Global Gaming Business, Novmber 2017 by Global Gaming Business

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GGB Global Gaming Business Magazine

SPORTS BETTING IN INDIAN COUNTRY SLOTS: BIGGER IS BETTER ARUZE’S ERIC PERSSON

November 2017 • Vol. 16 • No. 11 • $10

Racing Ahead

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CONTENTS

november

Global Gaming Business Magazine

COLUMNS

28 COVER STORY Unique Appeal

12 AGA Stronger Together

The Fortune Cup horse-racing game, the skill-based Fogger: Get Hoppin’ and Beat Square are among a new breed of games from Las Vegas-based Konami Gaming that draw on the legendary video-game and amusement capabilities of its sister companies Konami Digital Entertainment and Konami Amusement Co.—feeding the desire of operators to include non-traditional slot product on the floor.

Geoff Freeman

14 Fantini’s Finance The Good Times Roll Frank Fantini

48 Table Games Lessons from HBO Roger Snow

DEPARTMENTS

By Frank Legato

FEATURES

18 40 Under 40 GGB, Global Gaming Expo and The Innovation Group kick off the annual “40 Under 40” program honoring 40 young executives in G2E’s Emerging Leaders program with 10 profiles of future industry leaders. By Marie Casias, Roger Gros, Christopher Irwin, Anthony Mason, Aaron Stanley, and William Sokolic

32 Sports Betting in Indian Country As legal sports betting draws near with the U.S. Supreme Court examining the constitutionality of the federal ban, tribal gaming operators assess the opportunities and the risk.

The Agenda

44 Bigger and Better

By the Numbers

Large-format slot machines have become all the rage, as major slot manufacturers vie to compete with new approaches to the giant gaming machine.

10 5 Questions 16 AGEM Page 49 New Game Review 52 Frankly Speaking

By Dave Bontempo

50 Innovation on Display This year’s Global Gaming Expo proved once again that there is no limit to the innovation pouring from the supplier side of the industry, or the depth of the G2E Education Program.

53 People 54 Casino Communications With Eric Persson, President & Chief Operating Officer, Aruze Gaming

By Patrick Roberts

By Dave Palermo

38 The Crowded East With new casinos in Philadelphia and Massachusetts on the way, Eastern casinos grapple with the possible danger of market saturation. By Marjorie Preston and Rummy Pandit 4

Vol. 16 • No. 11

Global Gaming Business NOVEMBER 2017

A slot experience so immersive you can feel it. Experience the power of TRUE 4D™ gameplay on the new SPHINX® 4D Slots by IGT. Gesture-recognition and mid-air haptic technologies empower players to explore ancient Egypt with the wave of a hand. This immersive journey includes stunning HD graphics, seven interactive bonuses and a choice of day or night background settings, allowing for a personalized and interactive gaming experience. Reach out to your IGT Account Manager today to bring the magic of 4D to your floor. © 2017 IGT. All rights reserved. All other 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

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THE AGENDA

Vol. 16 • No. 11 • NOVEMBER 2017

#VegasStrong Roger Gros, Publisher

y son and his family live in London, where he is an executive for a large travel company. Every time there is a terrorist event there (too often, unfortunately), I check in with him to make sure everyone is safe. The last one, a fizzled bomb on a subway train, occurred just two tube stops away from his home. He frequently travels through the airport in Brussels that was bombed last year. I have been very concerned about his well-being while he’s living in Europe, and even while visiting, I’m always watchful when I’m in crowds with my two grandsons. So it felt strange the night before G2E was to open that I was the one texting him that we were OK and safe in our hotel on the Las Vegas Strip. We were about a mile away from the scene of carnage and could hear the sirens of all the first responders and police heading to the site. Waking up on Monday, it was difficult to see how we could conduct business on the heels of such insanity. It was almost a malaise that engulfed everyone I spoke to that morning. That the horror happened on properties owned by one of the major companies in our industry only made it worse. But then something remarkable happened. People started to rally. We weren’t going to let one lunatic change our lives, even though he so tragically took the lives of so many others. Hearing about the heroes who responded so positively during the shooting made it even more imperative to get on with our normal lives, at the same time keeping in mind those who had lost theirs or who had been injured. The stories were inspirational and heartbreaking, and somehow gave us hope that not all humans are as evil as the shooter. Much credit needs to go to the American Gaming Association for the dramatic turnaround and positive attitude that emerged at G2E. The staff had to be nimble and responsive, while understanding the sensitivities of the victims and the potential for politicizing the tragedy. Geoff Freeman walked that tightrope with skill and aplomb, and bringing in former Boston

Global Gaming Business NOVEMBER 2017

Police Chief Ed Davis, who presided over the aftermath of the Boston Marathon bombing, was a stroke of genius. Davis’ actions during that terrible situation gave the industry confidence we’d get through this, no matter how difficult it felt at the time. Making matters worse is the shooter was a gambler who was known at many of the Strip and locals casinos in Las Vegas. But even Steve Wynn acknowledged that there was no reason to expect anything untoward about the video poker player—nothing to make any casino operator suspicious. He said the shooter and his girlfriend were always well-behaved and never drank or abused their comps. But if the shooter’s goal (and no one to this day understands his motive) was to demoralize Las Vegas and the casino industry, he completely missed his mark. In addition to drawing the casino industry closer together, Las Vegas demonstrated that it’s more than just a collection of transients—it’s a true community. The day after the shooting, thousands of Las Vegans stood in lines of four hours or more just to give blood. A GoFundMe account set up to benefit the victims and their families reached its goal of $2 million in less than two days and now stands at more than $10 million, with large contributions from many gaming companies. Many casino executives and Las Vegas officials felt this day was inevitable. Las Vegas is the capital of decadence and indulgence in the American culture and a huge symbolic target. Ever since it was revealed that several of the 9/11 terrorists had cased the Las Vegas casinos, officials have had their guard up. But no one could have predicted and foreseen the madness brought to the Strip by the shooter, and we may never know the reasons. But we all know now that there is no place that is truly safe. Whether it’s London or Las Vegas or anyplace in between, we must remain diligent, protect our communities as best possible, and love each other so we can erase the silly divisions that keep us apart. In this way, we can all remain #VegasStrong.

Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | cooley7@sunflower.com John Buyachek, Director, Sales & Marketing jbchek@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Frank Fantini twitter: @FantiniResearch Geoff Freeman twitter: @GeoffFreemanAGA Roger Snow Contributing Editors Dave Bontempo | Marie Casias | Christopher Irwin Anthony Mason | Rummy Pandit Dave Palermo twitter: @DavePalermo4 Marjorie Preston | Patrick Roberts Aaron Stanley twitter: @AaronWStanley | William Sokolic

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

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

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

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

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

• Dean Macomber, President, Macomber International, Inc.

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

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

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

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

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

• Roy Student, President, Applied Management Strategies

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

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BY THE

NUMBERS

BiG RESulTS FoR Small BuSiNESS T

he American Gaming Association report “Gaming Means (Small) Business: How Casinos Boost Local Economies” demonstrates how casinos benefit their local communities by creating jobs, growing small businesses, generating billions in taxes and supporting local workers not directly employed by casinos.

The study focuses on five communities where casinos are located and examines the economic impact on the regions. The chart shows the total direct and indirect employment spurred by the casino industry. The AGA commissioned Spectrum Gaming Group to produce the report.

Total Private Gaming-Related Non-Farm Employment Contribution (across businesses of all sizes)

The innovation Solution

nspired by the Steve Jobs quote “Innovation is the only way to win,” three executives from leading gaming suppliers put together a group on how to encourage innovation in the casino industry. Blaine Graboyes, founder and CEO of

Video Game Console Sales Cycles Global Sales

Global Gaming Business NOVEMBER 2017

GameCo, Inc.; John Connelly, CEO of Interblock; and Steve Sutherland, president and CEO of Konami Gaming, Inc., believe that innovation is crucial to the continued success of the industry. In a report titled “Innovation Adoption for the Casino Gaming Floor,” the group assembles a panel of seven gaming by Generation experts to evaluate how that can happen. They outline how innovation has driven other industries, and pinpoint the concept of continual evolution of a product. They demonstrate that concept by looking at video game console sales. For the last several years, video game consoles have been moving toward a tipping point. Now, with all the major console players on the same platform as the PC, a paradigm shift has occurred that will end the traditional five-to-seven-year console life cycle. In its place will be a quicker console cadence, one inspired by the iterative nature of the PC and smartphone markets.

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Join Scientific Games this year as we unveil the best in gaming – from player-favorite classic titles showcased on our newest platforms, to the most innovative and cutting-edge technologies designed to enhance your entire operation – on the casino floor, behind the scenes, and beyond. The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character as well as each of the distinctive elements of the board and the playing pieces are trademarks of Hasbro for its property trading game and game equipment. ©2017 Hasbro. All rights reserved. Used with permission. ©2017 Scientific Games Corporation.

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NUTSHELL

5Questions

Kathy George

CEO, Firekeepers Hotel & Casino

“They

Said It”

“Nothing will hold me back there.” —Lawrence Ho, billionaire owner of Melco Resorts & Entertainment, on his determination to win a Japanese casino license

athy George was named president and CEO of the Firekeepers Hotel Casino in Battle Creek, KtakenMichigan in May. She joined Firekeepers in 2012 as vice president of hotel operations, and has now over one of the most successful casinos in the state. To hear a full podcast of the interview— where she discusses improvements to the property, community involvement and the assessment of the Michigan/Indiana market—visit GGBMagazine.com. GGB: Bruce McKee and Brian Decorah left a healthy operation with lots of customer loyalty and employee enthusiasm. What was your first goal when you took over at Firekeepers? Kathy George: Brian and Bruce did leave a great foundation on our property, so I just wanted to con-

1 2 3 4 5

tinue moving forward, continue our great service we already provide and expand our revenues. We want to keep growing and take our service even to the next level. You came from the hotel side, so how did you get up to speed on gaming?

I was a general manager for Seneca Gaming Corporation, so I had experience in that area. But even when I worked on the hotel side, we did extra projects that exposed me to the different departments in the hotel. When the position opened up, the other people asked me to apply because they didn’t want someone from the outside to come in and change things, and it all worked out. The Nottawaseppi Huron Band of the Potawatomi is a real example for other tribes. Casino gaming was introduced very carefully and thoughtfully from Laura Spurr to Jamie Stuck. How has it been working for the tribe?

The ownership is so good to us as employees and the community that I’m really proud to be part of the family. They work very hard to do the right thing and make the right decisions. Sometimes people might not understand our decision, but we’re not going to build or open something that’s not right for those involved. It’s all heart-driven. Yes, we’re in business and we’re there to make money, but they also consider all the heartfelt things as well. Brand recognition is important, and Firekeepers has done a remarkable job marketing to a wide region via the golf tournament and race sponsorship. How important is that to your success?

It’s huge. The partnership we have with Michigan International Speedway for the NASCAR race gives us millions of imprints around the world. To go in and see the tribal flag and the Firekeepers logo is incredible. And our relationship with the LPGA is just as good. It’s great to contribute to women’s golf and Battle Creek Country Club, and to see our logo and flag is just as exciting. It’s important to get our name out there. You can have the greatest facility, but customer service is of course the most important element to success. How do you motivate your 1,700 employees to provide that great service?

My expectations about the service levels have been clear. Right after I started, we had team rallies that allowed me to get my message out. Between myself and the vice presidents, we’re out on the floor, we walk the property, they see us everyday. I think that helps a lot. They know what we expect and everyone wants to meet or exceed those expectations. We also work for some great owners. The benefit package they provide us is very motivational. And just to have a great job in Battle Creek right now is a motivation in itself. Everyone wants to be recognized. We have secret shoppers that identify exceptional service and we reward them with Keeper of the Month or Keeper of the Quarter. And we have programs where we can award cash, prizes or paid time off for those who give exceptional service.

Global Gaming Business NOVEMBER 2017

CALENDAR November 2-3: Big Africa Super Show, Emperors Palace, Johannesburg, South Africa. Produced by Eventus International Limited. For more information, visit bigafricasummit.com. November 7-9: SAGSE LATAM 2017, Costa Salguero Convention Center, Buenos Aires, Argentina. Produce by Monografie. For more information, visit monografie.com/sagselatam. November 14-15: Sports Betting USA 2017, Convene, New York City. Produced by Clarion Gaming. For more information, visit sportsbettingconference.com. November 21-23: Eastern European Gaming Summit and Balkan Entertainment & Gaming Expo (BEGE) 2017, Inter Expo Center, Sofia, Bulgaria. Produced by BEGE. For more information, visit balkangamingexpo.com. November 22-25: Summit of iGaming Malta (SiGMA) 2017, MFCC Malta Fairs and Convention Centre, Malta. Produced by SiGMA. For more information, visit maltaigamingsummit.com. December 6-8: World Gaming Expo, Grimaldi Forum, Monaco. Produced by Monaco International Events. For more information, visit World-Gaming-Expo.com. February 6-8: ICE Totally Gaming, Excel Centre, London. Produced by Clarion Gaming. For more information, visit ICETotallyGaming.com.

HIP HIP HOORAY Three cheers for James from Potawatomi Hotel & Casino! He will be taking home the $1 million* dollar grand prize and the title from the 2017 TournEvent of ChampionsÂŽ in Las Vegas. James came out on top of more than 250,000 entrants from over 100 casinos in North and South America, in our fifth annual TournEvent of Champions. The journey to the next Million Dollar Eventâ&#x201E;˘* in 2018 promises to be even more exciting as we search for our next champion. Could it be you?

Arrive a Winner. Leave a Legend. *Payable in periodic payments over 20 years or in a lump sum, present day cash value payment.

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AMERICAN GAMING ASSOCIATION

Stronger Together

PUBLICATIONS

A resilient Las Vegas community comes together

Global Gaming Business Magazine

his has been an unprecedented time for the business of gaming. The annual Global Gaming Expo (G2E) recently concluded, with 26,000 gaming industry professionals gathering in Las Vegas only hours after the tragic event that took the lives of 58 innocent concertgoers, industry employees and first responders. I’ve always maintained that we are at our best when we are together, and that was certainly true having everyone in Las Vegas, the heartbeat of our industry, on the

Tribal Government Gaming

Casino Style Magazine

nated blood, and offered unique tributes to those affected. I was struck by a couple of things: First was the perfectly executed security plan that had clearly been prepared in extensive detail. Each property activated its own protocols, while surrounding-area police departments dispatched immediately to assigned properties to ensure the safety of visitors and employees everywhere. Second was the resilience of our community and customers. Not only did employees wake up

will now always know that our industry is “ We strongest when together, and that Las Vegas represents the very best our industry and country has to offer. ”

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By Geoff Freeman, President & CEO, American Gaming Association

Global Gaming Business NOVEMBER 2017

heels of this tragedy. Like other attacks on public gatherings in London, Paris, Orlando and elsewhere, there are often more questions than answers, particularly in the days immediately following. But we’ve seen the resilience of Las Vegas shine through. As of now, there have been no notable meetings or conventions canceled, casino floors remain busy, entertainers are performing, and the dedicated employees of casinos, restaurants and entertainment venues have reported for work each and every day. At G2E, we appropriately tailored our content to reflect on the shooting, including a discussion with former Boston Police Commissioner Ed Davis, who shared commonalities between how Boston reacted and then recovered from the marathon bombing in 2013. Not surprisingly, he complimented the tremendous efforts by Las Vegas Metro Police, first responders and citizen-heroes who helped to mitigate even more horror, and the significant outpouring of support by people and organizations from near and far that committed financial resources, do-

and come back to the Strip the next day, so, too, did tens of thousands of Las Vegas visitors who refused to be deterred by a terrorist. Like our colleagues up and down the Strip, we gradually pivoted, bringing the G2E program back on track. AGA members introduced innovative new games, and attended a robust program of educational sessions on everything from the pending Supreme Court hearing on legalized sports betting in December to responsible gaming initiatives and increased alignment between commercial and tribal gaming operators. We will remember G2E 2017 for the highs and remarkably tragic lows. We will be proud of how our industry helped those in need, supported one another through a difficult time and rose to the occasion at our seminal event. And we will now always know that our industry is strongest when together, and that Las Vegas represents the very best our industry and country has to offer. #VegasStrong

Follow Geoff Freeman on Twitter at @GeoffFreemanAGA.

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FANTINI’S FINANCE

The Good Times Roll Many gaming stocks have hit 52-week highs; is time to cash in?

he stock market has had a great run as of this writing, and gaming stocks have done even better. Many have hit new highs repeatedly. Fantini’s North American Gaming Index rose 29.96 percent year-to-date through September, far outperforming the overall market. Our World Index did even better, up 39.52 percent. Here’s a list of U.S. gaming stocks recently hitting 52-week closing highs: Boyd Gaming, Caesars Entertainment, Churchill Downs, Eldorado Resorts, Galaxy Gaming, Golden Entertainment, Las Vegas Sands, Melco Resorts, Monarch Casino, Penn National Gaming, Pinnacle Entertainment, Scientific Games and Wynn Resorts. Even stocks not at or right next to their 52week highs still hit those highs recently and haven’t fallen back much from them, such as MGM Resorts, MGM Growth Properties and Everi. Some of these gains have been simply spectacular. Scientific Games, at $8.72 when Kevin Sheehan became CEO in the summer of 2016, is near $46 as of this writing, a 550 percent rocket ride. Some are clearly stories of troubled companies that have cleared their paths ahead. Caesars, long burdened by debt, has been reorganized under a much lighter debt structure. Galaxy Gaming, long limited in expansion plans, is now Nevada licensed under new CEO Todd Cravens, and is ready to enter new jurisdictions. But a lot of the growth appears based on a general feeling of well-being and confidence in the future as the economy is giving the gaming industry a prolonged period of steady growth. So the question for investors: Is it time to take profits and put some money aside for a rainy day? The future will tell us the answer, but for now, economic trends remain encouraging and valuations are not stretched.

