Global Gaming Business, September 2019 by Global Gaming Business

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GGB Global Gaming Business Magazine

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September 2019 • Vol. 18 • No. 9 • $10

BOSTON Tea Party

Stifling Cyber Crime How the industry can improve its online security

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CONTENTS

Vol. 18 • No. 9

september

Global Gaming Business Magazine

COLUMNS

18 COVER STORY

Wynn Resorts’ Boston Encore

10 AGA Rallying Around Responsibility Casey Clark

With gaming veteran Bob DeSalvio at the helm, Wynn Resorts debuts the incredible Encore Boston Harbor with an eye to the future of the company, and finally putting to rest the problems that have dogged the operator surrounding the resignation of founder Steve Wynn. Frank Fantini provides insight on what Boston Harbor means to Wynn Resorts’ strategies.

12 Fantini’s Finance Ups & Downs Frank Fantini

Jeff Koons’ iconic Popeye the Sailor has returned from the desert to gain a place of honor next to the sea at Encore Boston Harbor

By Roger Gros

30 Making My Point Machiavelli, Sonny and You Roger Snow

46 Global Gaming Women About the Why Christie Eickelman

50 Regulation Looking Inward Jennifer J. Gaynor and Jacob S. Frenkel

FEATURES

DEPARTMENTS

14 Building Cybersecurity Cybersecurity expert Gus Fritschie discusses how operators need to protect themselves against cyberattacks, and how to implement regular cybersecurity testing. By Gus Fritschie

By Chloe Fletcher

32 Betting at the Ballpark The venues with perhaps the greatest potential for retail sports betting may be the arenas, stadiums and ballparks where the games are played. By Howard Jay Klein

The Agenda

By the Numbers

5 Questions

13 AGEM

26 The Potential of Blockchain Casino operators are realizing the value of blockchain technology not only as a payment vehicle, but as a marketing tool to promote player loyalty.

36 Emerging Leaders With Global Market Advisors’ Kit Szybala and Las Vegas Sands’ Yosh Rubinstein

48 New Game Review

38 On the Side Side bets and progressives are changing the face of the table-game pit, and yielding more hold for the operator on lowhouse-edge games. By Dave Bontempo

50 Frankly Speaking 51 Cutting Edge 52 Goods & Services 57 People 58 Casino Communications With Joe Lupo, CEO, Hard Rock Atlantic City

SEPTEMBER 2019 www.ggbmagazine.com

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THE AGENDA

Goodbye, Old Friend By Roger Gros, Publisher

Dave Palermo

Vol. 18 • No. 9 • SEPTEMBER 2019 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Marjorie Preston, Managing Editor mpreston@ggbmagazine.com Monica Cooley, Art Director | mcooley@ggbmagazine.com

t’s always a shock when you lose someone who you think is rather indestructible. Dave Palermo was one of those guys. When I heard he had taken his own life last month, I was dumfounded. I first met Dave in the 1980s when he was the gaming reporter for the Las Vegas Review Journal. Since there were only two gaming trade publications at that time, we got to be pretty friendly, sometimes referring each other to “scoops” or soon-to-be scoops. Our friendship continued when he moved to Biloxi, Mississippi to work on the newspaper there during the emergence of the Mississippi gaming industry. It was a heady time for everyone involved, and Dave reported it accurately and fairly. If you read Dave’s resume, you’ll see he worked at many of the major newspapers in the country and knew a lot of famous—and infamous—journalists and newsmakers around the country. But he was restless. His tenure at any one publication was usually relatively short. Yes, Dave could be a little ornery—OK, I can already hear some of the readers say “a little?”—but he had a good heart. There was nothing he liked better than a good story. And that was all that mattered to him when chasing a story. He didn’t really care about the characters or who would be helped or hurt by his stories. He just wanted to tell the truth, and sometimes that got him into trouble. Let the chips fall where they may. But when he found tribal gaming, it was here where Palermo found his passion. I’ve always contended that tribal gaming is the best story in the casino industry because it raised up an entire race of people when they often had no hope. Dave agreed and was immediately drawn to the subject. When he started working for me about 10 years ago, that was his beat. He didn’t care to cover commercial gaming unless it had some sort of impact on tribal gaming. That said, however, Dave knew there were warts and problems with tribal gaming and he didn’t shy away from pointing that out. He would always forward to me emails after his stories were published from tribal officials telling him how much they enjoyed his reporting.

He would also forward to me emails from those who didn’t agree with what he reported—always with a caveat that if I thought he got something wrong, we could run a retraction. I never had cause to do that in all the years he worked for me. I remember how passionate he got when he told me about how Jacob Coin, a longtime executive with the San Manuel tribe of California but also a member of the Hopi tribe, invited him to take part in Hopi rituals that were normally offlimits to non-tribal members. Dave was blown away by the spiritualism and respect for the elders of the tribe. He described to me how he had been moved to tears when he witnessed the connections with the past, present and future of the Hopis. Dave was eternally grateful to Jake for that opportunity. From that point on, Dave’s reporting on tribal gaming became more than just a story to him. He was totally involved with the intricacies and links that bring together tribal governments, regulators and gaming operators. But because he had such an elevated regard for tribal gaming, he held officials to a higher standard. Business as usual wasn’t good enough for him. Because tribal gaming officials had a higher responsibility to the tribe they worked for or belonged to—and Indian Country as a whole—Dave was the gadfly to point out when things fell short of the mark. It’s always difficult for those of us left behind when someone takes their own life. We wonder what we missed or what we could have done to change that person’s mind. Believe me, I’ve been doing that since I heard about his death. But in the end, we never know what was in the mind of that person or what drove them to that decision. The outpouring of love and respect that we’ve seen for Dave in the days and weeks since his death has been awesome. From posts on Facebook, to emails, to phone calls I’ve received, everyone is grieving his loss and remembering him fondly. But if I could tell Dave one more thing, it would be this: Dave Palermo, you made a difference in this world and your life was worth living. We will miss you and your sometimes gruff personality, but know that we will always respect you.

Global Gaming Business SEPTEMBER 2019

Terri Brady, Sales & Marketing Director tbrady@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 Casey Clark | Christie Eickelman Frank Fantini | Jacob S. Frenkel Jennifer J. Gaynor | Roger Snow Contributing Editors Dave Bontempo twitter: @bontempomedia Chloe Fletcher | Gus Fritschie Howard Jay Klein | 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

• Dean Macomber, President, Macomber International, Inc.

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

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Michael Soll, President, The Innovation Group

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

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

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 901 American Pacific Drive, Suite 180 • Henderson, Nevada 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor. Copyright 2019 Global Gaming Business LLC. Henderson, Nevada 89014 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 901 American Pacific Dr, Suite 180, Henderson, NV 89014

Official Publication

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BY THE

NUMBERS

MANUFACTURERS MARKET SHARE A

t one time, IGT controlled the U.S. slot market, supplying over 70 percent of the machines operating there. Of course, those were the days when there were only four or five slot manufacturers in the field. So it was bound to even out, but even today, IGT holds a healthy lead in market share in the U.S., coming in almost 10 points ahead of runner-up Scientific Games in the July 2019 edition of the Eilers-Fantini Game Performance Report. And even though there have been complaints about sharing revenue in leased slot machines and wide-area progressives, the Game Performance Report shows that casino operators actually own almost 90 percent of the games on the casino floor today.

State of Play

he American Gaming Association recently added a new tool in conjunction with its June release of the annual State of the States report, in which the association provides data for gaming in every U.S. state, the regulations, the number of properties, types of gaming and more. In the new “State of Play” section on the AGA website (AmericanGaming.org), users can now click on individual states and the information about the impact of gaming on that particular state will come up. Visitors can also download an “Economic Fact Sheet” about each state, which, for the first time, includes tribal gaming. According to AGA President and CEO Bill Miller, this is important because it gives a total view of gaming impact no matter who owns the casinos, and because often the perspective of the customers doesn’t distinguish between commercial and tribal. At right is the fact sheet on Minnesota, which offers only tribal gaming.

Global Gaming Business SEPTEMBER 2019

MANUFACTURER MARKET SHARE

OWNERSHIP STATUS

AN ENTERTAINMENT ECOSYSTEM

FOR EVERYONE Scientific Games is a committed game-changer, playmaker, innovator, and partner, exclusively offering the industry’s broadest portfolio of products that work together to create an evolving entertainment ecosystem.

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NUTSHELL

“They

5QuesTions

Aaron Gomes

Chief Operating Officer, Peninsula Pacific Entertainment

he first gaming operation of any kind was introduced in Virginia earlier this year with the opening of Rosie’s Gaming Emporium at Colonial Downs Racetrack in New Kent featuring historical horse racing devices (HHRs). Since then, two more Rosie’s have opened in other parts of Virginia. Gaming veteran Aaron Gomes is COO of the company that owns and operates these parlors, Peninsula Pacific Entertainment, which also owns Del Lago casino in New York, Kansas Crossing in Kansas and Diamond Jacks in Bossier City, Louisiana. Gomes spoke with GGB Publisher Roger Gros at Colonial Downs in August. For a full podcast of this interview, visit GGBMagazine.com. GGB: Congratulations on the opening of the Rosie’s properties in Virginia. What has the response been? Gomes: It’s been overwhelming. All the feedback has been very positive. We put a lot of money and effort

1 2 3 4 5

“Whoever wins is going to have their work cut out, because the goal is to try to get the IR open in time for the World Expo in 2025. It requires almost surgical precision, not just by the developer, but also by the government—from a permitting perspective, from an infrastructure perspective. But it’s certainly not impossible.” —Jim Murren, chairman and CEO, MGM Resorts International, who says an Osaka, Japan IR operator can be chosen and the resort built and opened by 2025, although most analysts disagree

CALENDAR September 5-6: Scandinavian Gaming Show, Stockholm, Sweden. Produced by Eventus International. For more information, visit eventus-international.com.

into it, and it’s great to see this kind of response. We now have three facilities open. In addition to Colonial Downs with 600 games, we opened a location in Vinton, outside of Roanoke, with 150 games, and just last month we opened one in Richmond with 700 games and have another 700 games scheduled for Hampton in the fall, and then a location in Chesapeake with another 700 games early next year.

September 9-10: Strategic Perspectives in the Gaming Industry, University of Nevada, Reno’s Gaming Management Program. For more information, visit bit.ly/StrategicPerspectives2019.

So that will give you close to 3,000 games? And you’ve got approvals for 10 locations.

September 17-20: Betting on Football 2019, Olympia, London. Produced by SBC Events. For more information, visit sbcevents.com/betting-on-football-2019.

Yes, 3,000 is the limit that is approved through the temporary regulations, but we’ll be asking them to raise that cap as the regulations progress. And we do have the right to build 10 locations as long as we hold a referendum in those communities and get their approvals. Of course, the cap on the number of games would have to be raised in that case. For those of us who have not seen or played an HHR, what’s the experience like? And are your customers new to gaming, or have they gambled somewhere else?

It’s similar to a Class II bingo game; it’s very similar in terms of time on device, payouts, hold percentage and more. The only difference is you’re not playing against the house; you’re playing against other players in a parimutuel pool. Other than that, the experience is very much like a traditional slot machine. The themes are similar, even down to a players club for the customers. As for our players, it’s a combination of both. We have a lot of customers who have played elsewhere and are grateful to have their entertainment hobby closer to home. Then there are other players who are new to the market or have previously been horse racing fans and have fun playing the games. What is the tax rate on these games?

The tax rate is actually a percentage of the handle. We pay about 1.25 percent of handle, which based on the hold of each machine is roughly 15 percent to 20 percent tax. And then we supplement the purses of the horse races here at Colonial Downs, which is about 6 percent or 7 percent of the revenue. And then we have a technology fee paid to the manufacturer which is another percentage of the revenue. When you blend it all together, the effective tax rate is around 35 percent. The Virginia legislature recently considered a bill that would legalize casinos in the state but pulled it back to conduct a study. Where does that stand now?

There’s a lot of moving parts right now, especially when you add the Pamunkey tribe that recently received federal recognition. The state has commissioned a study by The Innovation Group about introducing gaming, the risks and benefits, so we believe that much of what the state decides to do with gaming will hinge on that study.

Said It”

Global Gaming Business SEPTEMBER 2019

September 11-12: Casino Marketing Strategies, University of Nevada, Reno’s Gaming Management Program. For more information, visit bit.ly/CasinoMarketing19.

September 17-20: CasinoBeats Summit 2019, Olympia, London. Produced by SBC Events. For more information, visit sbcevents.com/casino-beats-summit-2019. September 18: UNLV Gaming & Hospitality Education Series: Retail and Food & Beverage—A Menu of Options, Stan Fulton Building, University of Nevada, Las Vegas. Produced by GGB Magazine and UNLV William F. Harrah College of Hospitality. For more information, visit UNLVGHES.com. September 23-25: Gaming, Entertainment & Tourism Summit (GETS), Bhairahawa, Nepal. Produced by Eventus International. For more information, visit EventusInternational.com. October 2-3: ICE Africa, Sandton Johannesburg, Gauteng, South Africa. Produced by Clarion Gaming. For more information, visit ICEAfrica.za.com. October 14-18: Global Gaming Expo (G2E) 2019, Sands Expo Center, Las Vegas. Produced by the American Gaming Association and Reed Exhibitions. For more information, visit GlobalGamingExpo.com. October 28-31: Advanced Management of Slot Operations, University of Nevada, Reno’s Gaming Management Program. For more information, visit bit.ly/AdvancedSlots19. October 30: UNLV Gaming & Hospitality Education Series: Customer Service & HR—The People Factor, UNLV’s Stan Fulton Building, Las Vegas. Produced by GGB Magazine and UNLV William F. Harrah College of Hospitality. For more information, visit UNLVGHES.com. December 9-12: Certificate in Gaming Leadership, Oklahoma State University. Produced by OSU Center for Executive & Professional Development, Hard Rock Casino Tulsa, and Gaming Management, University of Nevada, Reno. For more information, visit business.okstate.edu/cepd.

