Global Gaming Business, July 2019 by Global Gaming Business

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GGB Global Gaming Business Magazine

SLOT ROUTE OPERATIONS ONE UP IN INDIAN COUNTRY PROGRESSIVE JACKPOTS GAMING WOMEN ADVANCE

July 2019 • Vol. 18 • No. 7 • $10

Roulette Revolution The wheels go round and round

with new variants and electronic versions

10 Troubles Sports betting still has some issues to overcome in the U.S. Mid-Atlantic

Mayhem

How competition in the eastern U.S. is brutal

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CONTENTS

Vol. 18 • No. 7

july

Global Gaming Business Magazine

COLUMNS

18 COVER STORY Roulette Rage

AGA 10 Making a Market

Young players are discovering the game of roulette, which survives not only in its traditional state but in new formats like triple-zero for millennials with low gambling budgets, electro-mechanical and electronic table-game versions, digital slot-machine versions, and several online offerings. Here’s how the game continues to thrive after 120 years.

Casey Clark

Fantini’s Finance 12 Playing the Percentages Frank Fantini

Making My Point 22 Tales from the Tables Roger Snow

By Nicole Schultz

DEPARTMENTS

FEATURES 14 Mid-Atlantic Moves From Pennsylvania to Maryland to potential new competition in Virginia, the Mid-Atlantic gaming market is heating up. By Marjorie Preston

34 Sports Betting Pitfalls

The Agenda

One of the founders of a major sports book system provider outlines 10 dangers to the burgeoning U.S. sports betting market that must be addressed with high priority.

By the Numbers

5 Questions

13 AGEM

By Bruce Merati

44 Emerging Leaders

36 Women Advance The gaming industry is beginning to realize results from the effort to create a diverse industry, including more women in boardrooms and in C-suite jobs. By Keli Elkins, Allison McCoy and Marie Casias

24 The Route Game

42 California’s Systemic Problem

With MdME Lawyers’ Carlos Eduardo Coelho, Ainsworth’s Ryan Kulp, Angel of the Winds Casino’s John Baca, and 8-Pixel Consulting Group’s Serkan Constantine Gecmen

54 Frankly Speaking 56 New Game Review

Slot route operations constitute an already-healthy segment of the gaming industry that could be poised to expand into new markets.

A 97-page audit report by California State Auditor Elaine M. Howle blasts the state’s bifurcated gaming regulatory system as inefficient and unfair.

58 Goods & Services

By Frank Legato

By Dave Palermo

61 People

28 California Dreaming

48 Progressive Progress

Explosive expansion across California’s tribal casino market means the state’s Indian casinos could soon rival Las Vegas.

Linked progressive slots of all varieties are hot items on casino floors lately, thanks to a burst of innovation from several slot manufacturers.

By Dave Palermo

By Dave Bontempo

60 Cutting Edge

62 Casino Communications With Alan Feldman, Distinguished Fellow, UNLV International Gaming Institute

JULY 2019 www.ggbmagazine.com

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THE AGENDA

Louisiana of the North Roger Gros, Publisher

Vol. 18 • No. 7 • JULY 2019 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Marjorie Preston, Managing Editor mpreston@ggbmagazine.com Monica Cooley, Art Director | mcooley@ggbmagazine.com

orry, we really shouldn’t compare states with bad regulations and ridiculous gaming expansions to Louisiana anymore. It just isn’t fair. Today, Louisiana is a well-regulated, operatorfriendly, transparent gaming state. In the past, it had its problems with irrational regulators and regulations, institutional corruption and massive gaming expansion that hurt existing operators. But those days are gone, and Louisiana is now an upstanding member of the gaming fraternity. I wish we could say the same for Illinois. The recent legislative session demonstrated once again that Illinois is the North Korea of gaming states, per Penn National’s Tim Wilmott. Illinois currently has 10 casinos, each limited to 1,200 slot machines. The industry has been a ping-pong ball for state legislators determined to wring the last dime in taxes out of state gaming. At one time, the state charged as much as 75 percent tax on gross gaming revenue. Several years ago, the state allowed VGMs (video gaming machines) at bars, restaurants and clubs. This added 30,000 slots to the casinos’ 12,000. Casino business suffered greatly as a result. The market was saturated. So what does Illinois do next? How about six new casinos (including one in Chicago that will have 4,000 gaming positions), an increase in gaming positions at existing casinos from 1,200 to 2,000, slots at racetracks, slots at Midway and O’Hare airports, more VGMs at each location (along with a higher tax rate), slots at truck stops, sports betting both in casino sports books and on mobile devices, as well as sports books in seven stadiums and arenas across the state? Now, our friends in the slot manufacturing business were beaming the day after the expansion was announced. They’re going to make lots of money selling slots. And the state is going to make lots of money in taxes. It’s no secret that states use gaming as a “harmless” tax that can deliver tax revenues that aren’t felt by the general public. And it’s no mistake that the states that have allowed massive expansion of gaming are the high tax states like New York, Massachusetts, Pennsylvania and Maryland. And now Illinois, which is constantly seeking a boost for huge budgets from the gaming industry, has finally hit the wall. There’s not many more wells to tap anymore. Ten years ago, the state legislature legalized VGMs at bars and restaurants, which has resulted in

Global Gaming Business JULY 2019

legal gambling in over 6,800 locations in Illinois. But a report from ProPublica has indicated that the games haven’t worked for Illinois, which borrowed heavily against predicted revenues. When those revenues fell short, Illinois taxpayers were the ones holding the bag. The bill was poorly written with dozens of loopholes for both operators and cities hosting the devices. Even today, there is still a shortfall and charges of corruption in the bidding process held at secret meetings with the host town officials. Now, they’re back at the public trough. But what guarantees that the taxes that have been presumed will arrive? The existing casinos already have a problem filling the 1,200 gambling positions they are allotted. What makes anyone think that adding another 800 will help? Part of the law will allow the riverboats to come ashore in new casinos, but why would any operator invest in a new facility if there’s no chance that their business will increase to cover that additional cost? One interesting tidbit about the Illinois expansion bill was the “penalty box” provision for the daily fantasy sports companies in the legalization of sports betting. According to the bill, DraftKings and FanDuel cannot set up shop in Illinois for 18 months unless they partner with an existing casino company. The reason for this was that the two companies continued to do business in Illinois before the legality of DFS was determined by the state attorney general. This is the first time in the process of sports betting legalization that any company has been forced to the sidelines due to previous business practices. It happened in the online gaming world when PokerStars was punished for operating in the U.S. following “Black Friday,” but this is the first for sports betting. Somehow, however, I think it’s a reaction to the dominance that the two DFS companies have in New Jersey—they control over 80 percent of the market there—so legislators were doing the bidding of casino companies worried about getting run over by DFS. Casino companies should worry about the instability of the Illinois legislature rather than DFS, because you can never get comfortable with the business climate in Illinois. It’s like the weather. If you don’t like the weather, wait a couple of hours and it will change.

Terri Brady, Sales & Marketing Director tbrady@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Casey Clark | Frank Fantini | Roger Snow Contributing Editors Dave Bontempo twitter: @bontempomedia Marie Casias | Keli Elkins | Allison McCoy Bruce Merati | Dave Palermo twitter: @DavePalermo4 Marjorie Preston | William Sokolic Nicole Shultz __________________

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

•

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

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

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

• Dean Macomber, President, Macomber International, Inc.

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

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Michael Soll, President, The Innovation Group

• Katherine Spilde, Executive Director, Sycuan Gaming Institute, San Diego State University, twitter: @kspilde

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 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 2019 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

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BY THE

NUMBERS

ChiCAgolAnd’s Big gAmBlE C

hicago was often seen as the Holy Grail for a casino, but until now, Illinois legislators have resisted that temptation. Last month, Illinois passed a massive gaming expansion bill that includes six new casinos in the state and casinos at racetracks that can offer both slots and tables. When you add in the planned Ho Chunk casino in Beloit, it means six new casinos in the Chicago area. The impact on the existing casinos in both Illinois and northern Indiana is expected to be substantial and largely negative. And when you add legal sports betting that can be conducted at several stadiums and arenas in the area, as well as on mobile devices, the access to gambling by Chicago and northern Illinois residents will be greatly increased.

Existing and Planned Casinos in the Chicago Area Ho Chunk Casino

Rockford Casino

Arlington Park Racetrack Grand Victoria Rivers Des Plains

Chicago Casino Hawthorne Race Course Hollywood Casino Aurora Blue Chip Casino

Horseshoe Hammond

Existing Illinois Casinos Planned Illinois Casinos

Ameristar East Chicago Majestic Star

Harrah’s Joliet Hollywood Casino Joliet South Suburbs Harness Track

Existing Indiana Casinos

igaming growth

hile the growth of online gambling in the U.S. had stalled, it recently picked up with the legalization of iGaming in two more states, Pennsylvania and West Virginia, adding to the original three, Nevada, Delaware and New Jersey. Online gaming revenue has continued to climb since it was introduced in the mid 1990s. Projections are that it will continue to expand. This chart was included in a white paper produced by BMM Testlabs called “Online Gaming: Location.Location/Location” that examined the subject of geolocation. For copies of this white paper, contact Robin Bernhard at robin.bernhard@bmm.com.

Global Gaming Business JULY 2019

online gambling market size in Billion U.s. dollars

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NUTSHELL

“They

5Questions

Carol O’Hare

Executive Director, Nevada Council on Problem Gambling

arol O’Hare has been executive director of the Nevada Council on Problem Gambling since 1996, and prior to that served as a problem gambling consultant for Harrah’s Entertainment. The council has played an important role in researching and helping those afflicted with problem gambling, despite having no direct regular funding from the state. A passionate advocate for responsible gaming, O’Hare spoke with GGB Publisher Roger Gros in the council offices in Las Vegas in May. A full podcast of this interview can be downloaded at GGBMagazine.com, as well as on iTunes and Spotify.

1 2 3 4 5

GGB: Nevada has had gambling longer than any other state in the country. Having been around that long, is there a payback in terms of knowledge and experience in problem gambling? O’Hare: I guess there is and there isn’t. Gambling’s been legal in Nevada since the 1930s and the council

didn’t come along until the 1980s, so after 50 years of experience with gambling, the last 30 we’ve been able to study some of the consequences of problem gambling. How is the council funded?

I like to tell people that we’re a private nonprofit and we’re funded any way we can get it. We’re fortunate that we have support from several of the big gaming companies, who are corporate sponsors with an annual membership contribution. We also receive grant funding from the state of Nevada. We have fundraisers. We accept contributions, and we do generate some revenue from fees for services such as training. What kinds of numbers are you dealing with in terms of the people you treat?

It depends upon how you find the numbers. The number of people who are accessing treatment is increasing as we make that more available. We’ve been running the help line that is required to be displayed in all the locations in Nevada. What we see there, however, is a decrease in calls. But that’s true across the country. How many people dial 1-800 numbers for help anymore? We’re getting more people accessing our website for problem gambling information, and we’re not sure how many of them actually show up for meetings or even seek help. A gambling court has now been set up in Las Vegas. What role does the council play in this court?

We’ve been advocates for the law that made this possible for a very long time, and now it’s finally become a reality. It took 10 years to get this up and operating. When a crime is committed and that crime wouldn’t have happened in the absence of problem gambling, you need to get into treatment and not be subject to criminal penalties. It doesn’t mean you didn’t commit the crime or you don’t need to make restitution for the money that’s missing, but we know that these are folks that if we treat the addiction, there won’t be any repeat of that crime. This is a huge opportunity for us to address something that could be life-altering. Our role is to be an information provider and to link up the offender with the help they need. What advice would you give to states that are currently rushing to legalize sports betting, particularly mobile betting?

The advice I would give is not to the state but to the gaming industry itself. There are already 35 partnerships between major sports leagues and gaming companies. So I would advise the gaming companies to educate the sports fan. This is a new industry that knows nothing of problem gambling, an entire new employee base that may have been told nothing of problem gambling. So my dream has been that those folks in the casino industry who have been faithful to responsible gaming will hold their partners to the same standards as they’ve held for all these years. And then exceed them because there’s going to have to be a new approach to this new industry.

Global Gaming Business JULY 2019

Said It”

“This is a cowboy industry which won’t ever learn to be responsible until the NSW government and the regulator breaks free from industry capture and proves they can fearlessly govern this industry to stamp out predatory behavior.” —Rev. Tim Costello, Alliance for Gambling Reform, who says a pokies club in New South Wales should face big penalties after the suicide of a compulsive gambler

CALENDAR July 12-14: Phil-Asian Gaming Expo 2019, SMX Convention Center, Manila, Philippines. Supported by PAGCOR. For more information, visit phil-asiangamingexpo.com. July 12-14: National Council of Legislators from Gaming States Summer Meeting, Radisson Blu Downtown, Minneapolis, Minnesota. Produced by Spectrum Gaming. For more information, visit NCLGS.org/meetings. July 16-19: Amsterdam Affiliate Conference, Amsterdam RAI, Netherlands. Produced by Clarion Gaming. For more information, visit igbaffiliate.com/events/amsterdam-affiliate-conference. July 22-24: Oklahoma Indian Gaming Association (OIGA) 2019 Conference, Tulsa, Oklahoma. Produced by the Oklahoma Indian Gaming Association. For more information, visit OIGA.com. August 12-14: GRWA (Gaming, Racing, Wagering, Australia), L’Aqua, Cockle Bay Wharf, Sydney, Australia. Produced by Beacon Events. For more information, visit GamingDownUnder.com. August 13-15: Australasian Gaming Expo, Darling Harbour, Sydney, Australia. Produced by the Gaming Technologies Association. For more information, visit AustGamingExpo.com. September 5-6: Scandinavian Gaming Show, Stockholm, Sweden. Produced by Eventus International. For more information, visit eventus-international.com. September 17-19: Betting on Sports 2019, Olympia London, U.K. Produced by SBC Events. For more information, visit SBCEvents.com. September 18: UNLV Gaming & Hospitality Education Series: Retail and Food & Beverage—A Menu of Options, Stan Fulton Building, University of Nevada, Las Vegas. Produced by GGB Magazine and UNLV William F. Harrah College of Hospitality. For more information, visit UNLVGHES.com. September 23-25: Gaming, Entertainment & Tourism Summit (GETS), Bhairahawa, Nepal. Produced by Eventus International. For more information, visit EventusInternational.com. October 2-3: ICE Africa, Sandton Johannesburg, Gauteng, South Africa. Produced by Clarion Gaming. For more information, visit ICEAfrica.za.com. October 14-18: Global Gaming Expo (G2E) 2019, Sands Expo Center, Las Vegas. Produced by the American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com. October 30: UNLV Gaming & Hospitality Education Series: Customer Service & HR—The People Factor, UNLV’s Stan Fulton Building, Las Vegas. Produced by GGB Magazine and UNLV William F. Harrah College of Hospitality. For more information, visit UNLVGHES.com.

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Global Gaming Business JULY 2019

By Casey Clark

n May 2019, the industry marked a major milestone in the trajectory of American gaming: the first anniversary of the U.S. Supreme Court’s decision to strike down the Professional and Amateur Sports Protection Act (PASPA). The industry has experienced rapid growth over the last year, with lawmakers in 14 states plus D.C. moving to legalize sports betting for their residents and visitors. Seven new markets are already operational, with consumers outside of Nevada eagerly wagering billions in the first year alone. The message is clear: legal markets are here to stay. Anticipating the continued national enthusiasm for sports betting, the American Gaming Association and its members knew we must extend our commitment to responsibility in gaming to create the first Responsible Marketing Code for Sports Wagering. Great opportunity is coupled with great responsibility, and at AGA, our goal is to set the highest bar possible for the legal gaming industry, which includes marketing and advertising in new markets. The responsible marketing code is a set of proactive self-regulations, which took months of planning and collaboration. Led by AGA, members developed the code after studying similar models from other highly deregulated industries, namely the Distilled Spirits Council, and analyzing advertising regulations around existing legal markets both in the U.S. and abroad. Specifically, this is a guideline for operators, leagues, broadcasters and businesses involved in legal sports betting to make sure we market appropriately. The code stresses the importance of

respecting the legal age for sports betting, supporting responsible gaming, controlling digital media and websites and monitoring compliance. To ensure sports betting advertising is targeted only to appropriate audiences, AGA members will only advertise sports betting in outlets that appeal to those above legal age. This commitment also extends to only promoting sports wagering in media outlets not owned by colleges or universities. Also, as we continue to work with state regulators and law enforcement to prevent illegal gambling, our members’ websites will screen for individuals who live in jurisdictions that have not legalized sports wagering. All communications from AGA members will also include a responsible gaming message and a toll-free help number. Although the marketing code itself is new, the foundation of its message is not. Members have adhered to our Code of Conduct for Responsible Gaming for decades while demonstrating an extensive commitment to responsibility through their individual company policies and practices. These long-held views on responsibility are woven throughout the marketing code. Our industry is ready for the new era of legal sports betting. Together, it is more crucial than ever that we work in unison to promote responsible gaming, eliminate the illegal market, and separate good actors from bad actors through compliance and enforcement. There is still work to be done, but our code sets a high bar reflective of the values of our industry.

To ensure sports “betting advertising is targeted only to

appropriate audiences, AGA members will only advertise sports betting in outlets that appeal to those above legal age.

”

Casey Clark is vice president of strategic communications for the American Gaming Association.

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FANTINI’S FINANCE

Playing the Percentages With Chicago possibly in play and Wynn Encore up in the air, don’t be surprised to see some changes in ownership and direction By Frank Fantini

s of this writing, Illinois has jolted the gaming world by passing the broadest expansion since Nevada legalized casinos in 1931. The immediate reaction was twofold: one, that slot machine companies will be the biggest beneficiaries, with upwards of 35,000 games being added; and two, that casino companies will be hurt because the pie will be sliced into smaller pieces. Jefferies equity analyst David Katz summed up the reaction this way: “Slots don’t create revenue, people do.” At this point, it’s difficult to tell how everything will play out, but Illinois officials may be as disappointed with the tax revenues now as they were years ago, when they taxed casinos to a point of diminishing returns. They might find that investors aren’t willing to commit significant money to new development if the prospects of success are iffy. If they want an example, they can look at Pennsylvania, where a much smaller expansion— adding satellite casinos—is basically a dud. The biggest opportunity is Chicago. A few years ago, having the lone casino in the Windy City would have drawn all the major operators. That might still be the case. Perhaps the best positioned company is Las Vegas Sands. LVS has the financial wherewithal and isn’t facing distractions like Wynn Resorts has endured. It isn’t under pressure from activist investors to produce results from current assets, as are MGM and Caesars. In addition to the big Las Vegas-based operators, bidders could come from elsewhere, such as Hard Rock International or investors in partnership with the big operators.

MGM AND WYNN Perhaps a case of how activist investors can affect growth plans is MGM’s decision not to buy Encore Boston Harbor. The activists have spurred MGM to ap12

Global Gaming Business JULY 2019

point a special committee to discover how it can best profit from its existing real estate. Spending $3 billion or so for another casino probably isn’t what they have in mind. MGM might have hinted at that when the company said the prospective acquisition raised anxiety among some stakeholders. As a result, MGM management can get back to the business of improving the profitability of their business. But the same might not be the case on the Las Vegas Strip at the headquarters of Wynn Resorts. I’m reminded of a conversation I had years ago with a guy who was in on the financing of the Rio. He said he expected it to be sold. The reason: according to this guy, then-CEO Tony Marnell thought of selling the property and when that idea takes hold, it usually doesn’t go away. Several months later, the Rio was sold to Harrah’s. It won’t be a surprise if Wynn finds a buyer for its Boston property. Strategically, Boston doesn’t fit. Wynn, after all, is an Asian company with a Las Vegas presence. It gets 80 percent of its EBITDA from Macau and much of its Las Vegas gaming revenue from Asian players. Wynn will become even more of an Asian company if it gets a Japanese casino license. Having one regional casino makes Boston an outlier. Even the company’s reported interest in buying Crown Resorts in Australia (now in Melco CEO Lawrence Ho’s sights) would have made more sense, as Wynn would get the luxury Barangaroo casino in Sydney that’s being built for Asian VIPs. Wynn’s executives may want to get rid of the aggravation in Massachusetts and get back to their core business of destination resort casinos. The question then: Who can plunk down $3 billion to buy Boston? Not Caesars. Nor the regional operators, Penn National, Boyd or Eldorado. Some could speculate Mohegan Sun, though Massachusetts regulators might not be delighted to have their neighboring competitor in the Bay State. One possibility is Genting. The company has a history in New England, having helped finance Mohegan Sun and more recently lending money to

the Mashpee Wampanoag Indians to build a casino in, of all places, Massachusetts. For Genting, Boston wouldn’t be as much of an outlier. The company has Resorts World in New York City. Kien Huat, the real estate arm of the Lim family that controls Genting, controls Empire Resorts, which owns Resorts World Catskills. Additionally, the Northeast region can feed players into Resorts World Las Vegas now under construction. Another possibility to speculate is Galaxy Entertainment, the Hong Kong-listed Macau casino operator that already owns 5 percent of Wynn. Galaxy could buy Wynn for its Las Vegas properties and sell the Macau casinos. That could satisfy those who want to see new blood in Macau, and especially Asian blood, among the six casino concession holders. Of course, Wynn could, as the company says, commit itself to running Encore Boston and add steady profits to the corporate coffers.