BOYD, A STEADY GROWER We’ve mentioned Boyd Gaming several times in this space as a company that appears to have a steady growth plan. The company recently demonstrated that in its 14

By Frank Fantini

second quarter—while earnings missed analyst consensus, overall performance and corporate activities showed underlying strength. Among the positives: • Operating margins in the Las Vegas locals markets improved 3.3 percent in the quarter. Part of the rationale for buying Cannery, East Side Cannery and Aliante casinos is that they operated at low margins, which Boyd can improve. • Returning capital to shareholders. BYD initiated a 5-cent quarterly dividend, bought back 600,000 shares in the quarter and intends to complete the remaining $77 million in buyback authorization in 12 to 18 months.

‘

Investors would be wise to have some cash on hand for the day when the good times no longer roll, or an exogenous event is seriously damaging.

’

• Lower debt. Boyd had paid down $92 million in debt this year and expects to get its debt-toEBITDA ratio into the four- to five-times range next year. • Property improvements. While Boyd is paying down debt, it is also investing in upgrading properties, a necessary move for growth. • Las Vegas Valley. Gaming revenue growth in the Las Vegas Valley appears to be accelerating. Unlike most states, Nevada reports revenues by area, not by property, but July numbers suggest a strong month for Boyd. With last year’s acquisitions, the Las Vegas Valley now generates about 45 percent of the company’s gaming revenue. The locals markets and Downtown Las Vegas grew revenues $25.122 million in July, a combined 12.07 percent. Assuming Boyd has 30- to 40 percent of those markets, and assuming it shared proportional growth, the inference is that BYD grew revenues by a healthy amount.

Global Gaming Business NOVEMBER 2017

A combination of higher revenues and higher margins obviously means an even better bottom-line improvement. Boyd stock is near its 52-week high, and at 17 times next year’s earnings, it isn’t overly cheap. But it also isn’t expensive. Boyd appears to be early in a story that will develop over several years.

EXOGENOUS EVENTS Sometimes, things happen that you cannot predict. In investing, they are called exogenous events. They disrupt the business model but, because they come from outside an organization and cannot be predicted, they are not factored into the model or financial forecasts. The American casino industry has had several of them recently. Hurricane, then Tropical Storm, Harvey, was an exogenous event that dampened business in western Louisiana in late summer. The tragic October shooting at Mandalay Bay in Las Vegas could cause some prospective visitors to pass on major events, though that is just speculation at this point. We don’t know how these events will play out. In Louisiana, the economic disruption of flooded eastern Texas might keep many players at home, but the influx of wage-earning recovery workers might offset that. In Las Vegas, MGM Resorts might operate at less than full capacity for a short time, but similar events in other cities in the past have not demonstrated a long-term impact. And, no doubt, no one else will ever again get away with amassing an arsenal of weapons inside a hotel, casino or otherwise. Such exogenous events are relatively small and their effects are of short duration. But they are reminders that nothing is certain. And, much like the item above about the good times rolling for casino stocks, investors would be wise to have some cash on hand for the day when the good times no longer roll, or the exogenous event is seriously damaging. Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.fantiniresearch.com.

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AGEMupdate OCTOBER 2017 KEY BOARD OF DIRECTORS ACTIONS

AGEM MEMBER PROFILE Glory Global Solutions Inc. GLORY products and solutions optimize the cash chain from the cashier to the cage, through the audit process and to the bank. By eliminating the need to manually count and authenticate cash, GLORY helps liberate staff to perform higher-value customer service and operational tasks that drive business performance. GLORY’s solutions fortify the chain of custody, reduce manual handling of cash, detect fraudulent currency and help ensure accurate accounting. With less risk of human error, skimming and fraud, gaming establishments keep more of their earnings and spend less on securing cash. GLORY provides solutions that enable shared services to lower costs, ensure application of best practices for cash management, and drive economies of scale across gaming organizations and locations. GLORY’s cash automation technologies and process engineering services help businesses in more than 100 countries optimize the handling, movement and management of cash. While GLORY spans the globe, the company personally engages with each customer to address their unique challenges and goals—enhancing staff efficiency, reducing operating costs and enabling a more rewarding customer experience. To secure the future, GLORY products include: • CI-50 Cash Recycler. Lower-capacity unit for casinos interested in placing recyclers at various locations in the casino, restaurants or bars. Creates greater efficiency operationally. • QuickChange self-service coin sorting for casino patrons, enabling more streamlined and less expensive coin handling. GLORY is partnering with Acrelec, the leader in digital kiosk solutions, to introduce a self-ordering food-service kiosk that allows both cash and credit payments. Including cash in a food-service kiosk enables customers who prefer to pay in cash to complete the transaction in a self-serve environment. Cash-enabled kiosks ensure all customers receive the same experience, whether they pay with cash, card or debit, and eliminates the separate cash-only line. For more information, visit glory-global.com.

Global Gaming Business NOVEMBER 2017

• Following the horrific events that took place in Las Vegas on October 1, AGEM members quickly rallied to offer support to the Las Vegas Victims’ Fund. The Board of Directors agreed to a contribution of $50,000 with a number of AGEM member companies also individually contributing to provide an additional $118,500 to the fund. Initially set up by the Clark County Commission to provide victims with funds for funeral, medical, travel and other expenses, it has currently raised close to $20 million. • The AGEM Memorial Awards honoring Jens Halle and Peter Mead were presented on the show floor at G2E to industry veterans Rick Meitzler and Roger Gros, respectively. Both recipients are well-deserving AGEM members who have made their mark on the industry. The event was especially powerful this year as Jens Halle’s wife, Marietta, was in Las Vegas and attended the presentation. • Events in Harrisburg, Pennsylvania regarding the legislative review of approving video gaming terminals continue to change regularly. At the beginning of October there seemed to be more focus on mini-casinos and truck stops as proposed locations, but a subsequent change in the focus leaves many options still open. AGEM is a member of the Pennsylvania Video Gaming Association and continues to offer support for gaming expansion. • A landmark court case in Melbourne, Australia pitting a slot player and her law firm against Aristocrat Technologies and Crown Resorts has seen both sides conclude all their evidence, and the judge will rule in due course. The outcome is being closely watched, as the player is claiming one game title is deceptive and misleading despite receiving regulatory approval in markets all over the world. • G2E took place October 3-5, with organizer Reed Expo reporting a slower start to the show due to the events of the previous days. Attendance was slightly down overall at both the expo and conference; howAssociation of Gaming Equipment Manufacturers September 2017 ever, the show saw 97 new exhibitors and continues to grow.

he AGEM Index experienced significant gains in

September 2017. The composite index stood at UPCOMING EVENTS 457.91 points at the close of the month, which

Selected positive contributors to the September 2017 AGEM Index included the following:

• The AGEM Cup an Golf Tournament/Holiday take place on (SGMS) Friday, November at points will Scientific Games contributed 10, 16.49 represents increase of 26.25 points, orReception 6.08 a 30.26 percent increase in stock price from percent, when compared to August 2017. The AGEM Southern Highlands Country Club. Notifications are beingdue senttoout for golfers to sign up and register in$35.20 to $45.85. Index reported a year-over-year increase for the 24th consecutive month and has climbed 151.05 points, or terest. International Game Technology (IGT) reported a

49.23 percent, since September 2016.

20.52 percent increase in stock price to $24.55 and contributed 13.53 points. During the latest period, one half of the global gaming equipment manufacturers reported within the AGEM Crane Company (CR) contributed 4.91 points due to Index posted month-to-month increases in stock price, a 7.76 percent increase in stock price to $79.99. with four up by more than 10 percent. Two The AGEM Index gains while in September 2017. The composite index stood at 457.91 manufacturers saw experienced no change in significant their stock price, Selected contributors included thewhen following: four manufacturers reported decreases stock price points at the close of the month, whichinrepresents an increase ofnegative 26.25 points, or 6.08 percent, during the month, with all posting single-digit declines. compared to August 2017. The AGEM Index reported a year-over-year for the 24th consecutive With its stockincrease price falling 5.58 percent to ¥5,410, Konami Corporation (TYO:9766) month and has climbed 151.05 points, or 49.23 percent, since September 2016. During the latestcontributed period, The three broader stock market indexes produced solidly negative 6.75 points. positive results in September. The S&P 500 reported a

AGEMindex

one half of the global gaming equipment manufacturers reported within the AGEM Index posted month-

month-to-month increase of 1.93 percent to 2,519.36. Aristocrat Leisure (ASX:ALL) saw reported to-monththe increases in stock price, with fourincreased up by more than 10 percent. TwoLimited manufacturers no a 0.80 Similarly, Dow Jones Industrial Average percent decrease in stock price to AU$21.00, 2.08 percent to 22,405.09, thefour NASDAQ increased reported change in their stock price,while while manufacturers decreases in stock price during the month, contributing negative 2.27 points. 1.03 percent during the period to 6,495.

with all posting single-digit declines.

Agilysys Ainsworth Game Technology Aristocrat Leisure Limited Astro Corp. Crane Co. Everi Holdings Inc. Galaxy Gaming Inc. Gaming Partners International International Game Technology PLC Konami Corp. Scientific Games Corporation Transact Technologies

Exchange: Symbol (Currency)

Stock Price At Month End Percent Change Sep-17 Aug-17 Sep-16 Prior Period Prior Year

Index Contribution

Nasdaq: AGYS (US$)

11.95

10.29

11.12

7.46

0.60

ASX: AGI (AU$)

2.55

2.66

2.25

(4.14)

13.33

(0.43)

(0.80)

32.83

(2.27)

(55.74)

(0.00)

7.76

26.95

4.91

(1.56)

217.57

(0.10) 0.26

ASX: ALL (AU$)

21.00

21.17

15.81

Taiwan: 3064 (NT$)

15.05

34.00

NYSE: CR (US$)

79.99

74.23

63.01

NYSE: EVRI (US$)

7.59

7.71

2.39

16.13

OTCMKTS: GLXZ (US$)

1.17

0.82

0.46

42.68

154.35

Nasdaq: GPIC (US$)

10.76

10.55

10.60

1.99

1.51

0.02

NYSE: IGT (US$)

24.55

20.37

24.38

20.52

0.70

13.53

TYO: 9766 ( )

5,410

5,730

3,895

Nasdaq: SGMS (US$)

45.85

35.20

11.27

Nasdaq: TACT (US$)

9.75

7.48

38.90

30.26

306.83

30.35

(5.58)

(6.75) 16.49 -

Change in Index Value

26.25

AGEM Index Value: August 2017

431.66

AGEM Index Value: September 2017

457.91

AGEM is an international trade association representing manufacturers of electronic gaming devices, ww.AGEM.or systems, lotteries and components for the gaming industry. The association works to further the inofbygaming equipment manufacturers throughout(AGEM) the world. Through political action,©trade The AGEM Index is publishedterests monthly Association of Gaming Equipment Manufacturers and Applied Analysis | Copyright 2017 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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IN GOOD HANDS The 2018 Class of GGB’s 40 Under 40 proves that the future of gaming is secure

ach year, the process to determine GGB’s 40 Under 40 attracts the best and the brightest in the casino industry. This year was no different. Industry participants under the age of 40 can be nominated for the list by entering the Emerging Leaders program at G2E. That process begins in March or April, and is curated by several top-level executives in the industry. This year, the judges panel included Seth Schorr, chairman of 5th Street Gaming and the Downtown Grand; Kathy George, president of Firekeepers Casino Hotel in Michigan; and Julia Boguslawski, vice president of marketing for AGS. Together, they choose five winners of the Emerging Leaders scholarship to G2E who are automatically entered into the 40 Under 40 list. The remaining 35 are chosen by the GGB Editorial Advisory Board. This year, more than 100 people were nominated for the Emerging Leaders scholarship. The Emerging Leaders program was founded by The Innovation

Group and launched in 2012. Nominees are selected and then granted access to the array of resources and connections that The Innovation Group has been building for more than 20 years. That year, the company hosted the first Emerging Leaders networking event at Global Gaming Expo. In 2013, The Innovation Group, GGB, G2E and Reed Exhibitions joined forces to host the industry’s inaugural Emerging Leaders Scholarships program. The program has since provided scholarships to young professionals, and provided ongoing networking and career advancement opportunities that bring the Emerging Leaders closer to future senior-level and C-suite management positions. “Emerging Leaders scholarship programs and events shine an important light on the more than 200 unique careers that the gaming industry provides, supporting the development of professionals who seek to advance their careers in the industry. The Innovation Group’s support of this effort is invaluable to the AGA and to gaming professionals across the country,” says Michael Soll, the president of the company.

2018 GGB’s 40 Under 40 • Tyler Bain Executive Director of Relationship Marketing, Venetian and Palazzo

• Diana Golda Senior Director of Quality Assurance, Gaming Laboratories International

• Alex Bertone Class II Specialist, Ainsworth Gaming Technologies

• Michael J. Golub Deputy Attorney General, New Jersey Division of Gaming Enforcement

• Emmanuel Bezzell Director of Gaming, RiverSpirit Casino Resort • Ashley Burnside Deputy Commissioner, Eastern Shawnee Gaming Commission • Raquel Burton Vice President of Compliance, Four Winds Casinos

• Alja Halleran Director of Human Resources, Bellagio • Caitlin Harte Director of Product Marketing, Incredible Technologies

• Daryl Bruce Group Head of Electronic Table Games and Commercial, Crown Resorts Ltd.

• Matthew Katz CEO, CAMS

• Adrian Cacuci Senior Director and Treasurer, The Cosmopolitan of Las Vegas

• Siobhan Lane Senior Vice President of Marketing and Gaming Operations, Aristocrat Technologies

• Justin Carter General Manager, Hollywood Casino, Resorts Casino Tunica and 1st Jackpot Casino Tunica

• Amy Lawrence Vice President of Regulatory Affairs and Associate General Counsel, AGS

• Howard Copen Corporate Director of Revenue Management, Boyd Gaming

• Lim Pei Xuan Brenda Director, Casino Operations, Marina Bay Sands Pte Ltd.

• Melissa Cox Vice President of Customer Relations and Marketing, Gaming Capital Group, LLC

• Michael Marino Senior Vice President, Chief Experience Officer, Caesars Entertainment

• Mariah Dyer Director of Human Resources, Silver Sevens Hotel & Casino - Affinity Gaming

• Thomas Crawfish Mathews Assistant General Manager / Vice Chairman, Quapaw Casino / Quapaw Tribe

• Kristin Francis Manager of Community Relations, SaskGaming Corp.

• Mike Mitten Vice President of Table Games, Seneca Niagara Casino

• Murali Ganesan Vice President, Systems Sales (West), Scientific Games

• Ari Mizrachi Vice President of Operations Optimization, Tangam Systems

Global Gaming Business NOVEMBER 2017

• Shannon Keel General Manager, Akwesasne Mohawk Casino

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All in the Family Blake Sartini II Senior Vice President of Distributed Gaming, Golden Entertainment Inc.

f there is a royal family tree in gaming, the Fertitta/Sartini families would be it. And Blake Sartini II would be the crown prince. The son of Golden Entertainment founder and Chairman Blake Sartini and Delise Fertitta, the sister of Station Casinos leaders Frank and Lorenzo Fertitta, Sartini II has been raised in gaming. “As far back as I can remember, gaming has always been around the family,” he says. “It’s always a topic of conversation anytime everybody’s around.” When his father worked with the Fertitta brothers at Station Casinos, Sartini says the topics were usually casino-related, but when his father launched Golden Gaming (now Golden Entertainment) in 2001, it became more about bars and taverns, and distributed gaming (slot routes). While in college, he started on the ground floor. “I worked on the slot route; I’d bartend at one of the taverns every summer,” he says. “So I was kind of ingrained in that, as early on as Golden Gaming got started. But I always had passion for the distributed side. I always liked the personal touch that the distributed side offered. And so, I always was gravitating more towards the distributed side.”