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AMERICAN GAMING ASSOCIATION

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ach year, the American Gaming Association, our members and our industry partners dedicate a week to educating the public about our full-time commitment to responsible gaming. This year’s Responsible Gaming Education Week (RGEW) will take place September 15-21. It will provide a good opportunity to reflect on the work our industry does every day to promote responsibility in the 43 states with legal gaming. Of course, the evolution of gaming is such that new properties open and markets expand regularly, which has only accelerated with the recent proliferation of legal sports betting. This means the gaming industry must continue to do what it has done better than anyone else: extend its commitments to our communities, to our employees and to our customers. Annually, an estimated 35 percent of Americans enjoy the excitement and entertainment offered by the gaming industry. Acceptance of our mainstream form of entertainment is at an all-time high, which creates an opportunity for more patrons to directly see and experience our commitments to responsibility. From interactions with our well-trained workforce to literature in hotel rooms to voluntary restrictions on cash withdrawals to game play in general, guests at casinos nationwide and those participating in digital gaming where permitted are enjoying the safety of legal, regulated gaming in new ways. Members of the AGA adhere to a strict Responsible Gaming Code of Conduct, a prerequisite for association membership and the

Global Gaming Business SEPTEMBER 2019

By Casey Clark

standard by which all gaming operators in the U.S. should be measured. The set of standards includes provisions on employee assistance and training, alcohol service, casino games, sports betting, and the advertising and marketing of gambling. The code is a baseline, and our members have responsible gaming programs and commitments that exceed its core tenets. Success in this key area will never mean our work is done, especially as the industry expands. With its legalization, sports betting puts our industry in the spotlight, making it even more important that responsibility remains at the center of our business. That’s why, shortly after the Supreme Court deemed the federal sports betting ban unconstitutional, our industry acted to expand our Responsible Gaming Code of Conduct to incorporate sports betting. Then, on the anniversary of that decision, AGA released the Responsible Marketing Code for Sports Wagering. This code is the latest example of how our members strive to provide an experience that’s fun, exciting and importantly, enjoyed in a responsible manner. The AGA and its members have an unwavering commitment to responsibility. We are committed to addressing problem gambling head-on to ensure that people who need help get help. We invite all stakeholders in and around the industry, member or not, to join us in educating and engaging the public about responsible gaming. Responsibility is our shared responsibility.

The gaming industry must continue to do what it has done better than anyone else: extend its commitments to our communities, to our employees and to our customers.

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

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G2E 2019

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FANTINI’S FINANCE

Ups & Downs Investing in gaming stocks has always been a roller-coaster ride, and this year is no different

s the perhaps apocryphal story goes, a young investor, nervous about his holdings, approached JP Morgan and asked what the stock market will do. “It will fluctuate,” the great banker pithily replied. Apparently, JP Morgan foresaw gaming stocks. Many gaming stocks have been on a rollercoaster ride this year, rising and falling on takeover speculation and announcements, with severe weather dampening business, worries about U.S.China trade, etc. Yet for all the volatility, as of this writing gaming stocks generally have been stable to up. Fantini’s North American Index of a dozen casino companies and their suppliers is up 12 percent for the year, with some names, such as Everi (plus 88 percent), takeover target Caesars (plus 72 percent) and Churchill Downs (plus 49 percent) having big runs. The World Index of 23 American and international casino companies, suppliers and interactive companies is up marginally, though with a healthy 16 advancers, including NagaCorp up 32 percent and Aristocrat 30 percent. But turn back the pages of the calendar for a longer view, and the roller coaster has had drops and climbs that would cause the most ardent thrill-seeker to hesitate before riding. Often, stocks rise or fall based on business trends. Macau casino operators are a clear example. In 2014, when it seemed that Macau was some sort of otherworldly place where revenues would skyrocket forever, stocks reflected the giddiness. Las Vegas Sands hit $85, Wynn $249, and Galaxy HK$78 in February of that year. Then the Chinese government cracked down on government corruption, including many officials who spent public money heavily at the baccarat tables, and revenues plunged, taking stocks with them. Before it was over, LVS sank to $38, Wynn to $53 and Galaxy to under HK$20. The other Macau casino stocks mimicked the pattern. Today, with LVS around $54, Wynn $108 and Galaxy HK$47, an investor can look back and see

By Frank Fantini

where prices could go again. This past year has seen stocks that became investor darlings sink sharply when they disappoint. Golden Entertainment and AGS are two examples. When Golden acquired American Casino and Entertainment and laid out a plan to turn the properties around, investors bid up the stock from around $8 to $34. When it became clear that the turnaround would take time and near-term earnings fell below expectations, the stock collapsed almost to $12. AGS likewise was a story of premature and toogreat optimism. The stock IPO’d early in 2018 at $19 and shot up over $30 as investors took to the small company with big ambitions of entering numerous new markets armed with slot games loved by players. Then, when AGS stumbled, investors panicked. The stock sank 50 percent in one day. Yet Golden and AGS largely remain the same growth stories they were before. Both stocks have come back a bit from their lows, and investors now have a chance to buy them at a fraction of their former costs.

biggest gaining “The stocks of this year

have all gotten there by being proven growth stories.

”

Interestingly, the biggest gaining stocks of this year have all gotten there by being proven growth stories. Everi, under the guidance of CEO Mike Rumbolz, has gained momentum both on its slot machine side and its fintech side. It seems a long time since the stock seemed forever mired down and the company seemed to be in a commodity payments business. Churchill Downs (CHDN) has been perhaps the least noticed growth story. Under CEO Bill Carstanjan and with a veteran COO in Bill Mudd, CHDN has steadily diversified into casino gaming while growing the Kentucky Derby franchise and its online

Global Gaming Business SEPTEMBER 2019

account wagering business, which also positions CHDN in the emerging online betting industry. Aristocrat has had a long run of gaining market share by focusing on game development and on the world’s biggest market, North America. NagaCorp is a company few Americans know, but one that has had long successfully executed its growth plan, which has mainly been to use its casino monopoly in Phnom Penh, Cambodia, and to build NagaWorld into a destination resort. One relatively new category for gaming investors offers a smoother ride—the gaming REITs, which rely on steady rental revenues from geographically diversified casino operators such Penn National and Boyd Gaming. And the REITs pay significant dividends: Vici properties yield 5.5 percent, MGM Growth Properties 6.3 percent and Gaming & Leisure Properties 7.4 percent. Of course, as much as fundamentals, growth strategies and management execution matter, there is the element of timing: knowing when to get in and when to get out. Perhaps the most dramatic example was Las Vegas Sands. The stock peaked around $133 in September 2007 when investors were at their bullish peak. Then the financial collapse hit, and the Great Recession followed. LVS sank to $2.28 a share by February 2009. Lots of other stock followed the same pattern, which brings to mind another JP Morgan quote: “I made a fortune getting out too soon.” On the other hand, anyone brave enough to buy at the bottom had the chance to ride LVS up past $85 in 2014, or to hold onto now when the annual dividend of $3.08 a share is greater than the stock price at its nadir. That means the intrepid investor who saw past the dark days of the Great Recession, in effect, has been paid to buy the stock. Or, to close with a quote from a great investor of our age, Warren Buffet: “Be fearful when others are greedy, and greedy when others are fearful.” Frank Fantini is the editor and publisher of Fantini’s Gaming Report. For a free 30-day trial subscription email subscriptions@fantiniresearch.com.

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AGEMupdate AGEM MEMBER PROFILE

Founded in 1976, James Industries has spent 40 years developing contacts, knowledge of markets and relationships within the casino industry which consist of amusement, gaming and lottery OEMs and operators. James Industries is a results-oriented, technical manufacturerâ&#x20AC;&#x2122;s representative organization serving the worldwide markets that focus on the needs of the professional products manufactured by the principals the company represents. Selling a range of complementary products makes James well-informed about industry opportunities and trends, leading to increased sales for the manufacturers the company represents. James Industries takes pride in bringing leading-edge development programs to its principals early in the process. The companyâ&#x20AC;&#x2122;s customers enjoy the convenience of dealing with James Industries, a responsive source they have trusted for over 40 years, to meet their varied needs. The principal products of James Industries are always evolving. Products include electronic manufacturing services (EMS), touch screens, die casting, plastics, cables and storage devices. New for 2019 is a 3M PCAP ITO touch screen. Everyone at James Industries, regardless of title, is actively involved in the selling process. James firmly believes in the team selling approach, and sell at all levels of its customersâ&#x20AC;&#x2122; organization, from CEO level to design engineering and purchasing. All areas of the organizational chart are covered to maximize the exposure the principals receive throughout the selling process. This success is made possible because of the dedication, drive and enthusiasm of the elite professional team at James Industries. For more information, visit JamesIndustries.com or email Dan Savage at Dsavage@jamesindustriesinc.com. AGEM is an international trade association representing manufacturers of electronic gaming devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

AGEM Board of Directors Actions â&#x20AC;&#x201C; August 2019 â&#x20AC;˘ AGEM has been a major supporter of the Dr. Robert Hunter International Problem Gambling Center (PGC) for many years, and recently approved this yearâ&#x20AC;&#x2122;s contribution of $50,000, which will be matched by GLI through the AGEM-GLI Lasting Impact Philanthropic Initiative. PGC Executive Director Stephanie Goodman gave a brief in-person presentation to AGEM members outlining the important work the PGC provides. New to the role, Goodman shared that the program is free of charge to those in need, but they know they need to help more, so the PGC is embarking on a significant outreach initiative to get those who need treatment into the program. This will take the form of educating people through their website, social media channels, radio and visits to the community. â&#x20AC;˘ Connie Jones, AGEM director of responsible gaming, recently took part in the National Council on Problem Gamblingâ&#x20AC;&#x2122;s 33rd Conference on Gambling Addiction & Responsible Gambling held in Denver, Colorado. AGEM is a top tier sponsor of this event, which is one of the largest of its kind, seeing over 500 attendees gather from 42 states and 14 countries to educate, innovate and engage. The 150plus speakers and 70-plus sessions showcased the importance of education and collaboration in an effort to minimize problem gambling. â&#x20AC;˘ AGEM has engaged Apple and its App Review Team regarding the guideline changes that direct all new gaming apps must be native to iOS with existing ones updated by September 3. The time frame to achieve these changes has significant ramifications for AGEM members that specialize in these products, and there is concern regarding the conflict they may cause with existing laws and regulations. AGEM has been communicating with the Division of Gaming Enforcement (DGE) in New Jersey to assist in highlighting to Apple the potential legal and regulatory implications of the guideline change. â&#x20AC;˘ AGEM board members met recently with Nevada Gaming Control Board Chairwoman Sandra Mor Jim Barbee, to discuss how to improve the lab situation, gan, and Chief of the Technology Division highlighting a variety of issues and time lines experienced by suppliers. AGEM submitted member con cerns that are being discussed within the GCB, but in the meantime, suppliers are to be encouraged to bring more stakeholders to meetings and to highlight issues direct with Chief Barbee. â&#x20AC;˘ AGEM welcomed four new Associate Members in August: iPro Inc., a mobile and online gaming technology and platform company based in Nevada; Reed Exhibitions, a leading global events business and organizer of G2E; Shenzhen TMD Technology Company based in China, a manufacturer of touch screen monitors for gaming applications; and Sports Betting Community (SBC), a news media company based in London, promoting the sports betting industry. This takes the membership to 172 companies from 22 countries.

UPCOMING EVENTS â&#x20AC;˘ Once again, AGEM has pledged $30,000 to sponsor the invitation-only Chairmanâ&#x20AC;&#x2122;s Reception, which will be held during G2E on Tuesday, October 15 at the Palazzoâ&#x20AC;&#x2122;s Prestige Club. As in previous years, the American Gaming Associationâ&#x20AC;&#x2122;s Gaming Hall of Fame induction will be held concurrently.

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The AGEM Index decreased in July 2019 by 10.38 points to 494.96 points, a 2.1 percent drop from June 2019. The AGEM Indexâ&#x20AC;&#x2122;s July 2019 decline was driven by an 8.1 percent decrease in the stock price of Konami Holdings 9766), which declined from ÂĽ5,050 to ÂĽ4,640. The stock was responsible for 8.26 points of the AGEM Indexâ&#x20AC;&#x2122;s (TYO: Limited (ALL:AX) experienced stock drop from AU$30.72 to monthly drop. Aristocrat Leisure a 0.2 percent price which led to a contribution of negative points. Overall, most AGEM Index companies inAU$30.65, 5.85 reported creases in stock price during the month, with eight trending positively and five moving negatively. The major stock indices also performed Jones and the S&P 500 experienced of well, as the Dow Industrial Average monthly gains 1 percent and while grew 1.3 percent, respectively, the NASDAQ by 2.1 percent.

