Global Gaming Business, June 2016 by Global Gaming Business

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GGB Global Gaming Business Magazine

DOWnTOWn LAS VEGAS AnTI-MOnEY LAUnDERInG TABLE GAME BOnUSES OFFERCRAFT’S AROn EZRA

June 2016 Vol. 15 • no. 6 $10

Beyond Gaming

Brand IDENTITY

The successful U.S. iGaming sites all have one thing in common

How tribes are financing non-gaming developments

Content IS

KInG! Independent

game designers are changing the paradigm of slots

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CONTENTS

Vol. 15 • No. 6

june

Global Gaming Business Magazine

22 COVER STORY

COLUMNS

King Content

14 AGA

As the gaming industry continues its transformation into a world of multi-channel distribution, the new paradigm for content suppliers requires a higher volume of titles, faster time to market and a seamless transition between the land-based and online worlds. By Frank Legato

The ‘I’ Word Geoff Freeman

16 Fantini’s Finance Boy Oh Boyd Frank Fantini

Column

34 Table Games

26 What Makes a Good Game?

Roger Snow

John Acres

Straight From the Globe Casino Mike Halvorson, chief development officer, and Kent Young, president and founder, Spin Games

DEPARTMENTS FEATURES

50 21st Century Tables Table games are enjoying a sustained resurgence, in no small part due to innovative side bets, bonusing and progressive jackpot technology. By Dave Bontempo

6 The Agenda 8 By the Numbers 10 5 Questions 12 AGEM 38 Gaming History 54 New Game Review 58 Cutting Edge 60 Emerging Leaders With Eagle Mountain Casino’s Ronald Washington, Jr. and Wind Creek Hospitality’s Brent Pinkston

18 Taking it Downtown Downtown Las Vegas has completed its transformation into a destination in its own right, and a funky alternative to the mega-resorts of the Strip.

62 Frankly Speaking 64 Goods & Services

By Marjorie Preston

69 People

28 Beyond IGRA As the Native American gaming market has matured, many tribes have compensated for the loss of monopoly status through diversified economies. By Dave Palermo

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

40 iGames News Roundup

46 The FinCEN Difference

Feature

As Jennifer Calvery leaves her post as director of the federal Financial Crimes Enforcement Network, her impact on the gaming industry cannot be understated.

42 Branding iGaming An effective online gaming platform is essential for success, but well-known brands give online casinos an extra boost.

By James Rutherford

By Steve Ruddock

Global Gaming Business JUNE 2016

With Aron Ezra, President and CEO, OfferCraft

32” 32

27”

TOP BOX

You’re Covered from Every Angle.

Introducing the all-new CrystalSlant™ cabinet. Perfection attracts players from across the floor, with high-definition monitors, crisp lighting and rich sound. Comfort welcomes them with open arms, with an array of ergonomic features. And an extensive library of proven performers and hot new games will keep them coming back for more. Make sure you’re covered from every angle. Contact your IGT account manager, or visit igt.com for more information.

©2016 IGT. Except where ownership is otherwise identified, the trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. Patent and Trademark Office. IGT is committed to socially responsible gaming. Our business solutions empower customers to choose parameters and practices that become the foundation of their Responsible Gaming programs. Artwork, descriptions, game play, photographs, videos, and other product details depicted are subject to change.

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THE AGENDA

The Personal Touch Roger Gros, Publisher

he gambling experience is something that has been in decline now for several years. Slot revenues across the country have been flat or declining during this period, while table games, for the most part, have increased marginally. So, let’s think about what makes one experience different from another. At the table games, you sit down at a table with several other players, generally. Behind the table, you’ve got a dealer and probably a supervisor/pit boss. The dealer is actually required to speak to the players to explain the course of the game (in most cases, anyway; I’ve actually seen dealers who didn’t utter a word throughout an entire shift). The other players often chime in on what they think the best moves are, or even just making small talk having nothing to do with the game. At the slot machine, the player plants himself in a chair, slides his currency into the bill acceptor and pushes buttons until he wins enough money to quit or his money disappears (much more likely these days). He or she rarely talks to other players, probably never even sees a casino employee, and can now get a drink by tapping the service window on the machine, eliminating much of the interaction with cocktail waitresses. So, you can clearly see the difference between these two experiences. At the tables, there is personal interaction between casino employees and players in all variations. At the slot machine, the player is only interacting with a faceless machine, providing that player no human touch and therefore stranding him on a lonely outpost with little chance for feedback. It wasn’t always that way. Remember the days when coins would drop into the hopper, clanging happily, piling up for all to see? The slot attendant or change person would run over and congratulate the player, all the while rooting for them to win. There were often manned carousels, where employees would prowl the tops of the machines, urging the players on to victory. And when it came time to reward the player for his or her loyalty, a slot host would sidle up to them, passing out a comp for the buffet or even the steakhouse if it was a good enough player. Yes, the slot host (and often the slot attendant) knew

Global Gaming Business JUNE 2016

the player by name, and recognized him or her upon arrival. In those days, there was a theory among players that the highest-paying machines were near the entrance to the casino, because the casino execs wanted people walking in or even walking by to see people winning. And that was a solid theory—something subscribed to by many a slot player eagerly in search of that machine with the 97.4 percent payback. But no more. The impersonality of the casino is duplicated by the machines. Sure, there are tremendous themes, with high-tech sound, amazing graphics, and even story lines designed to get the player interested and excited. Yet, these fabulous machines have not been able to stop the slide of slot revenue over the past several years. And this impersonality extends to the properties, too. At one time, the casino was the center of attention, people spilling in and out, coins creating a clatter, music coming from the surrounding lounge. Today, it’s the flower garden display, or the pool, or the nightclub, all segmented away from the casino and other parts of the resort. The casino is often an afterthought. Yes, I know this is going to make me sound like an old man (which I am), but I think the soul has been cut out of the casino today. The lack of personal interaction with all players is a problem. The high cost of casino entertainment (high-hold slot games, very unfavorable table game rules, drinks that cost double digits) has chased off the marginal player and not replaced him with anyone. The friendly people players used to interact with on the casino floor are gone. Now, I know in this age of the penny pinchers, there’s not going to be a wholesale re-hiring of slot attendants and change people. But there are technological aids that can direct the remaining personnel to the best players, so something approximating the camaraderie felt in the heyday of slot machines can be returned. Let’s bring back that personal touch. Let’s make sure our customers know how special they are, and that they’ll have the time of their lives in our casinos. Let’s bring back that old-time gambling experience.

Vol. 15 • No. 6 • June 2016 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | cooley7@sunflower.com JohnBuyachek, Director, Sales & Marketing jbchek@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com Columnists John Acres | Frank Fantini @FantiniResearch Geoff Freeman | Roger Snow Contributing Editors Dave Bontempo | Chris Irwin Dave Palermo twitter: @DavePalaermo4 Marjorie Preston | Patrick Roberts Steve Ruddock twitter: @SteveRuddock James Rutherford

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

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

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Partner, Duane Morris, Baltimore

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Steven M. Rittvo, Chairman/CEO, The Innovation Group

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

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 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 2016 Global Gaming Business LLC. Henderson, Nevada 89014 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 901 American Pacific Dr, Suite 180, Henderson, NV 89014

Official Publication

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BY THE

NUMBERS

eConomiC impaCT of CalifoRnia GaminG TRibes T

he California Nations Indian Gaming Association (CNIGA) commissioned Beacon Economics in 2014, which surveyed 17 gaming tribes, to do a study of the economic impact of tribal gaming on the state. In this graphic, the largest category of expenditures was Fixed, General & Administrative, with $975.4 million in expenditures in 2012, or 25.4 percent of all spending. This category includes spending on office personnel and equipment, which supports running business operations at a casino. Gaming expenditures was the second largest category, with $807.1 million in expenditures in 2012, or 21 percent of all spending. This category includes purchases like gaming tables and chips and wages for dealers, supporting floor operations in casinos.

Catagories of Tribal Gaming expenditures

2015 iGaminG Revenues T

he U.S. iGaming market completed its second full year of operations in 2015, generating an estimated $160.7 million and growing at a rate of 19.3 percent, RubinBrown reported in its Gaming Statistics â&#x20AC;&#x2122;16 publication. The current legalized online gaming industry remained relatively unchanged in 2015, as the number of states remained unchanged. The segment is comprised of three state jurisdictions that include Nevada, New Jersey and Delaware, with Nevadaâ&#x20AC;&#x2122;s online gaming being restricted to online poker. The chart at the bottom details the results from each state/iGaming operator.

Global Gaming Business JUNE 2016

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NUTSHELL

“They

5Questions

with Rino Armeni,

Chairman and Founder, Las Vegas Business Academy

ino Armeni’s journey in Las Vegas began following a successful career with Marriott and the Walt Disney Corp., when he was named vice president of food and beverage for Caesars Palace. In 1994, he became executive director of marketing for Southern Wine & Spirits, the leading liquor distributor in Nevada. Today, as president of Armeni Enterprises, he remains active in several food-andbeverage-related developments. But Armeni is most proud of his role as founder and chairman of the board of the Las Vegas Business Academy (LVBA), a charitable organization that provides funding for worthy individuals to earn their advanced degrees in Las Vegas. To hear a full podcast of this interview, visit GGBMagazine.com. Tell us about LVBA and how it got started. Someone once asked me if this was a dream of mine. I told him it wasn’t a dream, it was an obligation on my part to improve the education in a city that has been very welcoming to my family and me. There are a lot of brilliant young people who are interested in earning their MHA, MBA or JD, who could not afford it or had to leave town to do it. My take was, I’d rather keep these brilliant people here than see them leave to go elsewhere.

1 2

How does it work? We offer up to $75,000 for the candidates to advance their education in hospitality, law, business, and we’re adding engineering now, too. The great part about this program is the mentorship. The money is important, but we’re blessed with more than 30 board members who are leaders in big companies like Golden Gaming, MGM Resorts, Coca Cola, Ecolab, Las Vegas Sands, Southern Wine & Spirits and many other companies who spend their time educating students on how to become business professionals. The students have to sign a five-year contract and work with a different company every month throughout their time in our program. Our recipients work to understand how these companies operate, so that by the end of the two years of the program, the depth of their knowledge will be attractive to any company looking for talent. And we also offer, to the employer, the opportunity to hire someone who is very well-rounded, very well-educated.

3 4 5

How do you identify the candidates? Most of them are referrals from previous students. They also come from leaders in the industry who have identified people in their organizations they believe are worthy. The students follow parallel curriculums, one with the University of Nevada, Las Vegas and one with LVBA, which includes working in the individual companies.

Do they work in all different departments? Yes. For example, if you go to work for Southern Wine & Spirits, your first days may be driving with a delivery person at 3 o’clock in the morning. Then you’ll be in accounting, sales, marketing, legal… Each student will end up with a basic knowledge of what happens in each of those departments.

What kind of reaction have you gotten from both the students and the companies? We’re a young organization—we’ve only had three classes of scholarship recipients so far—but so far the feedback we have received has been fantastic. One of our students has already been promoted twice, another works for a federal judge. They are already brilliant individuals, so this education gives them a quick boost to get ahead in their chosen careers. And the companies couldn’t be happier to be able to hire such talented executives.

Global Gaming Business JUNE 2016

Said It”

“Our tribes have called this land home long before it was named Connecticut, and we refuse to sit back and watch a casino company from Las Vegas take our jobs and revenue.” —Kevin Brown, chairman of the Mohegan Tribe, explaining the efforts of the Mohegan and Pequot tribes to build a third, satellite casino in Connecticut to mitigate competition from the planned MGM casino resort in Springfield, Massachusetts

“They invested in DraftKings, but it’s not gambling? What the hell is it?” —Baseball legend Pete Rose to the Las Vegas ReviewJournal, attacking what he called the hypocrisy of Major League Baseball Commissioner Rob Manfred after Manfred rejected his application for reinstatement from a lifetime ban from baseball imposed because Rose gambled on his own team

CALENDAR June 7-10: iGaming Super Show 2016, RAI Amsterdam, Netherlands. Produced by Clarion Events. For more information, visit iGamingSupershow.com. June 20-22: Northwest Indian Gaming Conference & Expo 2016, Tulalip Resort Casino, Tulalip, Washington. Produced by the Washington Indian Gaming Association (WIGA). For more information, visit washingtonindiangaming.org. July 25-27: Oklahoma Indian Gaming Association (OIGA) 2016 Conference, Cox Business Center, Tulsa, Oklahoma. Produced by the Oklahoma Indian Gaming Association. For more information, visit okindiangaming.org. August 9-11: Australasian Gaming Expo (AGE) 2016, Sydney Exhibition Centre @ Glebe Island, Sydney, New South Wales, Australia. Produced by the Gaming Technologies Association. For more information, visit austgamingexpo.com. September 26-29: Global Gaming Expo (G2E) 2016, Sands Expo Center, Las Vegas. Produced by the American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com. October 18-20: EiG - Excellence in iGaming 2016, Arena Berlin, Berlin, Germany. Produced by Clarion Events. For more information, visit eigexpo.com.

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AGEMupdate AGEM KEY BOARD OF DIRECTORS ACTIONS

AGEM MEMBER PROFILE JCM Global is the worldâ&#x20AC;&#x2122;s leading transaction technologies supplier for the gaming industry. Some in gaming may not realize that JCM is also a leading supplier to the global banking, retail and kiosk industries. Wherever highly secure cash transactions are required, JCM provides inventive solutions for the entire transaction, intake and output. JCM recently celebrated its 60th anniversary. From the beginning, the companyâ&#x20AC;&#x2122;s spirit of innovation has driven its employees to create pioneering solutions. Today, JCMâ&#x20AC;&#x2122;s extensive line of award-winning products sets global standards with groundbreaking peripheral transaction components, leading digital media hardware and the systems to tie them together. At G2E 2016, JCM expects to reveal new bill validation and printing technologies. Details will be released closer to the expo. JCM has a long history of giving back to the community. One of those ways is producing the annual AGEM/AGA Golf Classic in Las Vegas. This yearâ&#x20AC;&#x2122;s event, held in late April, was one of the most successful to date, with a sellout crowd coming together to benefit the important research conducted by the National Center for Responsible Gaming. Now, JCM is producing the inaugural LatAm Golf Classic, held in conjunction with Juegos Miami. The tournament takes place June 3 on the breathtaking greens of the Biltmore Golf Course in Coral Gables, and is a fundraiser for St. Judeâ&#x20AC;&#x2122;s Childrenâ&#x20AC;&#x2122;s Research Hospital. The event was inspired by the late gaming icon Jens Halle, a major advocate for gaming in Latin America and the Caribbean. JCM has a busy trade show schedule that allows staff to directly interact with the companyâ&#x20AC;&#x2122;s customers in the many regions JCM serves. In addition to the inaugural LatAm Golf Classic JCM will produce at Juegos Miami, over the coming months, you can find JCM at the Peru Gaming Show, OIGA, AGE and G2E. JCM is also a proud sponsor of the Canadian Gaming Summit and NWIGA. For more information on all JCM activity, visit jcmglobal.com.

Global Gaming Business JUNE 2016

â&#x20AC;˘ Bo Bernhard, executive director of the International Gaming Institute, University of Nevada, Las Vegas, made a brief presentation to thank AGEM for its support of the Executive Development Program. Founded in 1990 by Dr. Bill Eadington of the University of Nevada, Reno, the annual 10-day event held at Lake Tahoe features an all-star team of industry presenters. Various AGEM members have attended the program and endorse its merits. AGEM is also a founding â&#x20AC;&#x153;pillarâ&#x20AC;? of the International Center for Gaming Regulation at UNLV, having pledged $250,000 over two years. Launched a few months ago, the center is running well under the guidance of Executive Director Andre Wilsenach. Former AGEM General Counsel Mark Lerner has been tabbed with a prestigious â&#x20AC;&#x153;fellowâ&#x20AC;? position at the new center. â&#x20AC;˘ The Nevada Gaming Policy Committee first met March 7 in Las Vegas and will meet again three more times this year before making recommendations for the Nevada legislature to consider when it goes back in session in 2017. AGEM compiled initial input from various suppliers, and after consideration, has revised some of the content. The revised â&#x20AC;&#x153;wish listâ&#x20AC;? of items will be presented directly to the Nevada Gaming Control Board. â&#x20AC;˘ AGEM worked closely with the organizers of the SEGOB conference, held May 17-18 in Mexico City. The event was expected to be well-attended, with regulators from 12 countries confirmed. Featured roundtable discussions with suppliers and operator trade groups covered topics such as Latin American standardization and certification.

April 2016

UPCOMING EVENTS â&#x20AC;˘ AGEM launched Memorial Awards honoring Jens Halle and Peter Mead after the passing of these two key industry figureheads last year. Created to honor their legacy, the call for nominations was recently announced. Nominees should have a minimum of 10 years working in the industry and possess the qualities that both men displayed. All nominations must be received by July 15, and the winners will be announced during G2E Las Vegas in September. Please visit www.AGEM.org for more information.

AGEMindex O

The AGEM Index posted a slight increase in April 2016 after gaining 27.35 points in March 2016. The composite index stood at 226.51 at the close of the month, which represents an increase of 2.16 points, or 1 percent, when compared to March 2016. The AGEM Index reported a year-over-year increase for the seventh consecutive month, rising 25.84 points, or 12.9 percent, when compared to April 2015. During the latest period, seven of the 14 global gaming equipment manufacturers reported month-to-month gains in stock price, with two up by more than 10 percent. Of the six manufacturers reporting declines in stock price during the month, two were down by more than 10 percent. The remaining manufacturer, Ainsworth Game Technology (AGI), reported no change in stock price month-to-month.

AGEM Agilysys Ainsworth Game Technology Aristocrat Technologies Astro Corp. Crane Co. Daktronics, Inc. Everi Holdings Inc. Galaxy Gaming Inc. Gaming Partners International

Exchange: Symbol (Currency)

Stock Price At Month End Percent Change Apr-16 Mar-16 Apr-15 Prior Period Prior Year

Nasdaq: AGYS (US$)

10.68

10.21

9.41

ASX: AGI (AU$)

2.33

2.80

4.60 -

Index Contribution

13.50

0.14

(16.79)

(0.06)

ASX: ALL (AU$)

10.00

10.30

8.32

(2.91)

20.19

(2.16)

Taiwan: 3064 (NT$)

36.50

54.70

26.95

(33.27)

35.44

(0.33)

NYSE: CR (US$)

55.57

53.86

61.11

3.17

(9.07)

1.23

Nasdaq: DAKT (US$)

8.70

7.90

10.73

10.13

(18.92)

0.46

NYSE: EVRI (US$)

1.68

2.29

7.40

(26.64)

(77.30)

(0.35)

OTCMKTS: GLXZ (US$)

0.25

0.22

0.28

13.18

(11.07)

0.02

Nasdaq: GPIC (US$)

8.90

9.85

11.08

(9.64)

(19.68)

(0.08)

NYSE: IGT (US$)

17.34

18.25

20.35

(4.99)

(14.79)

(2.05)

INTRALOT S.A.

1.02

1.13

1.63

(9.73)

(37.42)

(0.20)

Konami Corp.

TYO: 9766 (ÂĽ)

3,435

3,330

2,209

3.15

55.50

4.96

Nasdaq: SGMS (US$)

9.92

9.43

12.67

5.20

(21.70)

0.53

Nasdaq: TACT (US$)

8.71

8.14

5.12

7.00

70.12

0.06

International Game Technology PLC

Scientific Games Corporation Transact Technologies

Change in Index Value

2.16

AGEM Index Value: March 2016

224.35

AGEM Index Value: April 2016

226.51

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.