• Kelly Myers Licensing Manager, Cherokee Nation Gaming Commission; Chairwoman, Oklahoma Tribal Gaming Regulators Association • Joseph Nayquonabe CEO, Mille Lacs Corporate Ventures • Skyelar Perkins Cooperate Slot Director, Choctaw Casinos • Queenette M. Pettiford Commissioner and Chairwoman, Sycuan Gaming Commission • Ryan Reddy Vice President Video Lottery Terminal and Class II, International Game Technology • Jennifer Rushton Vice President, Business Development, UP Lottery and Gaming Pursuit • Blake Sartini II Senior Vice President of Distributed Gaming, Golden Entertainment Inc. • Adam Siefert Operations Manager, Gateway Casino Hanover • Steve Sirianni Vice President Slot Operations and Marketing, MGM Grand Las Vegas Hotel & Casino • Mattias Stetz Chief Operating Officer, Rush Street Interactive • Martin van der Merwe Manager, VIP Marketing Services, Carnival Corporation & PLC, Doral • Parthena (Gina) Vorgiatzidis Casino Marketing Analyst, Boyd Gaming • Nicholas Weil Head of Business Development-U.S. Lotteries, Inspired Entertainment, Inc. • Seth Young Director of Online Gaming, Foxwoods Resort Casino

“I worked on the slot route; I’d bartend at one of the taverns every summer. So I was kind of ingrained in that, as early on as Golden Gaming got started. But I always had passion for the distributed side.” But first he had to get some experience. He worked for UFC, another Fertitta enterprise, for almost 18 months, based in London—getting his feet wet and meeting an influential boss, the company’s Chief Marketing Officer Bryan Johnston. “He had a brilliant mind, and was always willing to offer so much knowledge to me,” Sartini says. “He got me started.” But distributed gaming continued to beckon. He came back and worked his way up through the organization in various positions. Today, he leads the operations of more than 55 taverns and route operations in Nevada and Montana. But his focus is entirely on the customer and how Golden employees interact with them. And that starts with the bartender. “We ask these people behind the bar to do so much for us, whether it be offering a great customer service experience, or making sure they’re pitching one of our beverage specials, or asking them to sign up a gamer sitting at the bar,” Sartini says. “So when we sit here in this office figuring out how can we get our guests engaged in many of the different aspects we’re developing, we immediately put it on the bar host and people behind the bar. “So I have to remember what a burden that may be on their actual job. I try to put myself in their shoes, and understand that every time we add something more to their responsibilities, it takes away from the core of what we want them to do, which is to offer great gaming experience, great customer service experience, and to be a great bar host.” Golden Entertainment has four basic tavern brands: PT’s, Sean Patrick’s, Sierra Gold and the recently opened SG Bar. “They’re different price points, which is the biggest difference across the board,” he says. “We try to be everything to everybody, and the vehicle to do that is by the different brands.” As the son of the chairman, Sartini had one obvious influencer, but he also cites CEO Steve Arcana, who has been with Golden Entertainment for 16 years and was with Station Casinos before that. “He has always been in something of an awkward position, having to be my direct report,” he says. “I give him a lot of respect for not only handling that situation with such class, but also being able to offer inspiration and pointing me in the right direction.” The future is bright not only for Sartini II but for the entire company. By the end of the year, the company will close on its purchase of American Casino Entertainment Properties, adding Stratosphere Las Vegas, Arizona Charlie’s Boulder, Arizona Charlie’s Decatur and the Aquarius Casino Resort to the company’s portfolio. But for the present, Sartini wants to focus on his division. “I look at distributive gaming as being the cutting edge of gaming, going forward,” he says. “It’s something that I think I can get ahead of everybody if I learn, and I get to know this inside out. This will provide a real path for myself.” —Roger Gros NOVEMBER 2017 www.ggbmagazine.com

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Cracking the Learning

Curve

Diana Golda Senior Director of Quality Assurance, Gaming Laboratories International

L Building Relationships Tyler Bain Executive Director of Relationship Marketing, Venetian and Palazzo Las Vegas

master’s degree in experimental psychology and statistics has served Tyler Bain well in his role as executive director of relationship marketing for the Venetian and the Palazzo. “Psychological principles are at play everywhere in this industry,” Bain says. “The most obvious being that a slot machine is basically a 21st century version of a Skinner Box. Being in the industry for more than a decade, I am surprised that there are not more psychologists.” Bain, who has spent his entire career with Las Vegas Sands, focused his energy on understanding customers’ individual motivations and desires in order to craft more relevant experiences. The statistics and experimental aspect tested every approach to marketing through an analytical framework, using such knowledge to create micro-segments of customers based on personalized experiences. “I originally started as an analyst in direct marketing, and also did a short stint managing our gaming operations analytics group,” he says. “I also oversaw the loyalty program, partnership marketing, property marketing and email.” Using analysis and business intelligence functions to leverage the casino database to drive profitability, Bain and his team developed a casino event and promotional strategy, seeing that programs are carried out and evaluating what worked and what didn’t. “Additionally, I am working to find new ways to engage our guests through the use of technology as well as new gaming experiences,” he says. “I try to get people to join our loyalty program, get them to come back, provide them great experiences so they want to continue to visit in a way that is optimally profitable for the property.” One of the things Bain loves about his job relates to the many varied elements that come into play. “I get to interact with so many different people on so many different levels that it definitely keeps every day feeling fresh.” He’s learned from bosses who were experts in analytics, marketing and operations, just to name a few. “Being able to learn from them through direct interactions as well as watching the way they go about their daily functions has been an invaluable experience,” he says. Bain says the industry is well-positioned for growth as long as innovation continues. “I get very frustrated when I hear people talk about large swaths—women are interested in this type of experience, millennials don’t want this, for example,” Bain says. “Casinos have to do a better job of catering to the individual guest, based on their psychographic profile, past behavior and stated preferences. Even a single guest may come to Vegas at different points throughout the year and have different expectations.” As for those getting into the industry, Bain has sage advice: know your customers. “Spend time with your guests,” he says. “You can’t provide great service, recommend experiences or try to get them to attend a marketing event until you truly understand them. And never be satisfied with the status quo.” —William Sokolic 20

Global Gaming Business NOVEMBER 2017

ike many of us, Diana Golda did not plan to go into the gaming industry. After attending business administration school at the Stuart School of Business Administration, Golda’s first glimpse into the corporate grind was with an international distributor as an administrative assistant in New Jersey. After parting ways with that company, she found another opportunity while interviewing for an administrative assistant position in gaming. Little did she know that “gaming” meant casinos and not game hunting. This position was with Gaming Laboratories International, LLC, and that interview was 17 years ago. Golda was originally hired by GLI to compile certification reports, and with no industry knowledge or experience, it was a daunting task. Needless to say, she accomplished a great deal over the years, as she is now responsible for directing and overseeing quality assurance functions globally. However, this was not accomplished overnight. Her lack of industry knowledge, experience and even terminology were major hinderances to begin with. But her respect and appreciation of the organization’s culture made her eager and ambitious to do well. It was a company culture that fostered good work ethic and helped individuals strive for success. GLI’s culture encourages the constant assessment of a team’s talent as it pertains to advancement opportunities, never shy to promote those who deserve it. Golda is the first to say that it was not all smooth sailing. Hard work and dedication were instrumental in achieving what she has. At the beginning, she vividly remembers going home each day with a splitting headache from trying to understand this industry. She worked extremely hard to flatten what is ultimately a steep learning curve in this industry, and to say it has paid off is an understatement. As hard as Golda worked, she had help. Christine Gallo, vice president of compliance and quality assurance at GLI, was a tremendous help and leader along the way. It was Gallo who brought Golda to the compliance side of the business as a compliance analyst. This position led to her work closely with regulators, suppliers and operators to ensure product compliance. Not only did she ensure product compliance, but it required her to understand each of their needs in order to deliver consistent, accurate and customized certification reports. Outside of the business world, Golda says her father was her true mentor. Though he worked in a completely different industry, she learned that dedication, loyalty and commitment were traits that brought success not only in business but in life. If these are applied to all facets of life, business success can also follow. She fondly recalls a time when her father took money out of his own salary to make sure his customers were happy and got what they were promised. And though she has not had to take such measures in her own career, she says she knows that without the lessons learned from her father, she would not be where she is today. —Christopher Irwin

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Regulator Roundup Michael J. Golub

Deputy Attorney General, New Jersey Division of Gaming Enforcement

M Collaborative Compliance Amy Lawrence

Vice President, Regulatory Affairs and Associate General Counsel, AGS

s a child, Amy Lawrence spent hours with her father in the law library as he performed research geared toward putting mine safety and health administration regulations into the hands of every miner. Little did Lawrence know that even in those early years, she was being molded for her career as an adult. After earning her accounting and philosophy degrees from Westminster College and a juris doctorate from the University of Utah Law School, Lawrence’s gaming start came in 2007 when she was hired as the director of SEC compliance at Shuffle Master. Although she hadn’t initially intended to work in the gaming industry, she soon noticed and was inspired by several common characteristics of her gaming colleagues: their passion for their work, their prowess, and their propensity for keeping the gaming industry highly ethical and disciplined. The regulation component especially appealed to her, and as she continued her career path, Lawrence developed the goal to, instead of penalizing employees for non-compliance, empower them with the tools, education and knowledge base to know the compliance requirements. Although Lawrence has benefited from a multitude of great mentors during her education, business and legal career, two in particular helped get her to where she is today. Claire Svejkovsky, Shuffle Master’s head of compliance, persistently educated Lawrence on gaming compliance despite that it was not Lawrence’s area of responsibility. With a team-based professionalism, Svejkovsky took every employee willing to learn under her wing, regardless of whether they reported to her or not. In 2016, Lawrence joined AGS as senior director of regulatory affairs and associate general

counsel, and it was there where she met her other great career influence, Vic Gallo. After assigning Lawrence her first team, Gallo shared and encouraged her practical approach to compliance while working with other departments as a single team. He gave her the support and tools that she needed to grow, making time to remove any stumbling blocks on her end, encouraging her to share ideas, and offering his knowledge of gaming and compliance. Both Svejkovsky and Gallo are the kinds of business leaders that Lawrence strives to be. Lawrence now maintains several professional goals for her company, department and team. She strives to keep compliance simple, having observed that overly complex rules are too hard to follow. She believes that individuals outside of the compliance department do not need to know the complexities of the rules; they only need to know their part, as well as who on the compliance team to contact for assistance. Lawrence also seeks to integrate compliance into the culture of her company and into the very way that all employees do their jobs. She works to be as proactive as possible, getting approved product into licensed jurisdictions on the company’s timelines. Finally, she continues to maintain positive perceptions of the compliance team as a business partner, not as a department to avoid. “We are here to help them do their jobs, not the other way around,” she says. Lawrence now leads a team of 15 people, and stands as one of the very few women in the industry holding leadership positions within compliance. Her passion, tenacious work ethic and relentless optimism have all contributed to her unique career achievements, and as for her experience and career lessons, she is eager to “pay it forward” in mentoring future Emerging Leaders of Gaming. —Marie Casias

Global Gaming Business NOVEMBER 2017

ichael Golub joined the New Jersey Division of Gaming Enforcement as a deputy attorney general just as online gaming came into play in the state. “This was great timing because I was on equal footing, experience-wise, with more seasoned deputy attorneys general,” he says. Internet gaming constantly changes, with mergers, acquisitions and other issues arising almost every day. Golub works in the Service Industry Licensing Section, which licenses and regulates all companies that seek to do business with the casinos, from non-gaming vendors to slot manufacturers and internet gaming operators. “I primarily focus on licensing investigations,” he explains. “This involves directing investigations, reviewing complex financial documents, analyzing contracts and documents, taking sworn interviews and drafting recommendations.” DGE Director David Rebuck and his deputy directors entrusted Golub to handle some of the biggest licensing investigations and most complex regulatory issues. “They continue to put their faith in me and increase my responsibilities,” he says. “They have also served as sounding boards for me.” The Wayne, New Jersey native also serves frequently as the lead attorney and contact person for outside counsel on investigations, responsible for ensuring appropriate documents get filed, issues resolved. There are special projects that require attention, like regulatory reform, briefing memos on policy issues, and Director’s Advisory Bulletins to explain DGE’s position to the public. “A large portion of every day is spent receiving phone calls from industry personnel and trying to assist companies and attorneys in navigating the New Jersey gaming market,” says Golub, who is married to Amanda, a lawyer as well. Every legal job a young attorney has builds for the future, he says. While at American University, Washington College of Law, he interned at the federal Department of Justice, and worked as a research assistant for Professors Ira Robbins and Paul Figley. Immediately prior to joining DGE in 2013, he served as an associate at a mid-sized in-

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“A large portion of every day is spent receiving phone calls from industry personnel and trying to assist companies and attorneys in navigating the New Jersey gaming market.”

surance defense firm. For the 2011-12 court term, he worked as a law clerk for Judge Garry S. Rothstadt in New Jersey Superior Court, Passaic County. “Rothstadt, Robbins and Figley were great teachers who forced me to think critically about legal issues and spent countless hours helping me improve my writing,” Golub says. “Working for the DOJ was an

incredible opportunity to work on some of our nation’s most critical issues and provided me my first experience in government service.” Atlantic City is on the mend, Golub says. The future will be even brighter when sports wagering is authorized nationally, he adds. “DGE has a vibrant partnership with the industry, ensuring that it has all the tools needed to achieve

commercial success in an extremely competitive marketplace, while making certain operations are compliant with the requirements for integrity,” he says. As the healing continues, the industry and its regulators will need new blood. Golub recommends those interested in this environment become an expert at something. “Whether you learn all the facts of a particular matter or master a certain policy or regulatory issue, you can make yourself invaluable to your bosses, who will come to you for information.” —William Sokolic

NOVEMBER 2017 www.ggbmagazine.com

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Young & Restless Seth Young Director of Online Gaming, Foxwoods Resort Casino

or Seth Young, the entrepreneurial bug bit early. At age 13, he started an online business doing web hosting and web design. “Having been a child of the internet,” he says, “I did a lot of growing up online. I found that I really enjoyed the legal side of online business, which was not settled as a matter of law, when I was younger. I’ve always been competitive, so business seemed like a good fit.” Next up was law school, with a detour to the affiliate marketing business where Young learned his iGaming chops. “One of the other things I really like about online as opposed to land-based is the idea that you can do more exciting and different things with an online platform, perhaps with a little less friction than putting it on a casino floor,” he says. “It remains to be seen, as the industry is kind of developing, but the rapid prototyping idea is very compelling to me.” Now as the director of online gaming at Foxwoods, Young is experiencing life in a big organization for the first time. “Having been on the other side of the proverbial table for so many years, understanding what it’s like inside a large organization is really interesting,” he says. “It’s different, of course. Sometimes it can be bureaucratic and political, and I think you have to do the best you can to break down those walls, and educate the stakeholders within your organization about what this is, why it works, and make your business case.” He says Foxwoods has been a good landing point for him. “They’ve been innovating for a long time,” he says. “Not just online. This is relatively a new iteration of their business. But, the good thing about that is that if you make a compelling business case, and you have a good reason, and it’s well thought-out, it’s fairly straightforward to implement new things at that place.” As with anyone who becomes successful, Young has had many role models and people who influenced him through the years. “I’ve been lucky to interact with a lot of people throughout the decade-plus that I’ve been involved in gaming,” he says. “They are the greatest people for me so far, in terms of being friends, and in terms of helping steer me in the right direction. One is a guy named Bill Scigliano, who’s a long-term gaming consultant. He’s been very good to me. At Foxwoods, Brian Charette is our VP of information systems. He’s been the longest-running executive at Foxwoods. And he is just an unbelievable person. “And our CEO, Felix Rappaport, is a legend, right? He’s led some of the biggest resorts in gaming. He’s a fantastic guy to work for. We also have a terrific tribal council, who are really involved, and obviously, really interested in seeing Foxwoods continue to thrive. So as far as mentorship goes, I would say the people that I’m working with now are probably going to be the best influences I’ve ever had, moving forward.” —Roger Gros

Global Gaming Business NOVEMBER 2017

Tribal Opportunities Kelly Myers Licensing Manager, Cherokee Nation Gaming Commission, and Chairwoman, Oklahoma Tribal Gaming Regulators Association

ome might argue that Kelly Myers is exactly the type of person that tribal gaming needs in its most influential roles: educated, value-driven and committed to her family and the betterment of her community. But for Myers, a member of the Iowa Tribe of Oklahoma, who serves as licensing manager for the Cherokee Nation Gaming Commission in Oklahoma, breaking into the world of casino gaming wasn’t even an afterthought during her formative years—she had never even set foot in a casino. Rather, when she launched her career, she had her sights set on working her way up the corporate ladder as an accountant or an auditor. However, she became intrigued by gaming in the early 2000s when Oklahoma’s Class III compact negotiations had kicked into high gear and her native Iowa Tribe came calling to request that she put her skill set to use as a gaming auditor. One thing led to another, and nearly a decade and a half later, Myers is still serving as a tribal gaming regulator—albeit now with the Cherokee Nation— and enjoying every minute of it, particularly as the tribe prepares to roll out new casinos and expansions locally. “I feel grateful to work in Indian gaming here in Oklahoma,” she explains. “The Cherokee Nation is thriving and always expanding, and as a gaming commission, our goal is to work side by side with the operations to ensure compliance with all regulatory guidelines.” In addition to her full-time duties with the Cherokee, Myers serves as chairwoman of the Iowa Tribe of Oklahoma Gaming Commission. She notes that this is an especially exciting time to be involved with her home tribe, as it just received a license from the Isle of Man and will soon be rolling out online gaming internationally. “I am so proud to be a part of this history-making event with them,” she says. Additionally, Myers serves as chairwoman of the Oklahoma Tribal Gaming Regulators Association and is on the board of the National Tribal Gaming Commission/Regulators. By any measure, she views upholding the integrity of tribal gaming within the state and elsewhere as a critical responsibility. “We have a good working relationship with other gaming commissions here in Oklahoma and in other states,” she says. “We share insights and information with each other because our goal is not to only protect the casinos we are regulating but also to protect Indian gaming.” Despite all of those responsibilities, she makes being involved in her daughter’s life a top priority. “I am still chasing my daughter’s dreams with her,” she says. “She makes me want to be a better mom, friend and co-worker. She always sees the positive things in everyone she meets, and reminds you daily to just enjoy what you have that day.” Her daughter has taken up performing arts, and to support that interest, Myers now serves as regional director for Oklahoma Kids, a nonprofit talent entertainment association for children interested in singing, dancing and similar crafts. —Aaron Stanley

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Bridging the Gap from Past to Present Ari Mizrachi Vice President of Operations Optimization, Tangam Systems

lready a 15-year veteran of the gaming industry, Ari Mizrachi is a seasoned executive who currently serves as the vice president of operations optimization at Tangam Systems. In this role, Mizrachi passionately leverages his extensive and broad industry experience to bridge the gap from the past—where management relied solely on operational expertise to make decisions— to the present, where the decision-making process has evolved to include a myriad of data sources and analytics. “Our industry was built on relationships and ‘gut’ feel,” he says. “Though that is extremely valuable, it’s great to have data to support certain intuition.” Mizrachi’s interest in the gaming industry began at an early age, when he would accompany his father and grandfather on trips to Atlantic City. “The moment I walked onto the casino floor my first day, I knew this was the industry that I needed to work in,” he says. His first position at a casino was as a poker dealer for the Seminole tribe, moving to Foxwoods shortly thereafter. In 2004, Mizrachi transitioned to management, supervising the poker room at Seminole Hard Rock, subsequently managing poker operations for the MGM Grand, the Las Vegas Hilton, the Venetian and Harrah’s Entertainment. Seeking to broaden his management experience, Mizrachi moved to a position within the Harrah’s organization managing channel marketing for the Atlantic City region. In this role, he gained perspective on the link between the messaging that brings gaming guests to the casino and their behavior on the floor—as well as the data generated by casino systems and loyalty programs. Mizrachi continued broadening his knowledge base, serving as the senior director of table games and poker operations at Pennsylvania’s Parx Casino. Mizrachi emphasizes that his career trajectory has been heavily influenced by former and current co-workers who he considers mentors. Mizrachi makes special mention of one former colleague, Mike May, vice president of table games at Pechanga. “Mike taught me a ton in the three years we spent together,” says Mizrachi. “He taught me to take care of the folks interacting with the guests on a regular basis. If the folks on the front line are not engaged and happy, you will fail.” Prior to entering the gaming industry, Mizrachi played professional jai alai for eight years. Despite a clear devotion to the industry he loves, Mizrachi’s primary focus is taking care of his family, noting that above all else, he wants “to be the best husband and father that I could possibly be.” —Anthony Mason