SEPTEMBER

www.ggbmagazine.com 2019

p. 14 Cyper sept:Layout 1 8/14/19 11:06 AM Page 14

SafetyFirst Cybersecurity is a cornerstone of a successful gaming operation By Gus Fritschie

hen I wrote my first article for Global Gaming Business magazine back in January 2012, just one state, Nevada, had regulated online poker. Much has changed since then. Now, iGaming has expanded to multiple states such as New Jersey and Pennsylvania, including online casino games. Land-based gaming has also seen great growth. Sports betting (online and land-based) has grown rapidly, leading to greater acceptance in states where gaming once was frowned upon. In addition, niche products such as daily fantasy sports, esports and skill-based gaming have captured market share. My role in supporting the gaming industry has changed, too. In 2012 when I penned my initial thoughts on gaming security, I was establishing SeNet as an information technology security leader in the gaming sector. While it took time to get the ball rolling, I eventually worked with the biggest names in the business, both online and landbased, from MGM and Caesars to GVC and Scientific Games. The company also expanded in the lottery sector and played a major role in the forensic investigation and successful prosecution of lottery executive Eddie Tipton in association with the Hot Lotto RNG fraud. In 2011, I gave my first talk at Defcon on security weaknesses in iGaming sites, and gradually established a vibrant gaming practice at SeNet, building on the valuable work that SeNet already provided in other sectors. Recently, SeNet was acquired by Gaming Laboratories International, partially on the strength of its service to the gaming sector. However, the more things change, the more they remain the same. In 2012, I said of Nevada’s iGaming regulations, “Despite these items, the current emphasis seems to be on regulation related to the financial and management aspects of online poker. This is understandable, as there is no need to bypass a firewall or perform a sophisticated structured query language injection attack if the owners of these compa-

Global Gaming Business SEPTEMBER 2019

nies can simply steal players’ money by transferring it into their bank accounts. As we move toward regulated online gaming in the United States, computer security controls need to be enforced in addition to financial controls.”

The Weak Link This call for greater security requirements has only been partially met. There are some good examples of regulators incorporating security requirements and independent testing and validation into their requirements. New Jersey rises to the top of our list, as we have supported operators in that state for several years. Where IT security testing was only required for iGaming, testing requirements have expanded to include brick-and-mortar, too. In addition to New Jersey, other states have some form of required testing (Louisiana, Michigan, Maryland), but in many jurisdictions, it’s left to the operator or casino to perform this important activity. February 2014 served as a wake-up call to the casino industry. That’s when Las Vegas Sands Corp. suffered a major cyber breach that impacted the company both operationally and financially. If one of the largest gaming organizations in the world could be hacked, everybody was vulnerable. For every Las Vegas Sands, there are many more that escape media attention. My firm has responded to a number of gaming organizations that have had ransomware or other types of attacks. And there’s no sign of this slowing down. Over the past eight years, we’ve performed hundreds of security assessments on gaming operators across the country and in cyberspace. Several common weaknesses and mistakes are typically noted. None of these are unique to gaming organizations, but they pose a risk, as the integrity of gaming operations is paramount. There are four elements that will guarantee the integrity of your gaming operation:

p. 14 Cyper sept:Layout 1 8/14/19 11:06 AM Page 15

For every Las Vegas Sands, there are many more that escape media attention. My firm has responded to a number of gaming organizations that have had ransomware or other types of attacks. And there’s no sign of this slowing down.

1. Vulnerability Management/Risk Management: Vulnerability management is the process of discovering and developing a plan on how to mitigate vulnerabilities in your network and systems. Of course, you’ll never have 100 percent security, and that’s where the process of risk management comes into play. Typically, vulnerabilities are enumerated by a third party performing a security evaluation or the organization itself performing vulnerability scans. Some organizations don’t even perform this important task. If you don’t know where your vulnerabilities are, how can they be managed? I once had a potential customer tell me he would rather not have a security test performed because that way, he could claim he didn’t know if the company was vulnerable or not. I’m sure you can see the flaw in that approach. I advise companies that not all vulnerabilities are equal. That SQL injection flaw in your iGaming application has a much larger impact than a default password on a backend internal system. It’s all about making informed business decisions based on your risk appetite on what to mitigate and when. Unfortunately, this is an item many are failing at. 2. Patch Management: Patch management is something you probably think should be easy to perform. Just set your systems to autoupdate and forget about it, right? Unfortunately, it’s not that easy. Both operating-system and third-party patches have to be tested to make sure they don’t break anything. Gaming manufacturers often don’t make this easy. Their products and applications are often tied to a specific version, and they don’t want the casinos to upgrade as often as they should, for fear of breaking something. Casinos also bear some of the burden as they don’t patch as often as they should (i.e., quarterly versus monthly) even when they can, and sometimes perform this function manually rather than using an

automated patch solution, which leads to more delays. As much as organizations would like to not have to worry about patching, it’s a necessity, and this task can eliminate a number of vulnerabilities. It becomes even more important when you realize that the No. 1 method organizations get breached is via client-side attacks (i.e., phishing, and outdated third-party patches such as Java and Adobe are often to blame). 3. Cyber-Hygiene: Cyber-hygiene is another area where many gaming organizations are lacking. What is cyber-hygiene? Same as hygiene is for us—making sure we are clean and healthy. Often, networks and systems get implemented with default parameters configured, unnecessary services enabled, and weak security baselines. Many of these issues are low-hanging fruit that alone may have a low severity. But when chained with other misconfigurations, they could lead to a breach. Like patch management, casinos’ partners are often part of the problem. We performed an assessment on a casino where we were able to get access to the slot controller in the gaming machines from the corporate network. When discussing with the IT staff, we learned this is the way the vendor installed it. Rather than taking the time and effort to further restrict access, the easy approach was used to make sure everything was working correctly. Recently, we were performing a security test and the operator had upgraded the slot accounting system. The new version had a JBoss component, where the console was not password-protected. This could lead to an attacker from the corporate network gaining unauthorized access to the gaming segment. These examples highlight the need for proper cyber-hygiene.

SEPTEMBER 2019 www.ggbmagazine.com

p. 14 Cyper sept:Layout 1 8/14/19 11:07 AM Page 16

All regulations should require security testing on an annual basis, and have the requirements flexible enough so that they can be adapted based on changing technologies and needs. Operators who go above and beyond should get rewarded, and players should know who is approaching security seriously.

4. Secure Software Development: Secure coding is extremely

important for gaming systems, both on-property and in iGaming. If applications are not developed securely, it puts the players and operators at risk. The gaming regulators require games to be tested either in their own labs or by a third party, such as our parent company GLI. However, the majority of this testing is focused on the math and verifying that payouts are correct. How do we know that the software development life cycle (SDLC) of these major gaming manufacturers is building security in? As the pressure mounts to create new games on multiple platforms, including mobile, and to go live sooner, a solid SecDevOps program is needed. SecDevOps is a set of best practices designed to help organizations implant security deep in the heart of their DevOps development and deployment processes. A gap in security at the SDLC level could lead to a severe breakdown in the integrity of gaming applications. We don’t need to look any further than the Ultimate Bet/Absolute Poker scandal from the early days of online poker. An event like that in today’s regulated environment would be devastating.

Don’t get me wrong; there are several that are doing this work even when not required. They perform it because security has become a core objective and upper management has bought into the need. These are the types of companies we like to work with. I believe what’s needed is for all regulations to require security testing on an annual basis and have the requirements flexible enough so that they can be adapted based on changing technologies and needs. Operators who go above and beyond should get rewarded, and players should know who is approaching security seriously. However, these requirements must be balanced with cost and level of effort. If they’re too difficult or expensive, operators may look for shortcuts and not perform a comprehensive assessment. Lastly, all operators should remember that while they may start their security journey because of regulatory requirements, compliance does not equal security. But if you are secure, compliance will follow.

Secure coding is extremely important for gaming systems, both on-property and in iGaming. If applications are not developed securely, it puts the players and operators at risk.

Security Is Paramount So, where do we go from here? Gaming is a very competitive sector; the margins are not great. Many operators and manufacturers are not going to perform the level of testing that’s needed unless required by regulations.

Global Gaming Business SEPTEMBER 2019

Gus Fritschie has been involved in information security since 2000. In 2011, he transitioned a significant portion of his practice to the gaming sector. In 2019, SeNet merged with GLI/Bulletproof. The combined team provides a comprehensive set of security services to the gaming sector, and has supported many clients across the gaming spectrum from iGaming operators, land-based casinos, gaming manufacturer, lotteries, tribal gaming and daily fantasy sports.

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Encore Boston Harbor is the latest jewel in the crown for Wynn Resorts By Roger Gros

One of the many ways customers can reach Encore Boston Harbor is via water taxis from downtown Boston

Betting on

Boston W

hen Massachusetts legalized gambling in 2011, one of the four locations approved was to be sited in the Boston metropolitan area, clearly the pick of the Bay State litter. After all, Boston-area gamblers fueled the two Connecticut tribal casinos, so why not put a casino in their backyard? While there was lots of initial interest from the usual suspects, the two proposals left standing at the end were Wynn Resorts for an integrated resort casino located in Everett, across the Mystic River from Boston, and from the Suffolk Downs racetrack, managed by Mohegan Gaming & Entertainment (which replaced Caesars Entertainment after a messy licensing hearing). Finally, the choice was made: the proposal by Wynn Resorts echoed the company’s classy properties in Las Vegas and Macau. Its community involvement and commitment to excellence resonated with regulators. But then the wheels almost came off. When the Wall Street Journal reported in January 2019 that Steve Wynn, the company co-founder and chairman, was involved in a #MeToo scandal, Massachusetts regulators paid close attention to the actions of the company to determine that it was, indeed, fit for a casino license. (See “No Wynn Situation” on page 22.) And then after reports that Wynn would sell the yet-to-open property to MGM Resorts, the future was even more uncertain. 18

Global Gaming Business SEPTEMBER 2019

Luckily for Wynn Resorts, its former chairman had made a good choice in picking Robert DeSalvio as president of Encore Boston Harbor. It was DeSalvio’s steady hand that guided the property and its employees through the troubled waters and to the June 23 opening. DeSalvio says his message to the troops was “stay focused.” “The first day that the announcement came out about a possible sale, we immediately held a team meeting,” he says. “One thing I have learned early on is just be straight with folks. There wasn’t really much I could say, but it was pretty obvious that it was out there, with both companies talking about it. What I told everyone to do was exactly what I did myself. We had to focus on opening the resort. And so I told them to compartmentalize this, and put it aside. I told them I didn’t know where it was going, but at the end of the day, we had to have our eyes on the prize. And the prize is that we were going to open on June 23, regardless of anything. “I told them I’ve read it, I’ve now put that on the side, and I’m now back to doing what I do every single day, and we needed the team to do exactly the same thing. Which is what they did. And so, it was a little bit of a surprise, but at the end of the day, they were true professionals. Went right back to work, and we never skipped a beat.”

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“For me, professionally, it was one of the most rewarding times of my career, that I could actually work with this incredible team, and help put together a property like this.” —Bob DeSalvio, President, Encore Boston Harbor

Creating Communities DeSalvio has a deep talent for launching properties. He opened Sands Bethlehem for Las Vegas Sands, convincing a skeptical community to which Sands made a commitment, and would live up to it. The company hired thousands of local employees and helped to start the revitalization of the former steel town. Even with that experience, DeSalvio said he was surprised by the overwhelming number of applications from Boston-area job seekers. “One of the biggest parts of the success that the team has had is the fact that we had over 130,000 applicants for the 5,000 or so jobs that are here,” he says. “That was actually somewhat surprising in this low-unemployment environment, and we were thrilled that we got that many applications—a lot of folks who had some great experience in hospitality. It may not have been in gaming, but they might have come from some of the top hotel companies, and so we just had a great selection. The one thing I’ve heard over and over again is people are very happy with the team and the way they are experiencing the service levels in the property, even in this early time frame.” Another parallel with Sands Bethlehem was the polluted sites both properties had to start with. “Sands Bethlehem started out as an industrial site,” he says. “There was remediation involved, there was a tremendous amount of community

work. It was bringing, in a sense, an integrated resort into an area that previously never had one, and with that comes all the complications and the hundreds of community meetings that you have to go through in order to make sure that people understand that you’re going to be a good corporate citizen. And that at the end of the day, they’ll be very proud of the project, and they’ll feel like they made a great decision in welcoming you to the community.” In Boston, the site was even worse. For over 100 years, the site was used as a chemical plant, producing arsenic for most of that time. An early visitor to the site said the land squished under your feet as you walked across it. DeSalvio said Wynn spent almost $70 million just to clean it up. “It entailed removing 840,000 tons of contaminated soil,” he says. “And it was interesting; we wanted to do it and create minimal impacts on the local roads. So, there happens to be a rail line behind the project. We built a spur, and every day, we’d have two 26-car trains, and we’d load them up at midnight, and at 12 noon. And then the contaminated soil would go to its appointed rounds. And it went all over the place—Georgia, New England, Canada. And each trip would take about two weeks. So we had to lease 600 rail cars, and have them in perpetual motion for almost six months.” But that wasn’t the end of it. Chemicals had leached into the surrounding wetlands, so the company arranged to mitigate that damage too. “We had land below the water line to deal with, so we cleaned out seven acres of the harbor, and replaced that with 18 inches of clean fill. We were able to return the city of Everett to its waterfront, for the first time in over 100 years. So, the community was very appreciative of the fact that Wynn Resorts would actually tackle something as complicated and difficult as this, and yet be able to give the community rightfully back its waterfront. “We got some recommendations from the Mystic River Watershed Association, that instead of bulkheading the property, we decided to do what’s called a living shoreline. And that’s much more ecologically friendly. We took into account sea level rise, we elevated the main access road 13 feet above mean sea level. We took the casino floor and podium level, brought it up 25 feet above. That puts us above the 500-year floodplain level. And basically, all of Boston has to be concerned about future sea level rise. So, we want to make sure that this property was actually built for the long haul, and it was sustainable, environmentally friendly, and a great example for others to use.” Because Encore Boston Harbor is in the congested metropolitan area, DeSalvio says they had to be creative in designing ways to get people to the property. In addition to a 3,000-car parking garage underneath the property, there are connections to the local transit system, a pedestrian bridge over the Mystic River and even a water shuttle. “It’s been extremely popular,” says DeSalvio. “We run out of the seaport at the World Trade Center, and at Long Wharf in the financial district. We bought three beautiful premium harbor water shuttles, from Boston BoatWorks, a local company in Charlestown. And public reaction has been very strong. It’s a great way to try something different, and to enjoy looking at Boston Harbor and the skyline from the water. And it was one of the different transportation methods we used to see if we could ease up a little bit on car traffic.” SEPTEMBER 2019 www.ggbmagazine.com