DIVIDENDS AND REITS With investors getting nervous that the next recession may be near, it’s time to look at defensive stocks. In gaming, that includes the three real estate investment trusts (REITs). They provide good dividends and have the protection of rents that should keep coming in even if the economy slips (but doesn’t crash). In an era of consolidation, REITs can continue to grow their tenant bases, which means more rent to pay higher dividends and more profits to boost stock prices. In other words, REITs can combine safety, growth and total return. Here are their dividend yields: Gaming & Leisure Properties 6.9 percent MGM Growth Properties 6.1 percent VICI Properties 5.2 percent Frank Fantini is the editor and publisher of Fantini’s Gaming Report. For a free 30-day trial subscription email subscriptions@fantiniresearch.com.

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AGEMupdate AGEM MEMBER PROFILE With 150 years of experience, Howard & Howard is a full-service law firm with a national and international practice, providing legal services to businesses and business owners. With more than 160 attorneys, the firm has offices in Michigan (Ann Arbor and Royal Oak), Illinois (Chicago and Peoria), Las Vegas and Los Angeles. Todayâ&#x20AC;&#x2122;s casino gaming industry is comprised of numerous types of entities, including commercial and Native American casino operators, gaming equipment manufacturers, peripheral suppliers, regulatory, and standard-setting organizations. For the past two decades, participants in each of these industry segments, both in the U.S. and internationally, have relied upon Howard & Howardâ&#x20AC;&#x2122;s team of experienced gaming and casino attorneys to assist them in the varied legal matters involved in the industry. Howard & Howard has the most diverse and greatest combined gaming industry legal experience available, including experience within the industry as in-house counsel. In addition to providing counsel on typical business issues, the team offers its gaming industry clients distinctive benefits over other law firms in a number of key areas. Howard & Howard attorneys have: â&#x20AC;˘ filed, prosecuted and successfully obtained hundreds of gaming-related trademark registrations and patents, both internationally and throughout the United States; â&#x20AC;˘ represented the Gaming Standards Association (the standards-setting organization in the industry) for the past decade; and, â&#x20AC;˘ assisted entities from virtually every segment of the gaming industry, from operators to manufacturers, to peripheral suppliers, on both transactional and litigation aspects of domestic and international matters including IP, regulatory issues, contracts, financing, antitrust compliance, and labor issues. For more information, visit the firmâ&#x20AC;&#x2122;s website at howardandhoward.com.

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

AGEM Board of Directors Actions â&#x20AC;&#x201C; June 2019 â&#x20AC;˘ Apple recently announced a guideline change for gaming apps available through its App Store. The mandate directs that all new gaming apps must be native to iOS with existing ones updated by September 3. The time frame to achieve these changes has significant ramifications for AGEM members that specialize in these products such as sports betting and iGaming, in terms of the time it will take for recoding and also possible conflicts with existing regulatory rulings. AGEM is putting together a strategic committee to formalize these concerns and determine what options are available to work directly with Apple on potential relief. â&#x20AC;˘ AGEM members received a thorough update on the organizationâ&#x20AC;&#x2122;s participation in the Japan Gaming Congress in Tokyo and G2E Asia in Macau. Former AGEM President Tom Nieman, serving as â&#x20AC;&#x153;AGEM Ambassador,â&#x20AC;? worked to identify potential candidates to serve as AGEM director of Japan as the country progresses toward integrated resorts. He also met in Tokyo with the Integrated Resort Promotion Secretariat team that is currently researching technical standards that will impact suppliers that desire to participate in the market. â&#x20AC;˘ The European Casino Association recently set up Diversity and Inclusion for Career Enhancement, DICE Europe, to tackle all aspects of diversity, including on grounds of race and sexual orientation. Given the importance of AGEM in the global gaming industry, Tracy Cohen, AGEMâ&#x20AC;&#x2122;s director of Europe, has been invited to join a steering board which is made up of high-level representatives of ECA members and partners. The steering board will lead DICE Europe and participate in twice-yearly faceto-face meetings where they will provide strategic leadership on diversity and inclusion and support development of best practices, in addition to organizing events and workshops on relevant topics. â&#x20AC;˘ AGEM was a main sponsor of the recent 17th International Conference on Gambling & Risk Taking, which took place at Caesars Palace, Las Vegas. This prestigious event takes place every third year and is put on by the Universtiy of Nevada, Las Vegas with Dr. Bo Bernhard and Dr. Brett Abarbanel of the university as co-chairs. More than 500 attendees from 34 countries took part tackling the most relevant gambling-related issues facing the industry today. Connie Jones, director of responsible gam ing, represented AGEM as chair of a session on social gaming.

FORTHCOMING EVENTS â&#x20AC;˘ AGEM recently approved sponsorship requests for two forthcoming responsible gaming events. The Nevada Council on Problem Gambling Conference, held June 20-21 in Las Vegas, received a $7,500 contribution. This annual education and outreach event promotes awareness, education and professional networking, and attracts addiction and mental health professionals and interested stakeholder groups. The second event, Responsibility in Gaming and Gambling Europe, takes place October 2324 in Brussels, Belgium and receives sponsorship of â&#x201A;Ź3,000. This is a new event organized by Global Gambling Guidance Group (G4), whose accreditations exceed any current jurisdictional or regulatory standards in individual countries. holder groups.

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points, gain from April The AGEM Index increased in May 2019 by 6.65 points to 483 a 1.4 percent 2019. The AGEM Indexâ&#x20AC;&#x2122;s April 2019 growth was driven by an 11.7 percent increase in the stock price of Aristocrat Leisure Limited (ASX: ALL), which rose from AU$26.08 to AU$29.12. The stock was responsi ble for 19.81 of the AGEM Indexâ&#x20AC;&#x2122;s monthly Corp. 9766) points growth. Konami (TYO: experienced a 1.2 gain from ÂĽ5,060 led to a contribution points. Overall, percent stock price to ÂĽ5,120, which of 4.07 most AGEM Index companies reported decreases in stock price during the month, with five trending positively moving Gaming Partners International Corp. (GPIC) from and eight negatively. was delisted stock in May 2019 due acquisition a strategic buyer. the NASDAQ exchange to a take-private by

JULY

www.ggbmagazine.com 2019

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CRO WD Control: Has the Mid-Atlantic Reached Critical Mass? From D.C. to New York to New England, casinos are coping with new competition By Marjorie Preston

n 2006, New Jersey operators dismissed the zany notion that “slot barns” in Pennsylvania could compete with Atlantic City. Bad bet. By 2011, Pennsylvania had 10 casinos, and AC had shed more than 41 percent of its gaming revenues. Today, the Mid-Atlantic region is more crowded than ever, with ripples that radiate in every direction. Pennsylvania’s mini-casinos and online gaming invariably will affect the now fairly stable industry in New Jersey. Former rivals Foxwoods and Mohegan Sun of Connecticut have joined forces on a multimillion-dollar casino project in Bridgeport, hoping to fend off competition from Wynn Resorts’ splashy Encore, near one of the tribes’ biggest feeder markets, Boston. Upstate New York casinos were hard-hit by the opening of casinos in the New York City metro market and to some extent by Sands Bethlehem, soon to be Wind Creek Bethlehem. With casinos expected in West Virginia and Virginia and sports books about to crop up everywhere, what’s the latest thinking about how to compete? Is it entertainment? Conventions? A gaming floor that appeals to younger players?

Maxed Out The industry in the Mid-Atlantic has reached “maximum capacity,” says Cory Morowitz, chairman of Morowitz Gaming Advisors. Locals casinos may be especially at risk, relying more on frequent visits by neighborhood players and less on destination-style extras. “You have to make sure your cost structure is right-sized and that you have the ability to manage fixed and variable costs,” says Morowitz. “With more competition, you’re going to lose some share—no amount of investment will protect that.” For example, when Cordish Gaming’s Live! casino opens in Philadelphia in 2020, it may grow the market overall but will still take a piece out of Harrah’s Philadelphia and SugarHouse. “In these kinds of markets, there are diminishing rates of return,” Morowitz says; the existing properties, which have no hotels, couldn’t expand enough to offset the expected decline. “It’s not like people are going to pass by other casinos to stay in your casino in Chester, Pennsylvania or on Columbus Avenue. They’re just not destinations.” Not that those operators should throw in the cards. “But you can’t spend a lot of capital for very small returns,” says Morowitz, who advises “surgical,” cost-conscious upgrades in things like F&B. Retail sports books aren’t big profit-makers, “but they do bring bodies 14

Global Gaming Business JULY 2019

into the property, younger people who like blackjack and roulette and eating in restaurants.” That’s a demographic to cultivate now, as it could grow into a higher-value leisure customer base over time. Interestingly, Morowitz sees artificial intelligence as a cost-cutter of potential significance, enabling resorts to plug in robots to perform room service and maintenance. “There may be job losses in some lower-value areas like cleaning and security, but I predict it will create an opportunity for higher-rate jobs” along with operational efficiencies. When it comes to right-sizing, the states should be willing to kick in, too. For example, last year Delaware lawmakers OK’d a tax cut to help its struggling casino industry stay buoyant.

The Loyalty Card So whatever happened to good, old-fashioned customer loyalty? In some industries, loyalty is created “basically by taking prisoners,” says Morowitz; cable giant Comcast, for example, is a monopolistic industry whose customers “essentially have Stockholm syndrome—the company has 98 percent customer loyalty because there are no other providers.” That may have been true of casinos once, but no more. While big players like Caesars and MGM have created sticky loyalty programs, “millennials like disruptive technologies and are willing to change their relationships very easily,” says Morowitz. Players who have a favorite gaming hall, bartender or dealer are also likely to carry a wallet full of loyalty cards. “It’s really driven by the how much free play and how many free rooms they get,” says Morowitz. Michael Soll, president and founding partner of The Innovation Group, urges operators to experiment with their gaming offering and amenities—

“Anyone who tells you they already know where this is going and where it should go knows something the rest of the industry doesn’t. It’s a work in progress.” —Michael Soll, President, The Innovation Group

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up to a point. “It’s not changing up the gaming floor just to add eSports or skill games or whatever the buzzword of the day is, but to be flexible, to make room to do things that can be new and fresh. “One of the unfortunate aspects of that kind of experimentation is that the individuals whose minds and behaviors we want to understand— the next generation of players—have always been on the lower-budget side of the spectrum. We’ve never had great yield from 18-to-25-year-olds at the slot machines.” A 2016 feature in The Economist referred to an “existential threat” facing the traditional casino industry, which may not appeal to millennials “who grew up playing video and mobilephone games.”

Are We Saturated Yet? Clearly, it’s important to analyze customer trends and spending behaviors and not rely on data that says consumers become gamblers at, say, age 37 or 42 when they have a little extra money. Operators must learn what motivates emerging players, though they don’t now have big gambling budgets. “Anyone who tells you they already know where this is going and where it should go knows something the rest of the industry doesn’t,” says Soll. “It’s a work in progress.” The good news is the acceleration of mobile sports betting and online casinos should mean “marginal cannibalization” of bricks-and-mortar gaming, Soll says. “We actually see (online) as a complement, in some cases an enhancement and even a net revenue generator, particularly because it’s serving a different type of player.” The bottom line is, with multiple entertainment options, players can pick and choose. “The fact that there are more and more properties in the market and more gaming opportunities means your customer service level, your ‘experience,’ has to be a differentiator,” says Soll. “Properties that are not well-managed, not attractive and don’t make the guests feel good about being there—that’s the biggest vulnerability.” Not incidentally, he doesn’t believe the market has reached “technical saturation,” simply because the combined population of the Mid-Atlantic states is so vast (more than 53 million, according to a 2008 census). In all, he’s confident that the industry itself—and the noisy, neon-lit casino as we know it—is here to stay. “Bricks-and-mortar properties have always had some ebbs and flows as one has been introduced against the other, but in the long run they’ve survived and grown together. Going out and having a good time is not going away.”

Standing Out in the Crowd Tony Rodio CEO, Caesars Entertainment

n Atlantic City, Tony Rodio may be best known as the man who revived the Tropicana, lifting the property from near-rock-bottom to renewed prosperity. The former head of Tropicana Entertainment, who then took over as CEO of Affinity Gaming, was tapped for the top job at Caesars in April. GGB asked Rodio how he plans to operate Caesars’ multiple properties on the East Coast, principles which hold true across the whole portfolio. GGB: How do you compete successfully in a crowded market like the Mid-Atlantic states? Rodio: The key to success across our enterprise is

continuing to diversify the gaming and non-gaming experiences. That means deploying capital, especially focused on un-utilized or underutilized space, on offerings that drive more foot traffic into our properties. A good example is the sports book being completed at Wild Wild West inside Bally’s Atlantic City, which should attract many visitors who might not have given us a look in the past. How do you draw a new generation of players?

There seems to be a general consensus that younger consumers are unlikely to game exactly like prior generations. They appear to prefer more social environments, so table games like poker and blackjack should continue to be attractive. Skillbased games could also become a draw, but that’s likely to be an evolutionary process as operators and manufacturers develop and market new games to attract these customers. Also, it may be that not all games would involve gambling. Finally, part of the casino floor environment may further integrate gaming, entertainment, F&B and social interactions. This will be a process that involves some experimentation, capital investment and a lot of customer feedback. During your tenure at Tropicana in Atlantic City, the property was absolutely transformed. How did you achieve that kind of turnaround?

First, thank you on behalf of the team at Tropicana that executed the transformation. When I joined in 2012, our market share and customer base were shrinking, the property needed significant capital investment and we had low employee morale. We

had to prioritize, but over time we addressed all of these areas. As a result, financial, customer service and employee engagement performance all improved dramatically. I see a similar opportunity here, especially at Caesars Atlantic City, which has a great brand, ideal location on the Boardwalk and underutilized space that could be similarly transformed. What’s your take on how to strengthen and grow your presence in AC, Philly and Baltimore?

It’s not quite this simple but can be summarized in two words: Caesars Rewards. Our loyalty program is the glue that binds all Caesars properties. By emphasizing the customer’s ability to leverage their rewards points accumulated locally for use at destination properties in markets such as Las Vegas, New Orleans or Lake Tahoe, we have an advantage that none of our competitors can match. We should also utilize all of our available space to generate profitable growth, and make sure that our marketing spend drives revenue, EBITDA and cash flow growth as the top financial objectives for our operators. Are there any special challenges in the MidAtlantic states compared to other markets?

The Mid-Atlantic region is a crowded space with a lot of gaming capacity between Washington, D.C. and Boston. Especially in highly competitive markets, it’s critical to stand out by leveraging our brand and loyalty program advantages, deploying capital to create even more exciting customer experiences, and enticing customers to spend more of their gaming and non-gaming dollars with us. We should also, as I mentioned above, deploy our marketing spend as effectively as possible.

JULY 2019 www.ggbmagazine.com

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“The ability to host revenue-generating customers Monday through Thursday by offering a compelling product has been an essential part of our strategy.” “It’s all about giving customers a complete entertainment experience beyond gaming.”

Going Live! Rob Norton President, Cordish Gaming Group

n 2020, Cordish Gaming is expected to debut its $700 million Live! Hotel and Casino Philadelphia, entering a market that already has two hometown casinos. GGB asked Cordish Gaming President Rob Norton why he thinks there’s room for one more. GGB: Can you forecast how Live! Philadelphia will do when it opens? It’s an enviable location, close to the airport and major highways. Norton: Live! Casino & Hotel Philadelphia will be the only true luxury

resort hotel/casino in the broader Philadelphia area. It will elevate the Stadium District to a new level as a place to watch, play and stay. Given the power of the location, access and amenities, we’re certain it will quickly establish itself as the premier revenue-generating casino in the market. Do you think the casino industry is endangered in any way by new competition, new customers and changing technologies?

We do not. The evidence is overwhelming that millennials are no different than other consumers: they want a first-class experience, exceptional customer service and high-quality amenities and offerings. This is what we aim to deliver—to customers of all ages. Is skill-based gaming a critical component?

Not at present. We’re excited by the potential of these games, but they appear to be a generation away from being ready for broad deployment. Sum up your formula for success in gaming and hospitality.

It’s all about giving customers a complete entertainment experience beyond gaming. You have to design and deliver venues that are compelling places to go, regardless of whether you’re a regular gamer. They have to be first-class in their quality and finishes. Then you have to program them constantly with a variety of entertainment. We call it “approachable luxury” that welcomes everyone. 16

Global Gaming Business JULY 2019

Conventional Success Mark Vanderwielen Vice President of Hotel and Property Operations, Borgata Hotel Casino & Spa

ince it opened in 2003, Borgata Hotel Casino & Spa has been Atlantic City’s consistent market leader. Helping it maintain the top spot is an emphasis on the MICE segment (meetings, incentives, conventions and exhibitions). GGB asked Mark Vanderwilen, vice president of hotel and property operations, to elaborate on the strategy. GGB: How important is the meetings and convention segment to Borgata’s dominance in Atlantic City? Vanderwielen: Borgata’s MICE business has been and will continue to

be an important part of our market-leading success, especially as it pertains to midweek and off-season volume. The ability to host revenuegenerating customers Monday through Thursday by offering a compelling product has been an essential part of our strategy. For example, less than two years ago, we invested $11 million into an exclusive 18,000-square-foot meeting experience called Central Conference Center, allowing us to accommodate more weddings, special occasions, trade shows and business expos. That venue brought our total event capacity to 106,000 square feet. How many meetings does Borgata host each year? Are the groups mostly regional?

Borgata hosts several hundred groups per year ranging from 10 to 2,600 attendees. Since Atlantic City is primarily a drive-to destination, the majority of the groups are within a 350-mile radius. A significant amount of our business comes from corporate groups and associations, with additional auxiliary SMERF groups (social, military, educational, religious or fraternal) comprising the remainder. How likely are those guests to also frequent the casino, F&B outlets, clubs and other facilities at the resort?

Group attendees are very likely to enjoy all that Borgata has to offer— our fine dining, entertainment and nightlife options, spa and fitness experiences and gaming action. The ability for the property to offer everything under one roof is often a differentiator when it comes to booking a meeting or convention in Atlantic City.

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Roulette Reaction Movies like Indecent Proposal, Casino, Diamonds Are Forever and Casablanca—coupled with a classic design—have created a reputation for roulette that’s synonymous with the casino experience. But who’s playing now? By Nicole Schultz

classic red-and-black design and easy-to-follow rules make roulette an easily accessible casino game that’s fun for players of all ages. In fact, according to Oscar Giralt of Win Systems, a leading supplier of electronic roulette machines, “We consider roulette to be among the type of heritage games that differentiate a slot parlor from a full-service casino.” But in today’s era, it seems that casino players keep raising the bar— demanding newer, more and better ways to play. But who is playing roulette, and is innovation really necessary when it comes to such a casino classic?

Humble Beginnings Roulette as players know it today got its start in revolutionary Paris during the French Revolution (circa 1790s). “It was a combination of earlier games, in some ways a simplification and in some ways adding complexity,” says David Schwartz, a gaming historian who is associate vice provost for faculty affairs at the University of Nevada, Las Vegas and former director of UNLV’s Center for Gaming Research. And though this vision of the game is the kind players most often associate with casi18

Global Gaming Business JULY 2019

nos, time and necessity have created four versions of the game: traditional, electronic, video or digital, and online roulette. Traditional roulette is the kind players are accustomed to seeing in the movies; it requires a dealer to spin a physical wheel and for chips to be manually divvied up after every play. Digital roulette, however, is similar to a slot machine in that it’s electronically automated and uses a random number generator (RNG) to decide where the ball lands. Electronic roulette falls somewhere in the middle, offering both physical and digital elements; it involves a single, physical roulette wheel centered between a bank of slot machine-style screens depicting a traditional roulette table. However, typically, instead of using a dealer, an air tube forces the ball onto an already-spinning wheel. Online roulette is a variation of the game that’s played entirely over the internet. So in today’s era of innovation, which version of roulette are manufacturers betting on?