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Green Grass Steve Sirianni Vice President of Slot Operations and Marketing, MGM Grand Las Vegas

S Tribal Dedication Thomas Crawfish Mathews Assistant General Manager, Quapaw Casino, and Vice Chairman, Quapaw Tribe

homas Crawfish Mathews launched his gaming career at the tender age of 18 at his tribe’s Quapaw Casino in Quapaw, Oklahoma. For the next several years, he worked in various departments from Oklahoma to New Mexico and back to Oklahoma. “I worked for a year and a half dealing cards before moving on to Grand Lake Casino in Grove, Oklahoma, where I worked in off-track betting and the surveillance department,” he says. From there he took a position at the travel center for the Mescalero Apache Tribe in Ruidoso, New Mexico. He dealt table games and learned craps, roulette and poker. Upon his return home to Quapaw, Mathews went from slot attendant to poker room manager to marketing director to assistant general manager. In January 2016, he was named casino tribal liaison. “On a separate but more important note, I have the great honor of serving my tribe as the vice chairman of the business committee, a position I’ve held since 2011,” he says. Every step on the ladder contributed to Mathews’ understanding of his profession. “Having knowledge in many departments has allowed me to better understand our employees’ needs and how to help them be successful in their positions,” he says. As with any rise in the industry, Mathews owes a lot to those who helped him along the way. “The first knowledge I learned of the gaming industry came from my dad, J.R. Mathews,” he says. “He served as the president of the Quapaw Casino Gaming Board when I first started my career. For the past six years, I have really learned a lot from our tribal chairman, John Berrey. He guided me through several aspects of tribal government as it relates to the gaming industry. I would also like to give credit to Kirk Myrick, Jani Cummings and John Boyce, who have all helped me learn various aspects as well.” In his current capacity, Mathews isn’t just limited to Quapaw Casino. He also works with management teams at Downstream Casino. “I’m always looking at new ways to make the customer experience better along with making it a better work environment for our team members,” says the father of five and husband of Tonya. Mathews sees a new generation of gaming with easy access coming through mobile gaming devices. His advice to young people entering the casino world as a profession with the new generation: disagree and commit. “Speak your opinion, but once the decision is made to do something, commit to that decision 100 percent, even if it wasn’t what you thought,” he says. “Because at the end of the day, everyone should have the same goal in mind, which is to be as successful as possible.” —William Sokolic

Global Gaming Business NOVEMBER 2017

teven Sirianni knows a thing or two about bootstrapping one’s way up the career ladder. After taking a job as a front desk clerk at the Monte Carlo while a student at the University of Nevada, Las Vegas a decade and a half ago, Sirianni progressively worked his way up the MGM food chain to his current role as vice president of slot operations and marketing at the MGM Grand, with pit stops along the way at the Aria, Treasure Island and the Bellagio. So what’s kept him in the industry thus far? The multifaceted and constantly evolving nature of the industry, whether it be finding new operational efficiencies, floor layouts, product offerings or marketing efforts, is more than enough to keep Sirianni showing up to work each day. “It rarely gets boring, and every day is different,” he says. His ascent highlights what is arguably one of the most unique and positive aspects of the casino gaming business: the upward career mobility that it affords its labor force. Sirianni attributes his success to the ever-important combination of hard work, an entrepreneurial spirit and a positive attitude. “Work hard. Bring value. Do what others won’t do or haven’t done,” he says. But like in any successful career, there is always a benefit to being in the right place at the right time—or what folks in the casino industry might consider to be “luck.” “I’m thankful to be part of a larger company that supports internal growth, where any movement in leadership—which can be frequent when combined across a dozen-plus properties—often creates a domino effect and opportunity for upward mobility,” Sirianni explains. But that’s not to say grinding one’s way up the food chain is an easy task or without frustration. Having patience, embracing the moment and enduring challenges can often be the best strategy, even if it seems less exciting than other available alternatives. “The grass isn’t always greener,” he advises. “I’ve seen people get impatient too early in their careers, leave to another company, and want to come back.” For younger professionals in the industry, Sirianni stresses the importance of being able to grow and change with the company: “This is easy when you’re early in your career, since everything is new to you and you don’t know the difference. It becomes more difficult later when you feel you have a good system in place. But you need to keep your mind open and realize there are always other ways—and better ways—to do things.” He adds that always looking for opportunities to make the business better, making your boss and colleagues look good and doing the right thing when no one is looking will always pay off in the long run. Lastly, he emphasizes that the importance of building strong bridges—and not burning existing ones—cannot be overstated. “Treat everyone with respect—they deserve it. You never know who will work for you and who you will work for.” —Aaron Stanley

Left to right, AGEM President Tom Nieman, Marietta Halle, Rick Meitzler, Roger Gros and AGEM Executive Director Marcus Prater celebrate during G2E on Oct. 4 in Las Vegas

Jens Halle

Peter Mead

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Off to the

RACES Konami Gaming taps its legendary sister

companies to create new gaming experiences By Frank Legato

n 1985, Las Vegas casinos first offered a 10-player mechanical horseracing game called the Sigma Derby. In a time when microprocessor-based slot machines were first appearing, players flocked to the carnival-style throwback, betting quarters on their favorites among miniature horses and riders and cheering as the little figurines made their way around the mechanical track. The Sigma Derby had a lasting appeal. When the MGM Grand opened its new resort on the Las Vegas Strip in late 1993, Sigma Derby was on the floor. It’s still there. Along with a unit Downtown at the D, it is one of two Derby games still operating in Las Vegas. With manufacturer Sigma Game, Inc. long gone, the operators have to search for spare parts to keep the games running. But they manage, because of one thing: the Derby games are still wildly popular, with crowds typically gathering around them with buckets of quarters, just like the old days.

Global Gaming Business NOVEMBER 2017

The popularity of the Derby was not lost on executives of Las Vegasbased Konami Gaming, which set to work replicating the experience in a modern racing game. Called Fortune Cup, it is now live at the MGM and Venetian in Las Vegas. If any company could produce a game that captures the old Derby magic, it was Konami. The slot-maker’s parent company, Konami Holdings Corporation of Japan, was a legend in the amusement-game industry long before it produced its first casino slot machine. From Frogger to Metal Gear Solid to Dance Dance Revolution to a variety of pachinko and pachislot games, Konami Gaming’s sister companies have been a a fixture of the amusement industry since the 1970s. Konami Gaming has always drawn on this amusement expertise for its basic slot games, but it has only been relatively recently that the Las Vegasbased slot supplier’s engineers have worked closely with their counterparts at Konami Amusement Co., Ltd. (which produces arcade and pachinko/

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“At its core, the game is designed to attract incremental play, and through its essential nature, we believe Fortune Cup will appeal to a broad audience across the casino marketplace.” —Steve Sutherland, President and CEO, Konami Gaming pachislot machines) and Konami Digital Entertainment (the video-game legend) to produce new game-play experiences in products unlike anything else on the slot floor. “It started with the technology behind Advantage Revolution, a three-reel mechanical slot we developed with a unique rotating bonus reel box,” recalls Steve Sutherland, president and CEO of Konami Gaming, Inc. “This evolved into a much larger scale with the creation of the Titan 360, a three-ton, 10foot-tall multi-station release brought to market in 2013. Approximately two years ago, the process accelerated as we worked closely with Konami’s amusement groups to bring Fortune Cup, Beat Square and Crystal Cyclone to the North American gaming market, as a key strategy for our business.”

GETTIN’ IT HOPPIN’ Those three games are now joined by Frogger: Get Hoppin,’ with primary skill-based play replicating the legendary Konami arcade game, as evidence of close cooperation between Konami Gaming and its sister amusement companies. Frogger: Get Hoppin’ became the first game approved under Nevada’s New Innovation Beta (NIB) pro-

Beat Square rewards players’ skill in following musical patterns

gram, aimed at accelerating approval of games that offer experiences beyond the traditional slot game. “This type of product is aimed at expanding the target casino player base to attract non-traditional gamers, while at the same time providing new entertainment options for the core demographic,” Sutherland says. “Today, Frogger: Get Hoppin’ is running live at MGM Grand’s Level Up lounge and remains part of their strategy to offer skill-based game play in a fun arcadestyle atmosphere.” Sutherland says Frogger: Get Hoppin’—as Konami’s first skillbased offering—paved the way for another skill-based game developed with the amusement groups, Beat Square. “What we learned from Frogger: Get Hoppin’ has helped lay the foundation for future products like Beat Square,” Sutherland says. “Because of our experience with Frogger, we made a number of enhancements to Beat Square’s overall play experience and functional advantages.” Awarded the Gold Medal as Best Slot Product in this year’s GGB Gaming & Technology Awards, Beat Square rewards players’ skill in following musical patterns. For Beat Square, Konami again drew on the rich amusement-game history of its sister companies. “We were looking for something to engage multiple demographics across all generations—something that could potentially appeal to younger audiences and today’s core player base,” Sutherland explains. “A similar Japanese arcade game, called ‘You Beat,’ has a history of tournament play and reaching players of all ages—that is what has evolved into Beat Square for the casino market. There were a number of other products we could have explored, including one of the most popular music tournament programs in Konami’s library, Dance Dance Revolution. Beat Square ultimately rose to the top of the list because it provides the same type of thrill and experience with less strenuous physical effort from the player.” Similar to Dance Dance Revolution, Beat Square challenges players in a game of rhythmic coordination to tap choreographed square buttons across an elevated dashboard as they light up to the beat of the music, and instead of moving their feet, players use their hands. “It is

NOVEMBER 2017 www.ggbmagazine.com

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the industry’s first skill-based game with comprehensive tournament functionality, allowing players to compete individually and in teams,” says Sutherland. Two other new products have come from collaboration with Konami Amusement and Konami Digital Entertainment. One is Crystal Cyclone, previewed at G2E last year and now readying for market. Crystal Cyclone places player stations around a huge arcade-style center unit that releases balls that land in various prize spots around a roulette-like display. “AnimaLotta is the name of the Japanese arcade game that has been ‘gamblified’ for the casino space as Crystal Cyclone,” Sutherland explains. “We

identified that as a targeted product we wanted to bring to the gaming industry, and the end result looks very similar to what gamers of all ages are playing in Japan. “It is comprised of eight slant top-games that trigger one of three different mystery bonus events in a center roulette-style ring. During the game’s most anticipated event, the player is awarded a random amount of prize balls, which flood the center ring 10 at a time, each awarding a random credit amount or one of the progressive jackpots for the prize slots where they land.” Crystal Cyclone and Beat Square are both in line for casino introductions soon, but this fall, the big news for the company in this multi-player genre is the release of what is Konami’s second game to be approved under Nevada’s NIB program—Fortune Cup.

HORSE OF A DIFFERENT COLOR According to Thomas A. Jingoli, executive vice president and chief commercial officer for Konami Gaming, the company sees Fortune Cup as a way to bring incremental business to the casino floor. “Casino operators are looking for new ways to attract a different demographic onto the slot floor,” Jingoli says. “As a product category, mechanical horse racing has had a unique history. You can’t overlook the fact that Sigma Derby has been at MGM Grand Las Vegas since the day it opened. It’s also at The D Casino, and on any given night, there’s not a seat open. So it certainly brings another dynamic to the casino floor, and our casino customers look at it as potential incremental revenue for their slot floor.” Jingoli says Fortune Cup was styled on the Konami amusement arcade horse-race game. “The foundation for bringing a product like Fortune Cup to casinos began more than five years ago; it didn’t happen overnight,” he says. “We remained relatively true to the original—scaled down and rightsized for the casino environment.” The individual play stations are equipped with touchscreen interfaces and monitors including information like up-to-the-minute stats on horses, and easy ways to make bets that resemble wagers at a real racetrack—place, win and quinellas. Fortune Cup also adds a large central LCD featuring real-time digital animation of races, “powered by the same cross-platform gaming engine used in video games like Pro Evolution Soccer and Metal Gear Solid,” Jingoli says. The technology also gives Fortune Cup a capability to fit into a stadium gaming setup, and provides the potential for satellite betting. “For example, guests at the casino bar or lounge could place bets through a satellite and view live video streaming of races,” says Jingoli. “Our customers have expressed a great deal of interest in that technology as well.” For all the advanced technology, Konami’s engineers also made sure to retain the appeal of the older mechanical race games. “Many of the classic 30

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“The foundation for bringing a product like Fortune Cup to casinos began more than five years ago; it didn’t happen overnight. We remained relatively true to the original—scaled down and right-sized for the casino environment.” —Thomas A. Jingoli, Vice President and Chief Commercial Officer, Konami Gaming

elements remain,” Jingoli says, “including the carrier track that animates the mechanical horses, similar to what has been running in Japanese arcades for 20 years. It has a timeless appeal that generations have enjoyed.” Other classic elements improve upon legacy casino processors—perhaps most notably, the movement of the horses. “Advanced engineering allows the horses to move flexibly across the track—passing one another, crisscrossing formations, and switching directions with variant speeds,” Jingoli explains. “The digital screens feature real-time coverage of the events, in a sports broadcast format similar to what you would see on television.” One more improvement is the prize pool. Fortune Cup features a random progressive jackpot chance, with a top award resetting at $20,000. It is another way to generate extra excitement—when the progressive is triggered, the game announces the horse with a chance at the jackpot. If the horse wins the race, players who wagered on it can win a maxi, major or mini jackpot. “At its core, the game is designed to attract incremental play,” comments Sutherland, “and through its essential nature, we believe Fortune Cup will appeal to a broad audience across the casino marketplace.” He adds that while it draws on the classic elements that have made horse-race games popular in the past, the multiple technologies are what make Fortune Cup unique. “Product differentiation defines the market strategy behind Fortune Cup,” Sutherland says. “Nothing else like it is available. Other companies have had horse-racing games that have long since left production. We’re introducing the most advanced technology this product category has ever experienced, with the goal of driving new incremental revenue for our casino customers.” Jingoli says results from the initial Fortune Cup installations at MGM Grand and Venetian show the game is in fact creating incremental play—a more accurate measurement for this type of game, he says, than win per square foot, coin-in or other traditional gauges. “Each is showing success in reaching non-traditional slot player demographics,” he says, “which I find both interesting and encouraging. Slot directors, slot VPs and slot executives are looking to bring diverse players on the floor, and I think this is a product that certainly does that.”

ALL HANDS ON DECK Fortune Cup is the latest success story traceable to the engineering and experience of all arms of Konami Holdings Corporation, but it certainly isn’t the last. “Drawing elements from the various organizations within Konami Holdings Corporation—Konami Digital Entertainment, Konami Amusement and Konami Gaming—allows us to bring experts in each area together,” says Sutherland. “We have demonstrated talent in amusement and arcade technology that has endured for decades. Since Konami Gaming was first founded, we have always held close to the proven expertise and resources of our parent company. The foundation of core components such as our electronics, processor boards, graphics and sound have always relied upon world-class internal ingenuity. Our latest creative developments are an exciting continuation of that foundation. With recent market changes, the time is right to open that library for highly creative product unlike anything else available.” Sutherland calls Konami Gaming Chairman Satoshi Sakamoto a “pivotal player” in the trend to marshal all elements of the parent company for new casino experiences. “Years ago, he recognized that this may be part of the future of the industry, and ensured that Konami Gaming had the appropriate people engaged from Konami’s amusement groups to make it a reality,” Sutherland says. “That collaborative effort has been paramount to our success in this arena. “For nearly 50 years, Konami has been in business and built a profound legacy in gaming entertainment across diverse platforms and genres. At Konami Gaming, it is the best interest of our company and our customers to leverage that expertise and heritage.” “This is part of Konami’s legacy and how our company was founded,” says Jingoli. “We were built as an entertainment conglomerate, and it’s something we actively embrace. When you take that to the market—whether it’s the amusement industry, the arcade industry or the casino industry—it’s all about driving entertainment to the player, and that is where our focus lies.” NOVEMBER 2017 www.ggbmagazine.com

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SPORTING CHANCE

Indian Country in a quandary over sports betting BY DAVE PALERMO

ictor Rocha, consultant and owner of the American Indian news service Pechanga.net, was asked at the October G2E conference and trade show in Las Vegas if tribes view the potential legalization of sports betting as an opportunity, a challenge or a threat. “All of the above,” said Rocha, a citizen of the Pechanga Band of Luiseño Indians of Southern California. “That’s a really good question,” said Shannon Keller O’Loughlin, Oklahoma Choctaw and former chief of staff of the National Indian Gaming Commission. “I think for the most part it is considered more opportunity than threat, but guardedly so,” added James Klas of KlasRobinson, a hospitality consulting company with tribal clients. While the commercial casino industry’s American Gaming Association is lobbying full-throttle to repeal a federal ban on sports betting outside Nevada (and on a limited basis, Montana, Oregon and Delaware), the nation’s

248 tribes with casinos are in a bit of a quandary over the issue. “We need to determine on what side of the argument we’re going to fall,” says O’Loughlin, executive director of the Association on American Indian Affairs. “I don’t think we have enough information. We haven’t done our homework.” The AGA is seeking repeal of the Professional and Amateur Sports Protection Act (PASPA). The U.S. Supreme Court will hear arguments on the constitutionality of PASPA this December, and more than a dozen states have enacted or proposed legislation in the event the act is whipped off the books. Momentum is building for the AGA and a coalition of industry, state and law enforcement officials formed by the association to lobby the issue. A recent Washington Post poll showed 55 percent of the public favors legalized sports betting.

Legalize It, Tax It!