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The high-limit salon overlooks the casino floor

Nearly seven acres of gardens, art and spectacular views line the waterfront at Encore Boston Harbor

Designed Excellence Every Wynn project has a “wow” factor—the volcano at the Mirage, the water show at Bellagio and Wynn Palace in Macau, and the “mountain” at Wynn Las Vegas. For Encore Boston Harbor’s “wow” factor, DeSalvio says he’s got two choices. “First, the six-and-a-half acres of outdoor space is almost unmatchable, anywhere. We had this beautiful site that was close to downtown Boston. Our lead horticulture landscape team that we use on almost all Wynn projects is Lifescapes International. We also used a local firm, Pam Shadley Associates out of Lexington. The combination of those two companies, plus the internal horticulture and floral teams at Wynn, put together a package that is visually stunning. We find people all the time that are using that outdoor public space, and I think that is a real gem. Especially when you approach from the water. It looks beautiful with the lighting and the colors of the landscaping. So, I would say that is a major ‘wow’ factor. “The second is the arrival sequence, as you come in to the front of the building, and I think that is an architectural gem. You’ve got about 40-foot soaring ceilings, a beautiful skylight, you have the Preston Bailey feature, we have a Viola Frey beautiful vase that’s part of the curved escalator project that we’ve got. We did the escalators a little bit differently here. In Wynn and Encore in Vegas, as you go from Parasol up to down, we do have the escalators, except out there they’re parenthetical. Here we did them in tangent, so they literally meet in the middle, and it quickly became a fun ride, where you’re sort of passing the other person, right at that intersection point in the middle. When people enter the lobby, they literally stop and stare, and take photos. It’s a great Instagram moment. “I will tell you, for me, professionally, it was one of the most rewarding times of my career, that I could actually work with this incredible team, and help put together a property like this.” As in all Wynn properties, dining is a special occasion in Encore Boston Harbor. From the signature buffet, located directly adjacent to the casino floor, to Sinatra, the classy restaurant that got its start at Encore Las Vegas, dining is front and center. DeSalvio explains that they added some local flavor too. “We took two very famous Boston-area restaurateurs, Frank DePasquale and Nick Varano,” he says. “Together they have about 13 different 20

Global Gaming Business SEPTEMBER 2019

The signature curved escalators are part of the arrival sequence at Encore Boston Harbor, along with a flower-decked carousel

restaurants. And for the first time ever, they’re working together with Fratelli’s. So, it was our way to bring a little bit of the North End to Everett, and that worked out well.” While Encore Boston Harbor doesn’t have a traditional theater, DeSalvio says the 37,000-square-foot ballroom—the second-largest in New England—in the meeting space will serve the property well. Already, Encore has hosted Paul Anka and Earth, Wind, & Fire, as well as the property’s first boxing event. DeSalvio says the lack of a theater was intentional. “We decided not to go with an actual theater because there are so many venues that were available in the local market,” he says. “We wanted folks to go out and explore what’s available in Greater Boston. We have great suites at Fenway, at the TD Garden, at Gillette Stadium. At the Boch Center’s Wang Theatre; what a wonderful complex. With Live Nation, we did a package with them for their local venue. So, we want our guests to not only experience Encore, but go out and see what Greater Boston has to offer.” DeSalvio plans to make good use of the meetings space, targeting certain groups. “The life sciences, biotech area, and technology in general are all very strong,” he says. “And there’s a lot of customers that have previously visited Wynn or Encore in Vegas for their larger meetings, and they’re looking to hold a smaller, Northeast regional board meetings, those kinds of events, and they already know the brand well. “Room rates are very strong in Greater Boston, so we think we’ll have high ADR along with good occupancy. And that dovetails beautifully, because that’s mainly mid-week business, with the casino business a little more

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ARE YOU READY FOR WHAT’S NEXT?

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VISIT US AT G2E 2019! All ® and notices marks registered in the United States. ©and 2019displays Scientific Corporation. All Rights Reserved. The look feel signify of the games and their individual components areGames trade dress of Scientific Games Corp. and its Subsidiaries. TM and © 2019 Scientific Games Corp. and its Subsidiaries. All rights reserved.

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Former Wynn Resorts Chairman Steve Wynn used his charisma and elegant conceptual drawings to win the valuable Massachusetts license for the Boston area

skewed to the weekend. You’ll see the weekend casino blocks will be much higher. So, it’s a very nice way to complement our own resort, right on property.”

Marketing and Competition

No Wynn Situation The Steve Wynn scandal left Wynn Resorts with difficult decisions in Boston

t was Steve Wynn who made the decision on the site in Everett, Massachusetts. It was Steve Wynn who used his magic to convince the Massachusetts Gaming Commission to grant his company a license over the competition, Suffolk Downs and the Mohegan Tribal Gaming Authority. It was Steve Wynn who completed most of the design details on what is now Encore Boston Harbor. It was Steve Wynn whose lightning-quick exit left his company, Wynn Resorts, with some hard decisions to make. And Encore Boston Harbor is likely the final project to be created by the man who most observers acknowledge changed the industry multiple times—first with his entry into Atlantic City, second with his creation of the Mirage and later Bellagio and Wynn Las Vegas, and finally with his venture into China with Wynn Macau. When the Wall Street Journal broke the news about Wynn’s alleged sexual misconduct in January 2019, the company took quick action to distance itself from its co-founder. Wynn quickly resigned as chairman and CEO, a few days later sold his shares, and finally moved out of the villa at Wynn Las Vegas where he had lived for the previous 10 years. The name change in Massachusetts was an easy fix since Wynn and Encore are two brands the company uses in both Las Vegas and Macau, so Encore Boston Harbor it became. Next task was to totally revamp the board of directors, removing any directors who had a personal or business relationship with Steve Wynn—and there were many. Today, four of the eight board members are women.

In addition, the largest shareholder is Wynn’s ex-wife and company co-founder Elaine Wynn. She also saw a way out of the scandal by adding former Harrah’s and IGT Chairman Phil Satre as chairman of the board. Satre’s impeccable reputation ensured a fair and objective hearing for the company. The addition of Ellen Whittemore as executive vice president and general counsel was also designed to make regulators comfortable with a professional and reliable voice. The result at Encore Boston Harbor is a completely Wynn-wash. There are no references to the co-founder anywhere on the property. His legendary late-stage redesign didn’t occur following his departure. You’re hard-pressed to find even the elegant “W” logo of Wynn Resorts. While signature “Wynn” flourishes remain—a smaller version of the Bellagio/Wynn Las Vegas arboretum highlighted by a flowercovered carousel, the curved escalators, art installations across the property, and restaurants that echo previous Wynn properties—the man who created them no longer stands behind them. The success that Wynn Resorts has had in separating itself from Steve Wynn has paid off in Massachusetts and will likely continue to succeed in Las Vegas and Macau, and maybe even later in Japan. People used to wonder what would happen to Wynn Resorts in the inevitable absence of the leadership of Steve Wynn. But there’s no longer any reason to wonder or even be concerned. Wynn Resorts is going to remain a major player in the gaming industry for years to come. —Roger Gros

Global Gaming Business SEPTEMBER 2019

As a company new to the East Coast, the process of building a database—a process that can make or break a property—has only just begun. “That is one of the key components,” admits DeSalvio. “However, we did not start from zero, because Wynn Resorts already had a pretty significant database in the Northeast region. Of course, we contacted those customers because we certainly want to be their place of choice, right here in their backyard. So, I felt like that was an advantage for us. “But, as you know, for every new casino property, especially if they’re even remotely regional in nature, it takes a while to ramp these properties. We’re trying to set proper expectations, and for all the aspects of the resort, we’re going to continue to develop the database. We know customers have certain loyalties. A lot of them have comp dollars and points built up at other places, and so, it doesn’t happen overnight.” DeSalvio acknowledges the surrounding competition from the Connecticut and Rhode Island casinos, not to mention the two operating casinos in Massachusetts. He says he has a strategy for making Encore the destination of choice. “We think of the business in three different segments. I’ll start with the locals. I call it the world’s greatest locals’ market. We have 6 million people or so in the Boston metropolitan area. We know a lot of them are gaming enthusiasts. They’ve been going to these places for years. So it’s up to us to present ourselves and attract them in, so that they see the building, experience the service, and hopefully we will gain their loyalty through visitation. So that’s a big part of what we do. “However, there are two other segments that are interesting for us, that I think make us unique and give us the ability to be here for the long haul. Tourism from the rest of the United States will be a key driver for us. As you know, Boston already is rich in tourism assets. “Then there are people that fly in and out of here all the time, whether they’re coming for the colleges, or the medical facilities. So, we’ve got the Greater Boston tourism community that we can connect with. And then there’s the international piece. Last year, Logan had 42 million passengers go through the airport. We’re now up to 56 interna-

p. 18 Encore:Layout 1 8/14/19 11:04 AM Page 23

tional destinations, and that is intended to grow up to about 65. We have cities like Hong Kong, Beijing, Shanghai, all the big world capitals that are adding nonstop daily service in here. “So, we think we can actually get a piece of the international tourism market. And the way we can position ourselves, then, is a little bit of something for everyone. The high-frequency local, the person that’s coming from all over the United States, and then visitors from all over the world. And that combination of segments hopefully will give us the ability to have this business be very successful for the long haul.” While not much surprises the grizzled gaming veteran, DeSalvio says you can always learn something new. “I’ll tell you the one thing that has truly surprised me, which is how many customers I run into on the casino floor who are brand-new to the gaming business,” he says. “Here’s how I can tell: I walk around and somebody says, ‘Hey, I saw somebody with a card; what does that do for me?’ That’s usually a tip-off. “Or they look confused. You know how the slot machines have gotten slightly more complicated over the years, so they’re staring at the screen on a machine, and if they see you with a name badge, I constantly get waved over, and they ask simple things like ‘Where do I put my money?’ When you start hearing questions like that, you know that that’s not somebody who was a frequent player. The fact that we found that many new customers already is encouraging.”

In addition to the lack of a theater, Encore Boston Harbor is missing another Wynn signature element: a pool. DeSalvio says those items may be addressed in an expansion that could be considered after the property reaches its current potential. “We’ve got about 11 acres or so, in the surrounding area to the property,” he says. “That’s public knowledge. Right now, it’s being temporarily used for parking. But I will tell you that (Everett) Mayor DeMaria and his administration in the city had designated—even long before we were on the scene—the Lower Broadway area in Everett as their entertainment/hospitality district. We created a wonderful anchor for that. We love the idea of connecting to the other tourism assets. So this future acreage could either be developed by third parties, or potentially even by us. “What we’re doing here is no different than what we did in Las Vegas and/or Macau. In Las Vegas, when the opportunity presented itself, we bought that beautiful parcel across the street. I don’t know exactly where that’s heading yet, but to have the land is critical. “We announced recently that we’re moving forward with phase one of an expansion in Macau, and the only reason that was possible was because the original concession there had some room to move on either side of the property. And so, that’s the way our company thinks about it. We may not have the plans today, but you have to set yourself up for the potential in the future. And at the end of the day, that’s a real estate play, and the land will always be valuable. No matter what happens.”

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Wynning Strategy Macau, Las Vegas and now Boston, Wynn Resorts is racking up the numbers

here is an old saying that one gets rich by concentrating one’s investments, but one stays rich by diversifying them. The same might be said to hold true for companies. Wynn Resorts has gotten to be a $12 billion market cap company by concentrating on Macau. And in Macau it has concentrated on gambling—notably on high-end players, including VIPs who gamble in the private gaming rooms and whose play is measured as rolling chip handle as opposed to table drop. The numbers are impressive. In the second quarter, for example, Wynn generated over 71 percent of its property EBITDA from Macau, $343.1 million from just two casinos. Win at the VIP tables ran close to $40,000 a day per table at Wynn Palace and nearly $31,000 at Wynn Macau. The socalled mass-market tables averaged $15,000 a day in win at both properties. By comparison, in Las Vegas, where Wynn also focuses on the high end, average daily win per table was $5,800. No wonder Wynn is building the 1,300-hotel room Wynn Pavilion next to 1,700-room Wynn Palace with attractions to include what the company says will be one of the world’s biggest collections of Chinese art. Yet, some investors are nervous about Wynn. Its stock, $110 a share as of this writing, was 30 percent off its 52-week high, more than 40 percent from its May 2018 high—and that was below 2014. The concerns aren’t about the appeal of Wynn’s exquisite properties and splendid customer service. They aren’t about competition. They aren’t about market saturation when analyses show that Macau casinos penetrate a mere 2 percent of mainland China’s potential. The concerns are political, and about the health of the Chinese economy. Will gaming concessions be renewed in Macau, and on what terms? Will the political protests in Hong Kong become a crisis that spills over into Macau’s casino industry? Will the U.S.-Chinese trade war slow the Chinese economy? A solution to those concerns is diversification. If Wynn has more of its eggs in other baskets, it won’t be as reliant on Macau. There are two ways to diversify: 1) open casinos in other markets; and 2) broaden revenue streams beyond gaming, and especially beyond the upand-down VIP segment. Wynn is attempting to do just that. The art at Wynn Pavilion is an example. CEO Matt Maddox notes that many big Chinese gamblers like to travel with their families. Art galleries, retail shops and entertainment venues make casino trips more attractive to a family than just a baccarat table. Nor does it hurt that developing non-gaming tourism is a Macau government priority. The potential is clear. Chinese consumers spend billions of dollars on luxury goods and services. Casinos can tap into that growing stream. The model is also clear—Las Vegas. Wynn Las Vegas and Encore get three-quarters of their revenues outside of gaming. Wynn’s Macau casinos got just 14 percent from non-gaming in the last quarter. The potential for growing non-gaming revenues in Macau is much larger than the approximately $700 million it generated last year. It also should be noted that, while gaming has always been the high-

Global Gaming Business SEPTEMBER 2019

A new hotel tower and non-gaming attractions have recently been announced for the Wynn Palace in Cotai, Macau, dovetailing the company’s strategy to grow non-gaming revenues in all its facilities

The model is also clear—Las Vegas. Wynn Las Vegas and Encore get threequarters of their revenues outside of gaming. Wynn’s Macau casinos got just 14 percent from non-gaming in the last quarter. The potential for growing nongaming revenues in Macau is much larger than the approximately $700 million it generated last year. margin profit maker, non-gaming has become profitable, too. Las Vegas EBITDA margins based on total revenue neared 30 percent last quarter, about the same as Macau. And even within gaming, revenue mix can change. Wynn is developing amenities in Macau to appeal to the growing affluent premium-mass segment, which enjoys higher margins and is less volatile than VIP. The second kind of diversification actually began June 23 when Wynn opened Encore Boston Harbor. If Encore is as successful as many forecast, it will generate $250 million, maybe $300 million a year in EBITDA. That would have comprised 11 percent to 14 percent of Wynn’s total EBITDA in the past quarter. The big fish, of course, is Japan. If Wynn lands one of the three Japanese casino licenses, it will have a property that generates profits on a Macau scale. Of course, landing a license is iffy. Some observers think Las Vegas Sands and MGM Resorts are the leading candidates, which, if so, might make it tough for an American company to get the third license. Even if Wynn lands a license, opening day is years away. But there are other possibilities, such as Brazil if it opens, or in the U.S. if New York City or Atlanta happen. On his second-quarter investor call, Maddox made it clear that Wynn will pursue opportunities that fit its integrated resort model, whether internationally or in the U.S. And for that, he has said, Wynn has a model, too—Boston. —Frank Fantini

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What’s In Your Wallet?