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AMERICAN GAMING ASSOCIATION

The ‘I’ Word Integrity of sports at risk in unregulated market

By Geoff Freeman, President & CEO, American Gaming Association

rotecting the integrity of games is vital to sports leagues, professional athletes and fans everywhere. This mission is growing even more urgent as sports betting explodes in popularity and as the United States nears 25 years with a federal law that has driven trillions of dollars in sports betting to the black market. Just how big is this black market? AGA estimates that Americans bet nearly $14 billion on the two biggest sporting events of 2016— Super Bowl 50 and March Madness. About 97 percent of those wagers were made illegally. To highlight this thriving illegal market and the dangers it poses, AGA joined experts from around the globe at a standing-room-only event on Capitol Hill in April, where U.K. sports betting regulators, tech experts, sports league representatives and law enforcement discussed the threat unregulated gambling poses to the integrity of professional and amateur sports. The event, “The World of Sports Betting and Safeguarding Sports Integrity,” educated key congressional staff, policymakers and media about the thriving, widespread illegal sports betting market and current and potential solutions. Joining AGA was Genius Sports, a U.K. technology company that monitors and identifies suspicious betting patterns. Companies like Genius Sports are harnessing the power of data analytics to track patterns in wagering. They provide leagues, law enforcement and betting companies with powerful insights about potentially illegal activity and ensure that the integrity of sporting events is protected. In the United Kingdom, the casino gaming industry, law enforcement and professional sports leagues collaborate in a legal, regulated environment to scrutinize betting on every game and match. Moreover, experts noted that regulation has effectively eliminated a black

Global Gaming Business JUNE 2016

sports betting marketplace in the U.K. Panelist Rick Parry, who is the chair of the U.K. Sports Integrity Commission and former CEO of Liverpool FC, made clear that regulation and integrity go hand in hand. “I think I would have underestimated the current size of the illegal U.S. market. It’s not a case of ‘it’s inevitable.’ It is. It’s here. So if it’s here, you’ve actually got to do something about it—you have an obligation to protect the integrity of sports.”

change. Recent research reveals that 65 percent of Super Bowl viewers say legal, regulated sports betting would not jeopardize the integrity of games and 80 percent believe it’s time to change sports betting law. Over the last several months, the AGA has demonstrated through research and partnerships with law enforcement that the illegal sports betting market is more than just a question of integrity—it harms communities and preys on individuals.

“

Nothing threatens the integrity of sports more than a thriving and opaque sports betting black market where the bettors and those taking the bets hide in the shadows.

”

Other panelists noted that “regulation and having access to more data on betting patterns allows leagues, regulators and sports books to identify possible red flags regarding possible match-fixing.” While sports leagues’ views in the United States are changing, more education is needed. Last month, NFL Commissioner Roger Goodell acknowledged that “all of us have evolved a little on gambling,” yet he suggested that existence of sports betting would jeopardize the integrity of games. However, nothing threatens the integrity of sports more than a thriving and opaque sports betting black market where the bettors and those taking the bets hide in the shadows. As we’ve learned from the U.K., using 21st century tools to monitor betting and identify suspicious betting patterns helps promote the integrity of games and protect the sports we all love. Further, football fans are clamoring for

Billions of dollars flow through illegal bookies, organized crime syndicates and a web of hundreds of offshore gambling sites. These funds underwrite everything from money laundering and drug dealing to human trafficking and extortion. Additionally, illegal gambling does not generate a penny for our communities—nothing for local schools, hospitals or parks, or responsible gaming programs. In stark contrast, legal gaming in the United States generates $38 billion in tax revenues and supports $1.7 million in jobs across the country. These taxes support critical public services—including education, health care and law enforcement. We believe that there is a more effective approach to sports betting law—one that will protect consumers, the integrity of the game and the communities in which we live. Follow Geoff Freeman on Twitter: @GeoffFreemanAGA.

More than a transaction. A connection. The real moment of truth on the casino floor is when a player gives you her money. Only she doesn’t actually hand it to you. She hands it to us. From the moment that currency touches our bill validator, we are responsible for providing an effortless, accurate transfer of cash into play. We accept your customer’s wager with reliable grace and efficiency, just the way you would personally. We are your representative on your casino floor. This philosophy has earned JCM its position as the industry leader, with more bill validators and printers in play than all other brands combined. And now we will show you how a simple buy-in can lead to a level of player engagement that goes beyond the transaction. We’ll help you make connections.

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FANTINI’S FINANCE

Boy Oh Boyd Why the recent moves by Boyd Gaming solidify its hold on the Las Vegas locals market

he guys at Boyd Gaming have been busy increasing their position in the Las Vegas locals market in buying Aliante casino for $380 million and the two Cannery casinos for $230 million. The first price raised some eyebrows, given that Aliante generated just $17 million in EBITDA this year. Boyd expects $30 million in its first full year of ownership and aims for $40 million in three to five years. Cannery is cheaper on an EBITDA return basis, as it’s expected to generate $32 million in its first full year. Several analysts raised the question of whether Boyd paid too much for Aliante. CEO Keith Smith called the purchase a compelling opportunity as he rattled off the tremendous current and expected growth of North Las Vegas, where Aliante and the larger of the two Cannery casinos are located. The purchase was a strategic move, he said. We tend to agree with Smith. As former banking entrepreneur Vernon Hill used to say, picking the best location is almost always worth the price. As a Sun Belt city, Las Vegas will grow for a long time to come, and buying up casinos outside the Las Vegas Strip entertainment district will give Boyd assets that it can grow commensurately. Further, the purchases strengthen the value of Boyd’s B Connected players club and provide economies of scale that will drive down costs at what are now independent operations. Combined with its properties in resurging Downtown Las Vegas, Boyd is developing cash cows at a fraction of the price of Strip mega-resorts in the nation’s third-fastest growing metropolitan area. Another question about the purchases is running up debt at a time when Boyd has promised to bring down debt. The company says its debt-toEBITDA ratio will return to current levels in nine months, so we’ll have the answer to that question soon enough. The fact is that Boyd’s entire portfolio is strategically located throughout the country. And, while the company doesn’t have the glamor and glitz of a Wynn or even MGM Resorts, it has a 16

Global Gaming Business JUNE 2016

By Frank Fantini

steadiness that should reassure investors concerned with both preservation of capital and growth of capital. This is a case where strategic vision should beat short-term financial metrics.

One of the truths about tourism is that whatever a man can build, another man can build also, and often bigger and better. We’ve seen this lesson played out over and again in the casino industry. BEAU BILOXI I recently made my annual visit to the Southern Gaming Summit in Biloxi to appear on the Wall Street panel. As before, most questions were on the future of Gulf Coast casinos and how they will fare against surrounding markets, both those now competing and those that might join the fray, such as Georgia. Obviously, new markets opening in the Southeast will affect the Mississippi Gulf Coast, but the region has some distinct advantages that should sustain it as a destination resort. Here’s why: First, the prerequisites for any successful resort are to be safe and clean. The Gulf Coast is certainly that. Longer term, one of the truths about tourism is that whatever a man can build, another man can build also, and often bigger and better. We’ve seen this lesson played out over and again in the casino industry. The first riverboat casinos made money hand over fist—until bigger competitors came along. Likewise, Atlantic City casinos were gold mines

until their East Coast monopoly was broken. The key to sustained success in tourism is to have attractive assets that others cannot duplicate. Like water. Like warm weather. Like unique history and distinctive culture. Like location. In other words, like the Mississippi Gulf Coast. Upon those bases, tourism developers can build the man-made assets: attractive, clean and safe properties, critical mass, diverse amenities. The point for investors is those with a long view should consider the what-ifs of whether competitors might move in. A prime example to illustrate this point is the Gulf Coast’s own Mississippi opposite—Tunica. Before gaming proliferated, Tunica was an extraordinary story. One of the two poorest counties in America had, almost overnight, become a success. But Tunica was only a success until casinos proliferated and gamblers could play closer to home. There was a reason Tunica had been one of the nation’s poorest counties. It had no advantages of its own. The closest thing to a natural strength was proximity to Memphis. So Tunica declined badly, and there’ s no reason to believe it will ever revive. Now, man-made advantages can become unassailable if they reach a certain critical mass—Las Vegas with casinos and convention facilities, Orlando with theme parks and convention facilities. New Orleans will forever be an eccentric party town. Even then, there is no guarantee of preeminence. Certainly, few would have thought some decades ago that Chicago, with its central location and superb transportation network, would be overtaken as a convention city by a desert oasis in the West or a town surrounded by orange groves in the Southeast. So the Mississippi Gulf Coast has its limitations, and will never rival Las Vegas. But as far as this eye can see, the region will remain a destination able to support a healthy casino industry. Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.gaminginvestments.com.

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n w o t n Dow

Funk

The onetime heart of Las Vegas has a whole new beat. Downtown is the flip of the Strip, with its urban grit and funky vibe. It’s become a must-see destination for tourists, and a gleam of hope for locals. Marjorie Preston By

ong before there was a Strip, there was Downtown Las Vegas. Like a mirage in the desert, it materialized at the end of the Gold Rush era, with the opening of the Union Pacific railroad station on Fremont Street. Downtown boasted the desert city’s first paved street (1905), its first electric street light (1908), and its first gambling saloon, powered by electricity from the new Hoover Dam. Glitter Gulch, they called it, for its hurly-burly collection of storefront slot parlors, bingo halls, neon-lit lounges and assorted watering holes. The city’s first casino, the Golden Gate, opened Downtown as the Hotel Nevada in 1906. It offered small-stakes cards and social games while gambling was illegal from 1909 to 1931, but reopened as the “Sal Sagev Casino” (“Las Vegas” backward) when casinos became legal again in 1931, switching to Golden Gate in 1955. And in 1956, the first high-rise resort, the Fremont, rose a dizzying 15 stories. The cost: a whopping $6.5 million. For decades, Downtown was the heart and soul of Sin City. But starting in the 1950s, a building boom banked by the mob through the Teamsters Pension Fund transformed adjoining Las Vegas Boulevard into the Strip. Over time, an estimated 80 percent of the gaming business migrated there, and Downtown lost its mojo. That’s all changing, thanks to a coalition of public and private investors, entrepreneurs, and of course, casinos, all pulling together to turn

Global Gaming Business JUNE 2016

yesterday’s news into the next big thing. This is one urban renewal that’s actually working. “Downtown and the Strip complement each other, but they’re incredibly different experiences, by design,” says Seth Schorr, CEO of Fifth Street Gaming. “If Downtown is about authenticity, the Strip is about fantasy.” If the Strip is Times Square, he continues, Downtown is New York’s famous (and famously trendy) Meatpacking District: gritty, urban, and uber-cool.

No Business like Shoe Business An early innovation was the Fremont Street Experience, which recognized the potential of Downtown Las Vegas way back in the 1990s. The outdoor pedestrian mall and entertainment destination hosts nightly concerts, dazzling sound and light shows, and zany attractions like Slotzilla, a 12-story slot-themed zip line that flies intrepid riders from a launch tower 120 feet up into the heart of the main drag. Today, an estimated 18 million to 20 million tourists each year visit the Fremont Street Experience—or roughly half the 40 million annual visitors to Las Vegas. Schorr points to 2011-12 as the real turning point, starting with the opening of the Mob Museum and the Smith Center for the Performing Arts, and culminating with one big game-changer: the arrival of Zappos CEO Tony Hsieh. The online retailer not only moved his apparel and shoe business into the for-

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“One of the things people have always loved about Downtown Las Vegas is that it’s a walkable city. You can visit a dozen hotels in the time it would take to walk through one significant resort on the Strip.” —Seth Schorr, CEO, Fifth Street Gaming

mer Las Vegas City Hall, he also said he would invest $350 million of his estimated $840 million personal fortune in the neighborhood. He’s made good on that pledge. According to a 2015 feature in Forbes, Hsieh’s Downtown Project now owns 100 properties, 58 acres of Downtown real estate, 215,000 square feet of retail space, 130,000 square feet of office space and thousands of apartments and hotel rooms. And the boom was on. Also in 2011, Greg and Derek Stevens bought the old Fitzgeralds casino and rebranded it as the D, promising a vibe with “a little bit more Lady Gaga, Katy Perry and Black Eyed Peas,” Derek Stevens said at the time. In 2013, Schorr’s Fifth Street Gaming reopened the former Lady Luck as the Downtown Grand, following a $100 million upgrade. “Within a two-year period, there were more changes Downtown than in literally 20 years, just one thing after another,” says Schorr. Importantly, he points out, casinos in the vicinity urged visitors to get out, get around, and see what the rest of the district had to offer. “Strip casinos for decades were built to be the perfect mousetrap, so you’d never have to leave,” Schorr says. “We designed a casino that integrates with the city. It’s a relatively mid-sized casino box, and in that box are six or seven different points where people can access the street, and come and go as they please. It seems like a simple idea, but it goes against the way casinos were designed for decades.”

When the Downtown Grand was under renovation, he says, “We saw it around the country, a lot of hypotheses that people wanted an urban experience,” with more interaction between resorts and their surrounding communities. “Fast-forward four years, and you’ve seen (Caesars Entertainment’s) Linq open, and (MGM’s) Park. It’s no longer a hypothesis.”

Downtown Turnaround “What’s going on is we’re starting to build critical mass Downtown,” says David Strow, vice president of communications at Boyd Gaming, which owns three resorts Downtown: the Fremont, the California and Main Street Station. “The market is coming into its own as a destination.” “The Fremont Street Experience started that process of private and public investment in the area,” Strow says, “but it’s this cumulative investment over the years that’s built up the momentum in the market here. It’s everyone working together to build this great experience—all the business owners, city government and casino owners investing in the area to build this great experience. Working together, we’re creating something very special in Downtown Las Vegas.” Not coincidentally, as business picked up, crime dropped. According to the Las Vegas Sun, in 2012 robberies decreased 17 percent, gun calls fell 35 percent, assaults were down 23 percent and fights fell 20 percent.

The Life is Beautiful Festival attracts more than 100,000 visitors to Downtown for three days in September

“The D is a casino in its infancy. We’re growing and we’re pretty excited about it.” —Derek Stevens, co-owner, the D, formerly Fitzgeralds, in Downtown Las Vegas

JUNE 2016 www.ggbmagazine.com

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“Here in Las Vegas in the eyes of Lady Luck everyone is equal. This is what Fremont Street is all about.” —Steve Wynn, who threw out the first pair of dice at the grand reopening of the Downtown Grand, once the Lady Luck

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The gaming side has also responded. In terms of revenue, “Downtown has led the state fairly consistently in the past few years in terms of the growth rate,” says Strow. Boyd, the largest of the multi-property operators Downtown, “has seen pretty substantial increases in both revenues and profitability for the last couple years,” he adds. “We just reported first-quarter results, and in Downtown Las Vegas we saw 3.5 percent revenue growth and a 19 percent increase in profitability. Those kinds of growth rates are pretty consistent with what we saw in 2015. We’re certainly seeing the benefits of this continuing increase of visitation to the area.”

Value Added Amid all the positive changes Downtown, one thing remains the same: its well-deserved reputation as a great place to gamble. “Gambling is a big part of it,” said Derek Stevens, co-owner of the D, in a December interview with Global Gaming Business. “It’s important for people to have an experience at blackjack where you clip 10 in a row or catch a heater at a dice game or hit exactly what you need at a slot you’re playing. “The odds Downtown are quite a bit better than most,” Stevens said. “I’m a big believer in 10 times odds on dice, I’m a big believer in 3-2 blackjack. I’m a big believer in giving everybody a pretty fair shake. “Obviously, the casino has a small house edge, but it’s gotta be small,” Stevens insisted. “Realistically, if somebody comes to Vegas every year for eight years and they lose every time, what are the odds of them coming back? It’s important for people to win. That is critical to the Las Vegas experience.” Schorr agrees. “Most properties have 3-2 blackjack instead of 6-5 and generally better odds on craps. Downtown has looser slot machines—that is just a fact. There’s no question casinos all have the same product, but you’re going to get a better gamble Downtown.” As for the much-hyped Downtown renaissance, that’s a gamble the community is making

The Mob Museum is a high-end gallery that focuses on the roots of Las Vegas and organized crime

together, said Stevens. From the Fremont Street Experience to the First Friday monthly art festivals to revamped gaming halls to restaurants, bars, retailers and other industry, “we are all partial owners,” said Stevens. “We work together to develop strategies … We have more of a collective and common goal than most other jurisdictions.” Stevens suggested that Downtown is above the kind of direct, dog-eat-dog competition that characterizes some other gaming enclaves. “One of the cool things down here is, you’re going to visit 3.5 casinos on every trip, and I think that is a great thing. If you’re feeling unlucky, just bop 80 feet across the street, and you don’t have to worry about your girlfriend walking a mile.” The gaming industry supports add-on events like Life Is Beautiful, an annual three-day music and arts festival that’s growing year by year, and brought a total of 103,000 people Downtown last September. “It’s great to see such a diversity of new startups and entrepreneurs, from the tech space to new bars and restaurants and things like that,” said Stevens. “This is a very, very different area than even five years ago, when it was a little bit rough going.” And it’s just the beginning, says Schorr. “I would say we’re 25 percent there. We’re going to see far more growth, and the next stage is to have more people moving Downtown, more residential development.” Or, as Fremont Street bar owner Ryan Doherty told Forbes last year: “Downtown is two years away from being good, and four years away from being great.”

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The New Normal Mike Halvorson, chief development officer, and Kent Young, president and founder, Spin Games

The role of content suppliers shifts to match the new reality of a multi-channel world By Frank Legato

Global Gaming Business JUNE 2016

hen this magazine and others revisit the business of the major slot manufacturers as the annual Global Gaming Expo approaches, many of the executives likely will use one of these two terms: “Omni-channel.” “Multi-channel.” They are two of the latest buzzwords of the casino industry. They mean that even those companies whose business has always centered around the flashy boxes that populate any given slot floor must be ready with game content that also plays on the internet and on mobile devices, for real-money gambling and on free-to-play social sites. No one expects the traditional slot machine to go away any time soon, but creating content designed for distribution to land-based, online and mobile channels is the new normal for content suppliers. And that new normal is not restricted to the traditional slot manufacturers. Today’s market has given a shot of adrenaline to pure content suppliers as well, from third-party game designers who work with the big slot-makers to content companies dealing strictly online through remote game servers, to everything in between. Just ask Kent Young. Young, the founder and president of Reno-based Spin Games, has seen the entire evolution of gaming content. He moved from Australia to join Aristocrat Technologies in Las Vegas during an era in which the multi-line video slot was still in its infancy in the U.S., having been imported only a few years earlier by Aristocrat itself. Shortly after joining Aristocrat as vice president of R&D in 2001, Young would enable the slot-

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“ maker to keep pace in what was an intense three-way competition with IGT and WMS for the multi-line video space in the U.S. The way Aristocrat would distinguish its video products was by incorporating different kinds of content—namely, multiple progressives and various animated bonuses—into its basic video slot games. By the time Young moved to the marketing side at Aristocrat, first as marketing VP and ultimately as global general manager of marketing, progressive products like Hyperlink were nearly as popular as Aristocrat mainstays like Buffalo. Young left Aristocrat in 2007 to form his own third-party content supplier, called True Blue Gaming, which supplied content to some of the traditional manufacturers. Following a subsequent two-year stint as general manager of Aruze Gaming America, Young founded Spin Games and quickly employed game developer Michael Halvorson in 2012. One of his goals was to expand beyond the brick-and-mortar gaming world, to deliver quality content to all the emerging online and mobile gaming channels. Spin Games represents a model for 21st century content suppliers in the gaming industry. While the company supplied content to traditional manufacturers including IGT and others in its early days, Spin would instantly expand its horizons online through the late 2013 introduction of its remote gaming server, called the ROC, for Robust Online Content. The ROC is an interactive HTML5 platform designed to quickly deliver content over a dedicated server to online channels. Spin launched it in the fledgling New Jersey online gaming market in 2014, forging partnerships with most of the new online casinos, which are licensed to the land-based operators. The company now has ROC servers feeding more than 50 games to some 90 percent of the state’s online casinos, as well as social sites throughout the world. The HTML technology also allowed Spin to easily produce games for PC, smartphones or tablets, since players can access the games on any device without having to download an app. This led to contracts to supply social casinos—including more than 20 games currently on the millennial-friendly InteractivePro lounge tables at the MGM Grand and Mirage casinos in Las Vegas. The ROC has flipped Spin Games’ business model to the point that the majority of the company’s content is now distributed online, according to Young. “As a traditional third-party manufacturer of content in the old days, we did it very differently, in that we just did game assets,” Young recalls. “We would develop math and sound and graphics and animation, and then we’d put them on a disk and send them to a manufacturer.” That’s because regulations in the traditional jurisdictions restricted the writing of software code to licensed manufacturers. “That’s changed now,” Young says. “Third parties can actually develop software to a certain degree. From a purely technical perspective, things have changed.” He adds that the new emphasis on interactive content for real-money and freeto-play social distribution—including much content developed exclusively for online distribution—puts Spin Games in a unique position among content suppliers. “We’re sort of an anomaly as a third-party supplier,” he says, “because we’ve really gone into the interactive space, whereas other third-party suppliers are still

Virtual Sports from Inspired

very land-based-centric. We’ve actually moved away from the land-based space, because of our technology. Our programs and developments are focused now on the interactive space.”