The nearly $30 billion commercial casino business is chomping at the bit, hoping for a chunk of the $150 billion believed to be wagered illegally on sports in the United States every year. “It’s a unique opportunity for the industry,” Sara Slane, AGA senior vice president of public affairs, told attendees at a recent gambling seminar. Perhaps. But the slightly larger $31.2 billion tribal government casino industry—which consists of 484 facilities run by 248 tribes in 28 states—is not in complete agreement with Slane’s assessment. Many tribal leaders fear any new state or federally sanctioned gambling—whether it is sports betting, internet gambling or daily fantasy sports—will create competition for Indian casinos. —Ernie Stevens, Chairman, National Indian Unlike commercial gambling operations, tribal casinos genGaming Association erate revenue to help provide housing, health care, education

“Of chief concern to NIGA is to ensure that tribal interests are protected, particularly avoidance of any negative impacts on existing compacts and exclusivity clauses.”

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“It’s very, very important to protect the integrity of Indian gaming. We should be involved and be at the forefront of this issue.” —Stephanie Bryan, Chairwoman and CEO, Poarch Band of Creek Indians

Police Support Legalization of Sports Betting BY CHUCK CANTERBURY and other government services to some 2.9 million indigenous Americans. Tribes are trying to get out in front of both the expansion of gambling fueled by the need for state revenues and the rapid evolution of technology challenging a tribal casino industry subject to a myriad of complex federal, state and tribal regulations. “Indian Country should be afforded the same opportunity” as commercial casinos in operating sports betting, says Stephanie Bryan, tribal chairwoman and CEO of the Poarch Band of Creek Indians in Alabama. “But it’s very, very important to protect the integrity of Indian gaming,” she says of the brick-and-mortar operations that often fund the bulk of tribal governments. “We should be involved and be at the forefront of this issue.” A well-intended but clumsy effort by the AGA to form an alliance with tribes on the issue is finally beginning to work itself out. (See page 36.) But unlike the AGA, the National Indian Gaming Association (NIGA), the lobby and trade group for the tribal casino industry, is not advocating repeal of PASPA. Instead, NIGA is calling for any congressional or state legislation arising out of PASPA’s repeal to acknowledge the status of tribes as sovereign governments and honor tribal-state regulatory agreements, or compacts. The compacts and state laws often give tribes statewide or regional exclusivity to operate casino gambling in exchange for a share of the revenue. “Of chief concern to NIGA is to ensure that tribal interests are protected, particularly avoidance of any negative impacts on existing compacts and exclusivity clauses,” NIGA Chairman Ernie Stevens says. “As one of the key stakeholders in these discussions, we want to ensure that, if legalized, our members have the opportunity to offer this activity as part of their overall entertainment package, and as an additional source of revenue for tribal government gaming to promote tribal economic development, tribal self-sufficiency and strong tribal government.” In testimony in October before the Senate Committee on Indian Affairs, Stevens asked the group to explore the potential impact on tribes of all new forms of wagering—be it sports betting, fantasy sports or internet wagering. “These activities pose both potential expansion opportunities and challenges to existing tribal gaming operations and tribal-state compact agreements,” he said. NIGA also is putting together a working group to study the opportunity and challenges of sports betting in Indian Country. It won’t be an easy task.

Myriad Legal Issues Unlike commercial casinos largely taxed and regulated by the states, the scope of tribal government gambling is defined by the Indian Gambling Regulatory Act (IGRA) of 1988. IGRA restricts Indian casinos to trust lands and requires tribes operating

he Fraternal Order of Police is the world’s largest organization of sworn law enforcement officers, with more than 330,000 members in more than 2,200 lodges. Our members are the voice of those who dedicate their lives to protecting and serving our communities. The FOP mission is to protect and serve the public nationwide. Recently, we announced that the FOP would join the advisory council of the American Sports Betting Coalition (ASBC) to show our support for ending the 25-year-old ban on sports wagering in the United States. While well-intentioned, the Professional and Amateur Sports Protection Act (PASPA) has failed to stem the tide of sports betting, and has instead encouraged an explosion in illegal, unregulated wagering. This illegal sports betting marketplace fuels criminal enterprises, hides money laundering and facilitates other illegal activities. The facts are clear—the American Gaming Association conservatively estimates that Americans illegally wager $150 billion on U.S. sports each year. Other studies show that number could be as high as $500 billion worldwide each year. During Super Bowl LI this year, Americans wagered $4.7 billion, and only 3 percent of these bets were placed legally. During the NCAA men’s basketball tournament this year, it is estimated that $10.4 billion in wagers were made, only $295 million of which were legal. It’s clear PASPA is not working. Simply put, the ban has not stopped fans from betting on sports—it’s just driven it underground. Today, millions of Americans bet on sports through a massive illegal market that operates outside the reach of law enforcement with no regulatory oversight, no means of protecting the integrity of the games and no safeguards for consumers. Ending PASPA would bring sports betting out of the shadows, making it easier for law enforcement to protect the public and stop money flowing into criminal organizations. As we approach the 25th anniversary of PASPA, we urge Congress to recognize that the current approach is not working. Congress should allow states to work with law enforcement and other stakeholders to create a legal, regulated marketplace. This will give consumers what they want and allow law enforcement to protect the public and stop the flow of illegal money into criminal organizations. Let’s stop it now.

Chuck Canterbury is the national president of the Fraternal Order of Police, representing more than 330,000 members in every region of the country.

NOVEMBER 2017 www.ggbmagazine.com

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“It isn’t a matter of if, but when. Tribes need to get ahead of the ball. Be ready. Be prepared.” — Brian Cladoosby, Chairman, Swinomish Indian Tribal Community and National Congress of American Indians

Las Vegas-style casinos to enter into tribal-state compacts defining the scope and regulation of their operations. The compacts and legal and regulatory structures under which tribes operate vary dramatically from one state to the next. IGRA also limits tribes to types of gambling otherwise legal in the state in which they are located. If Congress defers to the states, tribes may only be able to offer sports wagering if states legalize the activity. Because sports wagering is generally regarded as a Class III game under IGRA, tribes would have to negotiate new or amended tribal-state compacts, an often contentious, highly political process that may result in additional revenue-sharing payments to the state. Tribes under IGRA have primacy to regulate gambling. The act prohibits taxation of tribal government gambling revenues. But tribes may be forced to operate sports betting as a commercial venture, taxed and regulated by the states. In addition, IGRA and federal law remain cloudy on the ability of tribal casinos to take wagers from off trust lands. And tribes in many states face potential competition with internet, sports betting and other forms of gambling from commercial casinos, card rooms and the lottery.

Some Tribes Have Advantages About 16.6 percent of the tribal casinos—many in or near metropolitan areas— generate 71.5 percent of the gambling revenues nationwide, according to senior economist Alan Meister of Nathan Associates. It is the more lucrative tribes that will likely pursue sports betting. They include at least seven tribal casino enterprises and two tribal governments that are members of AGA. Some of the AGA tribes—Seminole Hard Rock Gaming of Florida, Mohegan Tribal Gaming Authority of Connecticut, Wind Creek Hospitality of Alabama and the Chickasaw Nation of Oklahoma—own and manage commercial ventures. Other tribal casinos—largely rural, marginal operations providing jobs and a moderate flow of government revenues—are not likely to have the human and financial resources to pursue sports betting. The Seminole Tribe of Florida, Poarch Band of Creek Indians in Alabama and other tribes operate relatively free of competition. California has 110 of the 367 tribes in the lower 48 states, 62 of which operate casinos that compete primarily with card rooms. The state generates $8.4 billion a year, or nearly a fourth of the tribal revenues nationwide. Oklahoma has 38 tribes operating 130 facilities ranging from travel plazas to gambling resorts. There are several tribes with casinos in Arizona, New Mexico, Minnesota, Wisconsin and Washington state. The Mississippi Band of Choctaw Indians and tribes in Michigan, Iowa and elsewhere compete with commercial casinos. 34

Global Gaming Business NOVEMBER 2017

A Marginal Industry Sports books are a low-profit (4 percent to 6 percent margins) segment of the casino industry. It is a labor-intensive, high-risk business that requires a large capital investment. It also requires a unique skill set not easily found outside Nevada. “I don’t think the message is being conveyed properly of the risks and the lack of extreme profitability in sports books,” says Art Manteris, vice president of race and sports operations for Station Casinos. “Some of the Strip properties I was involved in, people are shocked when I tell them that sports book revenue is something like 1 percent to 1.5 percent of overall casino revenue,” Manteris says. “We’re not talking about a massive influx of new revenues in the sports book business.” The profits rise with account wagering and online betting. But the value of a stand-alone sports book or incorporating the activity in a sports bar packed with big-screen televisions is its ability to bring a newer and younger customer profile to the casino.

Challenge in the Golden State Oklahoma tribes are prepared to negotiate new compacts with a cashstarved state government, seeking both sports wagering and dice and roulette games. But California tribes are casting a wary eye on proposed legislation calling for a constitutional amendment that, if approved by the voters, would for all intents and purposes strip Indian casinos of their casino exclusivity. The tribes’ constitutional exclusivity in the Golden State currently doesn’t extend to sports betting, but is technically limited to the operation of slot machines, a lottery and banked and percentage card games. But California tribes contend permitting sports betting for all but indigenous communities (read: card rooms, parimutuel racetracks and the state lottery) constitutes an expansion of legal gambling in violation of tribal exclusivity and public policy for limited gambling. “We’re opposing the expansion of gambling,” says Steve Stallings, chairman of the California Nations Indian Gaming Association (CNIGA), a group of 31 casino and non-gambling tribes. If future policy discussions do lead to sports betting, he says, there should be assurances wagers will be made at brick-and-mortar facilities. “We would not want it to go on the internet,” says Stalling, a councilman with the Rincon Band of Luiseño Indians. “We would not want sports betting to go to facilities throughout the state. “We would want it to go to those entities already licensed to operate gambling, which would be the tribes, the card rooms and, potentially, the racetracks.”

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“I don’t think the message is being conveyed properly of the risks and the lack of extreme profitability in sports books.” —Art Manteris, Vice President, Race and Sports Book Operations, Station Casinos

‘Not a Matter of If, but When’ Pechanga Chairman Mark Macarro warns of the ebb and flow of industry trends: the naysayers who discouraged cashless machines; the prognosticators who wrongfully predicted the growth of online poker and internet gambling; the baseless forecasts of potential revenue and taxes. Experience taught Macarro to view sports betting with caution and a healthy skepticism that there are billions of dollars to be gained through an industry niche that generates so little profit. “We need some new studies,” he says. “We need something quantifiable.” Macarro remains keenly aware, however, that the industry is in evolution. A new and younger gambler is reaching for a mobile device—not to play slots, but games of skill, excitement and, yes, sports.

“These shifts happen,” Macarro says of industry evolutions and marketing trends. “If you were ready for it, you could take advantage of it. If you weren’t ready for it, you were behind the curve. “We need to be ready for the shift when it happens. We need to be at the table.” Brian Cladoosby, chairman of both the Swinomish Indian Tribal Community and National Congress of American Indians, agrees with Macarro that it is important to remain alert to protect the viability of a gambling industry that has meant so much to Native America. “It isn’t a matter of if, but when,” Cladoosby said of sports wagering. “Tribes need to get ahead of the ball. Be ready. Be prepared.”

NOVEMBER 2017 www.ggbmagazine.com

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NIGA, AGA Work Together, but Harbor Differences

ore than a decade ago, while attending a social gathering of the International Masters of Gaming Law in Las Vegas, commercial gambling lobbyist Frank Fahrenkopf was asked if he would welcome an alliance with American Indian tribes operating casinos. “Yes, we would,” replied the then-president and CEO of the American Gaming Association. But when asked what role the AGA would play in tribal government issues, Fahrenkopf shrugged and shook his head. “We’re not interested in that,” he said. An alliance of the commercial and tribal casino segments of the legal gambling industry is, at long last, becoming a reality, spirited along by the potential legalization of sports wagering. Nine tribes have joined AGA, seven through their casino business enterprises and two as governments. Most tribes welcome the unity. The AGA’s gambling expertise and resources exceed the National Indian Gaming Association, a trade group and lobby made up of 184 indigenous communi- —Steve Stallings, ties. Chairman, California Where NIGA is concerned with matters of Nations Indian Gaming sovereignty and advancing tribal self-governance Association through gambling, AGA is focused on industry issues. “Where we can find common ground—where we can advance and protect the industry—we should take advantage of the opportunity,” says Steve Stallings, chairman of the California Nations Indian Gaming Association (CNIGA), which represents 31 tribes. “There was an established gaming industry prior to tribes getting into it,” says Stalling, a member of the Rincon Band of Luiseño Indians. “I don’t think you’ll find tribes not recognizing or appreciating what AGA does for its members. “It’s not bad that our industries have a seat at the table with AGA. I think it’s fundamentally a good idea.” “The direction (AGA) is going is a direction we appreciate being proactive,” says Robert Martin, chairman of the Morongo Band of Mission Indians, an AGA member. “Gaming is so competitive these days. If you’re not out in front, you’re left behind. That was the big distinction for my council,” he says of the decision to join the commercial gambling lobby and trade group.

“Where we can find common ground—where we can advance and protect the industry—we should take advantage of the opportunity.”

Bumps in the Road The alliance got off to a problematic start, largely because of the gambling industry’s misunderstanding of the complicated legal status of indigenous communities and the role of tribal government gambling on Indian lands. • Several of 248 tribes operating casinos rose in protest when NIGA’s executive board in August announced it was joining an AGA coalition seeking repeal of the Professional and Amateur Sports Protection Act (PASPA). NIGA officials clarified they were joining the coalition to monitor the group, not to advocate for PASPA’s repeal. • The American Sports Betting Coalition (ASBC) website initially advocated state’s rights, ignorant that tribes are sovereign governments. The website

Global Gaming Business NOVEMBER 2017

was heavily edited, calling for the issue of sports betting to be left to both states and tribal governments. • AGA President and CEO Geoff Freeman told LegalSportsReport.com that 10 tribal members of the association represented a third of the $31.2 billion won by Indian casinos nationwide. The remark angered tribes sensitive to the false perception most indigenous Americans are wealthy from gambling. • An AGA press release in September stated NIGA Chairman Ernie Stevens and other tribal leaders were “instrumental in the fight” to repeal PASPA. It was pulled from the group’s website at the insistence of tribal leaders. • Finally, tribal leaders were unnerved by an AGA newsletter announcing the group was lobbying Congress and the Department of the Interior for “greater clarity and consistency” in the application process for trust lands for casinos. Reacquiring ancestral lands lost through European settlement—for gambling or non-casino purposes—is a serious priority for indigenous Americans. During the Obama administration, 2,100 applications were processed for schools, housing and government infrastructure. Only about 20 involved casinos. But Interior under the Trump administration is urging regulations that would make the process more difficult. AGA officials declined to discuss the tribal/commercial alliance or its position on newly acquired lands for gambling. “I have no idea what the AGA is doing involved with off-reservation gaming issues,” says John McCarthy, executive director of the Minnesota Indian Gaming Association. “We will be looking into what they are up to.” The San Manuel Band of Mission Indians, which joined the AGA through its casino enterprise, plans to weigh in on any AGA lobby effort that could impact the federal land/trust process. San Manuel “plans to have a direct participatory role with the AGA regarding policy issues the group may address, particularly as they might impact tribal government gaming,” says Jacob Coin, the tribe’s executive director of public affairs. “Regarding off-reservation lands, San Manuel supports the right of Indian tribes to reacquire their aboriginal lands,” he says.

Upside to NIGA/AGA Alliance A synergy of the tribal and commercial casino segments of the roughly $100 billion (gross revenues) gambling business—both on trade industry matters and political issues—could be of great benefit. It’s been 30 years since passage of the Indian Gaming Regulatory Act led to an explosion of casino gambling on tribal trust lands. Yet industry officials, trade publications and—perhaps most important—leaders on Capitol Hill remain ignorant about tribal government gambling. AGA hired Aurene Martin, a member of the Bad River Band of Lake Superior Chippewa and president of Spirit Rock Consulting, to solicit tribal members and work with the group on indigenous issues. “Although NIGA and AGA don’t necessarily agree on everything, I appreciate the fact Geoff Freeman is reaching out to the tribes,” NIGA’s Stevens, a Wisconsin Oneida, told LegalSportsReport.com. “Geoff has responded to our concerns. He’s been fair. I think if we are patient and work together, NIGA and AGA can accomplish a lot of good things for both industries, on sports betting and other issues.” —Dave Palermo

A NEW CULTURE OF COMPLIANCE

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FOR BEING NAMED TO THE CLASS OF 2018

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East Coast

CRUNCH New casinos may be growing the market, but they’re also splitting the pie and putting weaker properties in jeopardy. For operators, this may be the new normal. BY MARJORIE PRESTON

t’s getting crowded in upstate New York. Three casinos have opened there since last December: del Lago in the Southern Tier, Rivers in Schenectady, and the new casino at Tioga Downs in the Finger Lakes area. When the projects were pitched, gaming consultants forecasted combined revenues of $588 million through the end of 2017. The reality hasn’t been quite as rosy. Through August, the gaming halls generated just $222 million in combined gross gaming revenue, making a shortfall a pretty sure bet. They’ve also siphoned off revenues from their competition, with Saratoga and Vernon Downs off by 20 percent in August. The New York Times called the returns “underwhelming” and a sign of industry cannibalization. The New York Post called it “just the disappointment we expected.” Of course, that’s just part of the story. The new casinos have plainly underperformed based on projections, but also have grown the market overall, says Frank Fantini of Fantini Research. “If you added del Lago to Vernon Downs for a Central New York region, they gained revenues in August up 61 percent over last year,” says Fantini. “Adding Saratoga to Rivers in Schenectady for a Capitol region, they were up 51 percent. “The glass half-empty is that the numbers are lower than expected. The glass half-full is that the markets have grown substantially.” Governor Andrew Cuomo, who in 2012 pushed lawmakers to approve four upstate casinos, is unconcerned by the interim numbers. “The variance with the projections doesn’t bother me that much,” the governor said. “They’ve all been wildly successful in creating jobs and building beautiful complexes. Now they have actual data; they’ll adjust.” Fantini tends to agree. “It may take 18, 24, even 36 months for them to ramp up to what you’d call their run rate. It will take that long for new cus-

“You can’t measure against what the opportunities might have been 10, 20 years ago. It was much easier then.” —David Katz, Telsey Advisory Group

Global Gaming Business NOVEMBER 2017

The Atlantic City Boardwalk was for many years the epicenter of eastern gaming. Now that casinos have spread up and down the East Coast, margins have shrunk for all casinos.

tomers to visit, sign up for player cards, and get into the database so the casinos can market to them. The numbers a year from now might be closer to the forecast.” The same kind of crunch is playing out across the Northeastern and MidAtlantic states: Live Casino & Hotel, a Cordish Companies resort that opened in Hanover, Maryland in 2012, is now facing off with MGM Resorts’ sprawling billion-dollar National Harbor resort on the Potomac River, which launched in December. In Philadelphia, the push for a second city casino continues, to the dismay of incumbents SugarHouse, Harrah’s Philadelphia and others in the region. Massachusetts will provide more competition for surrounding states when its first casinos open: MGM Springfield, set to open next year; and Wynn in Everett, which will follow in 2019. And back in the Empire State, don’t be surprised if full-fledged casino resorts are proposed for the New York City metro area, where the Resorts World slot parlor at Aqueduct continues to outperform. The revenue pie may be bigger, but the slices are getting smaller. “It’s simple math,” says David Katz, managing director of Telsey Advisory Group. “Put a yardstick from Maine to Pennsylvania, and there are quite a few more outlets than there were a few years ago. It’s harder to find your revenue dollars in a crowded landscape. “You have to look at returns on casino projects in the current environment,” he adds. “You can’t measure against what those opportunities might have been 10, 20 years ago. It was much easier then.”