Blockchain transforms the way people make transactions. It may not be ready for gambling, but there are many applications the industry can use now By Chloe Fletcher

sing a peer-to-peer distributed ledger, the technology known as blockchain enables people to exchange digital items without a central, trusted arbitrator. The exchange of currencies is the most natural application of this technology—which is why many people confuse the term “blockchain” with “bitcoin” or “cryptocurrency.” But blockchain must prove its value in other, non-financial applications.

The Coming Revolution For the gaming industry, the most likely application is in loyalty marketing. There, the revolutionary potential of blockchain lies in attracting the next player generation and modernizing how operators motivate and reward them. Blockchain creates a digital wallet, which, like wallets in the physical world, can hold much more than money. Millennials may have no cash in their physical wallets, but they do have debit cards, loyalty cards and family photos. 26

Global Gaming Business SEPTEMBER 2019

In other words, their physical wallets likely contain: • Tools to buy things • Tools to reward their purchases • Items to show off to others Conceptually, a digital wallet can hold the same three things. The gaming industry understands the payment application of blockchain and the digital wallet to buy things, namely cryptocurrencies. While it’s a long way from players wagering in cryptocurrencies on a regulated, brick-and-mortar gaming floor, cryptocurrencies are being accepted in non-gaming amenities as a form of payment. For example, the D and Golden Gate in Downtown Las Vegas accept bitcoins for dining, hotel reservations, gift shops, and at the front desk through Bitcoin software BitPay. Accepting cryptocurrency for payments, and in the future as wagers, may be an innovation, but it’s not a revolutionary one: a wager is still a wager, regardless of the currency. Integrating

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blockchain technology into existing loyalty marketing programs, however, can be revolutionary.

Next-Generation Rewards

Blockchain technology can potentially attract a new, digitally native customer to casinos by providing incentive structures familiar to the player from other recreational modes of gaming.

In a typical loyalty marketing program, there are two general reward mechanisms: • Giving players something others can see • Giving players something only they can see Rewards visible only to the player typically have monetary value and take the form of free play or coin offers. Rewards visible to others are intangible. There is typically no monetary value associated with these rewards; they serve as status symbols. Examples include a different color loyalty card, priority lines at hotel check-in and valet, and access to a restricted player’s lounge. These rewards have no bearing on the player’s gambling outcome (I am no more or less likely to win because I have a certain color player’s club card), but they reaffirm to the player they are a VIP. Blockchain technology allows gambling entities to create digital statussymbol rewards to supplement the physical in-person rewards in their loyalty programs. These rewards enhance the game-play experience without altering the player’s outcome. While new to the casino gaming industry, digital status-symbol rewards are a core component of social and multi-player video gaming. Players earn virtual goods, known as “skins.” Skins are cosmetic elements that have no direct influence on game play, but change the appearance of items or characters in a game, such as the player’s outfit. Players displaying a rare skin get a perceived status recognition from other players. The potential to earn a new skin can motivate players to continue playing until they reach a certain level, or return to the game during a certain time period, such as a holiday. These are the fundamental challenges casino loyalty marketers also face: how to motivate players to continue visiting and playing at their facility. The question becomes: Can skins or digital rewards help overcome these challenges in a gambling environment? Alphaslot, creator of a tokenized player motivation system in a blockchain environment, and its newest strategic alliance partner Synergy Blue, an arcade style skill-based games designer, believe the answer is yes.

Give Me Some Skin Bringing elements from the social or video-gaming world—such as customizable avatars that display onscreen during game play and can be equipped with earned skins—can enhance the player experience, especially for a digitally native customer familiar with these reward types from other gaming platforms.

Sitting on the cosmetic layer of a game, skins and avatars only alter what the player sees. While the visual experience is enhanced, underlying game dynamics such as the random number generator are left untouched. Thus, similar to video and social gaming, skins change the appearance of the game without directly influencing game play or game outcome. Skins and avatars can become a new tool in the loyalty marketer’s arsenal. Blockchain enables a much-needed modernization of the player’s club to target the next generation of gambling customers. With multiple generations populating the gaming floor, marketers need to blend tried-and-true marketing tactics with rewards younger customers find appealing. And social and video gaming platforms serve as a trove of inspiration for rewards younger customers find engaging. In supplement to traditional gift giveaways, such as branded fleeces and holiday turkeys, marketers can give away branded avatars or special holiday-edition outfits for digital avatars. Digital rewards can be associated with achieving a certain loyalty tier or a limited quantity of an avatar or skin randomly distributed during an advertised time period on a particular day, creating a sense of urgency and fear of missing out.

Technological Underpinnings How does blockchain fit into this? Recall, our blockchain-powered digital wallet can hold three things, tools to buy things; tools to reward purchases, and items to show off to others. The avatars and skins received as rewards are stored in the player’s digital wallet. Blockchain facilitates the digital asset ownership transfer from the casino to the player. At the point of transfer, the digital asset becomes no different than a branded fleece a guest may obtain in a traditional gift giveaway. The player may choose to use it—say, by displaying it in game the next time they wager—or give it away. While blockchain technology can potentially attract new, digitally native customers to casino gaming by providing incentive structures familiar to them from other recreational modes of gaming, prerequisite technology has yet to hit the gaming floor. Games allowing players to use custom avatars and skins need to be developed and approved, and players need a means to download their avatars and skins to the machine—for instance, through a built-in QR code reader. Additionally, marketing programs must be altered to include digital rewards, and players need to be educated about these rewards. The next player generation, the one familiar with this reward structure from other gaming channels, needs to know these rewards exist in a casino gaming environment; however, this poses a responsible advertising hurSEPTEMBER 2019 www.ggbmagazine.com

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The oldest casino in the Middle East is the Casino du Liban in Lebanon, located just north of Beirut

In supplement to traditional gift giveaways, such as branded fleeces and holiday turkeys, marketers can give away branded avatars or special holiday-edition outfits for digital avatars.

dle, as social and video gaming platforms are shared by both potential adult gambling patrons and minors alike.

Is Blockchain Secure? Ultimately, regulators looking to approve games using blockchain technology will want to understand if the technology is secure. The distributed nature of blockchains and the sophisticated math powering the technology make blockchains difficult for attackers to manipulate. The computational resources needed to alter the chain make it essentially tamper-proof. The concern with blockchain technology isn’t data integrity, it’s theft. Theft can come in two forms: (1) loss of network control; or (2) loss of personal possessions. Blockchains consist of bundles of data known as “blocks,” and networks of nodes that remain in constant communication. Loss of network control occurs when communication is broken between one or more nodes. Each block contains data on transactions completed during a given time period, and each node stores a record of all the blocks added to the chain thus far. The network of nodes serves as a “distributed ledger” system. The information in the blocks can be thought of like a bank ledger, a record of all historical transactions in the network. Each node holds a copy of the whole ledger. Each block consists of a small number of transactions. To add a block to the chain, every transaction in the block must be validated (by solving a complicated math problem) by at least one node. If an attacker takes control of a single node’s communication, it can bog down the network by creating fake transactions other nodes must waste resources attempting to validate—the blockchain version of a “denial of service” attack. Alternatively, if an attacker were to take control of a majority of nodes, known as a “51 percent attack,” the attacker would essentially be able to rewrite history, preventing validation of new transactions and even reversing completed transactions. This type of attack is nearly impossible, because of the distributed nature of the nodes. To understand the loss of personal possessions threat, let’s return to our wallet example. If I always leave my physical wallet at home, it cannot be stolen. Similarly, if I never connect your digital wallet to the internet, I never worry about it being stolen. However, much as a physical wallet left at home is useless, a digital wallet without internet-connectivity has limited use. Blockchains use a key-based system to verify ownership. In essence, I need to prove the contents of your digital wallet are in fact mine before I

Global Gaming Business SEPTEMBER 2019

can use them, and the key used to prove ownership is stored in my digital wallet. There is only one copy of this key. While the sophisticated math and software rules underlying the technology make it computationally infeasible for hackers to duplicate this key, the key can be stolen and my digital wallet contents lost, much in the same way my physical belongings are lost if my real-world wallet is stolen. Vulnerabilities arise in places where blockchain systems meet the outside world, because these private keys can potentially be exposed, and once lost, these keys can be nearly impossible to retrieve. Ensuring private key security is a shared concern across all blockchain applications, and best practices are destined to arise as highly regulated industries, such as banking and financial institutions, join the blockchain user pool. Applications of blockchain technology in casino gaming have the potential to attract the next generation of gaming customer by providing a rewards system familiar to the player from other gaming platforms. However, to be successful, players and regulators must be ensured the contents of players’ digital wallets are secure during game play and game integrity is maintained. As mainstream adoption of digital wallets grows, it’s expected that consumers’ security concerns will lessen; game integrity concerns will dissipate as the technology becomes more understood and applications are trialed in Tier 2 and Tier 3 markets.

In Conclusion Over the last decade, blockchain has proven its applicability to the financial services industry, powering cryptocurrencies and their exchanges to a $40 billion-plus market value. As blockchain technology seeks to define itself as more than the foundation for cryptocurrencies, its revolutionary power, limitations and security challenges will become more apparent. For the gaming industry, blockchain has already altered how payments are made in non-gaming amenities, and will likely continue to change how payments and wagers are made as cryptocurrencies gain wider adoption. Beyond payments, blockchain is likely to enhance player loyalty marketing, allowing creation of rewards and marketing promotions that resonate for the next player generation. Chloe Fletcher is the manager of data analytics for The Innovation Group.

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MAKING MY POINT

Machiavelli, Sonny and You Workplace wisdom from a real wise guy

hen he wasn’t shooting some hot-head motorist over a parking spot, shoving some bad-luck gambler into a toilet so’s he wouldn’t jinx his own action, or—well, this was justified—smashing open the skull of some loudmouthed biker with the business end of a Louisville Slugger, Sonny LoSpecchio was a heck of a nice guy. A real paisan. At least that’s what a lot of people thought. Sonny, played by actor Chazz Palminteri, is the local mafia boss in the 1993 film A Bronx Tale. When you watch the movie or the play it was adapted from, or the Broadway musical adapted from both, you see a man who rules the Italian-American neighborhood of Fordham with an iron fist and an unblinking eye. You see a man who never lends anyone his car, lest it come back with a bomb strapped to the engine. You see a man who instructs an up-and-coming gangster who’s in love for the first time to dump his girlfriend—no questions, no quarter—if she doesn’t lean over and unlock the driver’s door after he lets her in on the passenger side. Which, come to think of it, is actually a pretty solid rule of thumb. But you also see something else: a dapperdressed, high-foreheaded, hand-talking man playing stickball with neighborhood folks. Folks that always protect him whenever the heat gets too hot. Hot because Sonny’s in that kind of business. Others, the residents of his domain, would never turn on him or turn him in. Sonny is a man who is either loved or feared. But never crossed. Once, when Sonny is walking and talking with that same lovelorn kid from the neighborhood, he reveals the key, the absolute key to being the master of all he surveys. He surveys not from far, far away. But from up close. Real close. “You ever hear of Machiavelli?” Sonny asks. “Who?” says the young man, his head tilted

By Roger Snow

in confusion, like a dog when you make a highpitched sound. “Machiavelli. He’s a famous writer from 500 years ago,” Sonny says. “‘Availability.’ That’s what he always said.” Sonny explains to his protégé that, although he’s wealthy enough to live anywhere he wants, inside or outside the Bronx, he stays right there on Belmont Avenue. His home is among the dive bars. Among the fruit carts. Among the shoe-repair shops. Among the teenage hoodlums and hoodrats. Why? “Availability,” he says. “I want to stay close to everything. Because being on the spot, I can see trouble immediately. Trouble is like a cancer; you’ve got to get it early. If you don’t get it early, it gets too big and it kills you. That’s why you’ve got to cut it out. “Capiche?” Sì, Sonny, sì. Let’s talk about you. If you’re running a company or a division or a department or a team or a—well, whatever’s smaller than a team and bigger than just yourself—you have to make yourself available. Available, accessible, approachable. And we’re not talking that, “Hey, my door is always open” tripe. Really? It’s always open? Maybe if you closed it once in a while, you’d get more work done. We are instead talking about extricating yourself from that office in order to mix and mingle with the proletariat, so to speak. You know, the ones that actually do all the work. Some executives have been executives so long, they forget what it’s like to not be an executive. They forget being a frontline employee or a supervisor and having the boss—the big boss—came by to say hi. Maybe he or she asked how your family was doing or what project you were working on. Maybe she or he gave a little insight into the challenges and opportunities that lay ahead for the entire organization. Maybe it was just small talk, followed by a shake of the hand or a pat on the back. They remember it feeling pretty darn good.