Volume and Speed The addition of the interactive channels has required production of a lot more content than in the past—pumped out much more quickly than when content suppliers dealt exclusively in the land-based space. “In social and in RMG interactive, the life cycle of the games is shorter, but there is a higher volume of product,” Young says, “so volume is definitely an area that changed considerably. But our ability to develop content a lot more quickly is significant. In the land-based space when I first started, it took more than a year to get a game done. Sometimes three. In the interactive space, you can get a game done in a couple of months. The time to market is much quicker.” Young adds that it is much easier now to do entirely new game categories. “In the land-based space, to do a new category of games—like keno, for example—was a monumental effort within the organization, because you would have to build a new software base; you’d basically have to create a new team… In the interactive space, it’s a lot quicker and a lot easier to develop a new engine, that caters to different categories of products.” Spin Games has developed a virtual assembly line of development engines—platforms with ready-made architecture for different product categories. Spin programmers can access a slot engine, a video poker engine, a bingo engine, a table-game engine—there are 12 in all, so far. There is even a Candy Crush-style engine for mobile games. The system permits development of a lot of games quickly, and in the social space, that speed is aided by the fact no regulatory approvals are required.

The New Paradigm The model of multi-channel game development is now being pursued by the major land-based suppliers as well as other third-party content companies. Like Spin Games, most of the top third-party suppliers have their roots firmly in the land-based industry. Also as with Young’s company, those landbased veterans have had to adapt to the new multi-channel world. Perhaps most prominent among those is High 5 Games, a longtime partner of several traditional slot suppliers responsible for major hits for IGT, Bally and other major manufacturers. Longtime IGT and Bally game development executive Jean Venneman joined High 5 Games in January as senior vice president of land-based business. Venneman is in a unique position to view the new game development paradigm—at IGT, she was on the team that developed the original Wheel of Fortune slot in the late 1990s, rising to senior VP of product development before moving to Bally Technologies in 2010. While Venneman conducts landbased business for High 5 Games, her role is now intertwined with production in the interactive area, where the New York-based content supplier was among the early entrants in the social space with the free-play High 5 Casino site. “A couple of years ago, we started to really ramp up our art and game development resources so we could create a lot more content than we may have otherwise,” Venneman says, “just to make sure our social site was really robust.” She says the company can place as many as 100 titles on the social site in a year. “The volume is definitely higher,” she says, “and because your play space is smaller, there’s still a real focus on what’s going on in the game, but less focus on the peripherals you have with land-based business.” Venneman says that while supplying content to the traditional manufacturers is still in the “core DNA” of High 5 Games, the social sector is now the company’s largest. Last month, the company launched a real-money version of JUNE 2016 www.ggbmagazine.com

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High 5 Casino in Europe. “Twenty years ago, the only real opportunity (for third-party suppliers) was to partner with land-based companies,” Venneman says. “Now, we have all sorts of angles, because the market has expanded so much.” The content and speed to market in the interactive space has allowed High 5 Games to test ideas on the social site that would never be possible in the land-based space. “For example, we had a seasonal game based on St. Nick that did huge numbers,” Venneman says. “That’s not something that would easily translate to land-based, but because we were able to capture that market in real time, we saw some real success.” Venneman says the variety of experiments in the social space allows her to sort out the content best suited for the land-based space. “We have some “Twenty years ago, overlap between games that are successful on our social site and games that the only real have been successful in land-based casinos.” For casino-style games, though, one guiding principle in the social opportunity (for space, she says, is to stick with the same program math used in successful third-party suppliers) casino slots. “That was one of our points of pride and differentiation when was to partner with the first social sites went live,” she says. “We were one of the only ones that used real casino math.” land-based companies. Now, we have all sorts of Young at Spin Games agrees on the importance of using casino-style angles, because the market has expanded so much.” program math in the interactive space. “The traditional land-based games are some of the best-performing games in the social space,” Young says. —Jean Venneman, senior vice president of land-based business, “So, we do all math as land-based math. Even if we don’t get a game apHigh 5 Games proved as a real-money game but still put it out on social, we still develop it within the parameters of a real-money product.” play an imaginary game, and players bet on the outcomes. Because the games One longtime third-party content developer who does not agree with this are virtual, it is not considered sports betting. principle is Benny Sum, an award-winning game developer in the 1980s who Spin Games signed a deal to become the first supplier to bring Inspired started content firm Global Gaming Group (G3) in 1994 and still does major deVirtual Sports to North America through its ROC server, integrating first into velopment work for traditional manufacturers. the Golden Nugget online gaming site in New Jersey. Like other suppliers, the explosion of interactive channels has required G3 to While some have called it “Madden 16 on your computer screen,” simusignificantly ramp up content output. “There is so much more content we have to lated NFL games are still in the future. The first offerings will include Rush do,” Sum says. “Back then, we had to make a suit custom-fitted for one person. Football—the popular simulation of European football (soccer)—along with Today, because the demographic is spread out so widely, it’s not just gauging the several racing games such as Rush Horse Racing and Rush Car Racing. person who would walk into a casino. We’re now gauging whoever may launch In many ways, Inspired Gaming, the world leader in server-based gaming the app on their phone. That’s why the demographic has expanded greatly.” technology, is a model of where the future of content supply lies. The company However, he says G3 approaches free-to-play social games as “almost a prostreams its products to land-based terminals in betting shops and casinos, but motional item.” He says because there are no cabinets to pay for, no land-based has an extensive European business supplying online, for-money games infrastructure costs, etc., he makes the hold percentages much lower, to generate streamed for PC and mobile use as well. more excitement from frequent jackpots. “In the casino, the players are rewarded “Just as we deploy a slot game on those VLTs in U.K. betting shops, we also with money,” he says. “On the social side, you can’t win money. Psychologically, can deploy the same game via our digital channels,” says Steve Rogers, chief comit’s a lot different.” mercial officer for digital games at Inspired Gaming. “So, an operator will have our games both on the video lottery terminals in their shops and New Offerings G3’s Freak Show exactly the same game, with the same or slightly different math, The gaming content business is still dominated by casino-style to deploy on their mobile platform so their players can play at slot games. However, as millennials continue to rise to promihome, on the bus or wherever else they like.” nence in the marketing plans of gaming operators, many content It is the model being adapted by an increasing number of providers are looking to new games. content suppliers, including the traditional slot manufacturers. “We’ve got a skill-based engine, and then we’ve got one “To me, it’s kind of odd,” comments G3’s Sum. “You used ‘Candy Crush’ engine,” says Young. “Probably 25 percent of what to have the land-based guys and the online guys, but now, the we develop would be within the skill-based, or what we call the land-based people are preparing all their games to go online. At ‘drop-down’ product category.” the same time, you can also see that some of the online people Spin Games is partnering with one of Europe’s veteran conare stepping into the heart of the land-based business.” tent suppliers, London-based Inspired Gaming, to bring another “It’s a new distribution model, a new commercial model,” new wagering activity to North America—Virtual Sports. says Young at Spin Games. “We’re not necessarily putting our Virtual Sports from Inspired, extremely popular in Britain’s content on a box anymore; we’re also putting our content on a betting shops and in real-money online gaming sites across Euphone, or on a laptop, or on an iPad. rope, uses high-definition graphics and animation to recreate pop“It’s a new world.” ular sports on a video screen or smartphone. Two simulated teams 24

Global Gaming Business JUNE 2016

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Slots

What Makes a Good Game? Great games use time-tested player rewards he answer to the question of what makes a good game depends on who is asked, and when. During my first casino job back in the ’70s, games were mechanical, and all those moving parts made for poor reliability. On busy nights, we needed one slot mechanic for every 50 games—at least 10 times more than required today. Our general manager, Norman Little, said, “Any game that can go for a full day without service is a good one.” Today, TITO tickets and digital electronics have eliminated coins and most moving parts. While all games today are good by Norm’s 1972 definition, plenty of bad games remain. In the early ’80s, we did a player survey about what they considered good. The response I remember most came from a thirty-something female player who, during a long session of gambling and comped beverages, screamed that her idea of a good game is “the one that pays enough that I can finally leave my pig of a husband!” More recently, I participated in a slot manufacturer’s planning session where the COO defined a good game as “one that earns well for 10 months and suddenly becomes unpopular.” Everyone laughed, because that definition is a manufacturer’s dream: a game that earns long enough that casino managers don’t lose faith in the manufacturer but quits earning soon enough that annual replacement is needed. Mathematicians tell us that a game’s “goodness” depends upon the ratio of small pays to large jackpots, and how they combine with midsized awards. Then there’s the puzzling 21st century belief that players don’t notice increased hold percentages, so good games are those that pay back 88 percent or less. Many slot managers judge a game by its fiscal performance relative to other games. They sum the revenue from all games on the floor and divide by the total number of games. Those that earn well above this house average are proclaimed good. Truth is, every game on every casino floor was considered good by someone or it wouldn’t have been built, bought or installed. Everyone agrees Wheel of Fortune is beyond good, but few remember its direct predecessor, Wheel of Gold, created in the mid-1990s by a marvelous marketer named Randy Adams. Randy’s idea was to put a roulette wheel on top of a standard slot machine. Each segment of the wheel held a different prize value. Randy’s genius was to merchandise the wheel spin as a winning event, thereby creating one of the first bonus events on a modern gaming machine. Players had to wager maximum coins and catch a special symbol on the last reel to spin the wheel. This provided two benefits. First, it drove larger wagers. Second, it created suspense: No matter what symbols the first reels didn’t land on, there remained the possibility of striking that special symbol on the last reel. Hope—which is a major part of any game’s success—endured until the last reel stopped.

Global Gaming Business JUNE 2016

By John Acres

Randy shopped his idea to every major game manufacturer. Each outlined reasons why the wheel wouldn’t work and refused to build it. I was at Acres Gaming, where we had already created a systems protocol—a communication language—that allowed us to integrate bonus awards with standard games. It wasn’t too hard for us to build Randy’s wheel as a bonus box that mounted atop a standard slot machine. Uncertain of success, Randy’s employer nervously ordered 50 units. Players instantly loved the game, and thousands of units were placed over the following year. Meanwhile, IGT’s Bob Bittman—another genius marketer—had licensed the Wheel of Fortune brand and used it on a slot machine concept that failed. Then Bob saw WOG and decided it was the ideal use of the game show’s name. IGT partnered with Randy’s company and the rest, as they say, is history. Perhaps the most important IGT enhancement to WOG was the chant “Wheel of Fortune” that plays each time a wheel spin is won. Of course, that chant reminds players of the game show, and many imagine themselves as lucky television contestants. More importantly, that chant also reminds surrounding players that wins are happening, causing them to play longer—and everyone who hears the chant watches to see what prize the wheel awards. That momentary audience makes the wheel winner feel a bit more special and a bit more important. Those feelings of specialness and importance are the real reason players pay to gamble. Today, games struggle to attract new audiences because consumer expectations are higher than ever, competition is greater than ever and gambling venues are more available than ever. Patchworks of brittle regulation prevent designers from trying out truly innovative ideas. These are real problems. A bigger problem, though, is that manufacturers are reluctant to risk failure with bold designs. That happened with Wheel of Gold, and it happens even more frequently today. That’s why smaller game manufacturers are so critical to our future, because it is at these entities—with little to lose and everything to gain—that new ideas emerge. Their challenge is to resist thinking of the gaming machine as a collection of parts that accepts wagers and prints tickets, and instead think of gaming machines as a launching pad for each player’s Hero’s Journey, where great battles are fought against long odds, where losses are simply obstacles to overcome on the path to victory, and where gamblers can feel proud of winning $100, even if $200 was spent to get it. John Acres is CEO of Acres 4.0, and a gaming consultant. He has over 40 years of experience in the casino industry, and invented the player tracking and bonusing systems used today by virtually every casino in the world.

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Talking Stick Golf Club in Scottsdale, Arizona, owned by the Salt River Pima-Maricopa Indian Community, features two uniquely different golf courses

Gaming tribes rushing to diversify economies By Dave Palermo

ongress enacted the Indian Gaming Regulatory Act (IGRA) of 1988 with the goal of providing largely impoverished American Indian tribes with the financial resources to strengthen their governments and build diversified economies. But the notion of creating a diversified business portfolio was not initially embraced by many Indian governments that, before gambling, lacked resources, access to capital and financial acumen to build tribal economies. Instead, tribes rewarded with statewide gambling exclusivity and little, if any, competition often didn’t bother to expand their business enterprises beyond hotels, travel plazas and other ventures linked to their already profitable gambling and tourism industries. “They had monopolies, and they took advantage of that business opportunity,” says Matt Sodl, co-founder, president and managing director of Innovation Capital LLC, an investment bank doing business with tribal and commercial gambling companies. That conservative business strategy is changing as IGRA nears its 30th anniversary and the $28.9 billion tribal gambling industry—after decades of double-digit growth—begins to level off. Some 243 indigenous governments operated 489 facilities in 28 states in 2014, according to Casino City’s Indian Gaming Industry Report by economist Alan Meister of Nathan Associates, statistics that have grown only slightly since before the recession of 2008. With casino markets saturating and profits leveling off, tribes are, finally, using their gambling resources and newfound financial savvy to explore new business ventures, both on and off the reservation—many that have little to do with casinos. “Now that the business of gaming has slowed, it’s time to be looking to do other things,” Sodl says.

Global Gaming Business JUNE 2016

Funding Economic Diversity Tribes diversifying their business portfolios are turning to investor and lender partnerships cultivated during the three decades they grew their casino and tourism industries. Recent revisions in federal tax codes and Department of Interior lease rules should help tribes lure businesses to the reservation, leveraging existing tax and regulatory advantages for entrepreneurs willing to negotiate the legal minefield involved with operating on tribal lands. And tribal lobbyists are asking Congress for parity with non-Indian governments on tax exemptions and the authority to issue tax-exempt bonds to finance infrastructure projects. The goal is for more tribes to emulate the Salt River Pima-Maricopa Indian Community near Scottsdale, Arizona, which recently broke ground on a $60 million auto mall, expanding an already vast, sustainable economy that includes a sprawling shopping center, a minor league baseball facility and the upscale Talking Stick Resort and Casino. “We’re going to see a lot more diversification over the next five years,” predicts Kristi Jackson, chairman of Tribal Financial Advisors, a firm recently expanded and rebranded as TFA Capital Partners to assist tribes seeking business ventures on and off their reservations. “There’s going to be more tribes buying real estate and other businesses, some related to gaming and hospitality,” Jackson says. “Tribes will also go far afield from what they’ve been doing, from gravel operations to construction management to other non-gaming businesses. “There’s definitely an evolution taking place. That’s precisely why we want to reform our company, to address this growing need.” TFA Capital Partners hired Bill Newby to serve as president of the restructured and expanded company with the goal of assisting tribes in off-

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TFA Capital Partners’ Bill Newby, president; Kristi Jackson, chairman; and David Howard, chief executive officer

reservation gambling and non-gambling ventures. “You haven’t seen a lot of that diversification, but you will see more of it in the next six months to a year. It’s going to surprise you,” says Newby, who like Jackson and TFA CEO David Howard is an alumnus of Bank of America’s gambling division.

Do What You Know Best Tribes will investigate commercial gambling opportunities, he says, capitalizing on their casino operating experience while entering off-reservation markets that could prove competitive. Those already making the leap include the Mohegan Tribe of Connecticut, owner of Mohegan Sun and Mohegan Sun Pocono, and operators of Resorts Atlantic City; Chickasaw Nation of Oklahoma, owner of racetracks in Oklahoma and Texas; and the Seminole Tribe of Florida, which in 2006 acquired Hard Rock International. The Poarch Band of Creek Indians of Alabama in April purchased a casino site on the Mississippi Gulf Coast with the prospects of entering a highly competitive casino market. Poarch Creek also is exploring slots at a North Florida greyhound track. “Many of these gaming tribes—and there’s quite a number of them— have been doing this for some time,” TFA’s Howard says. “They understand the gaming business and extensions of the gaming business such as hotels, hospitality and suppliers to those segments.” Transferring that experience to other ventures should not be difficult. “Tribes have learned to run large businesses,” Howard says. “They’ve learned to be business men and women. They are comfortable looking at other things.” There have been a slew of new hotels, water parks, outlet malls and travel plazas going up on or near reservation casinos. “We saw more of those in the past year than we’ve seen in the last five years,” Howard says. Tribes are also exploring wealth management opportunities as well as investing in and acquiring non-gaming businesses rather than launching new enterprises. “Tribes are being pretty creative,” Howard

says. “Sometimes it’s better to invest in other public companies than starting your own.” Fred Schubkegel of Varnum Law LLP of Grand Rapids, Michigan, noted that a recent meeting with the Pokagon Band of Potawatomi consisted entirely of managers of non-gambling enterprises, from construction and engineering to plastic molding operations. “Diversification was always the goal of IGRA, but, finally, it’s really taken off,” Schubkegel says. “Whether it’s the saturation of tribal gaming or whether it’s just the logical next step, there does appear to be acceleration in diversification out there. “Tribes are getting smarter. Some of them are seeing a fall-off in their gaming revenue, so they’re looking for the next best thing.” Sodl applauds the Mohegan tribe for a range of investments that include an Indiana wood chip pellet company and East Coast restaurant franchisees, including Arooga’s Grille House and Sports Bar. “I really like that idea,” he says.