Jockeying for Position To maintain its edge—and to hedge against a possible new casino proposed for Philadelphia’s stadium district—in 2016 SugarHouse unveiled a $164 million expansion that included a new high-limit lounge, additional table games and slots, new restaurants and a 30,000-square-foot event center. “Heck, we needed it to compete,” says General Manager Wendy Hamilton. Statewide in Pennsylvania, gaming revenue was down slightly in 2016-17 over the previous fiscal year, with only four of 12 casinos seeing growth. “They say a high tide floats all boats,” says Hamilton. “Well, this is what a stagnant tide does. You always have to be finding new pockets of profit; you can’t depend on market growth. With the threat of more competition in southeastern Pennsylvania, we continue to be baffled by how it will work for anyone—including that new tenant.” The proposed new casino is a project of the Cordish Companies and Greenwood Gaming. Reminded that everyone in the market knew a fourth license was up for grabs in Philadelphia, Hamilton counters, “That bill was signed in 2004. Back

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then, nobody foresaw that the economy would turn upside down or that four casinos would close in Atlantic City in 2014. Let’s not assume that legislation we wrote in 2004 is perfectly applicable in 2017.” Maryland Live is also fighting back. The resort is adding a $200 million, 310-room hotel tower with meeting space, a spa and fitness center, a concert venue and new retail and dining options. It’s set to open in 2018. “We’re holding up fine, and when we add the new amenities, we’ll have completed our original master plan and be prepared to go toe-to-toe” with the new competition on the Potomac, says Robert J. Norton, president of Cordish Global Gaming. “It definitely gives us more tools in our arsenal.”

Balancing Act Jeff Gural, owner of Tioga Downs and Vernon Downs in upstate New York, says it’s “fairly obvious” the financial projections for new casinos there were wrong. “But from an economic development standpoint, (the new casino at Tioga Downs) has been a major success.” “I think basically upstate New York is saturated,” says Gural, adding that del Lago “threw things out of balance. “It’s right in the middle of so many other casinos. It made it hard for them to succeed and hard for me too, because we’re competing for the same customers. It also basically encouraged the Oneidas to be very aggressive, cor-

“The glass half-empty is that the numbers are lower than expected. The glass half-full is that the markets have grown substantially.” —Frank Fantini, Fantini Research

rectly so, to protect their turf.” That tribe, which owns Turning Stone Resort Casino in Utica, began a major expansion in 2014—after the state approved del Lago—adding yet another casino to the region. Its $40 million, 65,000-square-foot Point Place Casino in Sullivan, slated to open next year, will include a gaming floor with nearly 500 slot machines and 20 table games. In the ongoing game of one-upmanship, Tioga Downs is adding its own hotel as well as a golf course. “We remain optimistic we’ll have people coming to the Finger Lakes region to visit the wineries, Corning Glass or Watkins Glen,” says Gural. “I remain cautiously optimistic that we’ll be OK once our project is complete.” Not incidentally, the racetrack owner is still pushing for a casino at the Meadowlands sports complex in New Jersey, a plan that was soundly rejected in a statewide referendum in 2016. He says he’ll bide his time until New York adds three new casinos in the southern part of the state, a development he thinks is inevitable. “I just have to be patient,” he says. “I know there will be a casino at the Meadowlands. It’s the best location for a casino in America.”

NOVEMBER 2017 www.ggbmagazine.com

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Q&A

Andrew Klebanow

“They say a high tide floats all boats. Well, this is what a stagnant tide does. You always have to be finding new pockets of profit; you can’t depend on market growth.” —Wendy Hamilton, General Manager, SugarHouse Casino

Crowded Out With so many casinos dotting the landscape, is every one destined to be a locals property? Does it do away with the concept of a destination resort? “Obviously, convenience is a big factor in determining where you play, just like it is when you go to a convenience store, the gas station or the bank,” Fantini says. “If you’re in central New York and you now have four major casinos including Turning Stone at Oneida, I would say yes, you’re probably looking at locals casinos there. If you’re dealing with Schenectady and the Capitol Region and you only have one full casino, then your geographic reach may be a bit broader in terms of players.” In response to the flood of new competition, New York State Assemblyman Gary Pretlow has griped that casinos there will probably ask for a tax cut. “You give a better tax rate, that money doesn’t go to education; it goes to a millionaire,” Pretlow said in June. “Give me a break.” But that month, lawmakers gave $2 million in tax relief to the struggling Vernon Downs racino. And so the debate continues. Fantini says the Baltimore-Washington area, with a population in excess of 9 million, actually has room for another casino. Norton vehemently disagrees. “Putting aside the obvious issues of cannibalization already evident in the market, there’s a basic issue of fairness. We have invested hundreds of millions of dollars in capital, created thousands of quality new jobs in the state, and generated hundreds of millions of new taxes for Maryland, all based on the current laws. Changing the rules of the road after the fact would not only be punitive to companies such as ours, but would send an extremely negative message to companies about doing business in Maryland. “There’s growth in the market,” Norton says, “but a lot of the growth is coming on the backs of the existing players.” The days are long gone when gaming in the East was limited to racetracks, tribal casinos and Atlantic City. Competition has become a fact of life. “But as long as you put the right strategies and tools together, this is still a very viable business,” says Katz. “That realistic approach needs to extend to the regulatory bodies involved, too. There are states where the tax structures are so high, it may be impossible to generate an appropriate return. They need to be realistic about the level at which they can tax an entity.” “Nobody cries for a casino,” says Fantini. “First of all, they exist to take your money. Everybody else does, too—the Philadelphia Phillies exist to take your money, charging $12 for a beer in exchange for entertainment, but nobody looks at it that way. They see casinos as those hard-hearted souls out there to take every penny you’ve got. They also have this misperception that all casinos are making a profit.”

Global Gaming Business NOVEMBER 2017

Senior Partner, Global Market Advisors

GGB: In upstate New York, what factors are in play besides oversupply? Klebanow: There’s certainly an oversupply

issue; there’s also a demographics issue. The I90 corridor (home of del Lago) already had multiple casinos: Seneca Buffalo Creek, Hamburg Gaming, Finger Lakes Casino, Turning Stone and Vernon Downs. That’s a lot for any market, much less one in a rural portion of the state. Probably the most critical success factor for a casino-resort is proximity to a sizable residential population. Stand on the rooftop of del Lago and you’ll see vineyards. Stand on the rooftop of Tioga Downs and you’ll see cornfields, a forest and a river. Stand on the rooftop of Yonkers Raceway or Aqueduct and you’ll see houses—as far as the eye can see. You can mitigate proximity to population by building more elaborate and attractive resorts—that was Foxwoods’ and Mohegan Sun’s strategy. The risk is that someone could open a more convenient casino between them and their customers. How did the consultants miss in their revenue projections?

Consultants rely on similar forecasting models, dependent on assumptions including each property’s level of attraction. If a developer says he’ll build a four-star resort with 10 restaurants, high-end meeting space and multiple entertainment venues, then builds a three-star hotel with a buffet, coffee shop and steak house, he diminishes the level of attraction. A gamer who’s disappointed in that new facility will return to his favored destination, whether it’s Turning Stone, Mohegan Pocono, Casino Niagara or Fallsview Niagara Falls. Also, developers sometimes cherry-pick consultant reports and only use those with the highest projections. As a gaming regulator seeking to maximize gaming tax revenue, which project would you select—one that forecasts $200 million a year or $300 million? I’m not a mathematician, but 42 percent of $300 million is larger than 42 percent of $200 million. Are the jobs and “economic benefits” worth it to the host communities?

Absolutely. What other industry can move into rural upstate New York and create 1,000 or more jobs without government subsidies? For years, the state struggled to find industries to replace Kodak, NCR, Smith-Corona and other employers that disappeared. It’s why prisons are in these rural areas: to provide jobs to residents that have seen entire industries vanish from their communities. Can the new casinos meet expectations over time?

Normally, the second or third year is when a property achieves its first year of stabilized operations. But I don’t see any of those properties doubling their revenue to match projections. The same crunch is happening elsewhere on the East Coast. What happens when Massachusetts opens? Is there ever a point when it’s time to stop?

Casinos in Massachusetts will primarily affect Twin River and, to a lesser degree, Connecticut. And why should casino development grind to a halt? As long as there are developers willing to risk capital, local communities willing to host casino development and state governments willing to issue licenses, then let capitalism flourish.

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Atlantic City Gaming, Hospitality and Tourism in Flux The first legal East Coast gaming jurisdiction continues to be buffeted by surrounding competitors BY RUMMY PANDIT

n January, the New Jersey Division of Gaming Enforcement reported the first increase in annual gaming revenue since 2007, and industry insiders heralded the end of Atlantic City’s “Lost Decade.” While it is still difficult to chart the full impact of four casino closures, or the increase in competition from new casinos in the region, one thing is clear—Atlantic City’s casino industry is changing. One of the more obvious changes to the Atlantic City casino industry is the addition of internet gaming products. Taxed at 15 percent compared to land-based gaming at 8 percent, internet gaming has been as lucrative for the state as for gaming operators. As of June 30, the state has collected $89.8 million in total gross revenue tax from internet gaming, and revenue for internet gaming operators has passed the $600 million mark. Indeed, New Jersey’s success in raising tax revenue through the legalization and regulation of internet gaming has led several states to consider implementing their own internet gaming operations based on New Jersey’s model. Despite early concerns that internet gaming would cannibalize land-based casinos, analysts (specifically Eilers & Krejcik) have provided evidence that New Jersey’s venture into internet gaming has done more good than harm. The addition of revenue from internet gaming has slowed and reversed the decade-long decline in total gaming win. Internet gaming has experienced double-digit percentage revenue increases yearover-year for 2015 (21 percent), 2016 (32 percent) and 2017 (26.6 percent to date as of July 31, 2017). Table gaming win increased by 7.21 percent in 2016 compared to a decline of 8.63 percent in 2015, and slot win declined by 1.11 percent in 2016 compared to 7.64 percent and 9.16 percent declines in 2015 and 2014. The decline in slot revenue (2007-2016) has been a long-term trend for the Atlantic City casino industry. A number of factors have contributed to this decline, including the national economic recession, increased regional competition (eight casinos opened in Pennsylvania in 2006-2010) and changes in gambler preferences. Previous studies by the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism (LIGHT) at Stockton University have examined the impact of the economy and regional competitors on casino revenues, and LIGHT’s Millennial Entertainment Preferences study has provided insight into the tastes and expectations of younger gamblers. To a lesser degree, LIGHT has also examined the impact of declining visitation on the city’s gaming, hospitality and tourism industries as a whole. Figure 1 shows visitation (annual vehicle counts at the Pleasantville Toll Plaza of the Atlantic City Expressway) in comparison to slots, table games, internet gaming and non-gaming revenues. Figure 1

The influence of the recession and regional competition can be seen in the peak and rapid decline in gaming revenues and visitation between 2006 and 2010. Likewise, the impact of the 2014-2016 casino closures can be seen in the sudden drop and decline in gaming as well as non-gaming revenues for those years. Declines in slots revenue also track closely with declines in the number of chartered casino buses entering Atlantic City. In 2009 (the first year the South Jersey Transportation Authority counted vehicles rather than visit-trips), Atlantic City welcomed 177,596 buses. In 2013, that number was 102,248, before dropping to 63,006 in 2016. Whether this decline is more closely related to the introduction of internet gaming (at the end of 2013) or the shrinking number of “traditionals” (persons born between 1927 and 1945) who represented the majority of charter bus passengers is difficult to say. Another method for examining shifts in the Atlantic City casino industry is to view gaming and non-gaming revenues as percentages of the total revenue share. Figure 2 shows total casino revenue shares for 2016, 2011 and 2006. Figure 2

In 2006, slot revenue accounted for 58 percent of Atlantic City casinos’ total revenue. By 2011, slot revenue share had dropped to 52 percent, and in 2016 it represented 49 percent. Table gaming revenue share has also declined, but to a lesser extent (2 percent in a 10-year period). In fact, non-gaming revenue has surpassed table gaming for total casino revenue share, growing from 20 percent in 2006 to 27 percent in 2011 before the casino closures and 26 percent in 2016 after the closures. Internet gaming is becoming a greater share of casinos’ total gaming revenue, increasing from 4.48 percent in 2014 to 5.81 percent in 2015 and 7.56 percent in 2016. In 2016, internet gaming represented 5 percent of casinos’ total (gaming and nongaming revenues).

Rummy Pandit is executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University in Atlantic City.

Global Gaming Business NOVEMBER 2017

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Big idea Why the super-large slot machines are making lots of friends By Dave Bontempo

hey are the perfect casino ambassadors. Large-format slot machines bring the subliminal nature of gaming to an extroverted space. Customers don’t simply want to win. They want to win BIG. Ten feet or higher big. Larger-thanlife big. The seemingly endless visual stimulation, heightened by sophisticated lighting, enhanced graphics and pulsating music, accents the fantasy that lures players to the floor. Oversized machines denote euphoria. Their look mirrors how a customer can feel after a big score—momentarily invincible. Casinos can use them as an unofficial sales staff, making tournaments, multi-player activities and photo ops a party. Whether the units match the revenue output of smaller machines may be secondary. Oversized machines drive the passion that drives the business. They can be justified either by revenue totals or by categorizing them with the aesthetic pleasure gleaned from stylish lobbies, timely amenities or tall structures. Size matters.

Opus Operandi Las Vegas-based Konami Gaming, a leading innovator of slot machines and gaming enterprise management systems, unveiled a freshly completed opus at G2E last month. Konami’s newest addition to the Concerto Collection of video slots drew a buzz at the prominent gaming summit. The innovation is called Concerto Opus. It features an extra-large 65-inch HD 4Kcapable display to highlight the company’s latest portrait-oriented game releases, as well as custom-designed content. Games like Riches Drop Plop Plop Peach and Solstice Celebration Triple Sparkle were featured at G2E. Concerto Opus is scheduled to hit the market in a matter of months. “The unique bonus mechanics and creative animation take over this gigantic screen so players are right in the action,” says Steve Walther, senior director of marketing and product management for Konami Gaming. “A great example is the mystery feature in Riches Drop Plop Plop Peach, in which the hero character swoops onto the screen riding atop a cloud, summons a collection of bonus wild peach symbols, and drops them on the reels with a plop-plop to award the player additional wins. It’s something so delightfully original and unexpected, seeing it unfold on the big screen is absolutely endearing. You can’t help but smile.” Walther says oversized machines attract varied audiences, with properties choosing to use bench seating for friends, married couples and other 44

Global Gaming Business NOVEMBER 2017

pairs. That’s why Konami equipped Concerto Opus with dual spin buttons and cup holders on either side. Concerto Opus also features a custom TouchDash touch-screen button panel that fills the dashboard with multi-color lighting effects programmed to the game. The oversized cabinets hit a high note, visually and emotionally, with customers. “They are found in prominent positions around the property and create a lot of buzz,” Walther asserts. “They demand a reaction, at least initially, and in the case of our Concerto KP3+ titles, the

The oversized cabinets hit a high note, visually and emotionally, with customers

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IncredIble ActIon proven game play keeps them engaged beyond that initial spin. With Concerto Opus, we’ve been able to deliver an oversized cabinet that has the substance for recurring play and value over time. “Concerto Opus is unique because it can be merchandised as a high-profile novelty or alongside standard core product with a lot of flexibility,” he continues. “It strikes a nice balance of appeal for both casual players and core slot players because of the game content quality and proven math. It’s just the right size to be placed as an end-cap in a high-traffic area, in pods of three or four, or banked against a wall.” Walther says premium oversized cabinets have seen a lot of success in recent years. They capture attention, provide unique content and infuse a certain excitement, especially for bonus feature events. Guests take notice and gather around to watch the action unfold.