Global Gaming Business SEPTEMBER 2019

Because it does. When people think the company cares about them, they will run through walls. When they don’t, meh, they won’t even break a nail. Here’s an easy rule of thumb to follow: budget at least an hour a week to chit and chat with the people who work for you. That’s only a dozen minutes per day. You probably burn twice as much time checking your Facebook feed. OK. That was a joke. It’s more like 10 times as much. Being accessible is not only good for the team, it’s good for the leader as well. You’d be surprised what you can learn on one of these little perambulations through the nooks and crannies of an organization. Who’s working hard and who’s hardly working. Who’s FILO (firstin-last-out) and who’s LIFO (last-in-first-out). Who are the heroes and who are the zeroes. Late in the film, Sonny offers another quotable quote on the importance of localized leadership. There is no substitute for face time with the people. Just to provide more impactful context, we have done the old Microsoft Word find-and-replace “neighborhood” with “company” to his quote. “The people in this company that see me every day, that are on my side, they feel safe,” Sonny says. “Because they know I’m close. But the people (that aren’t on my side), they think twice, because they know I’m close.” Hmmmm. Keep your friends close and your enemies closer. Sounds like something Michael Corleone would say. Or Niccolo Machiavelli before him. Or Sun Tzu before all of them. Or . . . OK, you get the point. Hey, no matter who plagiarized whom, it’s still good advice. As the boss, when in doubt, make sure you get out and about. It’s good for you and great for them. 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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Follow the

Bouncing Ball Could the sports betting arena of the future be— an arena? Illinois thinks it can By Howard Jay Klein

Competing with land-based casinos for sports bettors could be venues like (l. to r.) Chicago’s Wrigley Field and Washington, D.C.’s National Stadium and Verizon Center

s sports betting legislation surges across the U.S. at a quickening pace, the number of states now estimated to legalize within the next three years stands at 20, according to Morgan Stanley analysts. As the new entrants join the fray, we are beginning to see a swerve in the pattern of establishments being authorized. Early on, it was assumed, and still is in most states, that the natural heirs of the nascent national sports betting industry would be casinos. The case beyond all question is strong. Existing casinos are already licensed and regulated by the state to conduct betting operations. They have the best existing compliance infrastructure and quick ability to firewall against abuses from cheating to underage gambling. Racetracks represent a similar existing construct, and they too are included in much legislature for the same reasons. Yet, in recent legislation and many pending bills, we are beginning to see the appearance of a new paradigm—inclusion of sports arenas as natural homes for brick-and-mortar sports books as well as online mobile skins. Many of these arenas are owned and operated by professional sports teams who operate under a set of regulations laid down by the leagues. Their home games generate huge crowds of passionate fans in the core demo of sports bet-

Global Gaming Business SEPTEMBER 2019

tors. They are usually located in metro areas with good transportation infrastructure and already have diverse amenities in place: dining options for all budgets, VIP suites, merchandising kiosks. They also fill their calendars with non-sports events like major concert acts and oneoff events like political conventions.

Illinois Leads off The state got something right to the benefit of partners. Here where the fans are in a gateway city like Chicago, you can generate special team passion and brand the operation in an iconic venue like the United Center, among others. The recently passed legislation in Illinois confirms this expansion beyond casinos and racetracks. It’s first in the nation to do so. The law there not only authorizes sports betting for the state’s 10 casinos, but extends it to mass sports venues like the United Center, home of the NBA Chicago Bulls and NHL Chicago Blackhawks; Wrigley Field, home of the Cubs; Soldier Field, home of the NFL Chicago Bears; and Guaranteed Rate Field, home of the Chicago White Sox.

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The expansion into non-traditional gaming sites is a plus for all, because it serves the time-worn marketing idea of “different courses for different horses.” A gaming partner here will get access to the 3 million-strong fan base of the two resident pro sports leagues and the concert and special events dates staged there. The passion of sports fans will translate into eager wagers from a built-in emotion to be part of that team’s prospects. Diversification of betting outlets will become a major issue confronting sports betting operators. Going even further, we note that Washington, D.C.’s, sports betting law permits any restaurant or bar that can pony up $100,000 for a license to get into the game and become the neighborhood bookmaker to its patrons. So, for the industry, the question is raised: Will this expansion of sports betting sites beyond traditional sites like casinos and tracks set up a cannibalistic marketing war before the first laydowns are made? And what purpose is served if states do diversify authorized sites if they wind up in marketing wars? Those who remember the bus marketing wars of the 1980s in Atlantic City understand just how it can drain profits from operations when patrons are confronted with a dizzying array of offers. Will all these new entities go head-to-head on giveaways? Will they keep upping the ante on free bets and other marketing exotica to poach business from competitors? Quite the reverse. The expansion into non-traditional gaming sites is a plus for all, because it serves the time-worn marketing idea of “different courses for different horses.” Through its early days, what has become clear thus far is that the single most valuable asset sports betting brings to a casino operation is foot traffic. It is, in a way, an ongoing special event, a vehicle long used in the tool kit of casino marketing to attract play. It certainly can’t be hold percentage. As we have already seen, historically, sportsbooks in Nevada hold anywhere from 7 percent to 3 percent of total dollars wagered. It’s not exactly roulette or slots.

Incremental Values So, sports betting to a casino is a great marketing tool, particularly linked to major events like the Super Bowl, the Final Four, all sports playoffs, the World Cup, the World Series, the Stanley Cup and the NBA Championship. It brings in bodies. It creates footfall. It injects revenue into food outlets, sells hotel rooms and engenders a high level of chemistry that is contagious throughout a property. And it’s not only the bodies attracted, but who the bodies are. The average age of a Las Vegas visitor is 47. The average age of a sports bettor is 38. So the business gives casinos and certainly tracks a shot at a younger demographic—crucial these days as the traditional appeal of the slot machine and table games appears to find ever-diminishing favor among millennials. On the other hand, sports arenas have no shortage of chemistry or reg-

Global Gaming Business SEPTEMBER 2019

ular attendance by favorable demographics. Remember, the average age of a sports bettor is 38. Attend a game or concert at a sports arena and sweep your eyes across the crowd. You’ll see lots of young—very young—-faces. Lots of pumping energy erupting on great plays. Go to an A-list concert. Put Lady Gaga up on the stage and listen to the pounding music and crowd roaring out the lyrics as the star goes through the paces. Mainstream sports arenas already have that footfall and fan fervor built into the product. It is fairly clear that the sports betting populace divides itself between its core comfort zones. Older players, who comprise annual casino visitation, tend to be slot players, blackjack players, vacationers, conventioneers or weekend getaway visitors. Sports betting to them is a single component of a much larger pleasure-seeking experience. Attendees of arena events, sports or concerts tend to be younger, are on property a few hours rather than overnight and are distinctly younger and more enthused in general about fandom than are casino patrons. As such, we have the classic power of gaming capitalism at work: Patrons divided by motivation, demographics, leisure time available, budget. And in this respect, what we see is stratification of a potentially huge market common to all successful industries. In tech devices, for example, we have the dominant PC sprung loose from Microsoft. At the same time, there is a distinct sub-segment of tech device buyers who are Apple-loyal end to end. Both companies have thrived primarily because both understood this underlying principle: Nobody owns a market— they only own a segment of the market that finds their product most appealing. And that is why I believe on balance, the diversification of outlets for sports betting beginning to show up in legislation is in general a natural consequence of how an industry goes from its nascent birth into a fully blooded, growing entity servicing distinct segments of its markets. And in the end, an industry that found a way for a Wynn and a Circus Circus to survive and thrive in the same town over decades proves what I believe will happen as sports betting reaches those 20 states: This is an industry sorting itself out into a solid producer of total gaming leisure dollars over the next 10 years. Howard Jay Klein is a 30-year gaming industry veteran who has held senior management positions at Caesars, Bally’s and Trump Taj Mahal. He is now a consulting partner with casino veteran Joseph C. Jimenez. Among their clients is the United Center of Chicago, the largest arena in the nation, recently authorized by Illinois law to conduct sports betting. It is currently engaged in exploring partnerships with gaming entities to conduct sports betting on its site.

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iGaming and Consumer Protections: A Crucial Disconnect When your favorite team wins, the adrenaline rush can be addictive. But if you gamble on sports, more often the losses outweigh the wins. With nearly everything accessible at the click of button, including the chance to gamble on sports, is there a need for greater

consumer protection? By Sally Gainsbury

2019 study* found that only a limited number of internet gamblers in Australia use the consumer protection tools available on gaming websites. A common perception is that these tools are only for problem gamblers. Increased efforts are needed to promote the tools to more internet gamblers to keep gambling sustainable and affordable and avoid gambling harms. Internet gambling is growing in popularity and is increasingly accepted as a form of mainstream entertainment. In Australia, the activity more than doubled between 2012 and 2018, with more than 34 percent of Australian adults placing bets online last year. The main types of internet gambling are wagering and lottery, provided through domestically licensed sites; all other forms of online gambling are prohibited in Australia. Internet gambling is convenient, with round-the-clock access to highspeed, private, uninterrupted play and online payment methods—all features that make it difficult for some gamblers to maintain control. Reportedly, most internet gamblers set limits formally or informally, and use strategies to keep their gambling at affordable levels. However, it’s all too easy for gamblers to lose track of time and money, putting them at risk for excessive gambling and subsequent harm. Research shows that gamblers are increasingly seeking outside help for online gambling problems. Preventing these harms is a significant area of concern for researchers, gambling operators and policymakers.

Consumer Protection Tools Most licensed internet gambling sites in Australia are required to provide consumer protection tools such as activity statements (where players can view their gambling expenditures), restrictive tools (self-imposed limits on gambling spend), and time-outs (the temporary suspension of access to accounts) to help customers gamble only what they can afford. These tools, which require customers to opt in, are intended to help them maintain self-control and make rational, controlled decisions when gambling online. 36

Global Gaming Business SEPTEMBER 2019

Consumer Protection Tools Activity Statements Activity statements enable customers to track their gambling spend by showing their wins, losses, withdrawals, deposits and current balance. Gamblers have positive views towards receiving activity statements, and these are among the most popular of all consumer protection tools. They appear to be effective in reducing time and money spent gambling.

Deposit Limits Voluntary deposit limits (a form of voluntary pre-commitment) enable customers to set personal limits on the amount of money deposited into their gambling account for a specified period (24hour, weekly or monthly). These tools are generally positively viewed and show some effect on reduced spending, encouraging gamblers to reflect on the amount of time they spend gambling. Usage is low because operators do not promote the tool.

Time-out Temporary time-outs (also known as “take a break,” or temporary self-exclusion) allow customers to suspend their gambling account for a specified period (generally less than six months, with daily and one-month self-exclusion options available). Timeout has been found to be a useful consumer protection tool. Usage is low, again, because operators do not promote the tool.

The term “responsible gambling” should be avoided. Terminology must clarify that these tools are relevant for all consumers, perhaps with the use of the terms “play management” or “account tools.”

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An Australian study found that, although many internet gamblers know about consumer-protection tools and satisfaction with the tools is high, few gamblers actually use them.

The Study A survey of 564 Australians who use online sports wagering sites assessed the three consumer protection tools: activity statements, deposit limits and time-out. The study found that although many internet gamblers know about the tools and satisfaction with the tools is high, few gamblers use them. The research team wanted to understand gamblers’ perceptions of the tools and the motivators and barriers to their use, to help policymakers and iGaming operators promote greater use of the tools. The study is highly important, as understanding the use of and attitudes toward consumer protection tools is necessary to design effective strategies for behavioral change.

ute them to gambling on the internet using apps (48 percent). Relatively few participants attributed their gambling problems to betting via telephone (5.1 percent). One-quarter of participants attributed their gambling problems to wagering via websites (26 percent), and one-fifth to gambling in venues (20.9 percent). Participants reporting gambling problems were more likely to use deposit limits and time-out tools. Whether participants had gambling problems or not made no difference when it came to reported use of activity statements. Overall, the most popular reasons for using consumer protection tools were to increase feelings of control and proactivity with gambling and in response to spending too much money gambling.

Use of the Tools The researchers found that the majority of participants (60.5 percent) were aware that all three tool types exist. Participants were more likely to be aware of activity statements (96.6 percent) compared to deposit limits (85.5 percent) and time-out tools (65.8 percent). Usage rates also varied. Among those indicating awareness of the tools, 88.4 percent had used activity statements, less than a quarter had used deposit limits (24.5 percent), and only 8.1 percent had used timeout tools. Consumer protection tool users were, overall, satisfied with each tool. In general, use of the tools was higher among younger customers, and restrictive tools (deposit limits and time-out) were predominantly used by those who reported problems with their gambling. These findings suggest a need to improve engagement with the tools among a broader population of internet gamblers, and to change the perception that they’re relevant only to gamblers experiencing problems. The tools could be useful to all internet gamblers in proactively managing their gambling.