Investment Partnerships Investment partnerships cultivated since the birth of state-compacted Indian casinos in 1988 are proving useful. Large banks and traditional lenders are now familiar with federal regulations and tax laws governing tribal business transactions. “Most of our corporate partners have been with tribes for a long time,” says Dante Desiderio, executive director of the Native American Finance Officers Association (NAFOA). “Tribes go back to the people who have been helping Indian Country. “It’s the seasoned banks and finance people that are getting the majority of the business. They know how tribes work. They know the risks. They know what it takes to get these projects done.” “There’s a somewhat developed market for casino financing that has taken 20 years to evolve, maybe longer,” Howard says. “There are regular lenders— banks and funds and high-yield investors—that understand the business. But it’s a relatively small group. “We’re going to see more opportunities and people—particularly some of the traditional gaming lenders—are going to say, ‘I’d better get on the train here, because this is where things are going,’” Howard says of emerging nongambling business opportunities. “They understand things. They should be able to do it.” “The lenders these days are pretty sophisticated,” Schubkegel says. “They understand the sovereign immunity issues, that there has to be a waiver. They understand with trust lands they can’t mortgage the property.” Some projects will involve new lenders. “Depending upon the risk-return profile of a non-gaming business, you’ll see different lending players emerge,” Sodl says. “I would be shocked if you see a big bank go after a small manufacturing facility on tribal land. The big players will gravitate toward bigger deals.” “There’s still some education to do with some of those in the lending community,” Howard says. “If a project is on Indian lands there are a number of things to consider. But because of the experience we have had with casino financing and other things, we know how to deal with it. “You can take a loan on Indian land and structure it to make it look just as commercial as any other commercial deal. It just has more twists because of the laws and the fact a tribe is a sovereign nation.”

“Now that the business of gaming has slowed, it’s time to be looking to do other things.” —Matt Sodl, President, Innovation Capital

JUNE 2016 www.ggbmagazine.com

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“It’s the seasoned banks and finance people that are getting the majority of the business. They know how tribes work. They know the risks. They know what it takes to get these projects done.” —Dante Desiderio, Executive Director, Native American Finance Officers Association

Revised Tax And Leasing Rules Could Lure Business “Tribal leaders see state and local intrusion as a risk to development,” Recent federal tax code revisions limit state and local taxes applicable to leased NAFOA’s Desiderio says of often-litigated disputes over the imposition of tribal lands. And the Hearth Act of 2012 gives Indian governments more constate and local sales and use taxes on tribal lands. “Why go all out and develop trol and flexibility in leasing reservation land for commercial development withand diversify when you’re going to have the states reaching into your pocket out Interior Department approval. and taking the margins away? The tax code and leasing revisions are intended to give tribes greater control “We’re trying to mitigate that risk in different ways. The first are the leasover economic development of trust lands while reducing tax and regulatory ening regulations in the Hearth Act. That was a huge step forward for permanent croachment from state and local governments. improvements on tribal, leased lands. There are still challenges, but those reguThe code revisions—which are subject to court review—potentially impact lations have been reviewed by the courts and affirmed.” businesses on leased tribal lands currently paying possessory interest and busiLegislation was recently introduced in the U.S. House that would give ness use taxes, privilege and utility taxes, excise taxes and gross revenue taxes to tribes parity with state and local governments in issuing tax-exempt bonds to state and local governments. finance needed infrastructure. They could prove crucial as tribal officials and potential investors run the numbers on a venture not expected to generate the margins of a gambling or Salt River Pima-Maricopa Setting casino-related business. An Example “If it’s a low-margin business opportunity, tax considerations certainly The 52,000-acre remote reservation designated in the late 1880s for the farmhelp,” Sodl says. “That will move the needle, perhaps a lot.” ing Pima and Maricopa Indians has, a century later, become surrounded by “Unless there is a huge margin, taxes are a big part of the equation,” says aturban sprawl, bordered by the Phoenix suburbs of Scottsdale, Mesa and torney Troy Van Dongen of Winston & Strawn LLP, who is representing the Tempe, Arizona. Agua Caliente Band of Cahuilla Indians of Palm Springs, California, in possesDescendants live under a sophisticated government with tax and building sory tax litigation with Riverside County. codes, commercial leases and a land-use plan restricting business development “Counties don’t want to give up those taxes. It’s big money for them. But once there is some clarity in the law, tribes will be looking to non-Indian investing and building on tribal This General Plan Map is a part of the General Plan which was adopted by the Salt River Pimalands. It’s a big economic incentive.” Maricopa Indian Community in 2006. This map is used to guide decisions about what land uses and “It’s a huge incentive,” agrees indigenous tax law zoning should be permitted in the various areas of the community, based on the community’s goals expert Kathleen Nilles of Holland & Knight LLC in and policies. Washington, D.C., “clarifying that when tribes lease their trust lands—say, for an office park—that income is not only tax-free to the tribes but it can be distributed, tax-free, to tribal members. But state and local tax laws applicable to businesses on tribal lands vary from one state to another. Some businesses on Indian trust lands or ‘fee’ lands within reservation borders may be subject to dual taxation. “I’m certainly consulting with a lot of gaming tribes on non-gaming issues lately,” Nilles says. “Whether that’s part of a trend or people are more familiar with me, I just don’t know.” Other state and local tax benefits and regulatory relief—including government contracting advantages of a tribally owned 8(a) business—provide additional incentive for those seeking to do business on Indian trust lands. Meanwhile, the Hearth Act authorizes tribes to lease lands for business and other purposes for up to 75 years without review and approval by Interior, eliminating significant delays in efforts to lure business. 30

Global Gaming Business JUNE 2016

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In addition to its Talking Stick Casino Resort, the Salt River Pima-Maricopa Indian Community of Scottsdale, Arizona, has developed a minor league baseball park and several hotels

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to a nine-mile stretch of a 101 Freeway loop which, in the early 2000s, sliced through the east border of the reservation. “The community has always had visionary, forward-thinking leaders,” economic development manager Quannah Dallas says of the land-use plan drawn up in 1988. “The decision was made to put most development on the boundaries of the community.” About 30,000 acres of reservation land is held in communal trust by the tribe, providing for housing, agricultural land and some 19,000 acres of preserves. But the strip of commercial lease land adjacent to 101 largely runs through the 20,000 acres of federally allotted lands held by individual Pima and Maricopa families. The businesses pay sales taxes to the tribal government to fund services for Salt River citizens. “Assuring that community members were taken care of has always been at the forefront,” Dallas says. As is the case with most tribal governments, Salt River does not disclose financial information. The sales tax revenues, however, must be sizable. Salt River’s 59 commercial leases cover 2,400 acres and include the Talking Stick casino resort, Pavilions shopping center, golf courses, a minor league baseball field for Arizona Diamondbacks and Colorado Rockies spring training, a butterfly conservatory, a Marriott Courtyard motel, office and industrial parks and the OdySea Aquarium, currently under construction. The tribe last month broke ground on the Scottsdale AutoShow at Salt River, a $60 million, 70-acre auto mall, the first ever on Indian lands. Dealerships will pay sales tax to both the state and the Indian community. “We’ve been doing large-scale commercial leasing for several decades,” Dallas says. “Salt River has always been a model for other tribes in the nation.” Business growth on the reservation appears to be increasing. The tribe’s location adjacent to a freeway in a growing metropolitan area makes it a prime spot for commercial development. “We have not really offered financial incentives to lure developers here,” Dallas says. “We have our great location and our streamlined regulatory processes that really attract developers. “If anything, we’ve seen an increase in inquiries this year from people with ideas and proposals for leasing in the community,” she says.

Global Gaming Business JUNE 2016

Pool at the Marriott Courtyard Scottsdale Salt River

Risk-Taking Is Not Often Advisable Payday lending and cannabis farming have been looked at by a number of tribes seeking economic growth but lacking more traditional business options. “These are high-risk businesses that require a lot of study and thought and analysis before venturing into a deal,” Sodl says. “Payday lending is frowned upon by the federal government. “I’m not going to say those are businesses that shouldn’t be pursued. Tribes have got to be thoughtful about it.” Viewing business diversification from the perspective of a tribal government differs from a purely commercial vantage point. Tribes will seek options they view as culturally or environmentally appropriate. “If there’s any kind of a theme, the tribes I work with put a high value on sustainability,” Schubkegel says. “You’re not seeing tribes team up with investors to buy, chainsaw costs and flip a company. That’s not been the tribal mindset. “Tribes are looking at opportunities sustainable with respect to the environment. They’re looking at businesses from an ethical perspective, with the goal of more than just making money. Often they want to make sure there are employment opportunities made available to tribal citizens.” “I think in general, tribes are doing the right thing,” Sodl says. “They are being prudent and exercising a fiduciary responsibility toward their tribal members.”

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TABLE GAMES

Straight From the Globe Casino

‘A fool thinks himself to be wise, but a wise man knows himself to be a fool.’

illiam Shakespeare, aka England’s National Poet, aka the Swan of Avon, aka Captain Kirk of the Starship Enterprise (wait, that was William Shatner), celebrated his birthday in April. Well, okay, everyone else celebrated it. He was busy, as it turns out, being dead from typhoid fever since 1616. Like Aristotle and DaVinci before him, and Mozart and Einstein after him, there will never be another one like him. Writers who write about other writers’ writing rightly dub W. Shakespeare an epochal genius, the most brilliant, most prolific, most influential purveyor of the English language in the history of the English language. Or the future of the English language, for that matter. What’s to be left of it anyway, once the Emoji Generation finishes abbreviating and acronym-ing everything down so that even the most intricate thought can fit into an iMessage window or onto a personalized license plate? 2BRNOT2B... TMRW X3... ET2BRUTE Even today, long after his brief candle burned out, out, it’s as if Shakespeare is still with us. (Him and Tupac.) He remains the most quoted author of all time; his works—and allusions to such—have pervaded every inch of popular culture, from the Harry Potter movies to the video game Halo to the television show The Simpsons. Othell-doh? So, what about table games? Any beauts from the Bard that apply to our world? Let’s venture unto the breach and find out. “Love all. Trust a few. Do wrong to none.” —All’s Well That Ends Well Despite their omniscient, Big Brother image, surveillance operators are some of the nicest folks you’ll ever meet. Maybe being cooped up alone in a cold, dark room, staring at a wall of monitors all day, makes you appreciate those

Global Gaming Business JUNE 2016

By Roger Snow

rare and fleeting occasions of human interaction. And talk about fun at a cocktail party. Boy, oh boy, the stories they tell. (Well, the ones they’re allowed to, anyway.) Just don’t cross them. Surveillance exists, after all, to catch cheaters and foil scammers. The eye in the sky may not see everything, but it sees enough. And the eyes of the eye are trained to detect all sorts of shenanigans—even stuff that hasn’t gone down yet—so be on your best behavior. “Nothing will come of nothing.” —King Lear When in doubt, don’t. That adage served the table games industry well many years ago, when the riskiest decision ever deliberated was switching the layouts from felt to synthetic. As long as the doors were open, the racks were full, the cards were shuffled and the dealers were upright, casinos couldn’t help but make more money than they could count. That was then. This is now: Table games are squarely in the innovation business, whether they like it or not. And most, it would seem, like it quite a bit. Content, progressive jackpots, utility devices, technology, big data, small data, etc. It’s all about the new, new thing. This makes a lot of sense. Doing nothing, as the philosophers say, is doing something, and that something is being left behind. “Men of few words are the best men.” —Henry V Two ways. Just as there are only two ways to like your peanut butter (smooth or chunky), your martinis (shaken or stirred), or your desertisland women (Ginger or Mary Ann), there are only two ways to like your casino dealer. Chatty or quiet. Put me down for the latter category across the board. It’s not that dealers should be seen and not heard. That’s children. Rather, it’s about reciprocating the vibe coming from the players at the table. If everyone’s chill, you chill. If everyone’s

talkative, you talk. And if everyone’s throwing around racial slurs, you represent like you’re straight outta Straight Outta Compton. Actually, no. You don’t. Otherwise, you might find yourself pink-slipped from one of the most prominent casinos on the Las Vegas Strip. True story. Happened a few months ago. “Better three hours too soon than a minute too late.” —The Merry Wives of Windsor Casinos may have no clocks, but that doesn’t mean they’re lax when it comes to time. Quite the contrary. Ask anyone who’s dealt, sat box, stood floor, pit-clerked, or held any other frontline position, and they will confirm that punctuality is paramount and tardiness is not tolerated. If you want to test this theory, try blocking the walkway to the pit when dealers are coming back from break. You’d be safer taking your chances at the running of the bulls in Pamplona. “It is a tale told by an idiot, full of sound and fury, signifying nothing.” —Macbeth Poker bad-beat stories are to anecdotes what sarcasm is to wit: the lowest form possible. Yes, you were right to limp in under the gun. No, he shouldn’t have re-raised your check-raise when the flop came suited. Yes, you had to semi-bluff on the turn. No, it’s not fair the river card that gave you the nut flush gave him a baby full house. Sound familiar? It should, because bad-beat stories are like knock-knock jokes: If you’ve heard one, you’ve heard them all. Oh, and by the way: Yes, we’d rather be rubbing cat food in our hair than listening to you ramble on. And no, you’re actually not that good of a player anyway. 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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GAMING HISTORY

Reaching foR the Sky

The 20th anniversary of the Stratosphere reminds us of how special Bob Stupak really was By Patrick Roberts

ven with the new T-Mobile Arena, the Linq High Roller wheel and the lights of the Strip, there is one focal point that visitors see when they’re descending into Las Vegas’ McCarran International Airport. The 1,147-foot Stratosphere tower lords over the Strip from its northernmost boundary. And this month, the 20th anniversary of the opening of the Stratosphere, we’re reminded of the man whose brainchild it was, Bob Stupak. Las Vegas has welcomed many unique individuals over the years who have helped to engineer its growth, from Bugsy Siegel to Howard Hughes to Steve Wynn. But none of them was quite like Bob Stupak. Stupak grew up in Pittsburgh, the son of a man who ran a craps game at the city’s Lotus Club for 50 years. He arrived in Vegas in 1971—after a side trip to Australia for several years—and bought the Vault casino, changing the name to Glitter Gulch (ironically, recently sold to the next generation of Vegas entrepreneur, Derek Stevens, owner of several Downtown casinos, including the D). Later, he bought a small plot of land on the Las Vegas Strip just north of Sahara and opened up a gambling museum/casino in ’74. After a fire and a million-dollar loan from Vegas’ favorite banker, Parry Thomas, Stupak debuted Vegas World in 1979. The casino struggled at first, but Stupak developed innovative promotions and table game rules. He was the master of direct-mail marketing, creating a “Vegas Vacation” promotion and the city’s first million-dollar jackpots. Vegas World eventually was pulling in more than $100 million a year. But Stupak was never one to sit on his laurels. In 1990, he had an idea to build a 1,800-foot sign advertising the casino down below, the world’s largest free-standing sign. He later reworked the idea to include an observation deck and a restaurant at the top, creating the “Stupak Tower.” Some of the world’s most popular thrill rides were later added to the tower. Construction began slowly, and Stupak had trouble getting financing, until he brought in his friend and fellow poker player Lyle Berman, the chairman of Grand Casinos, then a major gaming company in tribal gaming in Mississippi. The $550 million that Grand brought to the table revitalized the project. But a serious motorcycle accident almost killed Stupak, who was in a coma for months. However, a miracle drug provided by his son, Nevada Stupak, saved his life. The Stratosphere tower opened in 1996, but it was a financial disaster. Stupak was forced out as chairman within a year, and further developments, including a Titanic-themed casino, failed to come to fruition. Stupak wasn’t just known in Las Vegas as a developer, however. He ran for mayor in 1987, and like current presidential candidate Donald Trump, he bested more than a dozen competitors to gain the nomination. He narrowly lost the election—some charge he was a victim of voter 38

Global Gaming Business JUNE 2016

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fraud, with much evidence to support that charge. He later started a short-lived muckraking newspaper, the Las Vegas Bullet (this time reminiscent of Sheldon Adelson, who recently purchased the Las Vegas Review-Journal). As late as 2006, Stupak ran unsuccessfully for lieutenant governor of Nevada. When he died in 2009, he was warmly remembered by competitors and colleagues alike. “Bob was an impresario, a ringmaster in the mold of the promoters who made Las Vegas the great town that it is,” then-Las Vegas Mayor Oscar Goodman told the Review-Journal. “His ingenuity got him into trouble sometimes, but that happens to folks who try to grab the brass ring. “I’ll miss his impishness.”

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Online Gambling Bill Considered in Michigan

ichigan is now among the states considering legalizing online gambling under a new bill introduced by a group of state senators, although one that has been in the works for quite some time. The bill, dubbed the Lawful Internet Gaming Act, was introduced by Senator Mike Kowall. He was joined by four other senators in introducing the bill. Michigan State The bill allows for the legalization and regulation of Senator Mike Kowall online casino games and poker, and seeks to “protect residents of this state who wager on games of chance and skill through the internet and to capture revenues and create jobs generated from internet gaming.” The state Senate Committee on Regulatory Reform heard testimony in early May. The bill restricts online gambling operating licenses to tribal casinos and Michigan commercial casinos already in possession of a license. It allows for a maximum of eight licenses. The up-front cost to obtain a license will be $5 million. The nine-person committee, chaired by state Senator Tory Rocca, heard testimony from four different people in support of the bills, including Poker Players Alliance President John Pappas and three representatives from PokerStars/Amaya Gaming. Pappas said online gambling expansion bills are primarily consumer protection bills. He noted that Michigan residents are already gambling online on unregulated, offshore sites. The three representatives from PokerStars/ Amaya detailed how PokerStars manages responsible gambling, identifying problem gambling and potential fraud and other compliance issues, the report said. Under the bill, players would have to be 21 years old. Michigan-based commercial and tribal casinos could apply for online gaming licenses. Under the bill, tribes would have to waive sovereign immunity and pay the relevant taxes and fees in order to qualify. In addition to the licensing fee, the state would levy a 10 percent tax on revenue. Licenses would be for five years. A $100,000, non-refundable ap40

Global Gaming Business JUNE 2016

plication fee would also be imposed. The bill does not require gamblers to be physically located in the state, and allows for interstate and international compacts to be signed, thus allowing gambling customers from other jurisdictions to play in Michigan-based online casinos and poker rooms.

New Jersey Clarifies ‘Grey-Market’ iGaming Policy

Further, the division acknowledged that determining what constitutes legal online gambling in another country can be “fraught with the likelihood of error or misinterpretation,” citing the ongoing gambling turf wars between the European Union and some of its member states. But the DGE insists it “will not adopt a standard that could erroneously substitute its own judgment for that of another sovereign jurisdiction’s executive, legislative or judicial authority,” according to CalvinAyre.com.

Spin Games to Deploy Inspired Virtuals

ondon-based Inspired Gaming has signed a deal with Reno-based Spin Games to deploy the first Inspired Virtual Sports in North America.

ew Jersey will only block online gaming companies that operate in “grey markets” from receiving a state online gambling license if another jurisdiction has taken action against the site. However, companies that operate in “black markets”—where online gaming has been declared illegal—will be shut out in New Jersey. The clarification came in a position paper released by the New Jersey Division of Gaming Enforcement. David Rebuck, director of the DGE, published an advisory bulletin on the “impact of operations in New Jersey Division of grey markets on suitGaming Enforcement Director Dave Rebuck ability re. licensure.” According to an analysis by CalvinAyre.com, the advisory defines “grey” markets as “jurisdictions where the legality of internet gaming operations is an open question,” while “black” markets are those where governments have “taken affirmative, concrete actions to actively enforce laws that prohibit online gaming, or have issued unequivocal official pronouncements that online gaming is not legal.” Operators who do business in black markets “will not be able to establish the ‘good character, honesty and integrity’ required for licensure in New Jersey.” For operators in grey markets, the advisory said that if no jurisdiction has taken affirmative, concrete actions against online operators, they should be able to meet the state’s licensing requirements.

