe DeSimone

ailroad Pass Casino Hotel is the oldest operating legal casino in Nevada. It was opened and licensed in 1931. Originally, it served the workers on Hoover Dam in nearby Boulder City, where all gaming was prohibited. It’s had many owners through the years, but its current owner is Joe DeSimone, a commercial real estate developer, who bought the property from MGM Resorts in late 2014. A newcomer to gaming, DeSimone officially took over the property when he was licensed in October 2015. He made some immediate improvements and has grown the small market Railroad Pass attracts. He spoke with GGB Publisher Roger Gros at his offices in Railroad Pass in November. To hear a full podcast of this interview, visit GGBMagazine.com. GGB: Railroad Pass is in Henderson, just outside of Boulder City, Nevada, and it’s a very charming little casino. Please give us some of your background, and how it led you into the casino industry. Joe DeSimone: My background is mostly in real estate and development. I was born and raised in New York. I moved to Nevada, and began doing mostly real estate sales for four or five years, and then made my way into the commercial development business. I did that from 1996, when I opened up First Federal Realty, and I continue to do that today. We’re always looking to diversify—especially after the recession. First Federal did very well during that time. And this was offered to me as an exceptional business opportunity. Were you actually looking for an opportunity in the casino industry?

Let’s say I’m aware of what’s going on in the community, and we’ve looked at a lot of different types of business over the years, and never really pulled the trigger. But I must admit that the character of the property, and the nature of the industry being in Nevada, led me to gaming 66

Global Gaming Business JANUARY 2017

Owner, Railroad Pass Hotel & Casino and hospitality, and I thought this would be a good property to start with. I didn’t know how exciting it would be, but the people at MGM made it easy for me. What shape was the property in when you got here? This was not a core property of MGM, by any means.

When I looked at their numbers, they had a $40,000-a-year capital improvement budget. The place was built in 1931. We replaced the roof, for a few hundred thousand dollars. We painted the place for a few hundred thousand dollars. We extended the bar; we changed the steak room layout and the menus. We renovated every room, for $1 million. Most recently, we bought an LED sign for the reader board on the highway, and spent $500,000 on that. So, we’re millions of dollars into the improvements. We made that commitment to the community, to our customers and to our employees. Exceptional customer service is the key to success in the casino industry. What are you doing to really try to keep your employees motivated?

Well, MGM had some happy employees, despite the leaky roof (laughs). We kept everybody on for six months, unless there was attrition. We found that they have happy employees, and the employees have a very unique relationship with the customers, since the majority of our customers are locals from Boulder City and Henderson. So, I understood that unique relationship. We didn’t buy it to flip it. We didn’t buy it to sell it. We bought it to contribute to community, and make money as we do that. You’ve got a relatively small market, as you mentioned mostly from Boulder City or Henderson. What’s the breakdown of your customers?

I think the standard rule of thumb for us is 80 percent of our business comes from locals, and 75 percent of that is from Boulder City. The cus-

tomers that come back every day, or once a week, or twice a week, are really all like family. We love them. You’ve got great payback on the video poker machines, and your table games are second to none, in terms of the low limits and the rules. You can have a good time and not go broke.

The first advice I got was to take out the table games, because it had been a loss leader. And I rejected that outright. And then I sought out advice on how to make it better, and the play has doubled; the people are having a better time. Anytime you come here, the tables are full. It brings excitement because it’s such a small place. And it also makes money now! Across the street, you’ve got this massive construction project going on: the building of I-11 that will connect Las Vegas with Phoenix. What kind of access will the drivers have to your property here, when that’s completed?

Well, the drivers will have access from three directions. There will be a 24-acre truck stop and travel center on our site. We have 55 acres, just adjacent to the casino. So, the access will be, from Henderson, without a stoplight. From the bypass and Searchlight, without a stoplight. And from Boulder City, there will be the same experience. So, there will be three avenues onto Railroad Pass Casino Road, which goes to the truck stop. We’re really excited about that. So, you’re enjoying this new industry?

I’m having a lot of fun. I’ve met a lot of really neat people. I’m a people person, and I’ve built my career on that and relationships, and it’s helped me to expand my relationships into a different field, which has been exciting for me. But I like coming by. I enjoy the employees. Not just at the management level, but on a personal level, with the dealers or the cocktail waitresses, or the chefs. I also enjoy the discourse with the customers. It’s been a real fun experience for us.

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