Consumer Protection and Problem Gambling Of the gamblers surveyed, 12.3 percent were problem gamblers, with the remainder identified as moderate-risk (30.3 percent), low-risk (27.6 percent) and non-problem gamblers (29.8 percent). The majority of difficulties among problem and moderate-risk gamblers were attributed to wagering on horse/dog races (37 percent) or sports events (17.2 percent), and slightly more than one-tenth had experienced problems due to electronic gaming machines (11.8 percent). Participants who experienced gambling problems tended to attrib-

• Activity statement users mostly viewed their statements to see their transaction history, and just under half to see a summary of their gambling. • Deposit limits were primarily used to limit gambling spending, as a means of tracking gambling spending, and to avoid developing gambling problems. • Time-out was used as intended—to take a break from gambling.

When researchers asked why people did not use the tools, the most common responses were, “I don’t have any problems with my gambling” and “I can control my own gambling without the (tool).”

How Do These Tools Affect Gambling? A portion of participants who used the tools reported that they impacted their gambling behavior. While only 22.9 percent of activity-statement users thought their gambling had changed because of the tool, the restrictive tools were more impactful, with 58 percent of deposit-limit users and 69.6 percent of time-out users reporting that their gambling had changed as a result of using the tools. Deposit-limit users indicated the tool had reduced the amount of money (63.8 percent) and time (46.8 percent) they spent gambling, increased their control over gambling (53.2 percent), and reduced their thinking about gambling (23.4 percent). Time-out users indicated the tool had changed their behavior in that that they spent less time and money gambling and were more in control of their gambling.

SEPTEMBER 2019 www.ggbmagazine.com

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The oldest casino in the Middle East is the Casino du Liban in Lebanon, located just north of Beirut

Deposit-limit tools reduced the amount of money (63.8 percent) and time (46.8 percent) people spent gambling, increased their control over gambling (53.2 percent), and reduced their thinking about gambling (23.4 percent).

Self-Budgeting

Changing Perceptions

Over half of the internet gamblers in the study reported setting formal or informal budgets for their online wagering (55.5 percent). Common strategies included limiting the funds available in wagering accounts (46.6 percent) and withdrawing funds on a regular basis or following large wins (47 percent). Approximately one-quarter of self-budgeting participants viewed their personal bank/credit card statement as a strategy (24.6 percent). Overall, people tended to adhere to the budgets they set themselves with half adhering to their budgets most of the time, and 38.3 percent always adhering. Only 9.9 percent adhered some of the time, and 1.6 percent never adhered.

Given the increasing prevalence of internet gambling, policies and practices that assist gamblers to monitor and limit their gambling expenditures across sites are necessary. Communication should focus on empowering autonomy among internet gamblers for exercising personal control. Changing terminology and placement of tools may encourage all online wagering customers to use the tools. Gambling operators worldwide predominantly use the term “responsible gambling,” which should be avoided. The researchers purposely did not use “responsible gambling” in their study, but rather referred to “gambling tools” to avoid introducing bias into recruitment and responses. Terminology must also clarify that the tools are relevant for the entire consumer base, perhaps with the use of the terms “play management” or “account tools,” which could replace current terminology. Additionally, developing tools and strategies that do not rely on individuals to be proactive and opt in should also be considered. Drawing on behavioral economics, operators could “nudge” gamblers toward sustainable play, for example, making tool use on gambling websites automatic, such that gamblers have to opt out rather than opt in. The self-management strategies reportedly used by gamblers—for example, keeping limited funds in their accounts and making withdrawals after wins—could be made available and automated on gambling sites. Clearly, not enough is being done to protect consumers from potential harm on gambling websites. More efforts are needed to develop and evaluate consumer protection and play management strategies that are perceived as useful by more internet gamblers.

Beyond Problem Gambling The Australian study indicates a need to enhance awareness of the consumer protection tools—a necessary precursor of tool use. Although activity statements were the most popular and widely used tool, relatively few gamblers used the restrictive tools (deposit limits and time-out). The report indicated that internet gamblers have some awareness of the importance of taking active steps and using tools to assist gambling within affordable levels. But there was a pervasive view that the tools are intended only for people with gambling problems. Although time-outs may be most useful for those who need assistance in avoiding gambling due to problem gambling and experience of harms, use of activity statements and deposit limits are arguably relevant for all gamblers to enhance sustainable gambling. The consumer protection tools reviewed in the study should be viewed as distinct from interventions such as self-exclusion. The tools are intended to be used by a broad segment of internet gamblers, including those who wish to be proactive and have assistance to keep their gambling within sustainable levels. Although the study suggests that internet gamblers already set budgets and therefore realize the importance of such actions, consumer protection tools should be promoted as supporting internet gamblers with their own personal strategies, enabling them to manage their play and track expenditures more easily.

Global Gaming Business SEPTEMBER 2019

*See the full study at: doi.org/10.1007/s10899-019-09859-8 Sally M. Gainsbury, Douglas J. Angus, Lindsey Procter and Alex Blaszczynski (2019). Use of Consumer Protection Tools on Internet Gambling Sites: Customer Perceptions, Motivators, and Barriers to Use. Journal of Gambling Studies. This work was funded by an Australian Research Council Discovery Early Career Research Award granted to Dr. Sally Gainsbury and research funding provided by Responsible Wagering Australia to Gainsbury and Blaszczynski.

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ChoosingSides As wagers-within-wagers and games-within-games, side bets serve two seemingly rival masters: the player experience and the house edge By Dave Bontempo

ver the past five years, the merging of technology and gambling appetites have spiked the popularity of side bets. Patrons can make a different bet in the wake of a dead hand or enjoy a low-priced wagering stab combining skill, luck and imagi-

nation. Blackjack hands can become poker. Dealers and players can unite for one card and then resume normal roles. The game grows. Technology is the path to prop-bet utopia, a thrill played out on gaming floors and mobile phones. It’s an instant decision available either on a game or with the tap of an app.

Wild Times Blackjack remains the prime innovation target, blending the operator’s goal to hike profitability above 1 percent with a player’s wish for more bets. New options have evolved, from the pragmatic function of insurance to the flashy 21+3 format with the player’s first two cards and the dealer’s up card forming a poker hand. Some payouts, for rarities like suited trips, pay 100-to-1. Sure, it’s luck, but not all wagers have to be handicapped. Multiple bets have caught on throughout the industry. Poker and baccarat continually offer new options, and while craps and roulette are eyed for future wild-card action, they already exist as a sidewager symphony. Bets extending beyond the norm are the core of the games themselves. Craps, already sporting whirlwind wagering, presumably could not find room for more. Then prop bets arrived for tall, small and all numbers that must be rolled prior to a seven. Payouts range from roughly 35-to-1 to 175to-1. The concept of perpetual action is unmistakable. Groups of numbers, a universe of numbers and a regular craps game occur simultaneously. That image could summarize the side-bet world. Even slots, not viewed in the classic side-bet context, took in-game bonuses to stratospheric heights with relatively recent innovations like Dragon Link. What’s more euphoric than a wild-card-like hold-and-spin bonus? It’s a victory dance, right in the middle of the game.

Global Gaming Business SEPTEMBER 2019

Side-Bet Storm Roger Snow, senior vice president of tables and utility products for Scientific Games, has created more than 50 games and side bets over the years, with perhaps 15 still in the market. He’s well known for Ultimate Texas Hold’em, Dragon Bonus Baccarat, Crazy 4 Poker and Four Card Poker, among other games. Snow likes the ascension and attention given the side-bet world. “You’ve got a couple of trends going on in the market,” he says. “First, you’re seeing more and more games with multiple side bets. You’ll see Buster Blackjack and Lucky Lucky, for example. In baccarat, we have an array of side bets called 5 Treasures, which, as the name suggests, has five different wagers. If this keeps up, pretty soon every game is going to look like the middle of a craps layout.” Snow sees the continuing emergence of proprietary side bets on proprietary games. “This is a trend that nobody is picking up on. Take Three Card Poker, for instance. Ten years ago, we launched Six-Card Bonus, a side bet that combined the dealer’s cards and the player’s cards to make a poker hand. Players loved it, and now it’s on 75 percent of the Three Card Poker tables out there,” he says. Professional gambler-turned-inventor Geoff Hall just came up with a side bet for Ultimate Texas Hold’em—and other games—called Diamondz, says Snow. “It just launched in the Caribbean and will be coming next to Las Vegas. You’re going to see all the top poker-style games with new side bets, something that will keep them fresh and interesting.”

“Like sports bettors, table-game players love action. And these side bets are just that: action.” —Roger Snow, Senior Vice President of Tables and Utility Products, Scientific Games

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Side-bet mania resembles the wacky, crazy, nearly limitless world of NFL prop wagering. The same types of players gravitate to both areas. “Like sports bettors, table-game players love action,” Snow explains. “And these side bets are just that: action. Instead of just trying to get closer to 21 than the dealer, now you can bet that you’ll start with two suited cards, or that your first two cards and the dealer’s upcard will make a poker hand, or that his upcard will be in between the value of your first two cards. It’s endless action.” The term “cover,” in fact, has significant meaning beyond an NFL wager against the spread. One of Snow’s newest innovations is Coverall, a side bet for proprietary games that lets players back-bet on every hand at the table. “So if you’re playing Crazy 4 Poker, you can make the Coverall bet and have action on every hand: yours, the dealer’s and the other players,” he says. “It just went live on some cruise ships and is doing well.” As the wagers multiply, so do the prominent industry entrepreneurs. Snow increasingly credits others with enhancing the landscape. “Ryan Yee, who runs the table games business for us, has become a prolific game creator,” Snow says. “He’s got some great ideas. Same with Geoff Hall, who’s one of the best of all time. I’ll work with them and maybe identify something to add to the game—or subtract from it—to make it better. I love working with those guys.” Snow says roulette will ultimately join the side-bet party. Unlike the wagers that transform blackjack and poker, a roulette side dish would upgrade an already-rich betting menu. Snow says Scientific Games has stepped up its emphasis on side bets. “I think for a long time, we didn’t focus sharply enough on the side bets—it was all poker games. Now we’re making up for lost time and coming out with all sorts of side bets. Not only that, but Ryan Yee has come up with a mechanism that automatically tips the dealer when players win a side bet. We call it ‘Dealer Envy,’ and it creates great camaraderie at the table. It’s a game-changer, so to speak.”

Roulette with a Side Snow’s prediction about roulette joining the side-bet party actually is already being implemented by table-game supplier TCSJohnHuxley. The London-based supplier’s latest innovation is a flexible Roulette Progressive. A first-o-its-kind offering, the product features an optional progressive bet that can be placed on a roulette table for an opportunity to win a combination of bespoke progressive, fixed and/or mystery jackpots. All of these jackpots can be customized to meet the needs and expectations of each operation, focusing on preferred hit frequencies as well as specific jackpots, their seed values and contributions. “With the ongoing and overwhelming success of TCSJohnHuxley’s blackjack and poker progressive offerings, it was a logical progression for

“With the ongoing and overwhelming success of TCSJohnHuxley’s blackjack and poker progressive offerings, it was a logical progression for us to roll out the system for roulette.” —Tracy Cohen, Director of Marketing, TCSJohnHuxley

us to roll out the system for roulette,” says Tracy Cohen, director of marketing for TCSJohnHuxley, “especially as there has never been a successful roulette progressive available that provides high levels of excitement as well as multiple customizable independent progressive jackpots, incorporating both event-based and mystery wins.” TCSJohnHuxley’s Roulette Progressive allows the player to wager an “in it to win it” progressive wager which, once locked in, gives the player access to a variety of potential incremental individual, community and mystery progressive jackpots as well as fixed payouts. All jackpots are independent, so even if the top prize is won the other meters are not affected and do not reset. “This keeps the excitement building and players at the table for longer,” says Cohen. The world launch of the Roulette Progressive recently took place at Tsogo Sun’s flagship operation Montecasino in Johannesburg, South Africa, to much fanfare.

Sides of the Times AGS views new technology as an enhancement of the player experience while preserving the core game, according to Gabe Baron, senior director of table products. “Side bets have become increasingly important to operators as a way to drive more revenue from traditional games like blackjack, and to add more player excitement by providing the thrill of a higher payout and an additional chance at winSEPTEMBER 2019 www.ggbmagazine.com

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“Side bets increase the level of anticipation and excitement on any table game.” — Gabe Baron, Senior Director of Table Products, AGS

ning each hand,” Baron says. “Low-limit blackjack, for example, is not a highly profitable game for casinos, but when you add a side bet, it becomes much more lucrative. “We especially see a rise in popularity of dual-felt side bets, which create multiple games within a game at a blackjack table, which is very in tune with younger players and multitasking.” Given the performance and popularity of side bets, AGS will continue to offer more side-bet options, often coupled with table progressives, in its portfolio of table products, he says. The company has more than 2,000 side bets in the market—mostly blackjack side bets, but also some craps and baccarat side bets. Blackjack remains king of the side-bet theater “by a long shot,” Baron says. “Aside from the total number of tables alone, the game lends itself so well to all kinds of various combinations of card-building poker hands, totaling the values of cards exposed, looking for similar suits, and so on, so that there really may never be a point when every possible blackjack side bet has been conceived. I have yet to meet a serious blackjack player who doesn’t have an idea for a new side bet in their head, waiting to be told to anyone who’ll listen.” AGS’ Buster Blackjack is attractive “because it enables players to win odds-based payouts when a dealer busts,” Baron says. “This is a result all players enjoy. The number of cards in the dealer’s busted hand determines the payout the player receives, creating anticipation as more and more cards appear. There’s also a community element that players love as the whole table wins together.” Baron touts a relatively new AGS side bet: Jackpot Blackjack. This wager pays odds when a player makes any three-of-a-kind using the player’s first two cards and the dealer’s upcard. It also pays even money for a winning blackjack hand, not just a blackjack itself. Any winning hand will pay out in addition to possibly receiving payouts on the three42

Global Gaming Business SEPTEMBER 2019

of-a-kind combinations. Baron loves the game-within-a-game philosophy driving the side-bet world, with increasing speed. “It’s so hard to talk tables without devoting a large amount of time to progressive side bets and their mainstream acceptance by players,” he points out. “They increase the level of anticipation and excitement on any table game, because the player is eligible for a potentially large jackpot. “One from AGS that is building quite a following is Blackjack Match, not only for the chance at both ‘night-changing’ and ‘life-changing’-sized jackpots, but also because it, like the rest of our STAX Progressive lineup, offers an optional ‘Must-Hit-By’ prize.” The “Must-Hit-By” feature randomly awards a player who’s made a progressive wager. “Imagine sitting and placing your regular and progressive bets as always, and at the end of a round, being awarded several hundred dollars just for participating in the progressive action,” Baron says. “That’s happening as we speak all over the continent.”