Inspired’s Virtual Sports content will be deployed using Spin’s HTML5 remote game server, The ROC (for Robust Online Client), which provides gaming content for digital gaming channels. The program will include the full suite of Virtual Sports, including Rush Horse Racing and Rush Football. “Inspired is delighted to be working with Spin Games LLC to bring its market-leading Virtual Sports to the North American market,” said Steve Rogers, chief commercial officer of digital games for Inspired. “We have seen a rapid growth in demand for Virtual Sports in the U.K. and Europe in recent years, and I am confident that their popularity will be equaled in the U.S. The combination of our best-in-class technology and Spin Games’ distribution channel is a fantastic proposition for operators, and we anticipate a long and successful working partnership.” Kent Young, president and CEO of Spin Games, commented, “Currently, virtual sports in the U.K. and Europe is a significantly expanding business which has been very well-accepted by operators and players alike. The virtual sports market in North America is yet to be exploited, and Spin believes the partnership is a further step in our strategy and positioning as market leader in RGS technology and content. Utilizing Inspired’s bestof-breed technology will allow for comprehensive deployment across North America.”

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1 9 0 0 AT T O R N E Y S | 3 8 L O C AT I O N S W O R L D W I D E˚

California Tribe Enters eSports Market

he Twenty-Nine Palms Band of Mission Indians last month announced that it has entered into a strategic partnership with the Canadian League of Gamers’ “Northern Arena,” the largest professional eSports league in Canada. The partnership will result in the creation of “Southern Arena,” and build upon the success of Northern Arena to create a North American professional eSports league. Northern Arena’s events in 2016 are expected to attract an astounding 4 million eSports fans through streaming video, and 10,000 fans on-site. Southern Arena’s two events in the fall and next spring are expected to attract 5,000 fans on-site and over half a million viewers online. Darrell Mike, tribal chairman for the TwentyNine Palms Band of Mission Indians, says, “Building Southern Arena as a world-class professional eSports league is the first of its kind for the 486 Indian gaming operations in the U.S. Being on the cutting edge of the eSports movement will benefit not only the tribe and its members, but more importantly build on the Coachella Valley brand as the capital of entertainment and hospitality in the United States.” Greg Spievak, co-founder of the Canadian League of Gamers, says it will vastly expand the reach of his league. “eSports is exploding with interest and becoming one of the fastest-growing sports in the world,” says Spievak. “The eSports market in 2016 is estimated to generate $1.3 billion in gross revenues, which is close to the $1.5 billion the NFL generates. According to Fortune magazine (October 2015), eSports revenue will surpass $1.9 billion in 2018.” The visionary behind Northern and Southern Arena and co-founder of the Canadian League of Gamers, Carl-Edwin Michel said he is “enthusiastic to oversee Southern Arena events and absolutely thrilled about the partnership between the Canadian League of Gamers and the Twenty-Nine Palms Band of Mission Indians.”

Global Reach The Global Gaming Practice at Greenberg Traurig is not limited to North America With hands on experience in Asia, Latin America and Europe, our 40 attorneys know there is more to understanding gaming law than just operating a casino. Our attorneys have diverse backgrounds in all aspects of gaming company operations. We have experience in working with foreign governments and with regulators worldwide. The Greenberg Traurig Global Gaming Practice can address casino operations, lotteries, pari-mutuel wagering, charitable gaming, tribal gaming, and Internet gaming. Our backgrounds include representing casino owners, operators and executives, gaming manufacturers and suppliers, private equity firms and investment banks on gaming related matters.

Global Gaming Practice Acquisitions | Financing | IP | Labor | Litigation | Operations | Real Estate | Regulatory Learn more at gtlaw.com/gaming GREENBERG TR AURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM The hiring of a lawyer is an important decision and should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and our experience. Prior results do not guarantee a similar outcome. Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2016 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. Contact: Martha A. Sabol in Chicago at 312.456.8400. °These numbers are subject to fluctuation. 27452

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The Proof Is In The Brand Finding the right recipe for online gaming success By Steve Ruddock

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ou’re unlikely to find customers in any industry as discerning as online poker players. Following a multiyear absence, U.S. players were clamoring for the return of online poker. New Jersey residents got their wish in November 2013 when several online poker sites went live. But true to form, these sites were critiqued to no end. Having access to online poker sites wasn’t enough to satiate these players. They wanted access to the best sites, and at the time, that meant PokerStars. Many of these players believed PokerStars was going to fix every problem overnight, and the general feeling was they would dominate the market in short order. After all, PokerStars has long been considered the best of the best by any measurable metric. For New Jersey poker players, it would be more than two years before this theory was put to the test. The eventual arrival of PokerStars, in March 2016, did in fact transform the Garden State’s online poker market overnight. Within days of launch, the total market jumped 20 percent, and PokerStars had already eclipsed the two existing operators—the tandems of 888/WSOP.com and PartyPoker/Borgata. PokerStars seemed destined to dominate the New Jersey market in much the same way the company dominates virtually all of the international markets in which it competes.

Immortality Put to the Test But a funny thing happened on the way to market domination in New Jersey. After the fast start, PokerStars cash game traffic has stagnated. PokerStars is now in a veritable tie with the 888 and WSOP.com network, something no 42

Global Gaming Business JUNE 2016

one publicly predicted. This is surprising, as PokerStars accounts for about two-thirds of the international online poker market (possessing nearly seven times the average cash game traffic of their nearest competitor, which happens to be 888) and leads in every established, regulated, ring-fenced market not named France. In Italy, PokerStars controls about 70 percent of the market. In Spain, PokerStars controls about 66 percent of the market. But as intimated above, France is an outlier. In France, PokerStars’ market share is a much smaller, but still significant, 30 percent. The factors that propelled PokerStars to near-monopoly market shares in other markets, sans France, simply haven’t had the same impact in New Jersey. The best software, the best customer support, the best VIP program, the biggest promotions and tournaments, and the best known sponsored pros haven’t paid the expected, albeit lofty, dividends in New Jersey. It would be easy to point to the divisive changes the company has rolled out over the past six months—ranging from VIP cuts to rake hikes—as the reason PokerStars hasn’t dominated the New Jersey market. The changes Amaya has implemented have certainly caused its once-pristine reputation among the poker community to take a hit, and have resulted in player-led boycotts and even protests at live events. But, this doesn’t explain the situation in France, where PokerStars has ranked behind France-based Winamax

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“

“When dealing with technology, a company cannot simply look at ROI on development. Where we are at today, customers do not deal with issues well; they just move on to something else. A seamless transition through registration, deposit and play is vital.” —Mike O’Malley, COO, Pala Interactive

since 2014—well before the recent PR issues. The question is, why has PokerStars proven mortal in France and New Jersey, while racking up flawless victories in other markets? It’s most likely a combination of things, but high up on the list is the existence of established brands.

Brick-and-Mortar Brands In both New Jersey and France, PokerStars was confronted by competitors with pre-existing local, established brands. In New Jersey, the established brands predate online gaming. By law it’s the state’s longstanding brick-and-mortar casinos that are the licensed operators in the Garden State. If their nationally known brands (Caesars, Borgata, Tropicana and Golden Nugget) weren’t enough of an advantage, their online products also had a two-year head start due to PokerStars’ lengthy licensing process. But even if PokerStars had been part of the synchronized launch in November 2013, it’s not clear to what degree it would have helped. Without exception, when a New Jersey casino has launched an eponymously branded online gaming site alongside an identical site featuring the platform provider’s brand, the brick-and-mortar brand wins hands down. PokerStars brand is a known commodity within the online poker community, but among the general public in New Jersey, it can’t hold a stick to Borgata or Caesars—especially if we factor in that prior to its March 16 launch in New Jersey, the company hadn’t dealt a hand of online poker in the U.S. since April 15, 2011. As Chris Capra, 888’s U.S. marketing manager, explains, this physical presence is important, as it allows players to put a face to the name. “You can walk into Caesars in Atlantic City and make withdrawals and deposits to your online account,” Capra says. “Essentially, people can link the online site with a physical company they know and trust.”

sultant Matt Kaufman says. “I think Spain and Italy simply didn’t have a solid competitor, but France and New Jersey have reasonably well-run local sites.” Kaufman also notes that ring-fenced markets create different challenges that money alone cannot fix. “Globally, PokerStars has an inherent marketing edge due to their liquidity and cash flow,” he says. “They have more money to spend, and they get to accurately advertise that they host the biggest tournaments in the world. “In ring-fenced jurisdictions, they lose some of that edge. It goes to show that PokerStars’ software isn’t the only reason they do well globally, and the sites in France and New Jersey deserve credit for what they’ve done to keep up.” As Kaufman notes, software may be important, but based on the results in New Jersey and France, it’s apparently not the only determinant of success.

Start With a Good Product

France: Similar But Different

According to Mike O’Malley, the COO of Pala Interactive, the key to creating a successful online gaming site begins with your product. When it comes to product, he believes it’s a combination of “investment in the product, and commitment to maintaining it” that will bear results. “When dealing with technology, a company cannot simply look at ROI on development,” O’Malley says. “Where we are at today, customers do not deal with issues well; they just move on to something else. A seamless transition through registration, deposit and play is vital.” Capra echoes O’Malley’s sentiment: “You have to provide customers with the features they’ve come to expect.” Kaufman, who helped build an online poker platform, HDPoker, from the ground up, also lists product as paramount to success, but in a somewhat more abstract way. “I think the most important thing is properly assessing the marketplace,” Kaufman indicates. “Too many companies build me-too products based on the success of others, and fail because of a lack of planning. “Many business types neglect having an interesting vision (of their product) in favor of filling voids in the market.”

France is a bit different. Established, French-based online gaming sites like Winamax and Everest Poker have kept PokerStars at bay. In Spain and Italy, local online gaming sites sprang into being when the market went from global-gray to ring-fenced-white. In France there were existing online gaming sites that had dedicated the bulk of their marketing efforts over the years to attracting French-facing players. “I think a big reason for their (PokerStars) relative lack of success in France and New Jersey is related to competent competitors,” gaming con-

A prime example of this is the now-defunct Ultimate Poker. In a shortsighted attempt to be first to market, the company rushed to launch its product in Nevada. The decision had its benefits, as Ultimate enjoyed a monopoly for several months, but it would ultimately (pun intended) prove to be their downfall when a competent competitor emerged, Caesars’ WSOP.com online poker site powered by 888.

The Ultimate Case Study

JUNE 2016 www.ggbmagazine.com

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PokerStars brand is a known commodity within the online poker community, but among the general public in New Jersey, it can’t hold a stick to Borgata or Caesars— especially if we factor in that prior to its March 16 launch in New Jersey, the company hadn’t dealt a hand of online poker in the U.S. since April 15, 2011.

Ultimate was quickly overtaken in the Nevada market by the more robust WSOP.com, but its lengthy first-mover advantage, coupled with a lack of viable alternative options to WSOP.com, allowed Ultimate to maintain a fair amount of market share, while it floundered in New Jersey. According to O’Malley, Ultimate made three critical mistakes. First on the list: “Ultimate failed because they invested too much, too quick. Their vision was bigger than New Jersey, and when New Jersey didn’t pan out as they had hoped, they were in too deep.” Second: “Their product was terrible. They bought a decaying platform that couldn’t be maintained quickly and effectively.” Third: “They didn’t have a known, local brand, which in hindsight was most important when competing with the local casinos.” O’Malley notes that Pala, which also lacks a known, local brand, faces similar hurdles. California-based Pala Interactive launched an independent, self-branded online casino (piggybacking on Borgata’s online gambling license) in November 2014, and launched an online bingo site earlier this year. Because it lacks a brand that resonates with the local population, Pala has learned to do things a bit differently than some of its higher-profile and better-positioned competitors. “We have no database, and no brand,” O’Malley says. “So competing is tough. We have also learned that players are willing to try brands out besides those they are familiar with. We are putting our toes in the water in all of the different products, so it’s a balancing act for us.” But as O’Malley notes. unlike Ultimate, “we didn’t over-invest, and are positioned to ride it out.” Even though he isn’t speaking to Ultimate specifically, Kaufman agrees with O’Malley that funding and creating accurate projections is crucial. “Unforeseen costs, especially related to entering new markets, can be enormous and potentially catastrophic for smaller companies,” Kaufman says. “Failure to recognize how steep regulatory hurdles can be when getting started is a death wish. Startups with programming chops simply cannot coast through the process of getting past regulators, no matter how great your software architecture might be.”

Intangibles Matter Software and proper funding aren’t the be all, end all. They are more or less the foundation that puts a company in a position to thrive. But to truly be successful, an online gaming platform has to get two other things right— marketing and customer service. “Party proved that marketing was the No. 1 factor to getting players,” O’Malley says, in reference to PartyPoker’s pre-UIGEA market domination. “In the New Jersey market today, local brands are better positioned to market to local players. Marketing takes different approaches depending on who you are marketing to, how big the audience is, what the product is, and who you are.” Capra notes that in anticipation to PokerStars launching, his company 44

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has changed its approach. “Last year our promotions were pretty sporadic, without a lot of rhyme or reason,” Capra says. “Since January, we’ve created a very solid campaign, and have been more consistent.” Capra goes on to say that had they waited until PokerStars launched to begin their new marketing campaign, it would have appeared more knee-jerk, and may not have had the same effect. Another crucial intangible is customer service. As O’Malley puts it, “Players will have issues, and they need to be addressed. Dedicated, local support is vital.” Capra agrees, noting the impact locally based customer service has on customers. “Being very local here (New Jersey) is very important. I don’t think there can be enough said about having the local presence here and letting the players feel that,” Capra says, noting how he gets happy, surprised looks when he explains the customer support for 888 is local. “I always tell customers, the folks that you’re talking to are in New Jersey; they’re in Secaucus—and that’s a very reassuring thing.”

Could a New Competitor Emerge? There is a huge barrier of entry when it comes to the online gaming market. That barrier is money. As Kaufman succinctly puts it, “Most new competitors simply run out of runway before they can take off. “It costs an exceptional amount of money to go through design and production of a product that’s sophisticated enough to engage modern players to begin with, and there are countless mistakes that can easily be made during that process. “By the time a platform starts looking good internally, you still have to get through testing labs and licensing with different jurisdictions, all of which takes more time and money,” Kaufman continues. “And just when you think you’re done, you finally enter a market where in most cases there are existing companies with cash flow to support their marketing efforts, and you’re trying to dig your way out of the hole created by production.” The money issue goes beyond startups. As O’Malley notes, maintaining or updating an existing product is also an expensive undertaking. “Technology is constantly changing, and it’s not easy to update massive pieces that make up your platform,” O’Malley says. “If you look at products like PokerStars and PartyPoker, they are built off of old technology, that has been maintained and updated throughout the years.” So what’s the answer? According to O’Malley, it could be specialization. “PokerStars was successful for many years because they focused on a single product,” he says. “That gives a development team a single focus, and the ability to understand that product. “In New Jersey, most companies are doing casino, poker and even bingo. Each of those platforms requires a different type of attention, for a different type of player. That means sacrificing some feature function, or deeper investment to put total focus on each. It’s a never-ending battle to prioritize what is necessary, versus what is wanted.”

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FAREWELL

TO THE ENFORCER Jennifer Calvery has left FinCEN, but the gaming industry may never be the same

BY JAMES RUTHERFORD

ennifer Shasky Calvery resigned last month as director of the Financial Crimes Enforcement Network, the U.S. Treasury Department’s money-laundering watchdog. She had accepted a senior compliance position at HSBC, the global banking giant she once helped nail for $1.9 billion as part of a settlement with the Justice Department that included an admission from the bank that drug cartels had laundered at least $800 million through its doors. She’s the second FinCEN director to join HSBC, which has struggled since the settlement to “de-risk” the business in terms of its compliance with U.S. anti-money laundering regulations. She’s leaving behind more than one casino operator capable of feeling the bank’s pain. During her years at FinCEN, which began in the fall of 2012, the industry was slammed for more than $145 million in civil penalties for violations of the AML provisions of a body of federal law known collectively as the Bank Secrecy Act. Most of those penalties were built on her experience as a crime fighter with the DOJ and the work of a separate enforcement squad she created within FinCEN not long after she took office.

(The most the industry had forked over prior to that, going all the way back to 2000, was a little over $4 million, according to Courthouse News Service, which tracks civil litigation for the legal profession.) “Unlike her predecessors, she was a prosecutor, not a regulator, and she brought that to her tenure,” says Carl A. Fornaris, who co-chairs the Financial Regulatory and Compliance Practice of corporate law powerhouse Greenberg Traurig. “There was a kind of change of direction there,” says Grant Eve, a partner in the firm of Joseph Eve CPAs, a Montana-based firm in the forefront of regulatory compliance, testing and training for the industry. “Calvery comes in, a stand-alone enforcement division gets set up in 2013, and we’re seeing the results of that. It’s been a huge evolution in KYC and customer due diligence, and it’s just expanded.” Not surprisingly, casino compliance budgets have increased more than two-thirds over this time, according to the American Gaming Association, and for as many operators that are relieved to see her go, that has to come with a consideration of the possibility that her replacement may be even tougher.

“When some casinos say that probing their customers about their activities outside of the casino will drive customers away, I sense that they feel that it is not their responsibility to protect their institutions, and our financial system as a whole, from being used by illicit actors. I fear there may be a culture within some pockets of the industry of reluctant compliance with the bare minimum, if not less. I hope that together we can make a cultural change.” —Jennifer Calvery 46

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“It’s a burden to casinos, and it takes time and money to do it. It’s definitely not easy.” — Grant Eve, Partner, Joseph Eve CPAs, on tightened AML and IRS regulations

Certainly there’s no questioning her legacy. The “risk-based approach” to compliance she championed—part and parcel of an organizational philosophy defined rather more vaguely as a “culture of compliance”—has fundamentally altered the rules of engagement, not only for casinos but across the world of financial services, and with them everyone’s AML obligations have gotten more complex and a lot costlier. A risk-based approach, as the term suggests, means that AML programs will vary from one operator to the next and among properties within the same company, depending on management’s assessment of the risks presented by the nature of the product and its gaming offering. The controls that result must also include comprehensive employee training. They must also be tested in-house and independently for effectiveness.

Industry Cooperation As the industry’s principal lobbying arm on federal issues, the Washington, D.C.-based AGA defines its role in all this as that of a “facilitator,” in the words of Whitaker Askew, vice president of government relations. The association’s job, he says, is to disseminate knowledge and serve as a two-way channel with the authorities “to help educate the financial community and the Treasury Department on how seriously the industry takes AML compliance.” The best practices the association has helped codify in partnership with the industry include an array of customer due diligence processes, which likewise vary with a property’s evaluation of its potential exposure to financial crime. These processes can range from vetting sources of player funds to verifying an occupation and conducting criminal and civil litigation checks—and that’s just the beginning. There could be factors requiring management to consider the risk of financial crime in a player’s home jurisdiction. They may have to check the player against sanctions lists and make a determination as to whether the person is prominent enough politically to be involved in corruption or bribery or in a position to launder illicit funds. They may have to identify and evaluate known associates, even search for negative reports in the media. Procedures must be in place for identifying junket representatives and for conducting due diligence on front-money accounts. They must, in other words, be their own bad cops. “It’s a burden to casinos, and it takes time and money to do it. It’s definitely not easy,” says Eve.