For some players, luck and randomness surpass skill and The Rise of Electronic, Digital strategy. These elements Online Roulette make roulette easy to play, and There are arguments to be made for all variations raise the stakes and the game, and in many ways the true winner is contribute to the game’s fun ofa draw. and social atmosphere. In the “pro” column for online roulette: roulette translates well to the online space. According to Todd Haushalter of Evolution Gaming, a company that runs “live” dealer online

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In digital and electronic roulette, the player intimidation factor associated with live games disappears. There’s no real pressure—even the pressures of potential wheel inconsistencies, inaccuracies and dealer error are removed in this space.

casinos, “Players can relax and play at their own leisure. It’s OK to miss a spin or two, and you can bet small stakes.” Much the same goes for digital and electronic roulette. Plus, in these versions of the game, the player intimidation factor often associated with live games disappears. There’s no real pressure when it comes to these forms of roulette—even the pressures of potential wheel inconsistencies, inaccuracies and dealer error are removed in this space. Not only this, but electronic and digital roulette have the added bonus of relative ease of regulation and ease of innovation. According to Lance Gautreaux, U.S. senior vice president and chief casino officer of Las Vegas Sands Corp., “Fully digital roulette slot games are basically RNG-based slot machines with roulette graphics.” Digital roulette is regulated like a slot machine; both digital and electronic roulette are often permitted and played in markets that preclude live ball games. Digital and electronic roulette’s similarities to traditional slots mean that games can be innovated much like traditional slots. These innovations include themed games, additional bonuses, and various side bets. According to Giralt, “Win Systems has developed several electronic roulette games to attract new players and enhance the gaming experience for established ones, such as Knockout Roulette—which eliminates numbers in the roulette wheel that have already been called, increasing players’ chances of victory in the following spins; Gold Club Chinese Roulette, a themed roulette incorporating Chinese zodiac signs; Roulette Bingo Jackpot, and various other mystery jackpots.” For these reasons, the popularity of electronic and digital roulette has increased over time, and performance on these machines is equal to and— among some demographics—greater than traditional roulette. “For dealer-operated and fully automated roulette ETGs, we (Las Vegas Sands) are seeing more and more demand as players become used to the product,” says Gautreaux. “Because of the efficiencies casinos can gain from having this product over traditional roulette tables, they can be offered at a much lower price point that can cater to lower-end segments. “This is a significant growth market that we’ve been cultivating over time. The benefit here is that these products are attracting a unique guest in which their predominant play is on ETGs only. These players are not your typical slots or table games players and do not play significantly on anything but ETGs.” On the other hand, Gautreaux says, “fully digital roulette slots have maintained popularity over the last several years but it has not been a significant growth market. The typical player profile for these types of roulette

games are low- to mid-end slot players whose majority of play is derived from slot machines.” The hope is to expand the reach of these games through constant innovation—adding new features, elements, themes and side bets.

Discouraging Advantage Play The pro list for these roulette variations is almost as long as the list of variations themselves, but traditional roulette has remained king over the years for a reason. Those who stand firmly on the side of electronic, digital or online roulette often point to traditional roulette’s susceptibility to fraud, advantage play and other mistakes as a key drawback to the game; however, traditional roulette wheel manufacturers take additional security and fraud prevention measures to prevent these kinds of costly errors. For example, before TCSJohnHuxley roulette wheels are available for casino use, they undergo “more than 130 quality control checks,” says Steph Nel, general manager, Americas for TCSJohnHuxley. Other additions to prevent inaccurate balancing, table movement and fraudulent wheel manipulation come standard on every wheel, and optional real-time security enhancements—including ball track inclinometers and abnormal event detection (like the sudden change of ball or rotor speed)—ensure device integrity and “alleviate the need for daily leveling of wheels,” says Nel.

Attracting Social Gamers: The Case for Keeping It Classic Though electronic and digital roulette are both undoubtedly popular and profitable, and though online gaming is on the rise, younger generations of gamers patronize casinos to be social and look for a traditional, social gaming experience. As operators and manufacturers look toward the future of roulette, this characteristic must be kept in mind. And for this reason, as it currently stands, traditional roulette reigns supreme. Gautreaux says, “For various reasons, many movies and commercials have a tendency to promote casinos as a fun and social environment. Roulette is inherently a social game, so it plays well to that type of messaging. Given its history, easy-to-understand game rules and slight innovations over time, I think social players will continue to be attracted by roulette and we will continue to see it grow.” It’s become trendy for younger players to seek out social experiences in the form of “retro” games. With a live dealer spinning a physical wheel, soft table felts and stacks of colorful chips, traditional roulette could become a JULY 2019 www.ggbmagazine.com

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It’s trendy for younger players to seek out social experiences in the form of “retro” games. With a live dealer spinning a physical wheel, soft table felts and stacks of colorful chips, traditional roulette could become a go-to game for millennials in the casino.

go-to game for millennials in the casino. Similar to bingo, where players can choose between digital and physical cards and daubers, younger players gravitate toward the latter for the tactile sensations, anticipation and adrenaline rush associated with a physical game.

When Superstition and Strategy Collide

and instinctual for players to search for patterns amid the chaos. Players often resort to betting it all on a lucky number—typically a birthday, anniversary or another number of significance. Sometimes these lucky numbers pay off, and sometimes they don’t. When a particular table has seen a significant number of high payouts, players excitedly announce that the table “is hot.” And even though each spin of the wheel is completely independent of the last, it’s common for players to believe that the same outcome can’t happen too many times in a row. For example, if the ball lands on a red number seven times in a row, there’s no way it can happen an eighth time. Casinos have taken advantage of this superstitious proclivity, and often reader boards can be found alongside roulette tables, “allowing players to see the last 20 or so spins and giving them the perception of understanding ‘hot’ numbers,” says Giralt. But many players understand that these beliefs are nothing more than superstitions. Certain players are not only comfortable with the luck and randomness that “make roulette roulette,” but actually prefer it to other casino games for this reason. For some players, luck and randomness surpass skill and strategy. These elements are what make roulette so easy to play, raise the stakes and contribute to the game’s fun and social atmosphere. Perhaps summing it up the best is a young roulette player in a Downtown Las Vegas casino on a Friday night: “I like roulette because you can win whether you’re drunk or sober,” she says. Superstitions aside, and whether it’s traditional, electronic, digital or online, the base game of roulette remains largely the same across all platforms, and is still hugely popular after all these years. “It’s an extremely pure game,” says Haushalter. “One ball, one wheel and a winner on every spin—you just have to guess what it will be. There’s always a winning number or color that you could have bet on. This will not change any time soon. “In 20 years, it will still be the roulette that is in the movies.”

No matter the medium, roulette—potentially more than any other casino game—has been veiled by player superstitions for centuries. Giralt says, “It is human nature and the stuff of folklore to try to defeat casino games. Roulette lends itself to our desire to ‘beat the odds.’” Though the game is entirely based on luck and chance, it’s evolutionary

Nicole Schultz is the global gaming capital coordinator of the International Gaming Institute at the University of Nevada, Las Vegas, overseeing all communication and public relations efforts, and a freelance writer for various publications.

Minimum Bets and the Triple Zero Controversy As far as roulette goes, electronic, digital and online versions offer the lowest minimum bets because there are no physical limitations, whereas traditional roulette keeps minimum bets high to overcome labor and supply costs. A slightly controversial decision, the biggest change to the traditional roulette wheel over the years is the number of zeros (one, two or three): a decision that has helped keep minimum bets low and made the game more accessible to players of all ages and incomes. “Thanks to the house edge, variations of single, double and triple zero roulette can be offered at different price points that are geared toward the demographic an operator may be interested in attracting,” says Gautreaux. “For Las Vegas Sands, the great thing about designing triple-zero roulette was that we could launch the product and offer it at a much lower price point, providing a gaming option to players that may have been previously priced out of other live roulette variations. For our Las Vegas properties, pricing and average bet follows edge—with triple zero being the lowest minimum and single zero being the highest minimum.” Much like some casinos’ transition from 3:2 odds to 6:5 odds in blackjack, casual roulette players don’t understand the impact of extra zeros on the house edge. Players with less disposable income—typically younger players—see the lower minimum bets and simply play the game. According to Gautreaux, a study of millennials conducted in Sands’ Las Vegas property concluded that “roulette is hugely popular and growing among that generation; millennials showed the highest proportion of their total theoretical being generated through table games as compared to other generations.”

Global Gaming Business JULY 2019

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MAKING MY POINT

Tales From the Tables How games will change as the new world order takes over By Roger Snow

aution: Spoilers ahead. If you do not, repeat, do not want to know the latest and greatest inflection point in table games development, one that has—to be honest—already started and one that will—to be more honest—only accelerate over the next five years, stop reading immediately. Well, not immediately. We’ve got to give ourselves a little runway to get this thesis airborne. Don’t worry: you’ll get fair notice when it’s time to jump out the window and pull the ripcord. Just grab your chute and be ready. It hasn’t been around for long, the concept of proprietary table games. No, no, the notion of 1.) thinking up unique content; 2.) securing intellectual property around it; and, 3.) licensing it to casino operators only traces back to the late 1980s and early 1990s. Or, as modern historians refer to it: “Hammer Time.” The Big Bang of this universe was, of course, Caribbean Stud. That simple five-card poker game, replete with a coin slot for accepting $1 progressive wagers, was the first successful proprietary title in history. And if you weren’t around to witness its heyday, then you missed something you will never witness again. Because no proprietary game has ever or will ever dominate to the extent or for the duration that Caribbean Stud did. It’s not possible. Like literally. There is simply too much out there to compete for attention and floor space; back then, however, this was the only title in town. And its success, which went unchecked and unchallenged for years, led us to the first inflection point: poker-style games. You know ’em. You love ’em. You can’t spread a casino floor without ’em. We’re talking about the Crazy 4 Pokers. The Casino Hold ’em Pokers. The Let it Rides. The High Card Flushes. The Three Card Pokers. The Mississippi Studs. (Wait. That’s a country music group from Biloxi.) Then came blackjack side bets, aka Inflection Point No. 2. Once upon a time, the only side bet

on blackjack was insurance, and that was something you could only take—but who ever did?— once every 13 hands or so, whenever the dealer was showing an ace. Now, 75 percent of all blackjack tables have some sort of optional wager that pays odds. And if you remove high-limit tables from your numerator, it’s closer to 90 percent. Next were the blackjack derivatives, led by Spanish 21 and Pontoon, buffered by Blackjack Switch and Free Bet Blackjack and continued today by Multiplier Blackjack and Blackjack Burnout. After that in this battle royale, coming over the top rope, were the commission killers, the games with mechanics (pushing something, half-paying something else) to obviate the need to charge players 5 percent on some or all winning bets. Case in point: More than half of the world’s baccarat tables are now commission-free, with Super 6 Baccarat, EZ Baccarat, Dai Bacc, Bad Beat Baccarat and Commission Free Dragon Bonus being the most popular.

“Table progressives used to be harder to find than a threelegged ballerina.Now they’re here, there and everywhere.”

Global Gaming Business JULY 2019

What’s that—one, two, three, four so far? OK, the fifth and penultimate point is, alliteratively enough, progressives. Go back to the beginning. Caribbean Stud for the longest time was the only progressive table game in the industry. But that started to change about 10 years ago. Slowly but surely, incrementing jackpots went onto games like Fortune Pai Gow and Ultimate Texas Hold ’em as a la carte upgrades. Then other poker titles. Then blackjack with Super 4 and Blazing 7s. Then EZ Baccarat. Yup, table progressives used to be harder to find than a three-legged ballerina. Now they’re here, there and everywhere. Just like the Holy Spirit. And the Electric Slide. Which brings us to the most recent inflection,

the one we are experiencing right now. Again, if you want to be surprised, taken offguard by the new wave of innovation that’s about to crest and crash at a casino near you, then . . . Avert. Your. Eyes. OK. Here goes: The same old boring payouts on the same old boring—and not so boring— games that have been out there forever are going away. What will replace them is volatility, the chance at winning something more than you could have, you would have, before this inflection point. Lightning Roulette from Evolution Gaming does this. Straight-up winners pay 29-to-1 (instead of 35-to-1), but some numbers—randomly chosen after new bets are locked up—pay up to 500-to-1. Bonus Spins Blackjack from AGS does this. Instead of paying 15-to-1 or 17-to-1 on a prop bet that players get blackjack, you spin the wheel to determine your prize. Maybe it’s lower than it should be or maybe it’s higher than it should be. Sometimes much higher, like 10,000-to-1. Lucky Cat Blackjack from Geoff Hall does this. When the dealer pushes, players don’t get paid 1-to-1. The dealer shakes a dice cup to determine the payout. (Spoiler Alert No. 2: Each die has two cats on them, one gold and one white.) They can push, win even money or even win 10-to-1. All on the main bet of blackjack. And the rest are yet to come. You’ll see this year and next an absolute assault—White Walkers at Winterfell style—on the boring and the stodgy. The predictable. What if in blackjack you could win 10-to-1 on a push? What if in pai gow poker you could win 20-to-1 on a copy? What if in baccarat you could win 100-to-1 on a tie? What if this column wasn’t subject to a word count and we could rattle off possibility after possibility? Meh. That would just spoil the surprise. 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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Route to Success Route operators use technology and personal service to keep slot revenues growing and their locations successful By Frank Legato

he largest casino slot floor in the U.S. is at Oklahoma’s WinStar World, which offers 8,500 machines. Golden Entertainment operates well more than that outside of casinos. “Distributed gaming” is the industry term for route operations, which in Golden’s case, amounts to nearly 11,000 machines across Nevada and Montana. Route operators have the unique task of managing, marketing and operating slot machines not in one room, but in hundreds of rooms at once, spread across a given state, under the identifier “video gaming terminals” or VGTs, or in some cases, “video lottery terminals” or VLTs. In the case of Golden Entertainment, one of the largest distributed gaming operators in the U.S., those locations in Nevada consist of 65 wholly owned taverns under PT’s Entertainment Group in addition to around 700 convenience stores, truck stops and grocery stores. The company’s Montana division consists of a network of nearly 3,000 games in 300 locations. The PT’s chain in Nevada is rivaled by the Dotty’s tavern chain, which has 175 locations in Nevada, Oregon and Montana; and the oldest route operator in Nevada, Century Gaming Technologies, which operates at convenience stores, grocery stores and other operator-owned locations in Nevada and Montana. Century Gaming, which had operated a Montana route since the state first legalized VGTs at bars and taverns in 1986, entered Nevada in a big way in 2004 by acquiring United Coin Machine Company, with more than 7,000 machines in the state’s oldest route of convenience stores, gas stations, grocery stores and other non-casino locations. United Coin, founded in 1958, is now Century Gaming Technologies Nevada. When it comes to growth in the distributed gaming sector, the attention is normally directed to potential new jurisdictions beyond the current Nevada, Montana, South Dakota, Oregon and Illinois markets. In the case of Illinois, the VGT routes, which began with the 2009 law that legalized the machines in bars and taverns, have seen growth stalled at fewer than 30,000 machines. It is a state already oversaturated with slot machines—a situation that is about to become much worse with 10 new casinos (including one in Chicago) and slots at airports. 24

Global Gaming Business JULY 2019

The Illinois legislature’s new gaming package has put the brakes on the route markets there, which had been hot for acquisition earlier this decade. Four years ago, Penn National Gaming acquired an Illinois route of 1,100 VGTs across 270 locations. In May 2016, Delaware North bought a route with 1,800 VGTs at 438 sites in Illinois. Last year, Boyd Gaming bought Lattner Entertainment Group Illinois, LLC, which operates nearly 1,000 gaming units in more than 200 locations across the state. The new Illinois law has now thrown all of those operations into crisis mode, not to mention bringing potential expansion of the VGT route market to a grinding halt. Distributed gaming operators are now turning their attention to potential new markets in states like Pennsylvania, Indiana and Missouri, each of which has been debating bills for years to add video gaming terminals to bars and taverns. In Pennsylvania, the tavern owners’ association was stymied when VGTs for bars and taverns were stripped from the massive gaming expansion law passed late in 2017. In its place was a much more modest provision for VGTs in truck stop locations that had to meet strict specifications to qualify. A more recent law—being challenged in court by the Rudder’s convenience store chain—allows for local municipalities to ban VGTs in their jurisdictions, even for stores already licensed by the state for the machines. Indiana and Missouri lawmakers seem to debate bar VGTs at every session, and each state has seen grassroots organizations rise up on both sides of the issue. In Indiana, the Video Gaming Coalition holds a “Legislative Reception” every January to educate the public on VGTs, which it says would generate $165 million in new tax revenue. In Missouri, the Video Lottery Control Act, introduced by state Senator Denny Hoskins, would tax and regulate an estimated 4,000 “gray-area” video gaming machines already in bars. Route operators like Golden Entertainment are doing everything they can to promote these new growth opportunities. “We’ve worked very hard from a lobbying perspective in all the new ju-

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“Being able to hold up the route operator’s end of convenience is clearly investing as a service type of business, which will continue to be a focus for us in any market we move into.” —Blake Sartini II, Senior Vice President of Distributed Gaming, Golden Entertainment, Inc.

One of 65 of Golden Entertainment’s PT’s pubs in Las Vegas

risdictions, particularly Pennsylvania and Missouri, which have both had bills in their legislative sessions in the last year,” says Blake Sartini II, senior vice president of distributed gaming for Golden Entertainment, Inc. “We have been fighting for VGTs in Pennsylvania now for almost three years. We’ve gone out and done our due diligence, and we’ve partnered up with a few amusement and coin operators out there, to give us the ability to grow when the bill ultimately gets passed.” Just as in Illinois, though, state lawmakers in Pennsylvania are holding back efforts to create a new VGT market, first by reducing the potential of the market. “The state, in our eyes, took a step back from the original direction that they proposed to go, in the sense that the Pennsylvania VGT law right now only allows for five VGTs at any truck stop that hits certain milestones. So, it took the ultimate opportunity from 3,000 or so locations around the state now down to around 200 truck stops around the state.” Still, Sartini says the company will be ready when VGTs in bars eventually happen. “We’re licensed in Pennsylvania; we’re waiting for the full-blown opportunity,” he says. “Right now, I think we’re better focused in the state of Montana and in Nevada, from a distributive perspective, just because we know we can grow within those markets.”

Staying Strong While operators large and small continue to promote opportunities in new jurisdictions, the distributed gaming segment hasn’t needed new states to remain a healthy arm of the industry. “As route operators, we’re 100 percent healthy and stronger than we have been in a long, long time,” comments Tim Cogswell, vice president and general manager of Century Gaming Technologies in Nevada. “We’ve still been able to grow significantly as a route operator—specifically in Montana, where we’ve almost quadrupled ourselves within the past four or five years. We’re now by far the largest operator in Montana by triple.” Cogswell says route operations are seeing plenty of growth without new states, and separately from the casino business at large. “We’ve proven and shown that the route operation is a completely different segment from the casino business,” he says. Golden’s Sartini reports similar robust business in Nevada, with the PT’s brand surging. “We’ll be at 65 wholly owned taverns here by the end of the year, and we could easily get to 85 or 90 of our own wholly owned here in Nevada,” he says.