twin Win Scientific Games continues to astound. The Las Vegas-based company that provides gambling products and services to lottery and gambling organizations worldwide enjoyed G2E in its own backyard. As expected, it was locked and loaded for the gaming summit. Although the immersive James Bond experience comprised a major company theme, some other numbers besides 007 grab customer attention. Like V75. Scientific Games highlighted its TwinStar V75 cabinet, the biggest and boldest new member of the versatile TwinStar family of interactive game cabinets. This new large-display cabinet continues the TwinStar legacy of taking player attraction and innovation to new levels, company officials say. Like its predecessors, the TwinStar V75 has industry-leading internal hardware, sleek ergonomic styling, and captivating multimedia lighting and sound. It also has the TwinStar broad cross-brand versatility, capable of supporting multiple content streams. The most visible attribute of V75 is its bold, 75-inch, 4K resolution, ultra-high-definition curved display. The cabinet features emotive lighting through holographic LEDs, dual re-spin bet buttons, an oversized 24-inch iDeck digital button panel and a patent-pending simple assembly design. The unique monitor curvature enhances the visibility of upper display elements and provides players a more comfortable viewing experience than most large-display cabinets. Other ergonomic features include a wide-body structure with extensive leg room for two people and a foot rest. The V75 also offers a table-like, multi-level deck that provides room for personal storage, a USB power plug for charging mobile devices, and a large iDeck interface with integrated, extra-large left and right smash buttons. The simple three-piece assembly of the TwinStar V75 allows for easy transportation, installation and servicing with no specialty tools or heavy lifting required. Despite its size, the cabinet’s footprint is conservative, taking up a lot less floor and visual space than competitive cabinets, according to the company.

ncredible Technologies forged a large-format presence by merging an existing base with a touch-screen monitor to create an oversized machine. Its G2E showcase of Infinity Skybox, Super Skybox and V55 reflected the innovation of a company motivated to rise. The Chicago-based slot manufacturer has over 200 employees, more than 60 successful new and proven games in its catalog and just set up a new Las Vegas development office. Now licensed in 26 states, the company continually expands its footprint. At G2E, Incredible Technologies unveiled Infinity V55, a new Infinity core form factor utilizing a full touch-screen, 4K vertical 55-inch monitor on a standard Infinity U23 base. This creates an immersive gaming experience on what is the largest screen on a core for-sale cabinet in the industry, officials indicate. “This industry is too often an arms race of technology and the me-too product,” says Elaine Hodgson, president and CEO of Incredible Technologies. “This is not a fight in which we are interested. ‘One Step Ahead’ was not only our G2E slogan, but a message to the industry that speaks to why operators see value in our signature product—robust hardware, winning math and compelling content created by a unique combination of talented people. This is our strategy, and it is working.” The V55 product uses a 55-inch vertical monitor as the main screen, but still fits on a standard 28-inch base. The 4K-resolution monitor of the Infinity V55 is topped with a visually compelling, bank-synched LED light bar, catching the eye of casino patrons from across the slot floor. While the impression is huge, the footprint is not. Infinity Skybox takes the core U23 cabinet, adds a 55-inch vertical screen overhead for bonusing events and creates a cabinet that’s almost 10 feet tall. It utilizes a modular design leveraging the company’s Simple Sign Display Kit technology to secure the display. The signage is comfortable to the player sitting directly under it and can also be seen by patrons across the casino floor as bonus events and progressive meters are brightly displayed. The flexibility of the Infinity Skybox is ideal as stand-alone or in a large-bank format with linked progressives, according to Incredible Technologies officials. Infinity Skybox launched with two flagship titles. Crazy Money Deluxe and Money Rain Deluxe provided an impactful new twist of the company’s most popular game brands. Both titles feature a massive digital bonus wheel overhead and a linkable progressive jackpot display. Infinity Super Skybox takes four cabinets and links the overhead signage with a video director to link the screens, providing the equivalent of a cabinet exceeding 10 feet. Super Skybox transforms four standard Infinity Skybox units into a shared, bank-wide display spanning across each cabinet’s 55-inch vertical monitor to create one unified overhead display— equivalent to a 123-inch screen—leveraging a groundbreaking game-togame communication and video director technology. —Dave Bontempo NOVEMBER 2017 www.ggbmagazine.com

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Covering the Bases International Game Technology, as expected, brought an array of cabinets, games and solutions to G2E. Large-format innovations housed the latest version of the venerable Wheel of Fortune, as well as other mechanical reel and video poker offerings. Wheel of Fortune Megatower is presented on IGT’s largest cabinet, a whopping 11 feet tall. It was built to compete with other large-format cabinets in the market. The product’s huge size will draw people in while its premium titles, designed to work with the CrystalWheel Stepper and CrystalDual Stepper content library, will keep players engaged and entertained, officials say. With the Megatower cabinet, players can experience industry-favorite versions of Wheel of Fortune including Gold Spin, Triple Gold and Triple Double Diamond. The large cabinet uses the Crystal Upright base module and incorporates a huge, crystal-clear display. The machine will create a gravitational presence on casino floors. Features include three 9-inch-wide mechanical reels with a 55inch portrait upper display. The dynamic player panel has dual bash buttons and a lock-bet panel to eliminate errant screen touches. Lights sync up to game experience, music and sounds. Black chrome plating is featured on high-end titles. There is consistency in look between CrystalDual, CrystalCore and the S3000, IGT’s core stepper cabinet. The product also features a built-in external USB charging port, allowing players to charge their phones or other USB-powered devices at the machine. The S3000 XL gaming machine offers a larger-than-life gaming experience in the mechanical reels sector. This large-format cabinet immerses players like never before with its enlarged display and extended touch screen over wide mechanical reels. Its wide presence demands attention on any floor and offers an extra foot and a half of personal space. The product boasts a successful game library that lets operators show new and nostalgic spinning-reel titles. The S3000 XL cabinet features mechanical reel themes like IGT’s Pinball, Triple Gold and Red Hot 21 Double Diamond Games. It is a colossal version of the S3000 cabinet. Video poker meets large-format with the introduction of the Video Poker XL cabinet. The upright hardware melds design elements from IGT’s S3000 XL cabinet with the time-tested IGT video poker player panel. IGT showcased the Wheel Poker and 100 Play games on the Video Poker XL cabinet at G2E.

Colossal Impact For AGS, Colossal Diamonds on the giant crimson Big Red cabinet remains a gaming-floor stalwart. “In some cases, the game has been installed for years and continues to bring in more than five times the house average,” says Brett Vela, the company’s associate product manager. “The staying power has a lot to do with the game’s big celebrations and the social experience of the game play. Casinos often use this large, eye-catching form factor to create contagious excitement throughout their floor, especially near entrances and exits and other high-traffic areas. “Big Red’s unique design attracts every demographic because its iconic red cabinet stands out on the casino floor and spreads excitement,” Vela asserts. “Its simple, classic game play is inviting and doesn’t intimidate new players.” The company continues to advance upon approvals for its Colossal Diamonds slot machine, as the Big Red march has progressed steadily, primarily in Nevada. And now it’s Big Red plus one, he says. “Our next-generation Big Red cabinet features a 42-inch top monitor, 46

Global Gaming Business NOVEMBER 2017

which gives us the ability to create even more excitement on casino floors,” Vela indicates. “An attract mode helps draw more people in, and we’ll use that top monitor for win celebrations that can been seen anywhere on the floor. “Part of the appeal and high performance of Colossal Diamonds is the math behind the game and the entire ride of the experience—it’s what players love. We’ve taken that same base math and game experience and integrated them into our new theme, Colossal Stars, which features beautiful new graphics, animation, and sounds powered by our cutting-edge Atlas platform. We debuted Colossal Stars at G2E 2017, and it’s currently available in most jurisdictions.” Vela says AGS is literally committed to the big picture. “The positive response from players and operators has been incredible,” he says. “We’re excited to have a product that continues to perform well and has a strong, loyal following of players behind it. As one of the first suppliers to really enter this large-format space and succeed, it’s been fun watching how other manufacturers approach their large-format games and cabinet designs. We don’t think this segment will slow down any time soon, and we plan to keep developing high-performing products in this area as long as the market continues to embrace it.”

Lightning Strikes Everi Holdings made a giant splash into the gaming world a couple years back via the merger of Global Cash Access and Texas-based Multimedia Games. Its signature large-format product, the Texan HDX, arrives at more than 8 feet tall, with eye-catching accent lighting and a stylish, comfortable two-person bench. A three-way sound system comes with the package. Other highlights include the dual 42-inch HD integrated displays, ergonomic player controls and integrated touch screens. Dual repeat bet buttons, with classic and new content, also are prominent. And now...ZAP... another innovation, which gained prominent eyeballs at G2E. This one is a game, called Lightning Zap. When designing it, Everi’s Black Hat Studio stretched to answer a challenging question: Can a slot machine with no reels whatsoever deliver a fun experience? The resulting game has far exceeded all expectations, according to Juan Mariscal, the game designer for Black Hat Studio. There is no title anywhere on the screen, no reels or traditional symbols, and no pay table in the help screens. With an electric orb in the center

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Everi’s signature large-format product, the Texan HDX, arrives at more than 8 feet tall, with eye-catching accent lighting and a stylish, comfortable two-person bench. A three-way sound system comes with the package.

along with all prizes displayed on screen, there’s an immediate intrigue as to what playing this game must be like. “Lightning Zap is a one-of-a-kind gambler experience on a larger-than-life cabinet,” Mariscal asserts. “By eliminating reels, we’ve created a totally unique slot game that focuses on getting players to a win even faster using an electric orb that zaps and awards prizes. There’s a much quicker pace of play than with most slots, which boosts the excitement even more. In addition, by putting this game on our Texan cabinet, we’ve completely amplified the visual and audio impact to maximize the fun.” Throughout the industry, operators find new ways to maximize this unique product style. Large-format machines can stand tall, on their own, or drive eyeballs and foot traffic to the slot-machine realm. They combine the aspects of team members, marketing, sales staff and hosts. The products engage. They are, for all intents and purposes, gaming with a smile. NOVEMBER 2017 www.ggbmagazine.com

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TABLE GAMES

Lessons from HBO Game of Thrones isn’t just for geeks

urns out there are two kinds of people in the world. The first are the ones who can’t stop chattering on and on about Game of Thrones, delving into the most minute of minutiae, regaling anyone and everyone with their conspiracy theories and spoiler alerts, and proving physically incapable of walking past a bank of elevators without yelling out, “Hodor! Hodor!” Then of course are the second kind of people, the ones who want to slap the $@#% out of the first kind. Unless you’ve been living under a rock in the Sept of Baelor—what’s left of it anyway, right, Cersei?—or idling with the wildlings north of the Wall, you know the HBO drama just wrapped up its seventh and penultimate season. Thrones is set in Westeros, a mythical land of feuding families, shaky alliances, bloody battles, frontal nudity, dorsal nudity, side-al nudity, firebreathing dragons, and an unstoppable army of frozen albino zombies. More about them later. But, believe it or not, beyond the brilliant writing and exquisite set locations and the luxurious blonde, braided locks of Emilia Clark—oh, Khaleesi!—Thrones serves as an apt analogy for business in general and the gaming business in particular. Hey… what you talking ’bout, Varys? Let me explain. Imagine the show takes place in Las Vegas, and instead of royal houses there are casino suppliers: Scientific Games. IGT. Aristocrat. Konami. Interblock. Ainsworth. Everi. AGS. Nobody gets along, at least not for long, as they each want to expand their reach and influence over the industry. They compete. They fight. They litigate. They poach each other’s talent. They spend millions developing new products and millions more commercializing them, all with the intent of increasing market share at the expense of the rest. But, as any Thrones devotee understands, such scraps and squabbles—violent and viscous as they may be—are still just scraps and squabbles. They’re a way to keep score, a way of determining

By Roger Snow

whose banner flies atop whose castle or whose son gets to marry whose daughter. Meh. Who cares? What matters most is taking a stand against the real threat, the threat that could wipe every living human soul from the face of the known world. Unstoppable army of frozen albino zombies? That’s your cue. The White Walkers, as they’re called, have arrived. They’ve breached the Wall, the glacial barrier that had quarantined them outside Westeros for 8,000 years. They’ve got millions of soldiers who can’t be killed because they’re already dead. They’ve got giants. They’ve got weapons. They’ve got this bad-ass leader with Marilyn Manson’s skin tone, Bradley Cooper’s blue eyes, and Roberto Clemente’s throwing arm. And, yes, they’ve even got a dragon of their own. So if the inhabitants of the Seven Kingdoms don’t chillax and start focusing on this particular problem, then guess what? It won’t make a goddamn bit of difference in the next episode who defeats whom in the battle of whatever. Because. They. Will. All. Be. Dead. Same goes for gaming. While suppliers bludgeon each other with product innovation, strategic alliances and accretive acquisitions, they must also take up arms against the greater threats facing them all. Nightclubs. Day clubs. ESports. Uninterested and un-capitalized millennials. New technology. Outlet malls. Arcade games. Bottle service. Candy Crush. Haute cuisine. Not-so haute cuisine. In gaming’s Game of Thrones, these are the White Walkers. And they must confronted. Head on and right now; otherwise, the industry will be forever relegated to a near zero-sum battlefield. Where every victory is always someone else’s defeat. Where the average player gets older every year. Where you need a magnifying glass—or a microscope—to discern market growth. Where, when you see someone under the age of 30 in a casino, you assume he or she is lost. Or headed to the Deadmau5 after-party. Suppliers must not engage solely in a tug-of-

Global Gaming Business NOVEMBER 2017

war over current players; they must attract new ones as well. Gaming is not immune to the laws of physics, nor the laws of politics, for that matter. It cannot serve and re-serve the same group. The base needs to be more inclusive. It needs to expand. Truth be told, the resistance is already mounting. Unlike the good—and the evil—folks of Westeros, who spent six and a half seasons twiddling their thumbs and diddling their siblings as the White Walkers inched closer and closer, casino suppliers have been bracing for this assault. All of them seem to spend a significant amount of time and money on research and development. Many, especially among the major players, have “future labs,” where a team of dreamers and engineers is charged with conjuring up game-changing concepts that may take two, three or four years to hit casino floors. Still others have gone all-in on a fledgling niche, like skill-based slots or RFID tables. Yes, many ideas that come from these incubators will flop. Some spectacularly so. That’s not the point. Success often rises from the ashes of failure; the lessons learned are clues, and they can lead you in the direction you were meant to go all along. Though this may be madness, there is a lesson in it: You’ve got to take shots, even longshots. If you ain’t failing, you ain’t trying. Doing the same old same, assuming the world around you won’t change, is foolish. It’s the surest recipe for having your business disrupted and discarded. Just ask Circuit City. Or Blockbuster. If you can find one. Fortunately, the gaming industry is too smart for all this. It has withstood booms and busts, recessions great and small, global and local. As with casino operators, who always seem to pivot towards the next big opportunity, suppliers are resourceful enough—and humble enough—to avoid the trap of complacency. You can bet on it. 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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NEW GAME REVIEW by Frank Legato

Ultimate Fire Link Scientific Games

his new multi-progressive video slot series employs a unique holdand-spin progressive bonus feature that can result in several jackpots. The series is being launched with two base games, with themes celebrating two of the oldest streets in the U.S., Olvera Street in Los Angeles and China Street in New York City. Ultimate Fire Link: Olvera Street and Ultimate Fire Link: China Street reflect different themes and images, but the same basic game features. The base games are five-reel video slots on the Bally Alpha Pro Wave cabinet, available in configurations of 10, 20 or 50 paylines. The 10-line version is available only in the $1 denomination; the 200-line version is in nickel and 10-cent denominations; the 50-line is either penny or 2-cent denomination. The games feature a four-level progressive jackpot, with the top Mega jackpot resetting at 1 million credits times the denomination. There are two main bonus events—a free-spin feature and the progressive bonus. Three or more scattered Free Games symbols trigger the player’s choice from six free-spin options, varying according to volatility. The spins range from five free games with random multipliers of 10X, 15X and 25X to 20 free games with 2X, 3X and 5X multipliers. The player can also select a “Mystery Choice” that yields a random combination of the other five choices. Three Free Games symbols on a free spin awards a repeat of the choice selected, along with a 2X multiplier. Four or more scattered Fireball symbols trigger the main progressive bonus, the Fire Link Feature. Additional rows of symbols on the reel array are unlocked according to the number of trigger symbols—four

rows for five to seven symbols; five rows for eight or more. Beginning with three spins on the expanded array, Fireball symbols award either credit amounts up to 5,000 or one of the four progressives. Each Fireball symbol locks in place for the remaining spins, and each new Fireball symbol adds three spins. Bonus play continues until no spins remain or the entire array is filled with Fireball symbols. Manufacturer: Scientific Games Platform: Alpha 2 Format: Five-reel, 10-, 20- or 50-line video slot Denomination: .01, .02, .05, .10, 1.00 Max Bet: 50, 200, 500 Top Award: Progressive; reset at 1 million times denomination Hit Frequency: 30.16%, 26.08%, 26.54% Theoretical Hold: 4.01%-14.77%

Wild Fury Jackpots International Game Technology

his new slot on IGT’s CrystalCurve cabinet features a ladder-style jackpot round, woven together with wild symbols in a free-spin round. The base game is a five-reel video slot in 10-line or 60-line configuration. A mystery “Stacked Wilds” feature occurs frequently during the primary game. Randomly, stacks of wilds will appear after a spin, re-evaluating the win. One unique feature in the base game is the appearance on the screen of a gold-and-blue dragon, which anticipates big wins. The dragon appears any time eight or more wild symbols will be awarded, or before a win that is at least 10 times the player’s bet. The free-spin event is tied to the ladder-style jackpot display on the top vertical monitor. Each jackpot amount is accompanied by a number of corresponding wild symbols. The bottom $150 award is guaranteed when the free-spin round is triggered by three bonus symbols. During the free spins, all stacked wild symbols are tallied, and when thresholds are met, the player moves up the prize ladder. When the feature is triggered, a wheel appears, and the player

spins to determine the number of initial free spins, to a maximum of 20. Each wild symbol increases a tally on the screen, and when the total reaches 20, the player moves up a jackpot level. The player moves further up the ladder by reaching 40 or 65 wild symbols, with the top jackpot of $1,375 ($1,250 on the 10-line version) returned for 100 wild symbols. Helping the effort are “+1 Spin” symbols that appear in stacks on the free spins to add extra spins; and “Level Up” and “Double Level Up” symbols that automatically move the player up the prize ladder. Manufacturer: International Game Technology Platform: CrystalCurve Format: Five-reel, 10-line or 60-line video slot Denomination: Multi-denomination Max Bet: 100, 600 Top Award: $1,250, $1,375 Hit Frequency: 26%, 34% Theoretical Hold: 87.4%-96% NOVEMBER 2017 www.ggbmagazine.com

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GOODS&SERVICES

Magic Johnson gave an inspiration speech at G2E about dedication to success and concluded his presentation with a discussion with AGA’s Geoff Freeman about sports betting and Las Vegas pro sports.