Enforcing a Culture Historically, the U.S. government thought about money laundering mostly in terms of fraud and drug trafficking. That changed with the September 11 terrorist attacks. While most criminal abuses of the financial system remain fraud-related, combatting the financing of terrorism became a national security priority, and this would figure prominently later in 2001 in the language of the USA Patriot Act, which radically expanded the powers of federal, state and local authorities to monitor the activities and correspondence and the business and commercial associations of U.S. citizens and foreigners alike, both within the country and abroad. It incorporated a separate act of Congress, the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001, written specifically “to increase the strength of United States measures to prevent, detect and prosecute international money laundering and the financing of terrorism.” The Bank Secrecy Act, the body of federal law governing AML, was beefed up to ensure that financial institutions took effective precautions such as establishing AML programs, hiring dedicated compliance directors and implementing staff training. What constitutes a “covered financial institution” under the BSA became more broadly defined as well, as have reporting requirements, which are seen as critical to the government’s ability to pursue criminal, tax and regulatory investigations and act on information that could prove useful for counter-terrorism purposes. The baseline for reporting is the CTR, the Currency Transaction Report, a staple of the Bank Secrecy Act, which applies to any transaction or related transactions that exceed $10,000 in a day. For a casino this includes cash-in and cash-out, and it applies to all commercial and tribal facilities that generate more than $1 million in annual gaming revenue. Suspicious Activity Reports (SARs) cover any transaction over $5,000 that smells fishy. Failure to file these could cost a company plenty, depending on the perceived willfulness of the violation. Las Vegas Sands, Caesars Entertainment, Trump Taj Mahal, Sparks Nugget in Nevada and the Oaks Card Club in California all have learned this to their considerable expense. FinCEN’s long arm has reached across the Pacific as well, to the U.S. Commonwealth of the Northern Marianas and the Tinian Dynasty Hotel & Casino, whose owners, Hong Kong Entertainment (Overseas) InvestJUNE 2016 www.ggbmagazine.com

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“She may not have recognized or been aware of the industry’s commitment to compliance, but now I think she would say the industry has a great story to tell.” —AGA Vice President Whitaker Askew, on Calvery

ments, were fined $75 million for conducting business as if the Bank Secrecy Act didn’t exist. “Most roads lead back to one single point of failure—a failed compliance culture,” said Stephanie Brooker, who headed FinCEN’s enforcement division at the time. The government spent most of the years after 9/11 chasing the big financial houses. But then finally they “got in line,” as Fornaris puts it. They also began closing accounts wholesale, simply on the basis of perception, in many cases. It’s all about that “de-risking” mentioned earlier. An indirect result is that as the banks became more compliant the freer FinCEN was to devote resources to service providers that had fallen under the radar—remittance and cash-transfer businesses, securities and commodities dealers and traders, insurance companies, loan and finance companies, operators of credit card systems and dealers in precious metals, stones and jewels—and gaming not least among them. Calvery cast the net wider still to capture virtual currency and other “fintech” industries and the luxury property market. “I think the casino industry enjoyed a bit of a quiet period there, from the Patriot Act to around 2013,” Fornaris says. “But it’s not a coincidence that we’re seeing now a much more robust enforcement posture, with an emphasis on this idea of a ‘culture of compliance.’” Organizationally speaking, we’re talking about those “implicit norms that guide behavior in the absence of regulations and compliance rules— and sometimes despite those explicit restraints,” in the words of William Dudley, president of the Federal Reserve Bank of New York. It’s a mindset that considers above all what should be done, not merely what must be done. “Culture may be hard to see,” Dudley said, “but you can feel it.” Calvery was not sold early on that the casino industry entirely got it. “And where this understanding is lacking,” she said, “strong enforcement efforts may be needed.”

A Good Foundation From its vantage point in the nation’s capital, the AGA may have known enough of her reputation to make sure no time was lost in getting her in front of the industry. She’d been at the Justice Department when the internet gambling industry was stood on its ear by the 2011 “Black Friday” indictments. And there was her work on the HSBC settlement. Later, she would carve a role for FinCEN in the investigation that resulted in a $2.6 billion civil penalty against JPMorgan Chase for the bank’s involvement with the infamous Ponzi schemer Bernard Madoff. FinCEN would garner $461 million of that settlement. She wasn’t at FinCEN a year when the AGA invited her to Las Vegas in September 2013 to speak at the Global Gaming Expo. So it was, not four 48

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weeks after it was announced that Las Vegas Sands would forfeit $47 million to end a Justice Department investigation into why the Venetian Las Vegas had failed to file Suspicious Activity Reports on a series of massive cash deposits made by or on behalf of a suspected international drug trafficker, that Jennifer Calvery was on stage at the company’s Sands Expo and Convention Center adjoining Venetian informing a packed house that attitudes needed adjusting: “When some casinos say that they are not really in the business of providing financial services, I get the impression that they are saying that they should not have as much responsibility in the AML context as those financial institutions whose business it is to receive, move and protect money. “And when some casinos say that probing their customers about their activities outside of the casino will drive customers away, I sense that they feel that it is not their responsibility to protect their institutions, and our financial system as a whole, from being used by illicit actors. I fear there may be a culture within some pockets of the industry of reluctant compliance with the bare minimum, if not less. I hope that together we can make a cultural change.” Before her first year was over there would be an explosion in the number of SARs filed by casinos, some 27,500, which would soar to more than 40,000 in 2014, and it was expected that 2015’s total would be even higher. “I give her credit,” says Askew, referring to her first appearance before the industry. (She would return the following year to address the first Bank Secrecy Act Conference, a production of the State Bar of Nevada, the AGA and the University of Nevada, Las Vegas.) “She may not have recognized or been aware of the industry’s commitment to compliance, but now I think she would say the industry has a great story to tell.” How this will play out under her successor “depends on who is appointed and who the next president will be,” says Fornaris. “If you have a Democrat in the White House you will probably continue to see a strong regulatory enforcement environment. If it’s a Republican we may see more of a pro-business environment.” Askew, a veteran GOP operative, refuses to speculate. “Time will tell,” he says. But the Calvery era, as he sees it, has laid “a good foundation for the next director to build on in working with the industry in a positive relationship going forward.” Gaming and government aren’t adversaries, he says; they’re partners. “At the end of the day, the casino industry and the financial industry at large have an interest in protecting the U.S. financial system.”

James Rutherford is a freelance writer specializing in coverage of the gaming industry. He is based in Atlantic City.

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Table Tech

How bonusing and cuttingedge technology enhances the game experience By Dave Bontempo

able-game technology sprouts a wide umbrella. Some of its recent innovations concern bonusing, as game suppliers target the gambler’s insatiable wild-card appetite. Patrons want a side deal, a play within a play, a game within a game. Bonusing features have propelled a comeback for table games, which once drove the gaming industry before being overtaken by slots. Other industry enhancements concern the nuts and bolts of a table. Upgraded equipment induces faster play, more volume and an enhanced bottom line. Operators look to balance the delicate mixture of business and customer relations. They must accomplish this by shortening the time between hands, reducing table-side banter and moving the revenue needle without making patrons feel like a number. Some companies achieve their objectives by filling a market niche. Others forge meaningful symmetries. Either way, table games retain a prominent, re-emerging persona.

Bonusing: The Scientific Process Scientific Games has long been a major innovator in the global lottery and regulated gaming industries. Whether one considers its launching of the world’s very first secure instant lottery game in 1974, or its acquisition of companies like Bally Technologies, WMS and Shuffle Master in recent years, this company is a gaming giant. Roger Snow, senior vice president of table games and shufflers, has blazed an innovative table-games path. He has invented more than 90 original table games and holds more than 40 patents. One of his creations was DJ Wild, the five-card poker game introduced last year featuring four deuces and a joker as 50

Global Gaming Business JUNE 2016

wild cards (accounting for the DJ term). Bonusing has become a huge component in his repertoire. It’s also an industry omen. “You know how in sports, you have to take what the defense gives you? It’s the same thing in our world, and right now casinos are much more receptive to bonus add-ons than they are to completely new game concepts,” he says. “Casinos are looking for side bets or progressives that allow them to take their existing real estate and make the games more exciting, fun and profitable. “Bonuses are the big thing right now in table games,” Snow says. “Casinos are trying all sorts of concepts: felt side bets, progressives, even participation pricing models in which they split revenues with the company providing the progressive, like they do with slot machines.” A slot-machine-on-a-table formula describes Blazing 7s, for which Snow teamed with table games executives Ryan Yee and Jeremy Halter to launch. It is a $5 blackjack progressive, involving the player’s first two cards and the dealer’s up card. If any of them is a 7, the player collects. Payouts increase if two or three of the cards are 7s. A jackpot is hit if all of three 7s carry the same suit. “We’ve been trying to find the right formula for at least six years, and it looks like we finally got it,” Snow indicates. “We’ve got some huge installs in Pennsylvania and Nevada, and we are adding more every week. We also have a progressive bet for baccarat

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TCSJohnHuxley’s comprehensive Gaming Floor Live (GFL) allows the casino to design its own bonuses

called 99 Fortunes and a felt bonus called Cover All that will be hitting the market very soon.” Blazing 7s, of course, is a Bally slot brand. Linking it to the tables was a calculated, yet bold move. Snow says table-game players don’t usually respond well to branded games, but they have to this one. They also figure to like Cover All, an action-packed proposition play that Snow introduced. “I’ve had this idea for a while, but the technology didn’t exist to make it happen,” he says. “Cover All is an optional bet that goes on games like Three Card Poker, Four Card Poker or Ultimate Texas Hold ‘em. When players make the bet, they get action on every hand at the table. I’m talking their hand, the hand of other players, even the dealer’s hand. Here’s where the technology comes in: The payouts change depending on the number of players in the hand, because the probabilities change. It’s easier for someone at the table to get a full house if there are six players as opposed to two. The shuffler knows how many there are and modifies the odds accordingly.” There won’t be much time to savor the “new” for Scientific Games. Forward vision already anticipates the “next.” “One of the most exciting products close to launch is a wide-area progressive for blackjack,” Snow says. “We should be up and running soon on the Las Vegas Strip, and we also look to take this to the tribal casinos in California. This will be a first of its kind, and it’s something that only a company of our size and scope can provide. You need serious infrastructure in place to host this kind of jackpot.” The California market is indeed hot for bonus games. Buster Blackjack, developed by Stanley Ko and distributed by AGS, is a pre-eminent blackjack side bet across the state’s casino realm. It has also begun to emerge in Washington and Arizona. The game’s popularity stems from its strong community gaming dynamic of players rooting for the same outcome: a dealer bust. The game is one more illustration of gamblers wanting wild-card options and new wrinkles. Players can win both their blackjack and buster bets when the dealer busts. They can even win while losing, if they go over and the dealer also busts on a hand in which they played the side bet. “AGS acquired Buster Blackjack in September 2015, and in the first quarter of fiscal year 2016 we’ve already doubled the game’s install base,” says John Hemberger, vice president of table products for AGS. “Thanks to its easy-tounderstand game play, payout simplicity, and the excitement it adds to any standard blackjack table, we’ve seen an explosion in the game’s popularity, which has translated into exceptional performance for our casino partners.”

keting purposes as slot managers have enjoyed for decades—plus additional benefits such as monitoring the hands-per-hour of dealers against benchmarks. “The last 12 months have been concentrated on innovation,” Tristan Sjöberg, the firm’s executive chairman, said at the conclusion of this year’s ICE trade show in London. “We have been very focused on expanding our Gaming Floor Live suite, constantly innovating and adding products to the range—not just new offerings but also developing and evolving existing key products so that they are enabled to integrate with the Gaming Floor Live platform.” One of the most effective modules of the system is GFL Bonusing, which enables the casino to create its own table-game progressives and bonuses. Using GFL, operators can create multiple bespoke progressives and side bets for any table game, monitor the succeess of them in real time and, if necessary, modify the game configurations instantly. Instead of installing several different pre-configured side bets and progressives in the hopes that players will enjoy them, the flexibility of GFL Bonusing means casinos can create exactly what their unique player demographic wants. Mystery jackpots can be spread across any table group on the floor. GFL Bonusing allows operators to develop their own side bets without having to pay royalties on a game license. If one jackpot is won, the others remain in play until they are also won—adding extra excitement in connection with lower-paying hands.

EZ Does It DEQ Systems Corp., based near Quebec City in Canada and in Las Vegas, teams up with LT Game, a subsidiary of Hong Kong-based Paradise Entertainment, to make a worldwide “EZ” synergy. DEQ is a market leader in table games, progressive systems, live and online proprietary table games content and utility solutions. Its solutions exist in more than 300 casinos and 30 countries. EZ Baccarat, also known as the Dragon 7 game in Macau, is the most

GFL Advantage While casinos will pay fees for each table equipped with the branded side-bet bonuses and progressives, London-based TCSJohnHuxley’s comprehensive Gaming Floor Live (GFL) allows the casino to design its own bonuses. GFL is a complete modular network platform and table gaming management system that draws data from every aspect of the table and feeds it into the casino’s management system in real time. Users have praised the system for giving table game operators the same depth of information for auditing and marJUNE 2016 www.ggbmagazine.com

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popular baccarat brand worldwide, company officials say, with more than 750 installations in over 150 casinos and card rooms. EZ Baccarat is an operating system that can go on multiple platforms. LT Game licenses the EZ Baccarat intellectual property from DEQ Systems, the global distributor of the game, and DEQ and LT Game are working together to develop the software so that it works on LT Game LMG systems. “The LT Game deal offers an opportunity to put EZ Baccarat on thousands of LT Game Live Multi-Game (LMG) systems over the next few years, in the Macau market first,” says Francisco “TJ” Tejeda, the co-creator of EZ Baccarat. “Putting EZ Baccarat on terminals is a strategic maneuver that will give the brand more exposure while helping open up the largest baccarat market in the world. “What is exciting is how the LT Game terminals work: let’s take an example of a casino in Macau, where there are 10 dealers dealing two hands a game, including baccarat, sic bo and roulette, with 20 games going at a time and livestreaming to 900 terminals enabling players to play multiple hands. For players, seeing live dealers run the game is a reassuring feature that brings a measure of familiarity to the game.” The setup has some game-changing elements, Tejeda asserts. “A powerful appeal of ETGs is that they open up markets that would otherwise be closed due to table game regulation,” he contends. “In Macau, where table games are limited, labor-efficient ETGs can be profitable even when offering lower limits to attract players that have been priced out of live table games. In North America, the unqualified success of the New York electronic casino model will entice other jurisdictions to follow suit.” What is the WOW factor for this product? “One of the most compelling advantages that EZ Baccarat brings to ETGs using a random number generator is the JadeShoe with EZ Shuffle, a patentpending technology that makes the electronic version of EZ Baccarat virtually the same as the table game by replicating a standard baccarat shoe,” Tejeda says. “It it has eight decks and does not shuffle after every hand. This is a huge differentiator for the electronic game, and a powerful enticement for Chinese players for whom following the patterns (aka the ‘roads’) is a crucial part of the game.” The timing for a dynamic table-games partnership could not be better. Many experts, including DEQ President and CEO Joe Bertolone, believe the Asian gaming world mirrors the early path of Las Vegas. Table games drove the American industry for many years before slots emerged. That’s just fine, according to LT Game. The company’s signature product is Live Multi Game System, perfectly placed for a market that has “tabled” the next wave of growth. ETGs are surging in Macau. Betty Zhao, the chief operating officer of LT Game, says the number of ETG terminals, both with and without a live dealer, rose from 3,520 in 2012 to 5,670 last year. She predicts the market will continue to grow in the ETG stadium concept, either with a live dealer or fully automated RNG. “We already see in Macau that players are enjoying the live-dealer-streaming LMG and fully automated RNG ETG stadiums throughout some of the resorts,” Zhao says. “On average there are at least 60 LMG terminal stadium environments throughout Macau, with some venues having over a couple of hundred terminals,” Zhao asserts. “The stadiums in Macau also have more than 10 outcomes of games being dealt at once. In Las Vegas, the largest placement has been 34 terminals at one property with just four outcomes being dealt. “Las Vegas is in the early stages of this product type. Although Palazzo installed 24 terminals in November 2013, the market is still learning about this. Most recently, Palace Station in Las Vegas installed 12 terminals with two live outcomes of baccarat being dealt. The seeding progress is encouraging in Las Vegas, since it does seem that more casino operators are open to the concept of 52

Global Gaming Business JUNE 2016

having mini-stadiums of LMGs on their casino floors.” Zhao predicts LT Game will soon present a Fast Betting Terminal allowing players to bet 10 games simultaneously on a single multi-touch screen.

Setting the Table For some companies, it’s the setting that drives table-game efficiency. Ten-year-old VisuaLimits, based in Las Vegas, has stormed the gaming stage with VL-Focus, a versatile table games communications and analytics solution. The company’s fourth-generation product has been in operation for more than two years and is growing steadily throughout the United States. “What started as a simple, two-sided LCD Table Limit sign has matured into a powerful analytic and table-management system with the evolution of our multi-faceted analytics software,” says Perry Stasi, the president and chief executive officer of VisuaLimits. “The VL-Focus allows casino operators to utilize the high-value real estate on the table previously occupied by static table limit signs or cheap picture frames, and now automatically tracks hands per hour, player head-counts and side-bet participation along with enhancements including innovative new game protection technologies, all in the same footprint.”

The VL-Focus not only enhances the player’s experience by displaying internal casino marketing content and external information—such as sports scores and live TV feeds on the front screen—but it can also improve customer service, he says. The unit’s functionality via the rear screen of the sign allows for alerts to be sent directly from the table to other departments such as food & beverage, marketing and player development (casino hosts), and by making internal communications more direct and efficient. As for security features, the embedded VL-Focus cameras can assist surveillance in better recognizing cheaters at the table and can even send table-view video clips of previous rounds, along with alerts to surveillance. VL-Focus also has a performance evaluation component. When dealers tap in after a break, they can find out their hands-per-hour rate for their previous dealing period and determine if it meets the casino’s desired speed of play. This creates an interesting automated coaching tool for achieving proper balance between consistency in dealing floor-wide and increasing the amount of hands dealt. Some of VisuaLimit’s casino customers are rewarding dealers who meet benchmarks. In the final analysis, VL-Focus has shown that it can provide about a 10 percent improvement in hands-per-hour on a blackjack table, Stasi contends. It’s just one more bit of technology being applied to an area of the casino in which technology was historically a suspicious element, particularly to tablegame players. In the end, those players now get a better table-game experience.

The only animated gaming surface around Stand out on the gaming floor with TCSJOHNHUXLEY’s patented Blaze LED surface technology. Display unique attract sequences and themed animations on your tables, while also highlighting winning numbers. No other illuminated gaming surface on the market offers custom animations that can be tailored to any theme or design. • Assists dealers’ accuracy • Highlights winning bets for added security • Stunning patented game animations • Available for SicBo, Roulette, Big 6 See it in action: tcsjohnhuxley.com/blazeanimations

GFL BLAZE

Example of custom themed animation

www.tcsjohnhuxley.com

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NEW GAME REVIEW by Frank Legato

Frogger: Great City Wild Konami Gaming

his game is one of the first in which Konami dips into its own rich arcade-game heritage, replicating the legendary arcade-game hit Frogger, released by parent Konami of Japan in 1981. The game is not skill-based like the arcade game of the same name, but the main progressive bonus round replicates the game screen and the activity of getting the frog character across a busy street. Aside from the simulated arcade-game bonus, Frogger: Great City Wild uses all the substantial real estate of Konami’s new Podium Monument cabinet, which features a standard main game screen under a 32inch vertical top-box monitor. That oversized top-box monitor is used both for the Frogger bonus and for free-game events, during which the top displays two extra reel sets that are engaged for free spins. The base game is available in 20-line, 30-line or 40-line configuration. During the primary game on the main game screen, wild symbols are nudged to occupy the entire reel window.