(Officials of Dotty’s declined to comment for this article.) Each route operation also has a unique advantage that distinguishes it from other operators. For Golden Entertainment, it is its status not only as an operator of wholly owned PT’s locations but as a multi-property operator of traditional casino-hotels in Nevada. In October 2017, Golden acquired American Casino & Entertainment Properties. In addition to the routes, the company now operates 10 casinos, including the Stratosphere (recently rebranded as “The Strat”), the Arizona Charlie’s properties on Boulder Highway and Decatur, and Laughlin’s Edgewater and Colorado Belle. Sartini says that while the casino business is totally separate from the routes, the routes benefit from the consequent relationships with suppliers. “The good news for us is that with our casino assets in the proximity of our home office here in Las Vegas, near what we call Manufacturer’s Row, we clearly sit right in the middle of the action, and our large casino slot machine buys definitely help us with terms on the distributed side of the business. Being diversified clearly helps the route side of the business, anytime we need to do a manufacturing deal or work with the manufacturers on slot machines.” Century Gaming gets an extra boost from being a manufacturer of its own proprietary machines, which it places on its routes in both Nevada and Montana. A licensed slot manufacturer in Nevada, Century produces Power Vision, a multi-game machine featuring video slots and keno, plus all traditional varieties of video poker. Century, in fact, has been the only manufacturer other than IGT to produce bartop multi-game slots (although other manufacturers are now producing bartop units for introduction in Nevada in the coming months). These extra roles for two of the largest route operators in the U.S. only augment their inherent assets—prominently, their experience in building relationships with operators of customer locations. “No matter where this industry goes, whether it’s Nevada, Montana, Illinois, Pennsylvania or elsewhere, it’s a very blue-collar, relationship-based business,” says Golden’s Sartini. “It’s very important for us to continue to tie ourselves into other industries that have relationships with the bar and tavern industries within a given state. “Through our operating 65 taverns here in town, we have relationships with liquor and beer distributors, with coin-operator distributors... These partners get us in contact with people in these other jurisdictions—who help us introduce ourselves to those customers within those states, by somebody they trust.” JULY 2019 www.ggbmagazine.com

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Century’s player’s club, called Gambler’s Bonus, connects machines at locations throughout each entire state.

“In Nevada, almost half of our business is just our technology.”

A licensed slot manufacturer in Nevada, Century Gaming Technologies produces Power Vision, a multi-game machine featuring video slots and keno, plus all traditional varieties of video poker

—Tim Cogswell, Vice President and General Manager, Century Gaming Technologies Nevada

particularly in Nevada, where IGT Game King video poker machines continue to dominate the game mix. “We won’t have a lot of selection we work with here in the state of Nevada,” says Sartini. “However, in the state of Montana, we’re able to have 20 games per license, and there are a variety of different suppliers we’ll work with.”

Future Growth Once those relationships are established, he adds, customer service is everything. “We have been able to operate the service aspect of our business at the highest level,” says Sartini. “When you speak of distributed gaming, I think the draw from the customer perspective is the convenience aspect of the distributed business. Being able to hold up the route operator’s end of convenience is clearly investing as a service type of business, which will continue to be a focus for us in any market we move into.” For Century, service also means supplying technology—not only as a slot manufacturer, but in the operator’s proprietary slot management system that links the machines in its routes. “In Nevada, almost half of our business is just our technology,” says Cogswell. “It includes full player tracking.” Century’s player’s club, called Gambler’s Bonus, connects machines at locations throughout each entire state. “We’re able to track players, their performance, their play, and then as well, into the games and machines themselves, and how they’re performing,” he says. “And we’re doing that all remotely.” In Montana, where player tracking is illegal, Cogswell says Century concentrates on tracking certain types of play from the machines. “We distribute free play to the players based on an algorithm we were able to create,” he says. “Even though the route operation is a smaller, mom-and-pop shop type of operation—you don’t need the big, casino-type systems to operate—we’ve gone in-house and developed a type of system that helps all of our operators or customers run their business more efficiently. They can track their cash better, their players better, promotional systems better. And then on the same platform, as the operator or vendor, we’re able to operate more efficiently, work with our partners on how they can grow their business, and have a bigger dig and dive into the gaming platforms.” All of the route operators, in fact, have active slot clubs—the patrons are loyal, repeat customers who expect the same perks for extended play as they would get in a locals casino, says Cogswell. Of course, the choice of games is generally more narrow on the routes, 26

Global Gaming Business JULY 2019

Both Sartini and Cogswell note that the distributed gaming sector of the industry will continue to thrive, regardless of the direction of the traditional casino-hotel sector—mainly because players in route locations are unique. “We feel those customers are drastically different than our casino customer,” says Sartini. “The distributed part of our business grows somewhat in line with the locals casino demographic, but I think our customer is a lot more social. The demographic is a little bit different than your normal locals casino customer, where you may see a middle-aged female who’s a little more introverted. Our demographic is a little more male-oriented, a player who wants a little more social interaction.” The experience serving this type of customer will soon come into play in new jurisdictions, which Sartini says provide the biggest near-term growth potential for the distributed gaming sector. “Greenfield opportunities in new jurisdictions are clearly where we see most of the growth coming from in the next couple of years,” Sartini says. “Obviously, we can continue on our normal growth rate here in Nevada, but if you look at the route-specific business, I think it’s going to come from new jurisdictions, whether it be the full opening up of distributed gaming in Pennsylvania, any opportunity in Missouri, or Indiana, which had a bill in session this year that didn’t get a lot of traction, but has started the education process. “As these states continue to look for any sort of revenue that will help them close a tax gap, I think a lot of them are looking to Illinois as a kind of platform they can replicate at some point within their states.” “We have kept our finger on the pulse of every single one of those (states),” says Cogswell, noting that although Century does not actively lobby, “we do some other kinds of business in those jurisdictions with our game manufacturer’s license, and some connections and contacts we have, especially in the Illinois market. “With United Coin/Century Gaming in business for more than 60 years, Century in Montana over 30 years, we’ve got a lot of knowledge and experience in those types of jurisdictions. We’re watching the expansion, but we’ve also been guiding and helping some companies in other jurisdictions looking to do so, guiding them down the path on how operations work.” It’s a specialized knowledge that the big route operators are sure to get a chance to spread soon.

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Knock-Down Drag-Out

The competition is intense in Southern California, which is vying even with Las Vegas for more of the gaming market BY DAVE PALERMO

San Manuel is in the process of adding a hotel, more amenities and more gaming space to its popular casino

group of executives with the American Indian gambling industry who gathered last May for the UNLV Gaming & Hospitality Education Series at the Morongo Casino Resort & Spa near Palm Springs, California had a lot to crow about. Virtually all the Southern California tribal gambling operations have been undergoing multimillion-dollar expansions with hotels, spas and other amenities, accelerating an ongoing evolution of tribal casinos to fully integrated resorts. Meanwhile, new tribal facilities are being built in the Sacramento region by such prominent corporate partners as Hard Rock International and Caesar’s Entertainment. Boyd Gaming and Station Casinos also have regional projects on the drawing board. The maturation of the tribal government casino industry—which consists of roughly 500 facilities in 29 states—is creating intense competition, both among tribal operations and commercial casinos. San Diego County has 18 tribes, more than any county in the United States, generating an intense rivalry for customers between the casinos there and in neighboring Riverside and San Bernardino County. Competition is also torrid in New Mexico, where 14 tribes and pueblos operate 21 casinos; Oklahoma, where 32 casino tribes operate about 140 facilities; and Connecticut, where the Mohegan and Mashantucket Pequot tribes compete with casinos in surrounding states. Katherine Spilde, director of the San Diego State University Sycuan 28

Global Gaming Business JULY 2019

Sycuan Casino Resort recently completed an expansion to better compete with Southern California tribes that have also added amenities

Institute on Tribal Gaming, suggests the highly competitive $9 billion California tribal casino industry is taking a toll on the Las Vegas gambling market, where annual visitation for five years has plateaued at 42 million. As Southern California properties have expanded with upscale hotels, pools, spas and food and beverage facilities, the percentage of Las Vegas tourism from the region has declined dramatically, from 27 percent in 2017 to 19 percent last year, according to the Las Vegas Convention and Visitors Authority. “All of your properties are either new or recently expanding,” Spilde told a panel of casino executives at the conference, sponsored by the University of Nevada, Las Vegas Harrah College of Hospitality and Global Gaming Business magazine. “Las Vegas is wondering if this is a function of Southern California properties expanding and competing with them,” Spilde said. “Is that really the strategy, to offer a Las Vegas-style experience here in Southern California?” “That’s a good observation,” Morongo Resort COO John James replied. “As we’ve been adding these different amenities, it’s given the consumer more reason to say, ‘You know, why bother going to Las Vegas when everything I have is here?’ “We may not have the giant shows that Las Vegas has,” James said, “but I think—pound for pound—we offer equivalent experiences.” San Manuel Casino in San Bernardino County—which is undergoing

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“We may not have the giant shows that Las Vegas has but I think— pound for pound— we offer equivalent experiences.” —John James, COO, Morongo Casino Resort

a $550 million expansion that includes a 450-room hotel—has lined Interstate 15 with billboards reminding Southern Californians returning from Las Vegas that there are plenty of casinos in their backyard. “We want to get our message out to them, ‘Welcome home. There are some great options here,’” says Peter Arceo, San Manuel Casino’s general manager.

Explosive Growth The growth of tribal resort casinos in the Golden State began in 2000 with Proposition 1A, a ballot initiative that amended the state constitution to give tribes the exclusive right to operate casino-style gambling on Indian lands. Sixty-one tribes currently operate 63 licensed casinos that in 2017 won roughly $9 billion, according to the National Indian Gaming Commission (NIGC) and other sources. That’s about a fourth of the $32.4 billion won by tribal casinos nationwide. The notion that Southern California in 20 years would compete with the Las Vegas Strip for gamblers is impressive. Tribal casinos in central and northern California have long been blamed for a decline in the Reno gambling market. But a similar scenario is taking place in Oklahoma, Connecticut, Arizona and other tribal gambling markets, where Indian casinos are evolving into fully integrated resorts, drawing visitors from nearby metropolitan areas. “The current development in California tribal gaming is a continuation of the ongoing development of Indian gaming nationally in recent years,”

“The most important non-gaming amenity has got to be the hotel.” —Dike Bacon, Principal, HBG Group

says Alan Meister of Meister Economic Consulting, author of the Indian Gaming Industry Report. “Here in California, though, it is definitely an acceleration of that development with so many existing properties undergoing or planning large expansions.” “Tribes in San Diego County have to continue to improve and add amenities and stay fresh because they have so many competitors in their backyard,” says Dike Bacon, principal of HBG Design, a hospitality planning, architecture and interior design firm. Although the statewide tribal markets are reaching saturation, growth continues. Greenfield projects are few and far between, but the industry has been rife with new hotels, spas, food and beverage offerings, entertainment and other non-gambling expansion. The once double-digit growth of tribal casino revenue, which according to NIGC audits peaked in 2017 at $32.4 billion, has since 2006 largely leveled off, annually increasing at a rate of 2 percent to 6 percent. Revenues rose 3.9 percent in 2017, according to NIGC figures. Meanwhile, revenue growth in California, Oklahoma, Washington, Connecticut and Wisconsin—five states that make up some 86 percent of tribal gambling revenues nationwide—ranged from 5 percent to 6 percent in 2016, Meister says. “There’s definitely a maturing of the market, but by no means is there an overall saturation,” Meister says.

Reaching Beyond the Locals “The most important non-gaming amenity has got to be the hotel,” Bacon says. “It increases stay. It increases play. The hotel is the best place to create a guest experience.” Oklahoma gambling resorts with entertainment and food and beverage attractions are drawing visitors from the Dallas-Fort Worth corridor. Meanwhile, the Mohegan and Mashantucket Pequot of Connecticut are partners in a proposed commercial casino in East Windsor, a project intended to head off competition from MGM’s Springfield, Massachusetts resort. “A lot of our clients are capitalizing on good business conditions and building a lot of amenities,” Bacon says. “It’s pretty healthy out there. The gaming industry is pretty strong.” Tribal casinos nationwide primarily market to local gamblers. “Eighty-five percent of our business comes from a 25-mile radius,” says John Dinius, general manager of Sycuan Casino Resort near San Diego. “Just imagine if we could grow that to 30, 35 miles.” JULY 2019 www.ggbmagazine.com

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“The traditional idea of expanding the gaming floor has given way to creating a mix of gaming and non-gaming amenities.” —John Cannito, President and COO, Penta Building Group Sycuan recently completed a $226 million expansion that included a 12-story hotel and 60,000 square feet of casino space. The Sycuan project and expansions at other Southern California properties are intended to grow their markets, some to nearby metropolitan areas such as San Diego, Los Angeles and San Francisco. “The evolution of the Southern California gaming market has gotten to the point where the current operators in the market are expanding their facilities to capture an additional gaming customer,” says Todd Simons, general manager of the Viejas Casino, which recently completed a 159-room luxury hotel. “That’s not a customer necessarily in the market but within what we would call the drive market, which is within a 100-mile radius of the property. The goal is to create what we would call a staycation.” Enterprise Rancheria, in partnership with Hard Rock International, a corporation owned by the Seminole Tribe of Florida, recently topped off an eight-story, $470 million gambling resort near Sacramento that’s expected to draw visitors from Tahoe and San Francisco. “The brand is so powerful it will clearly attract people in both the local and the regional area,” says Mark Birtha, president of Hard Rock Sacramento. Pretty much all the expansion in the Southern California region is hotels, pools, spas, bars, restaurants and other non-gaming amenities. The fact there has been little in the way of new slot machines and table games indicates the limited demand for more gambling. The recent $285 million expansion at the Pechanga Resort and Casino in Temecula—which included a hotel tower, two-story luxury spa, ballroom and meeting space, a pool complex and two restaurants—solidifies the resort’s standing as the premiere tribal facility on the coast. “There are expectations that need to be met,” says Jacob Mejia, vice president of public and external affairs for the Pechanga Development Corp. “We have a more discerning customer. We have a customer used to more luxurious experiences and amenities.” As is the case in Las Vegas—where an increasing percentage of revenue is coming from off the casino floor—tribal casinos have also turned to nongambling revenue. The percent of non-gambling revenue on the Las Vegas Strip has climbed in 35 years from below 40 percent to nearly 67 percent. “The traditional idea of expanding the gaming floor has given way to creating a mix of gaming and non-gaming amenities,” says John Cannito, president and COO of the Penta Building Group. Tribal government gambling, from its inception, has been an early 30

Global Gaming Business JULY 2019

adopter and utilizer of technology, whether it was bill validators or the advancement of Class II, server-based electronic devices. “Tribes have always been on the cutting edge of technology,” says Gene Johnson, executive vice president of Victor Strategies. That trend will likely continue as competition drives the increasing use of mobile technology in customer service. “The number of slot attendants and people on the floor has diminished,” says Tom Soukup, vice president of system products for Konami Gaming. “All of us, as operators, are facing compressed margins,” Dinius says. “We’re in a very mature market and a very competitive market.”

Customer Service Is Key The current key to success is personal service, upscale amenities, smoke-free gambling and slots that allow for time on machine. “At the end of the day the cash cow is the slots, the gaming experience,” Dinius says. Before its recent expansion, Sycuan was luring players with personal service and loose machines. “There were a number of amenities that we were lacking,” Dinius says. “We were smoke-filled. We had no hotel and very few food and beverage offerings. “While you might not make a whole lot of profit (with those amenities), it’s a tremendous opportunity to drive traffic to the casino.” Unlike a Strip casino that counts on visitors two to four times a year, tribal operations look to bring in their regulars 20 times a month or more. That requires creating an entertaining experience and a pleasurable guestemployee relationship. “I think the tribal properties have evolved themselves into a family type of experience,” James says. “That’s what consumers are looking for.” “We’re kind of in the middle, offering Strip-like experiences yet getting to know our customers,” Birtha says. “That provides us with a competitive advantage. “We get to know our guests. We have guests that are literally in our properties 20 or 30 days a month. They become part of our family. Our guests and our employees know each other.”

Doing Las Vegas on a Budget Arceo says San Manuel has never considered competing with the entertainment offerings of the Las Vegas Strip, focusing instead on customer service and creating a “memorable experience so that when they consider gambling, they’ll stay local first.”

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“We have guests that are literally in our properties 20 or 30 days a month. They become part of our family. Our guests and our employees know each other.” —Mark Birtha, President, Hard Rock Sacramento

“Some people want great odds,” Arceo says. “Some people want the friendliest staff. Some people want a great meal. “We are OK with the fact that when they consider entertainment they’ll perhaps choose somewhere else.” Southern California operators contend they have an edge in competition with Strip properties that charge for parking and levy resort fees ranging from $36 to $44 a night. That’s on top of transportation costs. “You either fly into Las Vegas or drive,” James says. “It’s either fuel costs or airline tickets. The room rates are not exactly cheap anymore. The average daily rate if you want a nice place is $199 to $249.

“By the time you’ve locked, loaded and landed in Las Vegas, $500 out of your wallet is already spent in getting there.” Birtha recalls a recent celebratory evening on the Strip when he spent roughly $600 for a meal and a show. “I had a really, really good time,” he recalls. “But to leave with the last thought of my experience on the property paying a $35 fee to park—after I just paid $500, $600—was disturbing.” “Parking and resort fees could pay for another trip, literally,” Arceo says. Customers to the San Manuel Casino are looking for a slot floor with new products and variety. A regular customer recently told Arceo he walked a Las Vegas casino and couldn’t find his favorite machine. “I couldn’t wait to get back home,” he said.

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SoCal Tribes Don’t Care About Sports Wagering xecutives with several American Indian casinos in California displayed muted enthusiasm for legalized sports betting at a recent conference at the Morongo Resort Casino in Cabazon, perhaps aware of the potential controversy the issue poses for their tribal governments. “A lot more time and discussion is needed,” John Dinius, general manager of the Sycuan Casino Resort, told attendees at the May 21 University of Nevada, Las Vegas Gaming & Hospitality Education Series. “But it’s not going to drive a lot of revenue. “I think it will drive a tremendous amount of traffic into the casino, as long as you can keep it exclusive to Native American properties.” The state’s 61 casino tribes have expressed opposition to any attempt to amend the state constitution to extend sports betting to card rooms and racetracks. An amendment to the constitution approved by voters in a 2000 ballot initiative gives California tribes exclusive rights to operate slot machines and banked and percentage games. Tribal-state compacts would need to be amended to allow tribes to offer sports betting should a constitutional amendment be approved to permit the activity.

Tribes are suing card rooms and state regulators, claiming the clubs are offering banked card games in violation of exclusivity provisions in the constitution and state compacts. “It is a unique development,” said Peter Arceo, general manager of the San Manuel Casino, of the May 2018 U.S. Supreme Court decision to strike down a federal prohibition on sports betting, leaving it to the states to take up the issue. “We’ve got a long way to go before we realize what the landscape is going to be like.” Of 15 states that have legalized sports betting operations since the Supreme Court ruling, only New Mexico has a significant Indian casino gambling industry. While tribes in Mississippi and Montana recently legalized sports betting, wagering on college and professional sports remains illegal in virtually all the 29 states with tribal casinos. Many tribes are leery of amending tribal-state compacts for fear of negatively impacting government revenue from their casino operations. Others fear that expanded gambling including sports betting would encroach on exclusivity provisions in the agreements. “Whenever you see tribes involved, you’re going to see tribes saying, ‘Wait a second, take a little more time, let’s get a better understanding of it,’” Luiseño Victor Rocha, owner of the

“(Sports betting) is the same with the risks involved in getting out from under the tents and building hotel rooms.”

“We’ve got a long way to go before we realize what the landscape is going to be like.”

—Vic Salerno, President, US Bookmaking

—Peter Arceo, General Manager, San Manuel Casino

Global Gaming Business JULY 2019

Pechanga.net news website, told conference attendees. “The states that don’t have tribal gaming are going to move a little faster.” Vic Salerno, president of US Bookmaking, which manages sports wagering for the Santa Ana and Isleta Pueblos, says New Mexico tribes embraced the business because it did not require amending their compacts. “Most of the tribal casinos are growing. They’re comfortable where they’re at and they don’t want to open up the compacts,” Salerno says. “It’s the same with the risks involved in getting out from under the tents and building hotel rooms.” The 14 New Mexico tribes are also locked in intense competition with 21 tribal casinos and travel plazas competing with five racetrack casinos—in a state with less than 2.1 million citizens. Salerno predicts tribes will eventually realize sports betting is a valuable tool in generating traffic and revenue, first with retail sales on the property and later with mobile and account wagering. “They need somebody like us to come in and teach them how it’s done,” Salerno said of US Bookmaking. “Once they learn, they’ll take it over themselves.” —Dave Palermo

“I think it will drive a tremendous amount of traffic into the casino, as long as you can keep it exclusive to Native American properties.” —John Dinius, General Manager, Sycuan Casino Resort

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2019

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Danger,

Danger

U.S. sports wagering is the biggest issue driving the gaming industry today. But threats lurk that few are discussing. By Bruce Merati

he legalization of sports wagering in the U.S. on a state-by-state basis is an exciting new development for the gaming industry. Based on my 20 years of experience dealing with sports wagering and related issues, however, I see a number of challenges worth debating. Some of these issues must be addressed with high priority or the business could get on a wrong track, and its already-thin margins may get further squeezed. Below are the top 10 points, together with a brief summary of each: 1. Money Laundering. The legalization of full sports wagering beyond Nevada might be the best thing that’s happened for money launderers. They can now launder money through sports books in two different jurisdictions by hedging their own bets, e.g., placing equal amount of wagers on the opposite sides of an event with two operators in two jurisdictions, thus ensuring they would get 95.5 percent of their money back. Unless regulators in jurisdictions that offer sports wagering join forces to develop a cooperative process, these guys won’t be easily caught, because one state by itself cannot connect the dots beyond its own borders. Without collaboration among regulators, the federal government will have a good excuse to intervene with legislation that could be more burdensome than a solution the industry could develop on its own. It’s conceivable that within a year or so we might see a 60 Minutes segment with FBI agents arresting an organized crime group that laundered money through sports books with the industry blamed for not intervening because it benefited from the extra handle.