SOLID SHOW G2E 2017 got off to a rough start, but the heart and soul of the gaming industry made it a success By Patrick Roberts

lthough tragedy shadowed Global Gaming Expo 2017 all week (see Agenda on page 6), the show must go on, and it turned out to be one of the most memorable of 16 years of G2E. The industry rallied together to demonstrate that nothing can stop progress, while paying homage to the victims of the Route 91 shooting. Every slot manufacturer rolled out new and innovative products, while welcoming clients from around the globe. Other exhibitors with products and services for all aspects of the gaming industry were able to generate new business. The conference program was altered slightly to focus on the events of the previous Sunday, but thousands of delegates heard cutting-edge solutions to topics of interest to the entire industry. And of course, the networking events were second to none. Signature events, from the Chairman’s Reception where four new members were inducted to the AGA Gaming Hall of Fame to the Casino Entertainment Awards that featured stars such as Carlos Santana, the Isley Brothers and Clint Holmes, entertained and connected gaming people from all regions of the globe. Save the date for next year’s G2E on October 8-11, 2018, and get prepared for the next “big show” for the industry, ICE Totally Gaming in London February 6-8, 2018.

American Gaming Association President and CEO Geoff Freeman welcomes former Boston Police Chief Ed Davis to talk about the aftermath of the Boston Marathon bombing and lessons Las Vegas can take away It was standing-room only for the annual “State of the Industry” keynote panel where the AGA presented its upcoming agenda and executives gave their views on the future of gaming. Slot tournaments at the Everi and Konami booths were a highlight of this year’s G2E.

Tribal gaming was wellrepresented with a ceremony in the Tribal Gaming Lounge honoring former BIA executive Larry Roberts.

The Cintas Fashion Show, one of the centerpieces of G2E over the years, was especially popular this year as it was held on the keynote stage. The annual ribboncutting opened the show on Tuesday.

The show floor was busy from the opening to the close, with all the keynote presentations occurring in a specially constructed area of the floor.

Global Gaming Business NOVEMBER 2017

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WINNERS RECEIVE AWARDS FOR

17th ANNUAL GGB GAMING & TECHNOLOGY AWARDS AT G2E

Record number of nominations demonstrates that the awards are truly considered the ‘Best of the Best’

2E 2017 was the venue for the winners of the 17th Annual GGB Gaming & Technology Awards to receive their plaques. The 2018 GGB Gaming & Technology Awards are the industry’s standard in this field, recognizing excellence in innovation and practical application in all gaming disciplines.

The Konami team for the Beat Square program

The winners of the 17th Annual GGB Gaming and Technology Awards are: Best Consumer Service Technology Gold Medal: JACK Entertainment for GT Connect Silver Medal: JCM Global for FUZION Best Productivity-Enhancement Technology Gold Medal: Scientific Games for iVIEW 4 Silver Medal: The Rainmaker Group for grouprev Best Slot Product Gold Medal: Konami Gaming Inc. for Beat Square Silver Medal: AGS for Orion

The JACK Entertainment team for GT Connect

Scientific Games’ iVIEW 4

Rainmaker’s grouprev

TCSJohnHuxley’s Qorex Gameball

Best Table Game Product or Innovation Gold Medal: Gamblit Gaming for Gamblit Poker

LIVE Silver Medal: TCSJohnHuxley for Qorex Gameball

“The nominations for the GGB Gaming & Technology Awards exceeded our expectations this year,” said Roger Gros, publisher of Global Gaming Business magazine, which administers the awards program. “The amazing products submitted for the judges’ review were all at the cutting edge of technology that serves all facets of the gaming industry. For the first time in the history of the awards, an operator submission, JACK Entertainment’s GT Connect, won the Gold Medal for Best Consumer Service Technology. The GGB Gaming & Technology Awards surely recognize all the trends and innovation being made in the industry today.” Judges for the awards are: Claudia Winkler, president of GHI Solutions; Rob Russell, gaming analyst, Regulatory Management Counselors, P.C.; Frank Neborsky, vice president of slot operations, del Lago Resort Casino; Gerhard Burda, president and CEO, ESCAPES Advisory Services; and Cliff Paige, slot director, South Point Casino Resort.

Orion by AGS

JCM’s FUZION

Gamblit Gaming’s Gamblit Poker LIVE

NOVEMBER 2017 www.ggbmagazine.com

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FRANKLY SPEAKING by Frank Legato

November Haze

Global Gaming Business NOVEMBER 2017

Hagen, whose lawyers convinced the jury that the marijuana charges were ridiculous, particularly in light of the fact their client had no visible ponytail. Changing the subject from buds to suds, McCormick & Schmick’s restaurant and the company it pays to clean out the lines in its beer taps are on the hook for $750,000 to compensate a guy who was injured when he drank beer at the restaurant’s franchise at Harrah’s Atlantic City. It appears they forgot to clean out the caustic chemicals used to clean the lines, leading the bartender to unknowingly serve up something akin to a foamy, frosty mug of Drano. Yikes! I may never order a draft beer again. Harrah’s was not named in the lawsuit, because it simply leases the space for the restaurant. So, the poor guy didn’t even get a free room out of the deal. But at least he now has $750,000 to blow at the slots and tables. He might even be able to afford the craps tables at Harrah’s now. Finally, a recent study by 24/7 Wall Street cites casino managers and casino service workers as two of top five U.S. jobs leading to divorce. It’s because of the crazy hours, of course, but there’s something off about the list. Two of the other top five are “rolling machine setters” and “switchboard operators.” So, what, the list was made in 1950? Did telegraph operators just miss the Top 10? For further developments on the Flandreau Santee Sioux Tribe’s marijuanaand-gaming-lounge plans, please refer to Frankly Speaking in our November 2018 issue. Now if you’ll excuse me, I need to go brush my ponytail. VIC TOR RINAL DO

he month after the big trade show is usually not a big one for casino news. After the G2E show, everybody in our industry generally lets out a sigh of relief and goes home to sleep for about, oh, three days. (This year... probably four.) It’s why I normally have trouble finding casino stuff to fuel my wisecracks for the November issue. Normally, when this happens, I turn to the November issue of one year before. Look at last year’s November issue. I did that. I updated a story on South Dakota’s Flandreau Santee Sioux Tribe, which, a year earlier, had fueled my column with its plan for a gaming and marijuana lounge. As you may recall, the tribe had planned to convert a bowling alley into sort of a haven for the connoisseur stoner who gambles. There were going to be slot machines, spas and other attractions assembled around a menu of fine marijuana strains, cultivated by a professional from Colorado. The professional—I pictured a bald 60year-old with a ponytail, for some reason—was a veritable Henry Ford of the ganj, able to cultivate strains the same way fine wines are created by a vintner. (Just learned that word. “Vintner.”) Well, since it’s the November issue, I decided to update last November’s column, which updated the November column before that. There have been a few developments since we last explored the saga of the planned Souixby Doobie Lounge, Casino & Spa. (My suggested name, as I’ve noted. If they end up using it, I want money.) For one thing, there are more details on the demise of all the pot cultivated by the professional, Eric Hagen—who, in fact, is only 34 and actually looks like a perfectly normal fellow. (OK, a ponytail would definitely help. A pot grower without a ponytail is like a cowboy without a Stetson.) Since we last visited South Dakota, the state arrested Hagen and put him on trial for conspiracy to possess, possession and attempted possession of more than 10 pounds of marijuana. His trial concluded in May, when he was acquitted of all charges. More on that in a minute. More information on the end of the tribe’s marijuana program came out during the trial. Although the prosecution attempted to portray Hagen as in charge of the day-to-day growing operation, Hagen’s attorneys were able to show he only offered guidance, and visited the growing operation only three times. The trial also clarified the situation around the burning of the tribe’s crop. I wrote last year that the tribe burned the crop after a threat to arrest patrons of the casino dope lounge from Attorney General Marty “Buzzkill” Jackley, who is running for governor of South Dakota next year. Trial testimony reveals that news of a pending federal raid was the real trigger for the tribe burning the weed crop. (They tried flushing it down the toilet, but there was just too much.) In the end, Jackley was unable to make charges stick against

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PEOPLE ARUZE GAMING AMERICA ANNOUNCES CHANGES

as Vegas-based Aruze Gaming America recently announced several changes have been made to its organizational structure and leadership team. Eric Persson Richard Pennington has resigned from his positions as president, chief administrative officer and chief financial officer. He will remain at the company as vice chairman of the board of directors and senior adviser to the chief financial officer and chief executive officer. Eric Persson will assume the responsibilities of president and chief operating officer, and also will become a member of the board of directors. Former Chief Operating Officer Yugo Kinoshita has been named chief financial officer and chief strategic officer. He will focus on finance, accounting, treasury and strategic planning as well as continue to manage the company’s manufacturing operations, and will remain as a member of the board of directors. Robert Ziems, Aruze’s chief legal officer, will continue with his current responsibilities and will assume the additional responsibilities of corporate secretary and become a member of the board of directors.

RENO’S CARANO DIES AT 85

on Carano, one of Reno’s most influential figures, recently died at age 85. An attorney, philanthroDon Carano pist and winery owner, Carano was responsible for promoting and growing Reno’s local gaming and resort industry. Carano, a Reno native, served in the U.S. Army and earned a law degree from the University of San Francisco. In 1973, he left active practice and built the 282-room Eldorado Hotel and Casino—a risky move since it was located “north of the railroad tracks.” In 1992, Carano partnered with Circus Circus Enterprises and Mandalay Resorts/MGM to build the Silver Legacy Resort Casino. In 2015, Eldorado Resorts gained full ownership of the Silver Legacy and Circus Circus. Today, Eldorado Resorts owns 19 properties in 10 states.

Carano also was involved in the construction of the National Bowling Stadium in 1995 and Reno Events Center in 2005. In 1981, Carano founded Ferrari-Carano Vineyards and Winery in Sonoma County’s Dry Creek Valley in California, and in 2008 he purchased Lazy Creek Vineyards. The Carano family also owns other hotels and restaurants and 24 ranches totaling more than 1,900 vineyard acres in Northern California.

SCIENTIFIC GAMES NAMES CMO

cientific Games Corporation announced the appointment of Shawn Dennis as executive vice president Shawn Dennis and chief marketing officer. Reporting directly to President and CEO Kevin Sheehan, Dennis will be responsible for elevating the company’s brand position, promoting its integrated brands and increasing engagement with customers and players for its content and technology in gaming, interactive and lottery. Dennis joins Scientific Games from DreamWorks Animation, where she had been serving as global head of brand and franchise. In addition, Dennis has served as chief marketing officer at Mattel’s American Girl Company and the National Football League, as well as a period leading global B2B marketing, brand management and marketing communications for Dell Computers.

INNOVATION GROUP NAMES ZHU AS NEW PARTNER

he Innovation Group (TIG) announced that Michael Zhu Michael Zhu, senior vice president of the company’s international division, has become a partner in the firm. Zhu joined TIG in 2014 as an associate, responsible for operations planning and analysis, and development services in Asia. He has since taken overall responsibility for the company’s Asia practice, which he’ll continue to oversee as a firm partner, and grown the company’s gaming operations services to include data analytics. Zhu began his professional career in the United States as a leadership development associ-

ate with Las Vegas Sands Corporation, where he oversaw a broad array of projects to establish financial planning and analysis for the opening of resort properties in Macau, China, Singapore and Bethlehem, Pennsylvania. Previously, Zhu worked in various management positions for hospitality agencies and companies throughout the AsiaPacific region.

MGM PROMOTES RESORT LEADERS IN LAS VEGAS AND TUNICA

GM Resorts International announced the promotions of five executives to the positions of president and chief opAnn Hoff erating officer at their respective resorts. The following general managers have been promoted: • Eric Fitzgerald to president and COO of Circus Circus Las Vegas; • Ann Hoff to president and COO of Excalibur Hotel & Casino; • Melonie Johnson to president and COO of Gold Strike Casino Resort in Tunica, Mississippi; • Patrick Miller to president and COO of Monte Carlo Resort and Casino.

GGB

November 2017 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . .27,55 Agilysys . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3,37 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 FABICash . . . . . . . . . . . . . . . . . . . . . . . . . .47 Fantini Report . . . . . . . . . . . . . . . . . . . . . .47 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 GGB Publications . . . . . . . . . . . . . . . . . . . .12 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Golden Entertainment . . . . . . . . . . . . . . . .25 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Interblock . . . . . . . . . . . . . . . . . . . . . . . . . .13 JCM Global . . . . . . . . . . . . . . . . . . . . . . . .15 Joseph Eve . . . . . . . . . . . . . . . . . . . . . . . . .39 Konami Gaming, Inc. . . . . . . . . . .Back Cover Merkur Gaming . . . . . . . . . . . . . . . . . . . . .17 OIGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Scientific Games . . . . . . . . . . . . . . . . . . . . . .9 TCSJohnHuxley . . . . . . . . . . . . . . . . . . . . . .2 UNLV Foundation . . . . . . . . . . . . . . . . . . . .43

NOVEMBER 2017 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Eric Persson President & Chief Operating Officer, Aruze Gaming

ric Persson took over as general manager of Aruze Gaming in March and was promoted to president and COO in October. Persson has a long career on the operations side of the industry, most recently as the corporate vice president of slot operations for Las Vegas Sands. He takes over a company that has posted impressive gains over the past year. He spoke with GGB Publisher Roger Gros and Editor Frank Legato at last month’s Global Gaming Expo. To hear a full version of this interview as a podcast, visit GGBMagazine.com. GGB: You came to Aruze from a career in casino operations. How did that experience help you approach the job at Aruze?

Eric Persson: When I knew I was going to leave Las Vegas Sands, the only company I wanted to consider was Aruze. And they’re exactly the company I wanted to go to. And that had a lot to do with the fact that my career has been spent mainly working with very successful businessmen—people like Michael Gaughan, Sheldon Adelson and Jeremy Jacobs at Delaware North. Coming to a company that’s very entrepreneurial by nature, with a true owner, like (parent Universal CEO Kazuo) Okada, was very appealing to me. And the reason is, I thought that I’d be able to effect the change more quickly by coming to an organization that had an individual owner that would allow some entrepreneurial freedom. And that’s exactly what it’s been at Aruze. I wanted to take all the things that were hidden disrupters for me, as one of the largest buyers in the world at Las Vegas Sands, and the things that I didn’t like about buying slot product, and then solve those customers’ needs, because they weren’t just my issues; they were many customers’ issues. For example, I never liked it when I would buy hardware, and then the game didn’t work, and they’d want me to purchase a conversion. So, one of the first things we announced was a two-year performance 54

Global Gaming Business NOVEMBER 2017

guarantee. So if your product’s doing 80 percent or less of floor average, the first two years, we’re going to give you conversion. We’re going to make sure it performs. From your first six months as GM of Aruze, what are the main lessons you’ve taken, that will help point the right direction forward?

One of the big things was getting back towards being focused on electronic table games, because it’s a space where we’ve been incredibly successful historically. We started competing more in the video space, and I understand why—because it’s appealing. It’s easy to create software titles. But the truth is, it’s a highly, highly competitive market. We’re never going to outspend our competitors. But from an ETG standpoint, we’re a leader. You have to see our craps table, which solves a huge customer need, because at the end of the day, it’s a real craps table; you’re playing craps, you’re throwing dice. It takes one-fourth the labor a traditional craps table takes. Many more rolls per hour, never has dealer error. There is no theft. And also, when you normally would shut down the table for graveyard, it has

balling the board. When the number comes out, it will read the number to you. It has a meteor—when the ball’s spinning around, it looks like a meteor is falling. It’s just a lot of fun. Do you still want to be a disrupter?

There’s no question about it. I came here, because I thought this would be the most amount of fun. I’m blessed in my life, because it’s not about economics, although I love getting paid. But what I really love is competing. And I felt like this was an industry we could compete in. We could compete really hard; I got with the right company. When you’re small, and you’re not tied to certain economic strategies, you can do so much more. You’re dealing with some controversy with the clashes of the parent company and Mr. Okada. Is that a distraction for you?

No. At the end of the day, what you have is a company that is vibrant, that is very successful. And we have a shareholder, Mr. Okada, who is having issues—a lot of them are family issues; he’s lost control of his trust, although I think he’s taken a lot of steps I thought that I’d be able to effect the change that (will lead to his) regaining control of his more quickly by coming to an organization trust formally over the that had an individual owner that would next month. allow some entrepreneurial freedom. You have to sepaAnd that’s exactly what it’s been at Aruze. rate Aruze from the shareholder. I believe an auto-play mode where you’re able to throw Mr. Okada will come out the other side. We’ve virtual dice and still continue to play. taken steps to mitigate risks. For example, I’m a We have a new roulette wheel that uses a trustee now. Mr. Okada has no management technology called DLP Projection Mapping. It control, or economic benefit. (CEO and Chairtakes a traditional wheel, and it has a real ball. man of the Board) Takahiro Usui and myself, The ball spins around, so it’s an actual roulette we run the company. And so, we do have to wheel. But it has a lot of projection mapping take pragmatic steps, but we believe at the end technology involved. And so, it’s integrated into of the day, Mr. Okada couldn’t say more forcethe game play. You can see the trends of what fully how he believes that he’s been wronged numbers have been coming up, just by eyehere, and he’s going to prove it.

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