Any three, four or five coin symbols trigger seven, 10 or 20 free games, respectively. During the free games, all three reel windows are active. If the wild Frogger symbol appears on one or more reels in the top window, those reels are copied over to the middle reel window. If the Frogger symbol appears in the middle reel window, those reels are copied to the bottom reel window on the main screen. The free-game session can be retriggered with coin symbols on free spins for another seven, 10 or 20 free games. The progressive Frogger Bonus is randomly triggered. The top screen transforms into a replica of the famous arcade-game screen, and the player is awarded three Frogger characters (equivalent to “lives” in the arcade game). The top screen then plays out like the arcade game. If the Frogger character makes it across the busy street at the bottom, he enters progressive zone in which the player logs credits for any icon the frog touches. If the character lands on Maxi, Mega, Major or Mini, that progressive is awarded. The bonus ends when no more Frogger characters remain. Manufacturer: Konami Gaming Platform: KP3; Podium Monument Format: Five-reel, 20-line, 30-line or 40-line video slot Denomination: .01-5.00 Max Bet: 20-2,000 Top Award: 50,000 times line bet Hit Frequency: 33% Theoretical Hold: 6%-15%

Hot Hit Rainbow Riches International Game Technology

his new five-reel, 30-line game in the mechanical reel-spinning format offers nine frequently hitting progressive jackpot levels, along with a free-spin bonus and a unique primary-game feature that causes variable jackpots for the same winning combinations. The Hot Hit progressive series returns a progressive prize any time “Hot Hit” symbols land on seven or more spots of the 15-space reel grid. Progressives start at a reset level of $15 for landing seven of the symbols, ascending to the top jackpot, starting at $15,000, for Hot Hit symbols in all 15 reel spots. Players must wager the maximum to qualify for the top jackpot. The progressive setup—a celebration of horns, sirens and buzzers greets each jackpot—is not the most unique aspect of the primary game, though. The base game features a weighted pay table in which symbols change color on every spin. Different colors award different payouts, with red awarding the highest, followed by blue, green, purple and yellow.

Global Gaming Business JUNE 2016

Added to this unique feature is a free-spin bonus, triggered by three scattered bonus symbols. During the free-spin bonus, solid-colored symbols evolve into rainbow symbols for higher awards. Manufacturer: International Game Technology Platform: S3000 Format: Five-reel, 30-line stepper slot Denomination: .01 Max Bet: 150 Top Award: Progressive; $15,000 reset Hit Frequency: Approximately 50% Theoretical Hold: 2%-15%

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or the last 14 years, GGB magazine has published an annual supplement, Casino Design magazine, highlighting architecture, design and construction of casino resorts. With dozens of casino resorts being built every year, Casino Design showcased the renovations and re-designs of existing properties and highlighted the importance of non-gaming amenities. Because we believe that design is at the heart of every casino experience, we have expanded our focus of non-gaming amenities. Casino Design magazine will now become Casino Style magazine. We will still cover the design and construction of casino resorts, but our coverage will encompass every aspect of the guest experience:

• Food & Beverage • Hotel Operations • Nightlife & Entertainment

• Meetings & Conventions • Pools & Spas • Other Non-Gaming Amenities

Casino Style will delve into the non-gaming customer; what attracts them to your property, what marketing seems to work best, and how analytics are changing the way casino resorts operate. Casino Style will be published to coincide with the dates of Global Gaming Expo (G2E) and its co-located trade show and conference, the Integrated Resort Experience. Casino Style will be the go-to guide for trends that shape the future of the casino resort experience. We’re sure you will be as excited as we are when you get your hands on the first copy of Casino Style magazine.

Roger Gros, Publisher rgros@ggbmagazine.com

For information & sponsorship opportunities contact: JOHN BUYACHEK Sales Director 702.248.1565 ext. 227 jbchek@ggbmagazine.com

FLOYD SEMBLER Business Development Manager 480-231-8433 fsembler@ggbmagazine.com

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StarBar

Interblock Luxury Gaming Products

nterblock, which is one of the world’s leading suppliers of electronic table games, has just launched StarBar, a play station designed exclusively for the bar top. The bar-top unit carries the same elegant black design as the company’s e-tables in the Organic series, with an intuitive touch-sensitive display, multi-game functionality, online system connectivity and a secure, tamper-proof cabinet. The unit can be placed as a stand-alone bar-top gaming machine with video slots, video poker and video table games, but also can be connected to external generators so the game menu can offer Interblock dealer-assisted, video or automated games. In this manner, operators can use the bar-top units as extensions of hybrid or stadium-style games already in place, using the video feeds from live dealers with the automated wagering and payouts of the play station. StarBar also allows players to interact with multiple games on one play station. Players can switch among up to 16 different games with one touch of the screen, without having to cash out, switch machines or otherwise interrupt play. “Power Meter” displays on the unit allow operators to offer incentives to players based on predetermined criteria, such as a sweepstakes entry for every 10 games played. The casino can customize promotions through the StarBar terminal.

Available games on StarBar include video slots, all variations of video poker, blackjack, multi-hand blackjack, baccarat, single- and double-zero roulette, craps, sic-bo, keno, Pop ‘N Poker and Big 3 Six. Several optional side bets are offered with the table games. Manufacturer: Interblock Luxury Gaming Products Platform: StarBar Format: Multi-game bar-top video gaming terminal Denomination: All denominations available Max Bet: Various Top Award: Various Hit Frequency: Various Theoretical Hold: Various

Tree of Wealth Scientific Games

his new progressive series features two initial games based on the popular Bally Asian-themed game Duo Fu Duo Cai. Tree of Wealth-Rich Traditions and Tree of Wealth-Jade Eternity both reside on the unique Bally Pro Wave cabinet, with its giant concavecurved video monitor. The base games are both ways-to-win setups, meaning there are no paylines, and wins are registered through adjacent symbols. On the Rich Traditions title (pictured), the player can actually choose the reel setup, which determines how many ways a player can win on each spin—a standard five-by-three setup resulting in 243 ways to win on each spin, or a five-by-four setup, resulting in 1,024 ways to win on each spin. The player here is selecting the volatility of his game. The lower ways-to-win choice results in higher volatility; the higher ways-to-win choice results in a greater frequency of smaller wins. The Jade Eternity title is available to casinos only in the five-by-three setup. Each game features four progressive jackpot levels, with from one to all four of them available through a single picking bonus, the title event “Tree of Wealth.” It is triggered when one or more Gold Coin symbols appear 56

Global Gaming Business JUNE 2016

on the screen, triggering a second screen displaying 15 scrolls. The number of Gold Coin symbols determines the number of picks the player gets from the scrolls. Each scroll reveals one of the corresponding jackpots. The player wins by matching three of the jackpot symbols, or by revealing three “Double Luck” symbols, which automatically awards one of the prizes. The top jackpot level is determined by the denomination—the common penny version returns a top progressive resetting at $40,000. There also is a free-spin bonus, which awards six to 10 free spins, based on the number of bonus symbols triggering the event. The event can be retriggered on a free spin. Manufacturer: Scientific Games Corporation Platform: Alpha 2 Format: Five-reel, ways-to-win video slot Denomination: .01-10.00 Max Bet: 880 Top Award: Progressive; Resets at 4 million credits times denomination Hit Frequency: Approximately 70% Theoretical Hold: 3.95%-15.18%

GAMING EMPLOYEES: MAKE YOUR VOICES HEARD IN THE PRESIDENTIAL RACE Inform candidates that gaming is a valued community partner in 40 states delivering benefits that include:

1.7 MILLION JOBS

$240 BILLION IN ECONOMIC IMPACT

$38 BILLION IN TAX REVENUES

A PATH TO THE MIDDLE CLASS FOR WORKERS OF ALL BACKGROUNDS & EXPERIENCES

GET INVOLVED Join the American Gaming Association as we hold on-the-ground events in key states. Tell candidates to meet you and your co-workers and learn more about the industry. Visit gamingvotes.org and register to vote. Use #GamingVotes to get candidates’ attention on social media and let them know you’re paying attention to them.

WITH YOUR ENGAGEMENT, CANDIDATES WILL GET TO KNOW GAMING IN 2016. Learn more at www.gamingvotes.org and www.americangaming.org

facebook.com/americangaming @AmerGamingAssn

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CUTTING EDGE by Frank Legato

Drafting a Winner Product: Fantasy Sports Software Manufacturer: BetConstruct

nline gaming content supplier BetConstruct has launched an enhanced version of its Fantasy Sports solution. Fantasy sports is a genuine phenomenon with over 50 million players in the Unites States alone, and Fantasy Sports from BetConstruct helps operators increase their profile with a distinctive and growing market segment, or enter emerging markets with new areas of growth. Enhanced with back-end CMS, it offers easy partner branding in addition to cross-platform and cross-browser compatibility, and allows players to join or create leagues as well as play with real money or for free. This software is perfect for existing operators who want a product to help increase their profile attracting millennials, the most prominent emerging group of players. This product is also perfect for both established and entrepreneurial businesses that want to enter new markets and take advantage of the more relaxed regulations that surround fantasy sports in markets including the U.S. The software also offers cross-selling and higher wager opportunities— such as betting on real matches—without cannibalizing existing revenue streams. Moreover, fantasy sports websites powered by BetConstruct have much traffic which enables operators to boost engagement with their users and monetize the traffic by offering real-money gaming.

To reach not only operators but players as well, BetConstruct comes to the U.S. market with the daily fantasy sports website WinnerDraft. WinnerDraft currently boasts the largest coverage of soccer—25 leagues from Europe and Latin America. The website will soon be available in Spanish as well, which will attract Hispanic sports fans by offering them an extensive range of leagues available only at WinnerDraft. BetConstruct has provided comprehensive and cutting-edge solutions for gaming businesses for over 13 years. The supplier’s offerings include an extensive range of market-leading vertical products including Sportsbook, eSports, Sports Data Solutions, Retail Betting Shop Solutions, RNG Casino Suite & Live Dealer Casino, Poker, Skill Games and more. For more information, visit betconstruct.com.

Bright Tables Product: Blaze LED Surface Technology Manufacturer: TCSJohnHuxley

ive casino table games have enjoyed a resurgence over the past few years, which can be attributed in some part to the rapid growth in online gaming. Traditional games are extremely popular with a younger demographic, and we’re now seeing them being enjoyed in lots of different formats. As far as casino gaming is concerned, there has been a resurgence in the innovations of games, content and hardware that has evolved at an unbelievable pace in recent years. Visually appealing products, such as TCSJohnHuxley’s Blaze LED surface technology—featuring patented animated video capability— continue to add further excitement to already-popular table games, and boost appeal for new player demographics. As the millennials enter their peak spending window, it is important to design and develop games that are in line with their expectations, based on their consumer electronics and online experiences. Available for sic bo, roulette and Money Wheel, Blaze LED surface technology is a sophisticated illumination system that adds entertainment for customers and increases security on the casino floor.

Global Gaming Business JUNE 2016

Through patented technology, energy-efficient LED lights fitted below the surface of the gaming table display unique attraction sequences and themed animations, while also highlighting winning numbers. No other product on the market has the ability to offer custom animations that can be tailored to any game theme or design. With a choice of single or double configurations depending on game type and with acrylic or cloth layouts, Blaze LED surface technology delivers high-impact brilliance and excitement to table games. For more information and to view Blaze animation examples, visit tcsjohnhuxley.com/cuttingedge.

“G2E G2E is the show you must attend every year.” Nehme E. Abouzeid Executive Director, Brand Marketing & Advertising Wynn Las Vegas

Discover new technologies. Source new vendors. Stay current with industry trends. Energize your career with world-class education and professional development. And make valuable new connections. It all happens at the gaming industry’s premier event: Global Gaming Expo. Join Nehme and thousands of other gaming professionals at G2E. Register today at globalgamingexpo.com

GLOBAL GAMING EXPO SEPTEMBER 27 – 29, 2016 SANDS EXPO CENTER LAS VEGAS

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EMERGING LEADERS Say the Word Ronald Washington, Jr. Table Games Shift Supervisor, Eagle Mountain Casino on Washington, Jr. graduated from City College in San Francisco in 1998 and went on to work in a number of different fields ranging from human resources to administrative support—none in the gaming industry. It was not until 2004 that he got his first taste of the industry. That year, Washington was hired as a player’s club representative as Eagle Mountain Casino in Porterville, California. Since then, he has remained with the casino, working in a number of different capacities until he was promoted to his current position of table games shift supervisor in 2014. When he was hired in 2004, Washington had never played a single hand of blackjack or poker, yet here he was, working in a casino. He says that was his biggest challenge when entering the industry. He made up for that by shadowing the pit boss as much as he possibly could. He also made sure to take the dealer training course to fully understand his responsibilities. Today, he is working to help improve the current curriculum to make it as effective as possible for entry-level dealers, helping pick up the shortfalls he saw when taking the course. Success is never easy, but Washington says integrity was the driving force for the success he has had to this point. Since entering a management role, he has used his integrity to take care of his employees—never turning his back on them, or as he states, “I simply care too much.” Mentorship was an important thing to him as a young person in the gaming industry, and as Washington looks forward to excelling in a high-level management position in the near future, he hopes to set up mentor paths for those people who are looking to “join the evolution of the gaming experience.” Washington wants others to have the opportunities that he did, because he says without young people entering the ever-evolving industry of gaming, there will be no new views, and a lack of perspectives that only new generations can bring to the table. —Chris Irwin, The Innovation Group

Washington wants others to have the opportunities that he did, because he says without young people entering the ever-evolving industry of gaming, there will be no new views, and a lack of perspectives that only new generations can bring to the table.

Global Gaming Business JUNE 2016

Going Undercover Brent Pinkston Chief Operating Officer, Wind Creek Hospitality eet the non-undercover boss. Brent Pinkston, chief operating officer of Wind Creek Hospitality, is more than a leader to 2,500 employees covering six properties throughout Alabama and Florida for the Poarch Band of Creek Indians. He is, at select times, their colleague. For about an hour a week, the 13-year gaming veteran puts on a uniform and performs one of his employees’ jobs. He has done practically every one of them in this cameo role, and subsequently implemented many staff suggestions. “It’s important to see what your team members are involved with,” says the Chicago native, whose career includes a stint as executive director at the Pearl River Resort in Mississippi and executive director of slots and marketing at Las Vegas Sands before joining this company in 2007. He has been the COO for three years. “You can obtain great ideas from the front-line staff, who perform that job every day,” Pinkston indicates. “My favorite job? Being a dishwasher. You turn off the phone an hour or so, do all the cleaning, and relax to the noise of the dishwashing machine. The hardest job? Housekeeping. It is physically demanding, and the speed at which you need to work is significant. You not only have to be clean and spotless and leave that room in great four-diamond condition, but it must be done fast—and yet you cannot rush through it.” Pinkston’s evolution combines marketing and finan-

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“

Generally being the youngest guy in the room, you want to push, push, push. Others have taught me to have patience and understand there is a process that must be gone through. From them, I have also learned that attention to detail is very important, especially in a resort type of environment.

”

cial backgrounds. The marketing expertise brings customers into the property, while financial acumen helps provide them a positive gaming experience. He has merged both disciplines well at the ripe young age of 40. “Generally being the youngest guy in the room, you want to push, push, push,” he says. “Others have taught me to have patience and understand there is a process that must be gone through. From them, I have also learned that attention to detail is very important, especially in a resort type of environment.” One detail he champions is Wind Creek’s payouts of 94 percent, via electronic bingo, compared to 92 percent on slots for nearby competition. Another detail is a service providing drinks on demand. “Two complaints I have long heard from customers is ‘when I go to a casino I can’t win, and I can’t get a drink,’” he says. “We have payouts that are much better than our competitors, and we serve drinks in an expedited fashion. Every customer can order a drink from the gaming machine (via touch screen). The order pops up at the bar and the drink is made in less than 45 seconds. Cocktail servers run it out to the customer. It will usually be about five minutes. If some problem occurs and the drink is not delivered in under 15 minutes, the guest will get $5 in free play.” Wind Creek completed an expansion of about $65 million for its Montgomery, Alabama property in December. Its 2016 plans will be aggressive to expand their brand, he says. —Dave Bontempo

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FRANKLY SPEAKING by Frank Legato

Tweeting With Bears

Global Gaming Business JUNE 2016

RINALDO

No, I plan to use Twitter the best way I know how. I’ll make wisecracks on the casino news of the day. So watch for my next hilarious quip. And don’t worry. I’ll leave enough casino news to lampoon in this space every month. Like, for instance, the item that says the Horseshoe Casino Cleveland will henceforth be known as the Jack Casino Cleveland. (Segue rating: 8.3.) I said before that the casino didn’t look like a horseshoe anyway. It doesn’t look like Jack, either. And they’re not even just calling it Jack. They’re calling it JACK, all caps— like you’re shouting at Jack, probably because the casino doesn’t look like him. From the Montana desk, it seems they caught the guy who held up Gabby’s Casino in Billings on January 2. I love casino names in Montana. You know Gabby heard about this event personally. (And gabbed about it afterward, I’ll bet.) On the night in question, 37-year-old Steven Richard Gill allegedly walked into Gabby’s with another man, both wearing ski masks. I know it’s cold in Montana, but that’s still never a good sign. A casino employee told them to take off their masks, at which point the other guy approached the bar, produced a gun and demanded money while Gill, according to the Billings Gazette, “stood guard at the door with a can of bear spray.” You know, like you do. I admit it. I had to look up “bear spray.” It turns out it’s not a bear in an aerosol can, and it doesn’t growl when you spray it. They’re talking about bear repellent, which temporarily blinds a pursuer, be it bear or man. Now, I’ve never lived where there are a lot of bears walking around. I happened to be in Tahoe once when this bear was waltzing through a kitchen at Caesars, but that’s about as close as I’ve come to encountering a bear that wasn’t of the teddy variety. I guess it’s different in Montana. You can be walking down the street, turn a corner and the next thing you know? Bear. Anyway, Gill’s accomplice ratted him out. No bear spray, hair spray or any other kind of spray will help him there. FranklySpeakn signin’ off. 10-4, good buddy. VICT OR

ast month, I was advised by my employer that I should have a Twitter account. I now do. My “handle” is FranklySpeakn. See how I did that? It’s like the name of this column, see? Only, in a very clever manner, it’s spelled differently. Now I know what to put on my vanity license plate. Do they really call it your “handle?” It’s officially your username, but according to the Twitter Glossary, a common subsitute has been “handle,” like 1970s truckers with CB radios. “Hey, it’s FranklySpeakn, good buddy! Got us a convoy. Come back!” And aren’t there supposed to be hashtags involved somewhere? How do the hashtags work? You know, they used to be called pound signs. I used to think Twitter users put hashtagged phrases in just to emphasize a point, but I now know, after extensive research, that they identify trends. So, if something is “trending,” you can bunch all related “tweets” under one “trend,” and then others add more “tweets” to the “trend.” See? I’m using Twitter lingo. When these posts pop up on your “feed,” they are often entertaining in and of themselves because of the trend phrases: “Crazy Girls statue on display at Planet Hollywood. #bronzebutts.” “The Linq will soon offer rooms with bunk beds. #arewe12orwhat.” “I’ll have it done before you can say Ticondaroga. #ifyoucansayTicondaroga.” Some of you may be surprised I was never on Twitter before, but I’ve never been known as an early adopter of new technology. I only recently began using a toaster. Never mind the 21st century; I had to be dragged kicking and screaming into the 20th century. But eventually, I stopped using a typewriter, stopped using a straight razor, got a cellular phone (when they took out all the pay phones), even got a smartphone, got on Facebook, and now on Twitter. So go ahead and tweet me. Make my day. As of this writing, I have 28 followers, which doesn’t exactly make me Gandhi, but hey, I didn’t have any followers at all a month ago. And if everyone reading this column right now follows me, I’ll have maybe another half dozen, at least. What’s up with all the following, anyway? I mean, I realize thousands want to know what Jay Z is thinking at any moment, but who cares if I took my suits to the cleaners and they put too much starch on my shirts?