Global Gaming Business JULY 2019

2. Match-Fixing. Bad actors looking to fix the outcome of a game can now spread their wagers on two or more operators in different jurisdictions and have a much lower chance of getting caught than the days when sports betting was only legal in one state. Nevada over the years developed policies and practices that involved a personal-level relationship between its enforcement division and the sports book employees, who were trained to look for issues relating to match fixing and money laundering. The regulators of different states and the gaming industry must develop a technology solution and a process to detect and deter match fixing and point shaving.

3. Insider Wagering. With legal sports wagering spreading over many states, the potential for insiders using non-public information for personal gain is now substantially higher than before. The current fragmented structure of wagering operations makes it much harder to identify bets made by insiders prior to the material information becoming public. It appears that some leagues are doing their part by educating their athletes and employees on these matters; however, there’s a need for an integrated information technology solution between the leagues, the operators and the regulators to build a multi-state framework to address this threat.

With legal sports wagering spreading over many states, the potential for insiders using non-public information for personal gain is now substantially higher than before.

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If a bettor is interested in betting on international games such as soccer, this could be another good reason not to close his or her offshore account anytime soon.

4. New Systems. The sports wagering solutions developed by international software developers such as the ones from Europe need fine-tuning to meet the needs of the U.S. market. For example, a simple issue of changing the European date format to the American format may involve a substantial amount of rework if the date format is embedded in different parts of the software rather than as a global configuration parameter. Another example could be related to the exact start time of a match for audit and reporting purposes. This could very well be an issue in the case of systems developed internationally in the last few years focused on combined pre-match and in-game wagering played online and on mobile devices. With these systems, the cutoff time between prematch and in-game betting may get very blurry and can become an issue in some jurisdictions. For example, lack of a clear match start time will not meet Nevada’s internal controls around the start time of a game, reporting requirements, system integrity for ensuring completeness of pre-match wagers and voided tickets. Another deficiency could be lack of readily available reports for accrual accounting that U.S. operators need for tax purposes or SEC reporting if they’re public companies. Another potential issue with newer systems could be that they’re made mainly for online wagering and might lack sufficient retail components for a ticket writer to quickly write a ticket to avoid long queues before a game starts. Moreover, if the system was built based on a legacy solution developed for the retail market and the manufacturer hastily mounts online and mobile components to it, there could be inherent architectural issues, making the system unstable.

5. Endangered Small Fish. There’s a need for a cooperative solution among operators to keep the big fish from sucking some of the operator’s juice, which ultimately comes from the small fish. We saw this in poker, initially a thriving and booming business until the supply of big fish diminished. With the current fragmented structure spread among different operators in different states, sharps can develop inter-market arbitrage schemes to place wagers on and between different books and international betting exchanges, thus exploiting the vulnerability of smaller books as well as odds offered on events that have low liquidity. If diehard fans consistently lose every month above their budgets, they’ll lose interest in betting and limit their wagers to special occasions such as the Super Bowl.

6. Limited Menu. Having a limited menu of events is a major drawback for legal books that want bettors to move away from the illegal offshore books, which typically offer a wide variety of events. If a bettor is interested in betting on international games such as soccer, this could be another good reason not to close his or her offshore account anytime soon. There are technology solutions that could enable U.S. books to offer wagering opportunities on international events as intermediaries without taking monetary risks associated with such events.

6 7

7. Wire Act. The main reason behind the 1961 Wire Act was to combat illegal sports wagering—pre-internet, when no one knew anything about online gaming. It’s preposterous that some are now playing around with the wording of the act, convoluting the issue and using it as a scapegoat to delay the expansion of multi-state sports wagering and online gaming. 8. Integrity Fees and Politics. The sooner the integrity issue is resolved, the better for everybody. Maybe the industry gets together with the league owners to create a bigger political cloud than the one that recently reversed the DOJ’s opinion. The joint effort could be towards getting the federal government to repeal or update the Wire Act. Online gaming, sports wagering and land-based casinos feed off of each other and could benefit all stakeholders.

8 9 10

9. Tax Rate Differentials. States with high tax rates may find themselves at a disadvantage with operators who have books in multiple jurisdictions. Multi-state operators could have inherent conflicts of interest with hightax states when managing their risks in different states and calculating their own overall potential gains and losses on an event.

10. Tax Based on GGR. Sports wagering is a volatile business, and tax revenues based on gross gaming revenues are much more unpredictable than those generated from gaming GGR. States looking for more consistent month-to-month tax revenues will have more predictable income if they receive their taxes based on an equivalent percentage of the total handle. For example, if a book loses $1 million on a golf tournament, the state will not only get any tax on all wagers placed during that tournament, but has to wait until the book recoups its loss from that event from the GGR of wagers placed on other events.

Bruce Merati is co-founder of BC Technologies, a sports book system provider; and CEO of Uplay1, a gaming IP company.

JULY 2019 www.ggbmagazine.com

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eye

on Change

The gaming industry is uniquely positioned to lead the way in women’s equality By Keli Elkins with Allison McCoy and Marie Casias | The Innovation Group

canning the news today, chances are you saw another story about one of the most pressing issues of our time: women’s equality, particularly in the workplace. From the record-breaking number of women in Congress to celebrity-driven movements in Hollywood, it’s clear that women are vying for change in all industries, including gaming. In 2011, a small group of female leaders from the U.S. gaming industry gathered for an exploratory dinner that ultimately became the birthplace of Global Gaming Women (GGW), an organization committed to supporting, inspiring and influencing the development of women in the gaming industry. At the time, little hard data existed to support what these women knew firsthand—the widespread barriers to advancement for women in gaming. Few people at any level of the industry were talking or thinking about these challenges, much less actively working to address them. Global Gaming Women is now a thriving education and mentorship network, and gaming organizations have launched very public diversity and inclusion campaigns. Simultaneously, women across the world have been buoyed by the revolutionary women’s empowerment movements #MeToo and Time’s Up. What does all of this foretell for women in gaming?

The Corporate Data “Women are doing their part. Now companies need to do their part, too.” That was the headline LeanIn.org chose for its 2018 Women in the Workplace survey, conducted with McKinsey & Company. Established in 2015, Women in the Workplace is the largest, most comprehensive study of the state of women in corporate America. The research indicates that while companies have reported strong commitment to gender diversity, that commitment has not translated into meaningful progress. Since the first year of the study, corporate America has made almost no progress in improving women’s representation. Fewer women than men continue to be hired at the entry level, and at every subsequent step, the representation of women declines further. 36

Global Gaming Business JULY 2019

Gender Representation in the Corporate Pipeline, 2015-2018 Percent of Women by Level Percent Change Position 2015 2016 2017 2018 ’15 to ‘18 Entry Level

Manager

Sr. Manager/Director 32

Vice President

Sr. Vice President

C-Suite

Source: Women in the Workplace 2015, 2016, 2017 and 2018 (LeanIn.org and McKinsey & Company)

For decades, the survey notes, women have earned more bachelor’s degrees than men. They ask for promotions and negotiate salaries at the same rates as men. And contrary to conventional wisdom, they stay in the workforce at the same rate as men. Despite all this, women are less likely to be hired for entry-level jobs. The disparity broadens at the next level, where women are even less likely to be hired and promoted into management positions. The data indicates that if companies continue to hire and promote women to management positions at current rates, the number of women in management will increase by just one percentage point over the next 10 years. Alternatively, if companies hired and promoted women and men to management positions at equal rates, more equitable numbers (48 percent women versus 52 percent men) could be achieved over the same 10 years. A study on gender disparity in gaming published in the UNLV Gaming Research & Review Journal last year evaluated more than 10,000 professional management positions across nearly 1,000 commercial and Native American casinos in the United States. Its 2016 data, roughly compared to this national data, offers good and bad news for the industry.

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Jan Jones Blackhurst Executive Vice President of Public Policy and Corporate Responsibility at Caesars Entertainment and the first female mayor of Las Vegas Sources: Women in the Workplace 2016 (LeanIn.org and McKinsey & Company) and “Glass Ceiling & Leaking Pipelines: Gender Disparity in the Casino Industry” (Repetti & Hoffman, UNLV Gaming Research & Review Journal, 2018)

On one hand, the gaming industry appears to be doing a better job at growing its pipeline than U.S. businesses overall, with 47 percent of management positions held by women. Unfortunately, despite this seemingly increased opportunity, the gender gap widens back to national averages at more senior levels, and is in fact slightly worse at the vice president level. Authors Toni Repetti and Shekinah Hoffman looked not only at the “glass ceiling” in gaming, or vertical occupational segregation, but also horizontal occupational segregation: the percentage of women represented in each department. Here, they learned that women lead in departments such as human resources, public relations, and sales and events, but lag in casino operations management. The casino category, which includes all gaming departments such as table games, slots, bingo, keno, and race and sports book, had the sixth lowest percentage of females (22.8 percent) out of 20 departments analyzed, despite having the most employees in the dataset. Even within female-dominated departments, Repetti and Hoffman found a lack of women in higher leadership positions. Hoffman’s dissertation builds on this research by attempting to understand the reason behind these numbers. Thus far, the graduate student has interviewed more than 40 women in the U.S., Canada, Latin America, the Caribbean and Europe. Existing literature about the broader hospitality and tourism industries indicates that the 24/7 business model, demanding employees to work long, unsocial hours and requiring frequent geographical moves, creates a particular challenge for mothers trying to satisfy both work and family needs. Further, women in gaming may face unique challenges of their own due to the industry’s idiosyncratic demands, like its labor-intensive structure and high turnover rate. Hoffman’s research also revealed challenges like tokenism, microaggressions and the need to downplay femininity or “toughen up” to fit in and excel. Says Hoffman, “My goal is to understand the stories and experiences of women in gaming. From work-life balance and sexual harassment to their perceived barriers to advancement, what is driving the gender leadership gap in gaming, and how can the industry better address it?”

The Movement in Gaming

Virginia McDowell Former President and CEO of Isle of Capri Casinos

Hoffman’s work strives to answer many questions that the small number of female leaders in gaming have been considering for decades. While we can pinpoint its foundation to that dinner eight years ago, the creation of GGW was really a culmination of years of work and dialogue steadfastly advanced by women across the industry, and a few key leaders who were particularly outspoken on the issue: Virginia McDowell, former president and CEO of Isle of Capri Casinos; Jan Jones Blackhurst, executive vice president of public policy and corporate responsibility at Caesars EntertainPatricia Becker ment and the first female mayor of Las Veteran Industry Executive Vegas; then CEO of International Game and Regulator Technology Patti Hart; and veteran industry executive and regulator Patricia Becker. In fact, it was the success of Becker’s first “Kick Up Your Heels” fundraiser (for the International Gaming Institute at the University of Nevada, Las Vegas, where she was executive director at the time) that led to the 2011 dinner and the development of GGW. Initially organized by the American Gaming Association, GGW launched in 2012 with intentionally broad objectives: to create a development program that would enable women in the industry to learn from each other and share ideas. More specifically, members of its first steering committee—including Becker, Hart and McDowell, among others—hoped GGW would foster stronger relationships between top female executives and promising young leaders, given the pivotal role many of them had seen mentorship play in their own success and advancement. One could say that the initial focus was on connection, which the AGA cultivated by building a network of women through education and industry events, including its JULY 2019 www.ggbmagazine.com

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Toni Repetti and Shekinah Hoffman authored a UNLV study on the role and numbers of women in the gaming industry

own Global Gaming Expo portfolio. Supported by the technology-driven supplier segment, these leaders wanted to develop a sort of Match.com for the women of gaming that could help build mentorships across an industry inherently segregated by jurisdiction. Over the next few years, GGW continued to develop and diversify its offerings, always refining them in response to stakeholder feedback. Keynote luncheons evolved into full-day workshops. Webinars were offered for those unable to travel to larger industry gatherings. Scholarships were created to support continuing education. In 2015, GGW undertook a strategic review of its programs that led to a change in its organizational structure, as well as a shift to more high-impact programming. That year, it hosted the inaugural W Development Conference in Las Vegas and the first Leadership Development event in Saint Charles, Missouri. The success of these events demonstrated an unfulfilled need for intensive, targeted programs to help advance women in gaming. The following year, GGW built on this idea with its “Education Pyramid,” designed to support women at all levels of their careers through four distinct programs—Leadership Foundations, Front Line Leaders, Leadership Development and W Development—in four different regions to answer the need for accessibility. Simultaneously, GGW expanded its thinking around the cultivation of mentorships to something more broadly defined as peer support. It looked for a place where mentorship, sponsorship and shared experiences could meet, and found it in “Lean In Circles.” Conceived and supported by LeanIn.org, these small groups of women meet regularly to learn and grow together. GGW likens a circle to a personal board of directors, “empowering participants to improve their personal and professional lives.” The organization established 11 gaming industry circles in 2017, arranged regionally as well as virtually to maintain their commitment to access. During this process of program refinement and targeted growth, it became clear that GGW had outgrown the capabilities of AGA. It was an entity unto itself, driven by a passionate, diverse group of industry women. In 2016, GGW relaunched as an independent nonprofit organization with financial support from leading gaming operators and suppliers to the tune of $1.5 million.

The Elephant in the Room On the heels of GGW’s independence came #MeToo, followed by the Time’s Up movement. Their relevance was not lost on the women of gaming. Stories had long been shared, confirming at least a lack of understand-

Global Gaming Business JULY 2019

ing in the male-dominated casino industry, and at worst a culture of misogyny. Debi Nutton, a longtime operations executive who got her start as a craps dealer, has told how she would be listed on shift boards then as “The F**kin’ Broad.” That was 1979, just three years after women were permitted to deal on the Strip. Forty years and so many strides for gender equality later, it turned out some things had not changed. This year, Wynn Resorts was fined $55 million by the Massachusetts and Nevada Gaming Commissions after yearlong investigations found that senior executives knew of sexual misconduct allegations against company founder Steve Wynn but failed to act. As #MeToo accusations continue to surface across the world more than 18 months after the movement launched, it’s hard to imagine that Wynn— the man or the organization—is the only culprit in an industry where the distribution of men and women, especially at the highest levels, is egregiously unbalanced. The Wall Street Journal investigation into the allegations against Wynn came just days after Becky Harris was appointed as only the second woman ever (after Becker) to serve on the Nevada Gaming Control Board and the first to serve as its chair. A former state senator, Harris took the opportunity to drive changes to Nevada regulations governing gaming licensee conduct to include language around sexual harassment awareness and prevention. Response to the efforts was initially mixed. At workshops held to discuss the revisions, some members of the industry argued that they were unnecessary given the compliance with existing regulations of the U.S. Equal Employment Opportunity Commission and the Nevada Equal Rights Commission. Ultimately, Harris garnered significant support—from industry representatives, former regulators, unions and even then-Governor Brian Sandoval, whose written testimony noted the state’s opportunity “to lead in the vitally important realm of sexual harassment prevention and reporting.” Becker, who also testified on behalf of the effort, shared a similar sentiment. Likening this issue to the industry’s response to problem gambling, she suggested that the changes would allow the industry to “act, lead the way and set a positive statement.” Harris’ amendments to Regulation 5 place more responsibility on employers to prevent and respond to claims of sexual misconduct and require casino license-holders to complete a 16-point checklist to verify that they have plans, policies, procedures and training in place to meet minimum standards set by the NGCB. Whether Nevada will lead the way by implementing these updates, which are still pending approval by the state’s Gaming Commission, or by creating a ripple effect across U.S. gaming jurisdictions, is yet to be seen.

The Industry Today Women of the industry are finally beginning to feel the trickle-down effects of these efforts. Conversations are happening that would have been impossible before. Says Eileen Moore, a regional president at Caesars Entertainment, “I’m not the one who notices when I’m the only woman in a meeting anymore!”

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And better still, she continues, “The conversation needed to bring diversity in all of its forms to the table is no longer uncomfortable to have. As an industry, certainly at Caesars, leadership now recognizes the imbalance and understands that it has to be part of the solution.” Moore’s longtime colleague and friend, Holly Gagnon, a former Caesars executive and now CEO of Seneca Gaming, echoes that sentiment: “There was a time when we didn’t see enough women leading operations. Maybe there were a respectable number of VPs in HR or finance, but we’re now seeing women fill very substantial roles in operations—property presidents and GMs. That doesn’t happen overnight.” Both women agree that companies are more aware than ever that they were looking “a little homogeneous” at the top. As gaming matures and becomes increasingly competitive, making profitability the highest objective, there is “absolutely an awareness now that having diversity makes you more profitable,” says Gagnon. For some companies, this isn’t news. Nearly 20 years ago, MGM Resorts was the first gaming company to voluntarily declare a formal diversity initiative as a matter of integrity and as a business imperative. MGM has backed up that declaration with action. It has the largest percentage of female board members in the industry (four of 12 seats). Initiatives like the MGM Foundation’s annual Women’s Leadership Conference attract sellout crowds of more than 1,000 attendees. More recently, Caesars Entertainment launched its “50/50 by 2025” campaign to achieve gender equality in its leadership ranks in the next five years. Working with the Billie Jean King Leadership Initiative, the company has launched a number of programs in support of this effort. Caesars’ new Equity Council, a task force including employees and external experts, is tasked with implementing unconscious bias training across management teams and conducting company-wide surveys to measure diversity and inclusion. As Blackhurst has said, “Companies must specifically target where they want to be, measure how they’re succeeding against those targets, and build in processes to make sure their recruitment practices are giving them the most diverse pool. Then sponsorship and mentorship practices must move those (recruits) through the system, and performance evaluations must include diversity and inclusiveness criteria. What isn’t measured doesn’t count.” Caesars’ 50/50 by 2025 campaign “measures against all levels of the organization, both horizontally and vertically,” she stresses. “It’s not just 50 percent of women in the company. We want 50 percent women at the highest levels.” The needle is moving. “There is definitely a lot more awareness in the industry today,” says Hoffman, “but the focus is very much on representation, and pushing women into leadership.” While these efforts are meaningful, she expresses concern that they’re just “Band-Aids” and do not address root problems. “The 24/7 nature of the industry remains a challenge to advancement for many women—the way we schedule work, the expectation and pressure to be available constantly at the management level, lacking maternity and paternity policies…” The list goes on. “These issues aren’t unique to gaming, but they are things industry leadership could work to address,” she adds. Many, including Hoffman, agree 40

Global Gaming Business JULY 2019

As chairwoman of the Nevada Gaming Control Board, Becky Harris added sexual harassment language to the Nevada gaming regulations

that because of its scale, its regulated nature and its historically positive relationships with host communities and legislators, the gaming industry has a unique opportunity to lead in the area of gender equality. The impacts of GGW are felt most personally. “Finding women who are going through the same stuff…that’s why I’m passionate about this for Native American gaming, which is often geographically isolated,” says Gagnon. “I’m so appreciative of my time at Harrah’s and the people I connected with there. By virtue of GGW, we can bring a bit of that to others.” Becker feels the change too. “It wasn’t competitive when I came up; it was just lonely,” she says. “But women have a support system now. It’s different. That’s GGW.” As organizations like GGW gain momentum and industry giants continue to put workplace equality at the forefront of their agendas, a change is coming—slowly—for the women of gaming. And the gaming industry, with its breadth and reach, is well positioned to lead that change worldwide should it choose to “lean in.” Keli Elkins, president of Bolster Events + Strategies, works with The Innovation Group to advance the firm’s communications and marketing efforts as well as support activities like business development and the Emerging Leaders of Gaming program. Vice President, Business Development Allison McCoy brings more than 15 years of experience in the gaming industry to The Innovation Group. Her diverse background features significant international and cross-cultural work experience that is instrumental in continuing to expand the firm’s established brand and suite of services. Marie Casias joined The Innovation Group in January 2013 with a diverse marketing background and an extensive skill set that continues to prove beneficial to the team. Facilitating the company’s marketing and administrative objectives, she aids The Innovation Group in gaining recognition and in broadening an already extensive worldwide client base.

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Bringing Down the Hammer Why California gambling regulators were slammed in a state audit By Dave Palermo

scathing audit of California’s politically bifurcated regulatory system concludes that the Bureau of Gambling Control and the Gambling Control Commission engage in lengthy, inefficient and unfair practices processing owner and employee card room licenses that “may require legislative intervention.” The 97-page report by California State Auditor Elaine M. Howle states that “incomplete or inconsistent procedures have contributed to delays and backlogs for gaming license applicants and have resulted in unequal treatment for applicants and licensees.” The backlog is roughly 1,000 applications. “Furthermore, neither the bureau nor the commission has addressed the fact that the fees they charge do not align with their costs for providing oversight,” resulting in a Gambling Control Fund surplus of nearly $100 million, Howle says. “Such misalignment… may call into question the legality of some fees.”

California card rooms have been the target of a numerous law enforcement raids due to allegations of money laundering and other federal cash transaction violations. The clubs have also been accused of offering games in violation of state penal codes and a constitutional amendment that gives tribes the exclusive right to offer banked and percentage games. Tribes have filed two lawsuits against card rooms and the state, the latter for breaching tribal-state compacts. Tribes accused regulators of being “complicit… and at times even encouraging” unlawful conduct by card rooms. California State Auditor Elaine M. Finally, former bureau chief Robert Lytle in May Howle found dozens of errors in the 2016 was stripped of his licenses to own card rooms and regulation of card rooms in the state consult with the industry when it was learned he engaged in a conflict of interest, issuing a controversial legal opinion on game rules prior to leaving the agency to work in the industry. The opinion on rotation of the player/dealer position, which was Points of Contention contrary to state law, was later rescinded. It’s not clear what action legislators may take in response to the report, called Although the audit targeted the agency’s regulation of the state’s 87 lifor by the Joint Legislative Audit Committee and released in mid-May. Bay censed card rooms, its findings fuel tribal demands for an additional audit Area Assemblyman Rob Bonta, who requested the audit, declined through his of the Special Distribution Fund, a pool of tribal money used in part to repress secretary to discuss the report. imburse the state for regulatory costs. Bonta raised the issue in response to Pacific Islanders in his district who Howle says there were instances where employees funded by tribal operated card rooms and claimed regulators were racially biased. One family money engaged in card room regulatory activities. had licensing difficulties because the matriarch had a felony criminal record. A supervisory agent in the compliance unit “is aware that its employ“Because neither the bureau nor the commission comprehensively tracks ees are not charging their time in accordance with their positions’ funding the ethnicity of applicants and license holders they regulate, we were unable to source,” Howle says. The agent “was taking steps to address this problem,” determine with certainty whether systematic discrimination has taken place,” she says. Howle says. “However, our review of individual applicant files did not identify The bureau routinely violates a 180-day time frame for reviewing lievidence of discrimination on the basis of ethnicity or other related charactercense applications, Howle says, and the process is further lengthened beistics.” cause the commission calls for evidentiary hearings rather than making Howle’s audit is the latest controversy to rock the bureau and commission, decisions at regularly scheduled meetings. which are responsible for regulating the state’s $2 billion card room industry Agents doing background investigations do not adequately report while providing limited oversight of the $9 billion American Indian casino inhours spent working on investigations, the report says. dustry.

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No Surprises Bureau and commission officials generally agreed with the bulk of Howle’s report and were attempting to remedy the problems, she says. The bureau did request, however, that 32 temporary employees assigned by legislators to help clear the backlog of license applications remain with the agency. Much of the problems with the state’s regulatory system have been blamed on the lack of coordination between the bureau, which operates within the Department of Steve Stallings, chairman of the Justice under Attorney General Xavier BeCalifornia Nations Indian cerra, and the commission, an adjudicatory Gaming Association, said the agency under Governor Gavin Newsom. audit “establishes a foundation California is the only state in the counfor us to expand upon the audit try with a gambling regulatory system diand include the tribal side of things.” vided between two constitutionally elected officials. “For years, the card room industry has been extremely concerned about the bureau and commission’s inefficiencies, delays, and inconsistent practices,” says Clarke Rosa, president of the Communities for California Card Rooms.

“The release of this independent audit… validates the concerns we have been expressing to the bureau and commission for years.” Tribes will discuss the audit later this month, says Steve Stallings, chairman of the California Nations Indian Gaming Association, a group of 38 tribes. “Unfortunately, it doesn’t cover the tribal regulatory operation, but it basically establishes a foundation for us to expand upon the audit and include the tribal side of things,” he says. “It’s all related. This lays out their business practices, whether it’s the card rooms or the tribes.” The report will also be a factor in ongoing negotiations to extend tribalstate compacts due to expire next year. Sixty-one tribes operate licensed casinos, but 77 tribes have compacts. About 33 tribes have compacts due to expire in 2020. The agreements, under federal law, require tribes to pay the state “actual and reasonable” costs for regulatory oversight. Tribes have primacy for regulating their casinos. “Tribes are questioning the billable hours,” Stallings says. “Most of the licensing work on the tribal side is done by the tribal commissions. It would be interesting to see if California regulators can account for the time they’re billing on the tribal side, where there’s actually not much work to do. “The report should raise a lot of eyebrows among the state legislature about what these two agencies are doing.”

ONLINE TITLE 31

TRAINING

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EMERGING LEADERS Winding Road John Baca Director of Slot Operations, Angel of the Winds Casino iven John Baca’s education, directing slot operations at a casino seems far-fetched. The San Diego native attended Embry Riddle Aeronautical University, where he majored in aviation business administration and minored in flight science and air traffic. He moved to Washington state with his wife, Amanda, and earned his B.S. in business administration at the City University of Seattle. Nothing says slots yet. Baca looked for gainful employment shortly after his relocation to Washington, and got a parttime position as a security officer at Tulalip Resort Casino. But he really wanted to work with slots, so he applied for a position as a slot technician. He learned the technology and got the job. In 2012, a sales position opened up with Rocket Gaming Systems, north of Seattle. Again, Baca took the leap. He spent just over a year with Rocket before returning to Tulalip as a lead technician and then slot engineer. At Rocket, Baca worked with a number of casino companies throughout the state, including Angel of the Winds Casino Resort in Arlington, near Seattle. “I could tell that the team at Angel of the Winds had a strong bond, a shared drive for results and a passion for their people and culture.” He landed a job as slot tech manager at Angel in early 2016 and moved up to director of slot operations in late 2017. Baca credits his rise to hard work in what is a tight community in Washington. “There were a lot of up-and-coming names being mentored by some of the early facilitators of gaming,” he recalls. “To separate myself, I made efforts to network, be a sponge for information, listen to other experiences and become comfortable with the latest applications and modules in the market.” Accomplishing these tasks required Baca to stay close to developers, suppliers, regulators, fellow operators, consumers and mentors who created and nurtured opportunities. In particular, Baca singles out Jeff Wheatley, assistant general manager at Angel of the Winds. “He helped mold my environment to ensure that my success carries over to the department and

Global Gaming Business JULY 2019

Digital Instinct Serkan Constantine Gecmen IT/Marketing Consultant, 8-Pixel Consulting Group

“To separate myself, I made efforts to network, be a sponge for information, listen to other experiences and become comfortable with the latest applications and modules in the market.” brings a positive return. As a mentor, he takes the time to carry his group with him. Three years later, I’m still learning and glad to be on his team.” While many tout sports betting, skill-based gaming and online gaming as the industry’s biggest changes, Baca says these are just small wins in expanding reach and creativity. “Skill-based gaming will bring better promotional/bonusing opportunities, but gamblers are safer and better off with predetermined fixed returns. Sports betting represents a definite increase; however, slots and tables will continue to be the bread and butter.” Baca is a sports and outdoor enthusiast who credits his home life—with Amanda, two kids and a German shepherd—for bringing calm and purpose to his life outside of work. For those young people who might want to give the industry a try, Baca says take a lot of chances. “Find good mentors and work hard. Gaming is still one of the unique markets that value growth and experience from within, equal to any college degree. This approach builds longevity and creates the ability to grow. So network, listen, learn and contribute to the market in some way.” —William Sokolic

ot many people can claim to have an education in both computer science and psychology, followed by a successful career that appeals to these two wildly differing fields. Serkan Gecmen achieved just that. Starting with a bachelor’s degree in software engineering at Orta Dogu Teknik University in Turkey, Gecmen moved on to psychology, economics and public administration classes at Anatolia University. Then he saw the challenge ahead of him: to determine a career-advancing route based on his unique education. Gecmen knew his computer science background would lend itself nicely to a future in application development and architecture. But his psychology education pointed toward technology marketing. Bear in mind the era in which this happened—20 years ago, when technology comprised less than 5 percent of all traditional marketing and public relations. But Gecmen’s keen business instinct told him technology would be the wave of the future for all of the above. So he opted to utilize both his technical and marketing education. Gecmen kicked off his career as a software developer, moving up in the ranks to become a lead architect. It was then, as his IT career was progressing steadily, that he was presented with an opportunity to use his technology background in a digital marketing position at Ameristar, a decision that had the biggest impact on his career to date. As director of digital marketing, Gecmen was able to use his technology experience in a newly born marketing field where technology was the driver. As a result, he ended up being one of the leaders and influencers of technology’s role in today’s casino industry marketing intelligence.

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Reflecting on his formative years, Gecmen says attention to detail was a main factor in his success in a rapidly changing industry. His interest in the human psyche, meanwhile, let him dive easily into information about what drives people—the very essence of successful marketing. Given that today’s technology is used to create even more technology, Gecmen looks back with pride on his ability to keep up with that insane speed and the exponential growth that comes with it. Throughout his marketing career, he’s maintained his deep knowledge of light-speed evolving technology and IT, keeping him miles ahead of traditional marketers and other digital marketers. Gecmen believes the changing gambler profile is driving many of today’s opportunities in the gaming industry. “As the buying power has been shifting to millennials, so have the target audiences for casinos,” he says. “The disinterest in traditional gambling of new, young customers creates many fun, opportunity-presenting challenges for young gaming professionals.” The communication weaknesses that some young professionals share have not gone unnoticed by Gecmen, who identifies poor business writing ability, weak presentation skills and ineffective time management at the top of the list. In an effort to help them improve these seemingly simple skill sets, Gecmen personally coaches young professionals on a regular basis, offering helpful reading materials and his own expertise. Ironically, he says technology is one of the main roadblocks to effective communications among young executives. “Technology has a negative impact on communication due to its warp speed,” he says. “I’ve seen many great ideas dissipate on account of miscommunication or poor presentation.” As for the future of the industry, Gecmen eagerly anticipates the release of more skill-based games, which he believes will create a leap for casinos. And like the rest of the industry, he looks forward to seeing how online sports betting will impact casinos and the sports community. Finally, he has his eye on data intelligence, saying, “I’m really curious about the adaptation of ‘big data,’ which is an old term today. I think the casinos are just getting to a place where they have collected enough data to come up with really cutting-edge stuff.” —Marie Casias, Manager, Marketing & Administration, The Innovation Group

JULY 2019 www.ggbmagazine.com

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Super Nova Ryan Kulp Systems Design and Documentation Manager, Ainsworth Game Technology lthough computer science can benefit someone entering the slot machine side of gaming, Ryan Kulp knew he needed more than a degree to wow the people at Australia-based Ainsworth Game Technology. So he did his homework. While he was still in college, his dad, Robert—an exec with Gateway Gaming at the time—told him about a remote technician position, installing and servicing machines, at Ainsworth. “I applied,” Kulp says, “and spent the next several days searching online for whatever slot machine manuals I could find and reading through them.” The job was his, and eight years later, he still works for Ainsworth, but out of the Las Vegas office. In his current role as systems design and documentation manager, Kulp leads a department that acts as liaison for the Australian engineering and R&D teams for technical issues handled in the Americas. These include new hardware release processes, product training, factory inspections and similar technicalities. When Ainsworth acquired Nova Technologies in early 2016, the department expanded exponentially, and so did Kulp’s job. His career has posed challenges along the way, but not obstacles. “An obstacle is something that hinders progress, and I’ve been fortunate enough to work with a great team of people who have not allowed this to happen,” Kulp says. “I’ve been challenged with new roles and responsibilities that required me to learn new things, but with the help of mentors and colleagues, I got through them.” Kulp cites two key mentors. One is his father, now chief operating officer for Encore Amusements of Georgia. “In all aspects of my life, my dad has given me great advice that has kept me on the right path, and is the reason I started in the industry.” The other is David Waters, a former exec with Nova, who became his boss in the acquisition. “I’ve learned so much working for him, and am humbled by his confidence in my abilities,” Kulp says. “I could not have asked for a better person to work under.” He also gives a shout-out to Ryan Comstock, chief operating officer at Ainsworth, for his support and ongoing leadership. As for the future, technology is limited only by imagination and regulation, Kulp says, adding that online gaming, mobile gaming and brick-and-mortar casinos can coexist. “Although I think mobile platforms will continue to grow, player demand for more interactive and immersive games will lead to better cabinet designs with built-in technology that can be leveraged for a better player experience that cannot be matched on a mobile phone,” says Kulp, who relaxes with a cold drink by a pool, tinkers with building things and brews beer. He tells industry newcomers to love what you do. “If you don’t, it’s unlikely you’ll spend the time needed to master your craft. You should always reinvest in yourself—with a class, seminar or certification.” And always listen to your elders in this industry, he adds. “They’ve seen and heard it all. The best lessons and advice can be taken from them.” —William Sokolic

Global Gaming Business JULY 2019

Asian Adventure Carlos Eduardo Coelho Senior Associate, MdME Lawyers arlos Eduardo Coelho grew up in Coimbra, Portugal, some 130 miles northeast of Lisbon. He graduated from the town’s law school after studying corporate law. He loved his hometown. So why move to Macau, a former Portuguese colony halfway around the world? It certainly wasn’t on his radar. Coelho worked as a lawyer in Portugal for several months but wanted to go abroad. “I had a few opportunities, and then was invited to come to work in Macau. I thought, ‘Why not?’ I was sure it would be a good experience,” he says. In Macau, gaming is ubiquitous. The industry is the main employer, accounting for more than half of GDP and around 80 percent of fiscal revenues. “It’s very unlikely to be a lawyer in Macau and not have exposure to gaming. If your clients are not related directly to gaming, they’re related indirectly,” Coelho says. After several years employed by a major shareholder of a gaming company, Coelho shifted to gaming manufacturers, which helped him better understand the industry. “I met people from different jurisdictions, so it was a natural evolution.” As senior associate with MdME Lawyers, Coelho focuses on mergers and acquisitions and other transactional corporate law. He also does advisory work with different kinds of corporations and financial institutions, advising on restructurings, regulatory compliance and capital markets. He has not relied for his success on a single mentor, but says he got good advice about his Asian adventure from those closest to him, starting with family. “I’ve also been lucky enough to work with very demanding professionals, which made me learn a lot—including what not to do, which is of extreme importance. I’m sure I’ll still learn from those around me and from those I find along the way,” says Coelho, who relaxes by exploring new areas, sampling different foods, or hitting the beach with his wife Barbara and young children. In Coelho’s view, Asia is ground zero for the future of gaming. “Major operators are already shifting their focus to this side of the world. Asia Pacific may become a focus for more mergers and acquisitions.” Even in very developed Macau, new opportunities will arise, he says. The area will become a global wealth capital in the near future. And Macau has expanded its tourism business with more non-gaming offerings. Other parts of Asia offer opportunities as well, Coelho says, including the Philippines, Cambodia, Vietnam, Korea and of course, Japan. Not limiting the future to Asia, Coelho gives a nod to Brazil and his native Portugal as gaming expands. And he wants to be part of the transformation. For young people interested in the evolution of gaming, Coelho says youth is a natural advantage. “Be technologically savvy,” he advises, “and keep up with the new trends.” Stakeholders are always trying to anticipate what new generations of players will want in terms of entertainment. Who could be in a better position to understand what the market will become than young people who adapt to the new realities: blockchain, cryptocurrency, virtual reality and more? —William Sokolic

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The Progressive

ParTy

As sure as bettors chase jackpots, so linked progressives will continue to prosper

By Dave Bontempo

inked progressives mirror human nature itself. As the jackpot lure blazes through stages of stand-alone, inhouse and wide-area multistate casino gaming, it reflects the three words found deep in the heart of many gamblers: more, more, more. The dream of a life-changing score fuels an entire industry sector. And while the gambler’s vision of a monster win hasn’t changed, the process feeding it has. Vendors, suppliers and operators have enlivened the chase, bringing excitement to several tiers of the jackpot quest. That’s the long-term secret sauce for this market segment. While players balance how much of their bankroll to assign to the big jackpot quest—the increased number of machines reduces the odds of hitting— gaming’s big suppliers provide the vehicles for the attempt. Their products are increasingly imaginative.

Aristocrat: Lightning Strikes Jon Hanlin, vice president of commercial strategy, gaming operations for Aristocrat Technologies, has helped orchestrate the company’s march through some linked progressive eras. The last four years have been dynamic, from the debut of Lightning Link in 2015 to Dragon Link in 2016 to the forthcoming release of Dollar Storm. “We can drive a very interesting player experience at Aristocrat,” Hanlin says. “We have some jackpots that can be life-changing and some that can award $50,000, so you can pay off your car or student debt. We also have multisite progressives (like in Nevada and New Jersey) which can go well over $1 million.” Dollar Storm, Emperor’s Treasure, Caribbean Gold, Egyptian Jewels and Ninja Moon are the next evolution of two top performers, Lightning Link and Dragon Link. Dollar Storm will introduce a lower-cost, fast-growing and more rapid hitting MSP starting at $50,000 with an average jackpot amount of $110,000. The signage package will be introduced with 48

Global Gaming Business JULY 2019

the next generation of industry-transforming LED animating signage and sound with the storm intensifying the higher the MSP climbs. Dollar Storm follows the success of Dragon Link, which Hanlin considers “Lightning Link on steroids.” This is a slot bank of four games, with a grand jackpot banner listed atop the machine. It incorporates the best of the in-house and stand-alone progressive dynamic. Dragon Link also contains the hold-and-spin bonus, perhaps the magic ingredient championed by Lightning Link. When a player hits six or more of the 15 symbols on the machine, three free spins are triggered. Any additional symbols trigger three more free spins. Players can win the grand jackpot if they fill up all 15 spaces or collect the additional amounts determined by the bonus spins.