G&Tfullpg.2016.qxp_Layout 1 5/12/16 7:51 PM Page 1

16th Annual

Nominations are open for the gaming industry’s most prestigious awards. The GGB Gaming & Technology Awards are the casino industry’s most prestigious awards for technology, products and services that enhance the gaming experience. The honors are designed to recognize and encourage innovation and technology in the rapidly changing casino industry. Winners will be announced in the November 2016 issue of Global Gaming Business magazine and a special ceremony with press coverage will be held at Global Gaming Expo (G2E), September 27-29, 2016 in Las Vegas. DEADLINE: July 14, 2016 Nominations are now open in the following 4 categories:

• Best Consumer-Service Technology • Best Productivity-Enhancement Technology • Best Slot Product • Best Table-Game Product or Innovation All Non-Slot Product nominations will also automatically be nominated for the “Progressive Products” feature in GGB’s 2016 G2E Preview magazine to be distributed with the August issue of GGB. Slot products will be featured in the September issue of GGB, distributed at G2E. Questions contact: John Buyachek Sales Director

jbchek@ggbmagazine.com 702-248-1565 ext. 227

www.ggbmagazine.com

For details and to enter online visit:

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GOODS&SERVICES

Comedian Jerry Lewis received a Lifetime Achievement Award at G2E’s Casino Entertainment Awards at last year’s edition

G2E’s Casino Entertainment Awards Issues Call for

Nominations

ominations are now being accepted for N the 2016 Casino Entertainment Awards, the only awards honoring outstand-

American Gaming Association President & CEO Geoff Freeman in Detroit

AGA HOLDS DETROIT ROUNDTABLE roundtable discussion about the casino indusA try’s two decades in Detroit recently was held at MGM Grand Detroit as part of the American Gaming Association’s Get to Know Gaming campaign, highlighting the positive contributions of gaming across 40 states. Gaming is a $2.8 billion industry in Michigan, providing more than 17,000 jobs and generating more than $721 million in local, state and federal tax revenue. Geoff Freeman, AGA president and chief executive officer, said, “The gaming industry is proud to play a significant role in the re-emergence of the city of Detroit. MGM Grand, MotorCity and Greektown are reaffirming the decision of voters 20 years ago by delivering good jobs, unmatched tax revenue and valued partnerships with community leaders in Detroit.” In 2015, Detroit’s three casinos contributed $174.3 million in tax revenue, 16 percent of the city’s total overall revenue. Casino revenue was the third-largest source of revenue for the city as it emerged from bankruptcy. “The revenues from MGM Grand, MotorCity and Greektown Casinos allow our city to avoid significant financial problems,” said City Council President Brenda Jones. “The gaming industry is providing good jobs for Detroit residents, while enhancing our small businesses and serving as a true community partner.”

IGT, PARADISE SIGN TABLE PATENT AGREEMENT aming supplier International Game TechnolG ogy Plc. and Paradise Entertainment Ltd., through their respective subsidiaries, have signed an agreement under which Paradise will transfer all of its electronic table game technology, patents

Global Gaming Business JUNE 2016

ing artists, executives and venues in the casino entertainment industry. Sponsored by the Global Gaming Expo and the American Gaming Association, the Casino Entertainment Awards will be held on Wednesday, September 28 at Vinyl, the award-winning nightclub at the Hard Rock Hotel & Casino Las Vegas. Categories for award nominations include: IGT executive Victor Duarte

and other intellectual property to IGT, with certain exceptions for table game IP used exclusively in Macau. IGT will pay Paradise an up-front fee plus an ongoing earn-out based on placement of products utilizing Paradise IP over a 15-year term. Closing of the agreement is subject to Paradise obtaining requisite shareholders’ consents and approvals. The agreement gives IGT exclusive rights to Paradise’s table game IP for the development, manufacturing and distribution of live and RNG-based electronic table games worldwide, except in Macau, where Paradise subsidiary LT Game will remain the exclusive provider of its market-leading electronic table game products.

• Independent Casino Talent Buyer of the Year • Casino Booking Agent of the Year • Casino Showroom/Theater of the Year • Casino Arena/Amphitheater of the Year • Casino Entertainment Executive of the Year • Casino Comedian of the Year • Casino Musical Artist of the Year • Casino Entertainer of the Year Nominations may be submitted online until June 17, at bit.ly/1SYQ2tX. Finalists will be announced in July.

Miss Universe and Miss USA Olivia Culpo hosted the Intrigue’s grand opening party. Also attending were actresses Kate Hudson and Vanessa Hudgens, along with other celebrities. The new venue is smaller and more “intimate,” in order to create a more interactive environment for patrons, and will provide an ever-changing experience, Christie told Las Vegas Sun columnist Robin Leach. Christie says they’ll “consistently change it up,” instead of providing the same repetitive sensory overload offered at many large-scale nightclub venues on the Las Vegas Strip. Further south, on the west side of the Las Vegas Strip, the Hakkasan Group opened its Jewel nightclub at the Aria, which also will provide an intimate experience for clubgoers. The Jewel will hold up to 1,923 patrons, and each of its 50 tables will be at the heart of the action inside the 24,000-square-foot, single-room club. Entertainment will include hosts comprised of artists of many types, as well as DJs, to help create

WYNN OPENS INTRIGUE; ARIA PREPS JEWEL ynn Resorts heralded a new era of intimate W nightclub entertainment with the April 28 opening of its Intrigue club in the Wynn Las Vegas, while Aria prepares its new nightclub, Jewel. Nightclub mogul Sean Christie partnered with Wynn Resorts to create the Intrigue, which replaces the former Tryst nightclub. Supermodel Charlotte McKinney and 2012

Wynn Resorts opened Intrigue in Las Vegas last month

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a party-like atmosphere. The Hakkasan Group says every guest will be close to performers, creating a more intimate experience. The Jewel also will have five themed skybox suites on a mezzanine level, as well as a bar and an area for general admission.

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ANGEL OF THE WINDS, QUINALT BEACH PICK SCIENTIFIC GAMES iversified gaming supplier Scientific Games anD nounced two agreements to provide system solutions to casinos in Washington. Angel of the Winds Casino & Hotel in Arlington, Washington, owned and operated by the Stillaguamish Tribe, has selected Scientific Games to provide a broad spectrum of casino-management systems solutions for its casino resort, replacing a competitorâ&#x20AC;&#x2122;s systems technology. In addition to the broad array of systems applications, Angel of the Winds has added an additional 88 Scientific Games slot machines to its casino floor. The casino resort selected a mix of the companyâ&#x20AC;&#x2122;s Alpha 2 Pro Series Wave and Alpha 2 Pro Series V27/27 slot platforms, as well as a portfolio of high-performing game content including Dragon Rising, Precious Jade and Lucky Tree. In a separate release, Scientific Games announced the Quinault Beach Resort and Casino in Ocean Shores, Washington, has selected the companyâ&#x20AC;&#x2122;s systems, games and interactive solutions for its new casino expansion. The $25 million Quinault Beach Resort expansion project, scheduled to be complete later this year, will add 70 percent more casino space to accommodate additional slot machines. As part of this major upgrade to its resort amenities, Quinault elected to upgrade its legacy Bally casino-management system with Scientific Gamesâ&#x20AC;&#x2122; modern SDS slot accounting and playertracking systems. To elevate excitement on the larger casino floor, Quinault Beach Resort is adding 100 new Scientific Games slot platforms and games, and also selected SG Universe, a holistic mobile solution with compelling content for land-based casino operators to connect with players everywhere, with a single view of the player through Core Systems Integration.

MUCKLESHOOT, EVERI SMASH TOURNAMENT RECORD he Muckleshoot Casino in Auburn, Washington, Ton teamed with slot manufacturer Everi Holdings April 30 to set a new Guinness World Record for slot tournament participation as 3,173 players participated in the property finals for Everiâ&#x20AC;&#x2122;s National TournEvent of Champions. 66

Global Gaming Business JUNE 2016

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“We are grateful to the Pauma Gaming Commission for trusting Joseph Eve CPAs with their auditing requirements,” said firm partner Grant Eve.

ODAWA SELECTS AGILYSYS oftware supplier Agilysys announced SPetoskey, that the Odawa Casino Resort in Michigan, has selected the industry-leading Agilysys solution suite—

including Visual One PMS, InfoGenesis POS and rGuest Pay—to streamline efficiency and optimize guest service at the 137-room property. The property’s executive team wanted stateof-the-art technology that not only would increase operational efficiency but also would enhance the guest experience. “Casino hotels that want to beat the competition must leverage technology to improve overall property performance,” said Jim Walker, senior vice president of global revenue at Agilysys.

Muckleshoot Casino Director of Player Services Michael Ka’ahanui with World’s Largest Slot Tournament Winner Benigno T.

The event smashed the record held by Connecticut’s Mohegan Sun, which teamed with the former Bally Technologies three years ago to hold a tournament on Bally systems with 3,001 participants. Officials from the Guinness Book of World Records were on hand to record that as the World’s Largest Slot Tournament, and officials from Guinness were at Muckleshoot this time to verify the new record of 3,173 for the casino and Everi. The Muckleshoot event was part of Everi’s annual competition in connection with the TournEvent instant-tournament system. The winner of the record-breaking tournament will go to the finals in Las Vegas the week of the Global Gaming Expo and compete with other finalists from around the country for a top prize of $1 million, with $400,000 in other prizes spread across a field of more than 180 finalists—no finalist receiving less than $500. Each finalist winning a property tournament also gets an all-expense paid trip for two to Las Vegas for the finals at the XS Nightclub at the Encore. The Muckleshoot winner also got $21,000 in cash for winning the record-breaking TournEvent contest.

JOSEPH EVE WINS CALIFORNIA CONTRACT oseph Eve CPAs has won a contract to conduct JSouthern external auditing services for Casino Pauma in California. Joseph Eve works for tribal operations in 28 states, and this win is the latest in a string of competitive external audit RFPs Joseph Eve has won recently. “Joseph Eve and the team have demonstrated the utmost professionalism and knowledge during their auditing proposal process,” said Alex Sanchez, executive director of the Pauma Gaming Commission. “The lines of communication are always open and they are eager to assist when needed.”

JUNE 2016 www.ggbmagazine.com

SAVE THE DATE. You’re changing the game at this year’s G2E. Take the next step and build on your success.

ATTEND G2E 2016.

SEPTEMBER 27-29, 2016 SANDS EXPO CENTER LAS VEGAS

EXHIBITS

SEMINARS

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PEOPLE SEMINOLE GAMING RE-UPS TWO KEY EXECUTIVES

eminole Gaming CEO James Allen last month announced the extension of employment contracts for two key executives, including Chief Operating Officer Larry Mullin, who joined the organization in DecemLarry Mullin ber 2012. Mullin’s contract has been extended to 2018. In addition, Allen announced the extension of the employment contract for Thomas W. Sparks, senior vice president for security. His contract has been extended for three years. Sparks has been part of the Seminole Gaming management team since 2003. “We are extremely pleased to extend the employment contracts of these two Seminole Gaming key executives,” said Allen. “I have known Larry and Tom for more than 25 years and I have always admired their dedication to achieving real results.” Mullin has nearly 30 years of experience in the gaming industry, including the past three years with Seminole Gaming, where he has been instrumental in developing programs to enhance the level of customer service and amenities. According to Allen, he truly cares about employees and guests. Mullin was previously chief executive officer of Echo Entertainment. Prior to joining Echo, he was president and chief operating officer of the Borgata Hotel, Casino & Spa in Atlantic City. He also has held senior executive positions with the Trump Organization and Harrah’s Entertainment.

TRIBAL CEO NAMED EXECUTIVE OF THE YEAR

he Native American Finance Officers Association (NAFOA) has named Santa Ynez Band of Chumash Indians’ Chumash Enterprises CEO Holly Gagnon as Executive of the Year. Holly Gagnon The honor was conferred at the NAFOA’s 34th annual conference at the Gila River Indian Community’s Sheraton Wild Horse Pass Resort near Phoenix. The NAFOA praised the honoree: “Gagnon has consistently led gaming enterprises to success

by increasing margins, stabilizing finances, and recruiting experienced and respected executive teams.” Gagnon oversees the Chumash Casino Resort, Hotel Corque, Root 246 and various other properties owned by the tribe in Solvang and the Santa Ynez Valley, which are along California’s central coast.

FUETSCH NAMED TO NEVADA COMMISSION

evada Governor Brian Sandoval appointed Wells Fargo Senior Vice President Debbie Fuetsch to the Nevada Gaming Commission. If approved, Fuetsch would fill a vacancy created when Debbie Fuetsch Michonne Ascuaga recently resigned after a federal money laundering investigation into the Nugget Casino Resort in Sparks was revealed. Ascuaga’s father, John Ascuaga, became the casino’s general manager when he bought it in 1960, and her family continued to own and operate it until selling it to Global Gaming and Hospitality in 2013. Ascuaga said the federal investigation did not involve her or her family, but she resigned from the commission to avoid a potential conflict of interest. Fuetsch manages Wells Fargo Bank’s commercial portfolio, and Sandoval said her experience with banking compliance laws will prove beneficial for the commission. Fuetsch will serve a one-year term, from May 1 through April 27, 2017. Sandoval also re-appointed Dr. Tony Alamo to another four-year term as the commission’s chairman.

PENN NAMES NEW REGIONAL OPERATIONS VP

enn National Gaming last month announced the appointment of Albert T. Britton as senior vice president of regional operations. Britton was most recently general manager of Penn’s Hollywood Casino at Charles Town Races in West Virginia, where he has been for 12 years. Following a planned realignment of the company’s reporting structure, Britton will be one of three such regional managers, responsible

for the Midwest Region, which includes Missouri, Illinois, Kansas and Indiana. He will report directly to COO Jay Snowden. Britton is a 35-year veteran of gaming. He began at the Claridge Casino Hotel in Atlantic City and held a variety of management positions there until he rose to be president and COO.

ORTIZ ANNOUNCES MANAGEMENT CHANGES

rtiz Gaming announced that Desiree Giles has been promoted to senior manager of regional sales for the Oklahoma region, with responsibility for Oklahoma, New Mexico, Texas, Alabama, Louisiana, Desiree Giles Arkansas and Kansas. Ortiz Gaming also announced that Randy and Claudette Carnett have left Ortiz Gaming to pursue other opportunities. During their three-year tenure with Ortiz Gaming, the Carnetts were major contributors to the company’s market penetration and growth.

GGB

June 2016 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Acres . . . . . . . . . . . . . . . . . . . . . . . .36,37,45,71 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . .49,65 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Agilysys, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .17 Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . .2,35 Casino Style Magazine . . . . . . . . . . . . . . . . . .55 Data Spade . . . . . . . . . . . . . . . . . . . . . . . . . . .61 DEQ Systems Corp. . . . . . . . . . . . . . . . . . . . .31 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . .66 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59,68 Gaming & Technology Awards . . . . . . . . . . . .63 Gasser Chair . . . . . . . . . . . . . . . . . . . . . . . . . .67 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Greenberg Traurig . . . . . . . . . . . . . . . . . . . . .41 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Interblock . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Konami Gaming . . . . . . . . . . . . .39, Back Cover Micro Gaming Technologies . . . . . . . . . . . . . .27 NetEnt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . .20 Scientific Games . . . . . . . . . . . . . . . . . . . . . . .13 Sightline Payments . . . . . . . . . . . . . . . . . . . . .25 Spin Games . . . . . . . . . . . . . . . . . . . . . . . . . . .33 TCS John Huxley . . . . . . . . . . . . . . . . . . . . . . .53

JUNE 2016 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Aron Ezra President and CEO, OfferCraft

ron Ezra joined the gaming industry when the former Bally Technologies purchased his company, MacroView Labs, which developed apps for a wide variety of companies, just some of them gaming. He became vice president for Bally and concentrated on many cutting-edge technologies developed by the company. But three years ago, he left Bally to launch another startup, OfferCraft, which “gamifies” communications with customers. The company has many relationships with casino companies, and has crossed over into retail, restaurants and other mainstream businesses. He spoke with GGB Publisher Roger Gros at the GGB offices in April. To hear a full podcast of this interview, visit GGBMagazine.com. GGB: What made you leave Bally to start your new company, OfferCraft?

Aron Ezra: We had a wonderful experience at

Bally. It’s a great company; there’s a lot to like over there. Very, very innovative. But ultimately, there are certain ideas that just need to be built, and certain ideas that are a lot harder to build in any big company. OfferCraft happened to be one of those ideas that we were just so excited about, and needed to do. And we felt like the only way we could really do it right was to incubate it on our own. Tell us about OfferCraft. What makes it so special that only you could do it?

There are a million companies out there trying to tell you what you need to give a player to get them to come back. What we wanted to do was really think about not what the offer should be, but how the offer should be presented. We spend so much time wondering whether we should give $12 or $15. But the way that something is given to somebody, the way that thing is presented, makes just as big a difference—often a bigger difference—in whether or not that indi70

Global Gaming Business JUNE 2016

vidual is going to actually use the offer. So we wanted to really create something that would allow us to bring the concept of gamification to all different parts of the property. You have so many casinos where they think about games all the time, but they only think about games on the casino floor. We thought that was crazy because casino patrons, more than maybe any other demographic in the world, love playing games. What areas of the casinos do you really focus on?

We’re primarily focused in three areas. We gamify marketing, operations and certain HR elements, as well. On the marketing side, one of the most frequently used parts of our platform would be sending out emails to a whole bunch of inactive customers who maybe haven’t shown up in a year or two, and they’re about to get rid of them in the system. By actually letting those folks go ahead and play a game to win things, we’ve been able to reactivate a pretty significant number of those folks. But then on the operation side and on the HR side, we’ll do quite a bit to actually use games to incentivize certain behaviors. Maybe the server who serves the most drinks in the night gets to play a game and win something. Or the housekeeper who cleans her 5,000th hotel room gets a chance to play a game to win something. And when we do all these things, we’re collecting data about these people’s preferences. There must have been a lot of psychological research that went into this—how people respond, why they respond, and then quantifying that response.

We spent a long time looking at fields like behavioral economics, the study of how people behave and think, and what incentives get them to think about things. We looked into cognitive psychology, spent a lot of time on decision-making sci-

ences. The goal of all of this was to discover how to present information in a more psychologically compelling fashion. Our clients spend X-million dollars a year on marketing, and typically have maybe 30 percent of the people respond. If we can increase that by even a few percentage points, then that is a massive return on investment. Tell us about Smart Rewards.

This is the part of our platform that I’m most excited about. The games are a really amazing way to get people engaged, and get people to sit up and take notice. We actually do get participation rates up pretty significantly, but the redemption rates go up just a little bit. So, before, you had a 10 percent redemption rate, now maybe we have a 14 percent redemption rate. But I wanted to figure out a way to make that redemption rate really skyrocket by giving out rewards. When we give out a reward, it looks like a normal coupon or voucher. But it’s not. It’s actually a tiny software program that can evolve and change itself, even after somebody has received it. Let’s say we give someone $20 of free play, but they decide not to use it. So if you don’t use that, in our system, we know that you’re ignoring it. We know you didn’t use it. So that reward is going to expire after a few days if you’re not using it. So then we send a message that we noticed you didn’t use this; do you want something else instead? So you can swap it out for something—maybe you don’t want more free play, maybe you’d rather get 2-for-1 on a hotel booking. So you can actually select something different, which not only dramatically increases the chances of you coming in and using the reward, but also gives us really, really powerful insights into your personal preferences, as well as the macro-level preferences of everybody. That’s the kind of thing that gives us a lot of insights, and there’s a million different behaviors that we can actually pre-program in. The possibilities are endless.

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