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“We have some jackpots that can be life-changing and some that can award $50,000, so you can pay off your car or student debt. We also have multi-site progressives that can go well over $1 million.” —Jon Hanlin, Vice President of Commercial Strategy, Gaming Operations, Aristocrat Technologies

“Lightning Link was the best game released in a decade,” Hanlin says. “I call it a jackpot delivery system—it’s a way, through entertainment and gambling, of enabling players to feel that the more they bet, the better their chances are for big return. It’s been fantastic and well-received. You show the player where the chase is, where you’re going up to, and that you have the math and the chops to deliver.” The game caught on like wildfire, to the extent of spawning Lightning Link Lounges, banks of anywhere from 20 to 100 machines. “This game has revolutionized the industry so much, that’s why we keep coming out with new titles,” Hanlin says. “With the lounges, you also have the chance to localize this in one space. As you walk up to the bank of four, every minute somebody is in that hold-and-spin bonus situation. It drives that excitement and winning environment. It gives our casinos a chance to liven up areas of the floor. ”

Konami: Onward, Upward The market niche is spiraling upward. “Linked progressives will be a growing sector, commanding more casino space in North America,” says Steve Walther, Konami’s senior director of marketing and product management. “It’s become more and more appealing and almost a baseline for what needs to be offered in high-performing products. We’re focusing our resources to take advantage of a changing trend. “We’ve been reaching a critical mass lately, with more of the popular games and progressives becoming mainstream products,” he adds. “The game mix is growing. We’ve seen stand-alone progressives, mystery, musthit, even symbol progressives. There is an increasing number of ways to engage players.” Roll out the propositions. Walther says player preferences change every few years based on economic conditions, and these times are comparatively prosperous. “When we were looking at the financial crisis a few years ago, we

were interested in helping people extend time on device with bonuses that looked achievable,” he says. “With the economy rebounding, people now want bigger jackpots.” Walther notes an interesting contrast between on-site proprietary and multistate wide-area dynamics. While they both work well, on-site has the reinforced effect of someone seeing another player hit or returning after a couple hours to see the bonus amount has changed, indicating there’d been a winner. The company’s award-winning Synkros casino management system offers casino properties a variety of options for systemdelivered bonus events—including linked progressives—that let players experience exciting floor-wide jackpot games from any equipped machine, regardless of manufacturer. Konami offers a number of products in this sector. Treasure Ball is a one-of-a-kind linked progressive game available on the Concerto Opus cabinet. Inspired by the surprising fun of retro coin-operated toy capsule machines, it’s recognizable by its large globe of round mystery prize balls, which players can redeem and reveal during the bonus. When placed in a bank configuration, Treasure Ball has a surprising attract feature in which the dragon flies across all connected machines in gigantic fashion, with a striking roar. This linked progressive game combines with almost any KP3+ base game, including Lion Carnival, Dragon’s Law Twin Fever, and Chili Chili Fire. Fans of Konami’s proven Solstice Celebration Xtra Reward game can now enjoy it in 4K with Solstice Celebration Triple

JULY 2019 www.ggbmagazine.com

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“The game mix is growing. We’ve seen stand-alone progressives, mystery, must-hit, even symbol progressives. There is an increasing number of ways to engage players.” —Steve Walther, Senior Director of Marketing and Product Management, Konami Gaming

Sparkle. This game amps up the popular original with a new symbol-driven progressive jackpot chance delivered through a modified Sparkle Feature called the Triple Sparkle Feature. Whenever framed Action Stacked Symbols undergo a third transformation, players can win a Mini bonus, Major bonus, Mega progressive, or large Maxi progressive starting at $10,000. Reels Up is among the linked progressive launch series on Konami’s KX 43 machine. Games in the series feature Reels Up arrow symbols across all reels. Whenever the arrow symbols appear across reels 1 and 2, it causes reel 3 to expand upward for the chance at various bonus events, depending on the base game. Reel 4 and reel 5 also expand up if arrow symbols appear on additional consecutive reels. Konami’s Reels Up series spans four original base game options: Vegas Rise, Mayan Times, Expanding Egypt, and Hong Kong Lights.

Everi: Well-Covered Everi continues emphasizing progressives in the gaming side of its multi-faceted operations. Two premium offerings are its Super Jackpot Series, a popular linked progressive made up of its nine-line mechanical games library, and its Willie Nelson licensed titles. On the standard for-sale side, Everi recently introduced linked, banked themes including the MoneyBall Series with a cascading reel presentation, Fu Stacks, which features a persistentstate element, and Lazer Lock, offering multiple progressive pools and playerselectable multi-denom options. In late 2018, the company introduced Lightning Zap Jackpots made up of three distinct games, five linked progressive tiers, and three volatility options to attract a variety of players. What’s driving the rollouts? “For the player, frequently hitting jackpots of various sizes are attractive,” says Jesse DeBruin, the company’s senior vice president of gaming operations. “Multiple games that feed up to ever-increasing meters make it more believable and realistically attainable for 50

Global Gaming Business JULY 2019

the player—as if they’re working towards recognizable jackpot pattern hit levels. “For the supplier, linked progressive products enable them to package together a family of similar games, which tends to make them more attractive and stand out among the rest of the floor, simplifying the decision-making process for the player of where to place their bets.” Everi plans to feature a number of new for-sale linked banked themes on its Empire MPX (“E43”) cabinet including the MoneyBall Series, Fu Stacks and Lazer Lock, a unique offering utilizing multiple progressive pools and a playerselectable multi-denomination option. Legendary country singer-songwriter Nelson is behind the newest installment of the E43 game series for the premium segment of tribal casino floors. “We continue to pay close attention to the linked-progressive space through industry and customer reports,” DeBruin says. “Based on Eilers reports over the past year, it’s clear there’s been significant growth in linked progressive products, as top-performing games tend to be associated with families of linked progressive offerings. We’re seeing no signs of this trend slowing and believe the potential for future growth remains strong.”

IGT: A Line for the Link Michael Brennan, vice president of product management for IGT, likes how this market sector is performing. “The linked progressive segment is ever-evolving,” he says. “For IGT, we continue to balance proven market trends with innovations such as progressive free games and different progressive payoffs. We also continue to innovate in this area with incremental innovation such as new game mechanics and math models, as well as more disruptive innovation such as PowerSight Technology and TRUE 4D.” Brennan says Cash Link has exceeded expectations. “Some of our customers report players lining up to experience IGT’s Wheel of Fortune Cash Link,” he says. “The title is elevating player excitement on casino floors across the U.S. with its compelling new Cash Link feature. We have introduced four Cash Link base games themes—our cus-

G&Tfullpg.2019-fullpage.qxp_Layout 1 5/9/19 4:45 PM Page 1

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“Some of our customers report players lining up to experience IGT’s Wheel of Fortune Cash Link. The title is elevating player excitement on casino floors across the U.S.” —Michael Brennan, Vice President of Product Management, IGT

Scientific Games: Strong from Near or Far tomers know the game is supported with a content roadmap that can extend the longevity of the game on casino floors. “In addition, our latest Asian-themed stepper game, Dragon of Fortune, features a progressive pick that elevates player excitement by enabling players to win more than one progressive with a single pick.” Wheel of Fortune offers the original wheel that players seek for a trusted slot experience. The proven Cash Link component builds anticipation on every spin as players watch gold coins collect on the reels before landing the triggering symbol on reel 5. The Second Chance feature keeps the action alive by offering players another shot at a wheel spin or credit wins if a Cash Link symbol doesn’t appear the first time. The wheel bonus features multiple pointers that can award credits, free games and up to three progressive jackpots. Players can win up to 200 free games, generating excitement and creating multiple chances for the Cash Link award. The Jurassic Park Trilogy video slots feature Jurassic Park, Jurassic Park: The Lost World and Jurassic Park III. The trilogy targets low-denomination jackpot players who are fans of the Jurassic Park brand and enjoy new interactive bonus features. The five-reel, 40-payline games feature a linked multilevel progressive with an operator-configurable cost to cover of 40 or 75 credits and a 5X or 10X configurable maximum bet. Players initiate the Jurassic Park Trilogy Jackpot Bonus when bonus symbols simultaneously land on reels 2 and 4 or when they collect bonus symbols on reels 2 and 4 through the persistence feature. Jurassic Park Trilogy Jackpot Bonus is played on a DNA game. Players are shown an active game board with each bet change, encouraging higher bets for better jackpot odds. Jurassic Park video slots feature the Wild Stack Multiplier Feature that awards up to a 5X multiplier when a full wild stack lands on one or more reels. Jurassic Park: The Lost World features the Wild Stack Attack Feature that awards full wild stacks on up to all five reels when a full wild stack appears naturally on one or more reels. Jurassic Park III features the Wild Stack Respin Feature that awards up to three re-spins when a full wild stack appears, locking the original and any subsequent wild stacks for each respin. 52

Global Gaming Business JULY 2019

Scientific Games offers an impressive lineup both in the near-area and wide-area progressives realms. On the near-area progressive front, Jin Ji Bao Xi is the company’s top linked game in Asia and is the follow-up to the hugely successful Duo Fu Duo Cai linked game series. The series is launching with two game themes, Rising Fortunes and Endless Treasure. The games include two levels of required near-area progressives that are won in the Jackpot pick bonus or randomly during the Free Games Bonus. The internationally successful Du Fú Du Cái series began with the beloved original 88 Fortunes game. Since then, other games have been added to this series that showcase the player-favorite features of this original game, as well as exciting new features. All the games showcase beautiful Asian imagery, four levels of progressive jackpots, unique free games bonuses, and the beloved Fu Bat Jackpot Feature starring the famous Fu Babies. In the Fu Bat Jackpot feature, players pick to match three of four Fu Babies symbols that correspond to one of the four levels of linked progressive jackpots. Lock It Link is an engaging series built around the Lock It Link game mechanic. SG currently has 13 successful Lock It Link games, each featuring the Lock It Link feature, two levels of linked progressive jackpots, and other exciting bonus features. The Ultimate Fire Link series showcases fastpaced progressive games that give players an exciting slot experience. They’re built around an actionpacked bonus mechanic, the Fire Link Feature, a lock-and-spin feature on an expanded reel set. During the feature, players can be awarded multiple progressive jackpots. There are currently six games in the series that offer multiple line and denomination configurations and feature four levels of linked progressive jackpots. On the wide-area front, Reel Adventures and Cash Connection are jurisdictional WAP links on which popular games are linked, including those based on the James Bond series, Monopoly, The Wizard of Oz, Willy Wonka and The Lord of the Rings—Rule Them All. The reset amount is $200,000 for Reel Adventures and $400,000 for Cash Connection. “Linked” is a good concept for progressive jackpots. Maybe forever. As long as human beings want to financially hit the ball out of the park, this segment is expected to thrive.

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Nominations Are Now Open! Are there special individuals in your organization under the age of 40 who have contributed above and beyond your expectations? Have you noticed a young person in the public or private sector who embodies leadership roles? Or do you believe that your abilities set you apart from your peers? Emerging Leaders of Gamingâ&#x201E;˘ (ELG) is now accepting nominations for its annual recognition program. ELG was created to support young executives on the path to industry leadership through education, networking and other career development opportunities. As part of this program, members of the industry are annually invited to nominate themselves or a colleague for the ELG 40 Under 40, honoring 40 rising stars of gaming under age 40. Deadline for nominations isÂ August 16, 2019.

The ELG 40 Under 40 is presented by:

To nominate yourself or someone else visit: www.ggbmagazine.com

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FRANKLY SPEAKING by Frank Legato

Welcome, Gamblers... And Spouses Galore

Global Gaming Business JULY 2019

Again, was that so hard? Ocean is now promoting itself as a stop for serious gamblers. We’ll see. Call me when the full-pay video poker, 3:2 blackjack and 5X-odds craps games get there. How about “Ocean Gambling Hall & Resort?” They could market it as “The World’s First Celebrity-Chef Gambling Hall.” (Don’t forget, you heard it here first.) Meanwhile, I’ll just gather up my wives and head to California’s Lake Elsinore Casino. Lake Elsinore, one of the state’s card-room casinos, is in hot water with California regulators for not fully disclosing information about its owner, Utah’s Kingston family—head of the Kingston Group, a polygamous sect also known as the Davis County Cooperative Society. The sect owns several types of businesses, but none that require the background-check scrutiny to which casinos are subjected. Apparently, the Kingstons left out the polygamy thing when they applied for a license in the 1990s. Regulators now want them to sell the place. They have sent the case to an administrative law judge, who is asking why the state’s two regulatory agencies have allowed the casino to operate under a provisional license for the past 20 years, while subject to what has to be the longest background check in the history of the industry. The provisional license has been consistently renewed. That’s because the casino pumps a lot of revenue into the city of Lake Elsinore and the state of California. The city’s mayor, Steve Manos, recently called the casino “a great partner for the city.” It is Lake Elsinore’s fourth-largest employer. Not surprisingly, money overrules that fact the place is owned by a family in charge of a Mormon sect that has been said to encourage child brides, incest, multiple wives and even white supremacy. To city officials, the Kingstons are so wholesome, they could be the Brady Bunch. Just add a couple of wives, and a few grandchildren. (I always suspected there were some shenanigans between Greg and Marcia anyway.) They would have to change the theme song, though: Here’s a story, about a man named Kingston, who was busy with seven wives and 23 kids of his own... All of them had hair of gold, and Aryan features... the youngest one in curls... Here’s betting Lake Elsinore survives. Good thing, too. After all, they do have 3:2 blackjack. VIC TOR RINAL DO

o, Atlantic City’s Ocean Resort Casino is now “Ocean Casino Resort.” Now, was that so hard? Ocean, of course, is the former Revel, the property at the end of Atlantic City’s Boardwalk that recently was purchased by the Luxor Capital hedge fund. The new owners have decided that—at long last—the place should actually be a casino. The original owners of this resort, opened on Memorial Day weekend in 2012 and closed two years later, did everything they could to avoid using casino gambling to promote the resort. They considered it a non-gaming resort that happened to have a casino. Gambling would be one of a host of amenities. They were almost ashamed of the casino. They didn’t even call it a casino. As noted in a recent article in New Jersey’s Courier Post on the new owner’s plans for the property, you can still find directional signs guiding customers to “Revelry,” a made-up euphemism for “casino.” There were no comps. No smoking. No gambling promotions. They wanted people to come to Atlantic City for, I don’t know, saltwater taffy, as if gambling had never been legalized. As was painfully realized by the first three owners of the place, the modern Atlantic City was built on gambling, and Atlantic City gamblers—like, um, me—were quite accustomed to being pampered for their gambling activity, and always looked for good deals. Free buffets were as important as celebrity chefs. Atlantic City gamblers, as we now know, visited toxic waste dumps more than they did Revel. The new owners are not making the same mistakes. For starters, you can now find the casino. One of the things I used to find so mystifying about the original Revel was that the hotel lobby was on the building’s 11th floor, and the casino was on the sixth floor, with no direct access between the two. To find the casino from the Boardwalk, you had to go up an escalator so scary I remember wishing I’d brought a parachute. “You would think (the original builder) would have wanted to make it easy for guests to access the casino, instead of the opposite,” Ocean Marketing VP Mike Donovan told the Courier Post. This Memorial Day weekend, Ocean debuted new elevators that deposit hotel guests from the lobby right to the middle of the casino floor.

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NEW GAME REVIEW by Frank Legato

Jack’s Haunted Wins Aruze Gaming

his new game on Aruze’s Muso Triple-27 cabinet is one of two sister games, the other being “Jack’s Winning Spell.” Both carry a jack-o’-lantern/Halloween theme in a 40-line game, with the reel array in a 3-4-4-4-3 layout. There are six bonus features, including four under the “Pumpkin Mystery” event, and a four-level jackpot. To qualify for the Pumpkin Mystery events and the two progressive jackpots, a 20-credit ante bet is required. The four Pumpkin Mystery features— they are random events that can occur after any given spin—include Mega Symbol, Wild Reel Spin, Prize Reel and Random Wild. The Hold Spin Bonus can also be triggered by the Mega Symbol or Prize Reel. The jack-o’lantern character comes to life during Pumpkin Mystery features. In Mega Symbol, the three middle reels merge to form one large middle reel for one free spin. In Prize Reel, the player selects one of three tombstones to reveal

one, two or three spins of a prize reel, which appears inside a giant pumpkin on the screen. In Wild Spin, wild symbols cascade down the reel array to settle on several reel spots, after which wins are determined again. In Random Wild, wild symbols appear in four to 10 random positions, with wins re-determined. The other bonuses include Hold Spin Bonus and Free Games. When a Hold Spin Bonus symbol appears, the player is awarded three free spins. Every time a Hold Spin Bonus symbol appears, it remains in place and the number of free spins is reset to three. After a credit prize is awarded, a multiplier reel spins once to increase the award, plus, potentially, award the Mini or Minor bonus prize or one of the two progressives. Free Games consists of a “mini game” and eight free spins. In the mini game, the player selects one of five icons to reveal an award of 30 to 50 extra wild symbols added to the free-game reels. Manufacturer: Aruze Gaming Platform: Muso Triple-27 Format: Five-reel, 40-line video slot Denomination: .01 Max Bet: 600 Top Award: Progressive; $2,000 reset Hit Frequency: Approximately 50% Theoretical Hold: 4.05%-15.53%

Dragon’s Law Rapid Fever Konami Gaming

onami has taken the popular Dragon’s Law video slot an enhanced it with its Strike Zone feature and multiple progressive jackpots in this giant version, on the large-format Concerto Opus cabinet. The Opus cabinet, with its 65-inch flat-screen LCD, provides a proper canvas for the familiar dragon character, which sits on top of a colorful prize wheel containing bonus credits, multipliers and four levels of progressive jackpot. The base five-reel, 40-line Dragon’s Law game retains the most popular feature of the original—randomly, extra wild symbols will appear on the reel array directly after a spin. In this version, the wilds are active if they land within the player’s “Strike Zone,” a portion of the reels where random extra rewards appear. The player’s Strike Zone grows as the wager grows. Randomly, wilds, multipliers or credit awards will pop up on the screen. At max bet, they usually fall inside the player’s Strike Zone. If they fall outside the Strike Zone, they don’t count—which is an incentive for higher average bets. The Strike Zone and the Dragon’s Law feature are active during the free spin round as well. Three, four or five ball symbols trigger eight, 12 or 20 free spins, respectively. The top two progressives are won randomly, either as a mystery award

Global Gaming Business JULY 2019

or a mystery bonus event in which the dragon spins the prize wheel. The top progressive jackpot resets at $5,000. Manufacturer: Konami Gaming Platform: KP3+ Format: Five-reel, 40-line video slot Denomination: .01, .02, .05, .10 Max Bet: 800 Top Award: Progressive; $5,000 reset Hit Frequency: Approximately 50% Theoretical Hold: 4%-15%

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Dancing Drums Explosion Scientific Games

his new version of one of Scientific Games’ most popular Asian themes is featured on the large-format TwinStar V75 cabinet, with its massive 75-inch flat screen monitor. The base game is a five-reel, 243-ways-to-win video slot available on one of two SG wide-area progressive links—Cash Connection, with a jackpot resetting at $400,000; or Reel Adventures, with a top prize resetting at $100,000. A mystery event in the primary game is called “Replacement Symbols.” Randomly before the reels spin, a number of positions are replaced with Bonus Replacement and/or Wild Replacement symbols. Reels 1, 2, and 3 are replaced with Bonus Replacement symbols, a Red Drum symbol, and/or a Gold Drum symbol. Reels 2, 3, and 4 are replaced with Wild Replacement symbols, a Red Fu, and/or a Gold Fu symbol. The probability of the replacement symbols appearing on the reels changes with the bet options. One or more scattered Red Fu and/or Gold Fu symbols triggers the “Fu Babies Bonus.” If the bonus triggers with at least one Gold Fu symbol, the Fu

Babies Gold Bonus will be activated. Players pick from 12 golden Lucky Coins until three matching Fu Babies symbols are revealed. Each Fu Babies symbol corresponds to the Mini, Minor, Major or Grand progressive jackpot. During the Fu Babies Gold Bonus, jackpots will upgrade to the Gold Jackpots. When playing 588 credits or more, the Grand will transform into the “Explosion Jackpot.” The value displayed in the corresponding meter is awarded. The chances of winning a jackpot increase with higher bet levels. Finally, a free spin bonus is triggered by three or more scattered Red Drum and/or Gold Drum symbols. If the bonus triggers with at least one Gold Drum symbol, then the Gold Free Spins Bonus will be activated. During the bonus, two or more scattered Red Drum symbols award three additional free spins. Before the bonus initiates, players can select five free games with different grid size scenarios, which include up to 15 free spins, and a grid size up to 6x5 when playing standard free spins, and up to 8x5 grid size when playing Gold Free Spins. Manufacturer: Scientific Games Platform: CPU 4.1.2X Format: Five-reel, 243-ways-to-win video slot Denomination: .01 Max Bet: 1,000 Top Award: Progressive; $400,000 or $100,000 reset Hit Frequency: 30.63% Theoretical Hold: 6.67%-14.67%

Smash Hit Progressive Everi Holdings

his is one of the latest titles on Everi’s “The Texan HDX” cabinet, an 8-foot-tall dual-screen, large-format cabinet. The Texan HDX cabinet features dual 42-inch HD integrated displays, a comfortable two-person bench, ergonomic player controls, integrated touch screens, and a premium three-way sound system. (The game also is available on the Core HDX cabinet.) The base game uses proven math from Everi’s popular Super Jackpot Series. The game is a traditional three-reel, nineline video slot designed for high denominations—quarter through $10, with a nine-credit cost to cover. The top LCD monitor displays the complete pay table, in the style of old reel-spinners. There are three bar combinations and four “7” combinations. There are four top jackpots displayed for lining up different-colored “Smash Hit” symbols. Mixed symbols return a prize resetting at $37.50; three green Smash Hit symbols, $70. Three orange Smash Hit symbols on paylines 1 through 8 re-

turn the secondary progressive, resetting at $250. The top progressive, for three orange symbols on payline 9, resets at $5,000. The Respin Bonus is triggered randomly by certain winning spins that do not trigger a progressive jackpot. Reels may re-spin up to six times, paying different winning combinations. Manufacturer: Everi Holdings Platform: The Texan HDX Format: Three-reel, nine-line video slot Denomination: .25, .50, 1.00, 2.00, 5.00, 10.00 Max Bet: 9 Top Award: Progressive; $5,000 reset Hit Frequency: 23.31%-28.26% Theoretical Hold: 3%-15%

JULY 2019 www.ggbmagazine.com

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GOODS&SERVICES AGA: PENNSYLVANIA A MODEL FOR GAMING’S BENEFITS

he Pennsylvania casino gaming industry supports more than 33,000 jobs statewide and has a total economic impact of $6.3 billion, the American Gaming Association announced at an event under the organization’s “Get to Know Gaming” campaign hosted in Washington, Pennsylvania last month. The AGA’s Get to Know Gaming campaign engages local leaders in a discussion about the critical role gaming plays as a community partner across the country. A roundtable Congressman panel at the Meadows RaceGuy Reschenthaler track and Casino included U.S. Rep. Guy Reschenthaler, Penn National Gaming President and CEO Timothy Wilmott, North Strabane Township Fire Department Chief Mark Grimm, local small business owner Melissa Mega of The Ivy Green, and AGA President and CEO Bill Miller. Washington County Chamber of Commerce President Jeff Kotula moderated the discussion. The event also marked the release of AGA’s latest report, “Casinos & Communities—Pennsylvania,” an in-depth look at the gaming industry’s economic and social contributions to communities across the state. The research couples key data on gaming’s economic impact—33,171 jobs supported and $1.8 billion in wages generated—with input from stakeholders including local business owners, industry employees and elected officials about gaming’s positive impact in their communities. “We are very fortunate here in Pennsylvania to have outstanding, community-minded industry partners,” said Reschenthaler. “Across our state, gaming companies are investing in the growth of our communities and supporting good jobs. It’s a critical partnership as we strengthen our economy and continue to expand job opportunities for Pennsylvanians.”

EVERI KICKS OFF TOURNEVENT OF CHAMPIONS 2019

lot supplier Everi Holdings announced the official kickoff of its seventh national TournEvent

Global Gaming Business JULY 2019

of Champions, a $1.3 million event staged on the manufacturer’s TournEvent tournament system. Satellite tournaments at Everi’s customer locations in the U.S. and Canada will result in finalists who are flown to Las Vegas in an all-expense trip for two, to compete in the national final event at the XS Nightclub in Wynn Las Vegas the week of the Global Gaming Expo in October. Now called TournEvent of Champions: The Million Dollar Event, the championship round awards $1.3 million in total cash prizes. “We are excited to kickoff our seventh annual TournEvent of Champions campaign which will again culminate in Las Vegas with a $1 million grand prize for one lucky slot player,” said Jeannie Moss, promotions manager at Everi. “Since its start as statewide slot tournaments in California and Washington in 2012 with only 30 participating casinos, our goal has been to create the premier slot tournament in North America and memorable experiences for all of our players and finalists.” Each winning casino representative will receive $800 towards airfare to Las Vegas for themselves and a guest; three night/four-day hotel accommodations; transportation to and from McCarran International Airport; food and beverage credit; and a seat at The Million Dollar Event. The championship event will take place on October 16 at the XS Nightclub.

SCI GAMES HELPS CREATE DIVERSITY PROJECT

aming supplier Scientific Games Corporation is involved in an effort to create an inclusive global gaming industry as a founding member of the All-In Diversity Project, a nonprofit organization creating tools to advance the industry’s diversity, inclusion and workplace equality. “Gaming is evolving and growing more than ever, and it’s crucial that the industry embraces the diverse and unique people who contribute to the gaming world,” said Scientific Games Director of Diversity and Inclusion Katharine Anderson. “Scientific Games is proud to be a founding partner of

this trailblazing project, and celebrates the efforts being made to create an inclusive environment with opportunities for all.” As a founding member of the All-In Diversity Project, Scientific Games will work collaboratively with additional partners to determine diversity, equity and inclusion expectations and standards for the gaming industry, while driving a conversation to establish global standards. Scientific Games will participate in dialogue with other members of the All-In Diversity Project, reference the benchmarks created to track the industry’s progress and reflect on its own current state in order to enhance areas of diversity and inclusion.

GALAXY LICENSED IN ONTARIO, MARYLAND, WISCONSIN

alaxy Gaming, Inc., a developer and distributor of casino table games and enhanced systems, announced that it has received its manufacturer’s licensing approval from Alcohol and Gaming Commission of OnGalaxy President and tario (AGCO) and from CEO Todd Cravens the Maryland Lottery and Gaming Control Agency. “As we have promised to our clients, shareholders and employees, Galaxy continues to receive new gaming licenses, and today is no exception,” said Galaxy President and CEO Todd Cravens. “This is a major milestone for our company as we recognize the high growth potential in Wisconsin, Ontario and Maryland, and we look forward to placing our products, including our proprietary progressive systems, in the very near future.” The approval is the latest in a string of new licensing for Galaxy since Cravens took over for former CEO and founder Robert Saucier, who left the company at the end of 2018 after a succession of licensing problems.

INTERBLOCK EXTENDS PAGCOR DEAL ON ETGs

eading electronic table game (ETG) supplier Interblock announced the renewal of its ETG lease deal with the Philippine Amusement and Gaming Corporation (PAGCOR) for another three years via its long-term partnership with Indepth Insights Inc. Interblock together with its local agent, Indepth, signed the very first ETG revenue-share

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lease deal with PAGCOR in June 2015 at 12 PAGCOR-operated casinos across the Philippines for a period of three years. As part of the deal Interblock supplied, installed and maintained 192 G5 Diamond play stations with fully automated roulette and video baccarat stadiums, according to Interblock’s president of Asia Pacific, Michael Hu. At the end of Decem- Michael Hu, Interblock president ber 2018, the total number of seats had increased of Asia Pacific to 204 G5 Diamond play stations spanning across 14 PAGCOR-operated casinos throughout major cities in the Philippines.

GLI PUBLISHES KIOSK STANDARDS

eading gaming testing company Gaming Laboratories International LLC announced that it has published the final version of a new set of standards for electronic kiosks used in the gaming industry. The new GLI-20 Standards for Kiosks V2.0 revise core standards to include technical requirements that reflect the latest technology and account for best-in-industry practices. The new standards are said to be better aligned with the overlapping requirements of the GLI Family of Technical Standards and other recognized industry standards. “In general, the changes are largely designed to improve the clarity and consistency of requirements,” the announcement said. In its announcement, GLI said it had worked closely with various stakeholders in the gaming industry, including suppliers and regulators, to ensure the new standards represented the most highly developed set of technical requirements and practices available.

release. “ALEA is a highly regarded online operator known for its innovation and focus on player entertainment, and we appreciate their confidence in AGS.” SlotsMillion is an online casino holding licenses from the Gambling Commission of Great Britain, the Malta Gaming Authority, and the Netherlands Antilles (Curacao) government. The site, founded by ALEA in 2014, has more than 2,000 games available for mobile, tablet, and desktop and is available to play in the U.K. and in regulated markets around the world, including an upcoming expansion to the Swedish market, the release said.

SIGHTLINE, BENCON PARTNER ON GAMESECURE SYSTEM

as Vegas-based payment solution provider Sightline Payments and Vancouver-based Bencon Technologies Inc. have entered into a partnership to bridge the current technological gap

between digital self-exclusion functions and payment services. The goal of the partnership is to ensure atrisk patrons are denied access to content or payment services in real time, through a link between Sightline’s GameSecure database solution and Sightline’s payment systems. The first quarter of 2019 has resulted in a number of violations of self-excluded patrons gaining access to content in the U.S. market, meaning regulator fines have been issued to noncompliant operators. GameSecure’s real-time database solution ensures these patrons do not gain access to digital content once self-excluded and by partnering with Sightline’s Play+ platform, it creates another barrier to a patron’s payment activity. “The Sightline team has been committed to responsible gaming for more than 20 years, and we are very excited to announce this important partnership,” said Cameron Conn, co-founder of Bencon Technologies Inc. A primary goal of the partnership will be to work with the responsible and problem gambling communities to ensure these new solutions will work to enhance future programs for player protection.

AGS PARTNERS WITH ALEA

GS has announced it is now providing online, real-money game content to Maltabased online gaming operator ALEA for its SlotsMillion online casino brand. The company said in a press release it is in the early stages of its partnership with ALEA, and just recently launched AGS’ proven land-based title Jade Wins in ALEA’s SlotsMillion online casino. “Player demand for our AGS game content is high, so we’re thrilled to add another operatorpartner and one as well-respected as ALEA in our first partnership with a Maltese operator,” said AGS Executive Vice President Matt Reback in the

For more information or to subscribe to the database or monthly report contact Ashley Diem at ADiem@FantiniResearch.com or call +1-302-730-3793 - www.FantiniResearch.com JULY 2019 www.ggbmagazine.com

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CUTTING EDGE by Frank Legato

24/7 Sports Product: Virtual Basketball Manufacturer: Inspired Entertainment, Inc.

irtual Sports provide an exciting new revenue stream for gaming providers that can be easily integrated into their existing sports book, website or retail venues. Virtual Sports’ constant schedule makes a broad array of sports available 24/7, providing a consistent stream of sports betting content, even at times of year when live sports are not available. They are visually fantastic and easy to play for novice and experienced sports bettors alike. Inspired’s newest scheduled Virtual Sports product, Virtual Basketball, sets a new benchmark for graphics and animations. Using the latest motion capture technology as well as new state-of-the-art proprietary software, Inspired

has created the most realistic player models and environments to date. Virtual Basketball takes the form of a single match event. The product offers three pools of teams: a U.S. pool, a European pool and a Greek pool. Each pool contains 12 teams that play on a competition-appropriate court. A wide array of betting choices is available, including spread, money lines, winning margins, over/under betting, half-time/full-time betting, odds/evens betting and more. Virtual Basketball is available across all land-based and interactive channels via the Inspired V-Play events platform. Watch a demo at inseinc.com/basketball.

Sign of the Times Product: Renegade 3600 Manufacturer: Everi Holdings

enegade 3600 is a larger-than-life sign package for Everi’s Class II and Class III wide-area progressive games and Class III localarea progressive games. The massive display features three 43-inch convex curved monitors, which combine to create a unique visual bonus experience. The sign-based speaker package with licensed music augments the sound capabilities of the individual gaming cabinets to offer sign sound celebrations that are sure to turn heads. The Renegade 3600 also features individually controlled LED lighting around each monitor to provide for exciting big win anticipation and a celebratory light show.

Global Gaming Business JULY 2019

Benefits to operators include: • Diamond Blaze and Diamond Blaze 9 Reel available as single-face three pack or double-facing six pack • Three Convex 43-inch monitors with game controlled lighting bezels • Custom theme merchandising package • One-of-a-kind bonus communication between EGM and sign package with queue system for ultimate player experience For more information, visit everi.com.

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PEOPLE STRIP VETERAN SIBELLA TO HEAD RESORTS WORLD LV

enting Group has appointed former MGM Grand President Scott Scott Sibella Sibella to head the company’s Resorts World Las Vegas mega-resort under construction on the Las Vegas Strip. Located on 87 acres where the Stardust once stood and priced at an estimated $4 billion at full build-out, the Asian-themed Resorts World is slated to open with 3,400 hotel rooms at the end of 2020. It will be the Strip’s first ground-up resort since the Cosmopolitan debuted a decade ago, and carries with it high hopes for a revitalization of the sparsely developed north end of the famed neon way. Sibella ran MGM Grand for eight years before departing in February, shortly after owner MGM Resorts International launched a corporate-wide cost-cutting program targeting upper management, among other areas. He also served under MGM as president and chief operating officer of the Mirage and Treasure Island on the Strip and is chairman of Las Vegas Events, the private events-scheduling arm of the Las Vegas Convention and Visitors Authority.

ODELL TO ADVISE TOP SCIENTIFIC GAMES LEADERSHIP

aming supplier Scientific Games Corporation has hired Jamie Odell, the former longtime CEO of rival slot-maker Aristocrat Leisure Limited, as “Special Advisor to the Chairman and CEO.” Jamie Odell Odell, who transformed Aristocrat’s fortunes as head of that company from 2009 to 2017, will advise Scientific Games Board Chairman and MacAndrews & Forbes Chairman and CEO Ronald O. Perelman on gaming industry trends and market innovations. In addition, Odell will work with company CEO Barry Cottle to support current growth strategies across the company. During Odell’s tenure as CEO, Aristocrat’s market capitalization grew from $1.3 billion to approximately $7.5 billion. Prior to joining Aris-

tocrat, he held senior executive roles in the global beverage industry. “I have known and watched Jamie’s success for years, and I am so glad he has agreed to join us in this new role,” said Perelman. “Scientific Games has done an incredible job building products and services that our customers and players love. The addition of Jamie will significantly enhance our ability to reach new players and markets as well as drive growth across the company.”

KONAMI NAMES GARNER FINANCE VP

onami Gaming, Inc. announced the hiring of gaming industry veteran John Garner as vice president, finance and accounting. Garner brings more than 30 years of gaming inJohn Garner dustry experience, overseeing total financial strategy for high-profile operators and major global suppliers. As vice president, finance and accounting, he is responsible for leading core fiscal strategy, planning and processes to achieve the company’s short- and long-term financial objectives. “Konami is pleased to bring John Garner’s industry expertise and proven experience into the organization,” said Steve Sutherland, president and chief executive officer. “His demonstrated abilities are well-aligned with our strategic vision and growth opportunities.” For more than 30 years, Garner has led responsible growth initiatives and results-driven strategies for world-class gaming companies. He carries a demonstrated track record in spearheading new operational efficiencies, leading successful negotiations, and implementing metrics to increase performance.

PAYSAFE GROUP APPOINTS PHILIP McHUGH CEO

aysafe Group (“Paysafe”), a leading global payments provider, announced the appointment of Philip McHugh Philip McHugh as its CEO. McHugh replaces Joel Leonoff, who is taking up a new position as vice chairman of the company’s board of directors. McHugh, who will also sit on the Paysafe

board, brings extensive experience of the global banking and payments industries to the role, and an executive leadership career spanning more than 20 years. He joins Paysafe from TSYS, a leading global payments provider, where he was responsible for heading up the merchant solutions division. During his tenure in the position, McHugh played an instrumental role in growing TSYS’ revenues and profits by over 30 percent. Prior to TSYS, McHugh worked for Barclays in London, where he was global CFO of Barclaycard and CEO of Barclaycard Business Solutions. In his new role as vice chairman of the company’s board, Leonoff will continue to be closely involved in the development of Paysafe’s corporate strategy. Leonoff founded Paysafe, originally Optimal Payments, in 1997 and has held the position of president and CEO since 2008. During his tenure as CEO, Paysafe has delivered consistent top- and bottom-line growth and successfully introduced innovative new payments solutions to the marketplace including its range of digital wallets and online cash solutions. In 2018, it achieved record global transactional volumes of US$85 billion.

GGB

July 2019 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . .13, 55 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Aruze . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Fantini . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Fifth Third Bank . . . . . . . . . . . . . . . . . . . . .23 GGB 40 Under 40 . . . . . . . . . . . . . . . . . . . .53 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 G&T Awards . . . . . . . . . . . . . . . . . . . . . . . .51 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 JCM/Golf . . . . . . . . . . . . . . . . . . . . . . . . . .39 Konami . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 MGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Omron Amusement . . . . . . . . . . . . . . . . . .45 RPM Advertising . . . . . . . . . . . . . . . . . . . .10 Rymax . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 SBC Events . . . . . . . . . . . . . . . . . . . . . . . . .47 Scientific Games . . . . . . . . . . . . . . . . . . . . .11 UNLVGS . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Wipfli/Joseph Eve . . . . . . . . . . . . . . . . . . .43

JULY 2019 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Alan Feldman Distinguished Fellow, UNLV International Gaming Institute

or many years, Alan Feldman was the spokesman for Mirage Resorts and later for MGM Resorts. He recently stepped down from MGM, but is still consulting for the company, and in May was appointed a distinguished fellow at the University of Nevada, Las Vegas International Gaming Institute. Feldman has long been the industry spokesman for responsible gaming, and is chairman of the National Center for Responsible Gaming. He spoke with GGB Publisher Roger Gros at the Gambling and Risk-Taking Conference—the Eadington Conference—in Las Vegas in May. To hear a full podcast of this interview, visit GGGMagazine.com or find it on iTunes and Spotify. GGB: You had an incredible run at MGM Resorts, and at Mirage before that. You played a huge role in the development of both of those companies. Congratulations on what you accomplished there. Feldman: Yes, it was 29 years. I was incredibly lucky to come into the industry just as the Mirage was being born and to have seen the incredible growth—not just in Nevada, but globally. You’re certainly not retired. You’ve still got a lot on your plate.

Oh, no. As I’ve told my family and friends, I’m working the same number of hours; they’re just a whole heck of a lot less stressful. First of all, you’re still a consultant for MGM.

Yes, I am. Are you still working in their responsible gaming area?

I’m working mostly right now on the responsible gaming component of their bid in Japan, which is going to be critical. And I continue to keep my hands involved in responsible gaming across the rest of the portfolio. But it’s really the UNLV work that’s taking over, and I hope to take on an even bigger role as time goes on there. 62

Global Gaming Business JULY 2019

Explain what you’re going to be doing with UNLV.

I’ve been given the opportunity to work with the team at the International Gaming Institute: Bo Bernhard, Brett Abarbanel, Jennifer Roberts, Becky Harris and others who really are leaders in their areas of expertise. I’m going to start working with them on responsible gaming programs and policy development. I think what’s most important for the industry is the notion of changing the culture of responsible gaming from one that’s compliance-based to one that’s customer servicebased. That’s going to require a lot of work, some research, some academic development and curriculum development. But all of that is possible. With the incredible team of professionals at UNLV, I think we’re going to end up with a pretty amazing program that we can then travel around not only the United States, but jurisdictions all over the world. It’s a crucial time in the industry when it comes to responsible gaming. Some countries in Europe have banned gambling ads, reduced stakes on slot machine-type of devices, things like that. The United States really needs to sit up and pay attention, because that could happen here in a heartbeat.

It absolutely can, and we must pay attention to it. In that cultural change I spoke of earlier, there are too many parts of the industry that have taken a look at responsible gaming and seen it as a minimum-standard objective—that they need to meet the minimum standard that the jurisdiction they’re in has outlined. And that’s not the way it ought to be. We ought to be taking control of this topic, marketing this topic, being assertive and aggressive with this topic, if for no other reason than that now we have the benefit in the U.S.—and Canada as well—of more than 20 years of research on this topic. There are a couple of things that come shining through over and over again, and the

real key to research becoming policy is to be able to replicate it over time. You can do prevalence studies across all kinds of time frames; you’re still going to find about a roughly 1 percent addiction rate. Of those folks, casinos aren’t the place that they generally tend to go. They generally tend to go into other forms of gaming. It doesn’t mean that casinos are left out of it. I think we’ve been too defensive about this topic. The industry needs to just go out there, take this subject by the collar and own it. Tell the public about it, tell policymakers about it. Act responsibly when it comes to advertising. We have to. I think the AGA has done a wonderful job not only with the original Code of Conduct, but more recently updating it. There’s now a responsible gaming task force that’s doing a lot of work. I’m hopeful that’s where this all is going to lead, and that you’re going to see more and more companies here literally advertising responsible gambling on their casino floors. So the casinos have a pretty good handle on problem gambling. But we’ve got a new type of gambling coming up with the legalization of sports betting and mobile sports betting. Is that something the NCRG and all these gambling organizations should pay attention to?

Everyone needs to pay attention to it. The NCRG is trying to put together funding for a center for research and study of sports gambling to specifically understand whether or not there is in fact any difference. We’re all walking out there assuming that there is. Well, no one really knows. Maybe there is, and maybe there isn’t. The other part of it is whether or not—in an online form, whether it’s slot machines online, or sports betting online—you can detect problematic behaviors and patterns. There’s the theory that you can. But I would suggest rather strongly that this is entirely unproven. Having said that, I think that there’s some truth in it; we’ve just got to get to what that really is.

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