Electronic Excellence IGT continually enhances its large-and-in-charge footprint in the electronic table games space, initially realized when it completed the nation’s biggest ETG installation at the Sands Bethlehem in Pennsylvania in 2016: 150 cabinets, featuring live roulette and baccarat games. The company has maintained its momentum in this sector. Last summer, IGT deployed 15 Dynasty Electronic Table Games terminals with Dynasty Auto Roulette at Harrah’s Cherokee Valley River Casino & Hotel in Murphy, North Carolina. IGT’s new landscape-oriented Dynasty ETG terminal and Random Number Generator roulette content created a stadium-style ETG destination on the property’s casino floor. IGT’s cutting-edge Dynasty ETG lineup, including RNG offerings such as baccarat and triple hand blackjack with expanded options for side

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“As more ETGs are placed on casino floors, it will be more important than ever to differentiate and modernize the player experience with engaging side bets, while ensuring they’re easy to understand and keep up with the pace of the game.” —Paul Baskerville, Director of ETG Product Management, IGT

G.A.M.E. G. A.M.E. O ON... N... bets, was on display at the trade show of the Oklahoma Indian Gaming Association in late July. The demand for these products figures to grow. The number of installations in one room can certainly rise, and with the impetus of side bets, expanded wagers can mushroom. The combination of a live dealer, software-driven outcome, reduction of player chatter and increased number of units dramatically enhances the number of hands per hour. The arsenal of products and venues gains a significant upgrade when side options unfold. “IGT is focused on differentiating our offerings in the electronic table games space, and one way we’re doing that is with our expanded side betting options offered on our Dynasty ETG solutions,” says Paul Baskerville, IGT’s director of ETG product management. “IGT’s Dynasty RNG Baccarat, for instance, gives players the option to customize their betting to their personal preference with over 40 different betting options. “This is done on our patented interface that enables players to drag and drop their chosen bets for a next-level player experience.” The side-bet lineup has a significant upside, with games like live blackjack, sic bo, Multi Baccarat, and single-, double- and triple-zero roulette offering their own versions of a wild card. “As more ETGs are placed on casino floors, it will be more important than ever to differentiate and modernize the player experience with engaging side bets, while ensuring they’re easy to understand and keep up with the pace of the game,” Baskerville says. The industry giants like what’s going on here. More game types mean more players. And more options often mean enhancing the house edge. These factors would normally butt heads, but side bets can be small investments and they are not mandatory. This balance makes it easier for players—and operators—to “take sides.”

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FRANKLY SPEAKING by Frank Legato

Slips, Trips and Granfalloons

Global Gaming Business SEPTEMBER 2019

Slot players quiet. Table players loud. Moving on, here’s the definition of irony: Slipping on a “wet floor” sign. Not slipping on the wet floor, mind you, but the sign put there so you don’t slip. It happened at the Jack Cincinnati Casino, or as they like to write it, JACK Cincinnati. (It’s like they feel they have to shout for you to hear the name.) A woman was awarded $3 million in a lawsuit against JACK. She sued because she was injured when she tripped over a wet floor sign. (The floor was wet, not the sign.) Evidently, the sign had been knocked over, and a JACK employee saw it and just walked around it. Moments later, the woman tripped over it and broke her kneecap. I’m guessing the employee didn’t comprehend what was on the sign because JACK didn’t use CAPITAL LETTERS on it. OK, hold the phone here. If she was able to report that the guy walked around the sign, she had to see the sign sitting there. Did she think the guy just stopped in mid-stride to do a little two-step? How did she trip over the sign moments later? That’s what the casino’s lawyers argued, anyway. She wasn’t paying attention, and she should have seen the sign. The judge didn’t buy it. Maybe the lawyers should have made their argument in CAPITAL LETTERS. Finally, if there’s anything I love, it’s sarcastic philanthropy. London bookmaker William Hill won a copyright infringement lawsuit against rival bookmaker FanDuel, after convincing a judge that FanDuel’s sports betting guide was a nearly word-for-word copy of the William Hill guide. William Hill donated part of the settlement to the creative writing program at Rutgers University’s Newark campus, right down the road from FanDuel’s New York headquarters. Love it. Of all the reasons to give to charity, sarcasm has to be the best. I think it’s just... CAPITAL. (Sorry.) Seriously, where’s my Scotch? VIC TOR RINAL DO

recently concluded an exhaustive study of casino patron behavior, focusing specifically on the variations in attitudes and interactions between those who prefer slot machines and those who prefer table games. Not really. I was just in a casino and looked around. But this intense scrutiny did yield conclusions and hypotheses. To wit: Slot players quiet. Table players loud. I am actually both, a veritable schizophrenic of a casino patron. I play video poker until I have enough money to play craps, and then play craps until I lose enough that I have to go play more video poker. It’s a vicious cycle. But it works for me. Anyway, I notice how differently I behave between video poker and craps, and it’s the same way for all other players, if I may make a rash generalization for the sake of the bit. At the video poker machine, I’m the picture of solitude. Of concentration. Of pondering whether the cocktail server actually traveled to Scotland to retrieve the Scotch I ordered. I hit the button, concentrating on the rhythmic beauty of the process of deal, draw, curse... deal, draw, curse... the only other noise being the electronic sound of the game, provided it even has one. Many psychiatrists think this means I’m mesmerized by a gaming machine, especially if it’s a slot machine. Responsible gaming advocates advise against falling into into a trance (or as Shemp used to say, a “transom”) while playing slots. But I don’t consider it a trance. (Or a transom.) I’m just chillin’, playing video poker, and appreciating the silence of the evening, especially if it’s late. Then, suddenly, enter table-game players: “Deal... draw... deal... draw... deal... dr-WOOOOOO!” That’s the sound of a woman playing blackjack at the nearby pit the other night, every time she won a single $5 chip. As I removed shards of glass after biting through my cocktail glass, I pondered the near-heart attack that resulted from table player behavior. But that’s the difference. When I’m at a table, I’m the same way. Everyone’s interacting, high-fiving each other, cheering... especially at craps. You form a sort of camaraderie and become what author Kurt Vonnegut called a “granfalloon,” a group of people who are proud to be a group because of some random, meaningless association. (Vonnegut used “Hoosiers” as an example.) At the craps table, we all happen to be betting against the house at the same time (except for the jerk betting Don’t Pass). After a couple of hours, we’re all best pals. We’re a granfalloon. For all I know, I could be high-fiving Charles Manson. But to get back to my exhaustive study of player behavior, I’ll reiterate my conclusion:

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GLOBAL GAMING WOMEN

About the Why

The principles of Global Gaming Women guide the direction of the organization By Christie Eickelman

lobal Gaming Women has a strong mission, and our guiding principles of courage, integrity and leadership continue to inspire our board and the women we serve. As an organization, GGW supports the development of women at all levels throughout the industry. We actively create opportunities for women from all segments of gaming to come together in an effort to enrich their professional and personal lives. However, the “why” we as a GGW board are so passionate about serving women in the gaming industry is worth repeating, and that “why” will be a guiding star as I accept the honor of steering the GGW ship for the next two years. Research tells us women account for over half the hospitality workforce, yet women hold just 36 percent of management or higher positions in gaming. A 2018 study from the University of Nevada, Las Vegas—Glass Ceilings & Leaky Pipelines: Gender Disparity in the Casino Industry—puts it succinctly: “Results of this study support a gender leadership gap in gaming. The higher the position, the fewer women there are. When women do lead, they are more likely to be found in traditionally women-dominated departments, like HR, that are generally not perceived as tracks to the boardroom.” This is not simply an issue of filling seats at a table or creating equity in statistics. Studies dating back as far as 2009 lay out a clear business case for bringing more women into leadership positions in the gaming industry: “When highly emotional and socially intelligent women fill higher positions, not only may gaming companies perform better, other women in the organization may benefit, as well. Research is beginning to show that when more women fill higher leadership roles, gender discrimination in the workplace and the gender wage gap may be reduced for women further

down the organizational ranks.” Through a wide range of activities, GGW helps to prepare women throughout the industry and at all levels of their careers to take on leadership roles—both by building leadership skills and a sense of empowerment. We are proud to report that there are more than 8,000 members in the GGW network, representing more than 50 companies. Further,

We are proud to “report that there are more than 8,000

Global Gaming Business SEPTEMBER 2019

members in the GGW network, representing more than 50 companies. Further, GGW awards 300 educational scholarships annually. These networks, scholarships, and our myriad other events all build toward the goal of creating a deeper, wider and stronger talent pool, filled with women eager and ready to tackle the positions and challenges of leadership.

”

GGW awards 300 educational scholarships annually. These networks, scholarships, and our myriad other events all build toward the goal of creating a deeper, wider and stronger talent pool, filled with women eager and ready to tackle the positions and challenges of leadership. None of this would be possible without the many companies and individuals who support GGW. We are extremely grateful to them for their financial support, which is always coupled with valuable insights and intellectual support. Now as we broaden our donor structure, bringing more companies and individuals into the fold and on board with our mission and goals, we will ensure we will have the resources necessary to support the development of women at all levels throughout the industry. Mother Teresa taught us many valuable lessons, and one quote of hers inspires me when I think about leadership. She said, “It is not how much we do, but how much love we put into what we do.” She also taught us, “It is in giving that we receive.” This is the “why.” As a GGW board, we are passionate about this industry, about the women we serve, and about our mission to help others succeed. We are asking you to join us. For information, visit globalgamingwomen.org today. Christie Eickelman recently began a two-year term as president of Global Gaming Women. She is vice president of global marketing at Gaming Laboratories International (GLI). Eickelman has been blazing a trail for women to follow in the gaming industry since 1992. In 2008, Global Gaming Business magazine named her one of the 25 People to Watch in Gaming. Recently, the Oklahoma Indian Gaming Association honored her contributions to the Indian gaming industry with the 2019 OIGA Modern Day Warrior Award.

CONNECTING INDUSTRY LEADERS AT THE HEART OF GAMING IT ALL STARTS HERE Set yourself up for success at Global Gaming Expo (G2E) – the largest gathering of global, commercial and tribal gaming professionals in North America. Take advantage of new educational content that is actionable and experience first-hand the new products and innovative technologies showcased in the Expo Hall. G2E has everything you need for your casino floor and across your entire operation – from traditional casino fare to sports betting, non-gaming amenities and digital products – G2E is where your business growth is accelerated.

2019

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NEW GAME REVIEW by Frank Legato

Deluxe Spin-der Konami Gaming

his new game utilizes the 43-inch flat-screen monitor of the KX43 cabinet for a unique extra-reel primary game bonus and a wheel-spinning bonus that can lead to one of four fixed bonus awards. The base game is a five-reel, 30-line video slot on a five-by-three array. Above the main reel array are three extra reels—each displayed in a single box over one of the three middle reels. The player activates the extra reels by making three extra bets. The bonus reels contain wild symbols, wilds with multipliers and wheel symbols. When a Wild, Wild 2X or Wild 3X symbol lands in one of the active extra-reel boxes, it will drop to replace all positions in the corresponding main reel. If six wheel symbols land on the reel array and extra reels, it triggers a wheel feature. The large wheel above the reels displays credit prizes and the four fixed bonus prizes. The wheel and bonus prizes scale up as the player’s bet per line is increased.

With maximum bet, the bonus prizes are topped off with the Maxi jackpot of $5,000. There also is a free game bonus. Three, four or five scattered bonus symbols trigger eight, 12 or 20 free games, respectively. During the free games, no blank symbols appear on the extra reels. Manufacturer: Konami Gaming Platform: KX43 Format: Five-reel, 30-line video slot Denomination: .01, .02, .05, .10, .25, .50, 1.00, 2.00, 5.00 Max Bet: 300 Top Award: $5,000 Hit Frequency: 25% Theoretical Hold: 6%-15%

Ultra Stack Panda Instant Trigger Aruze Gaming

his new game on Aruze’s Muso Triple-27 cabinet centers around free games, with unique mini-bonus features affecting the return of two frequent free-game features. The base game is a 50-line game on a five-by-four reel array. The two free-game features are either symbol-triggered or, at max bet, can also be triggered at random through an “Instant Trigger” mystery feature that instantly enacts one of the two free-spin features. Outside of the instant trigger, three or more scattered “Feature” symbols trigger Panda Free Games. The feature begins with a “Mini Game” that presents five icons. The player selects one to reveal one of the main game symbols. During the free games, the reels contain a greater number of the symbol revealed in the Mini Game. The player then is awarded eight free games on special reels containing only the revealed symbol from the Mini Game, the six poker symbols and the Feature symbol. During the free games, three or more scattered Feature symbols retrigger the feature for an additional eight free games using the same reels and Mini Game symbol. Three or more scattered “Super Feature” symbols trigger Super Panda Free Games. These consist of a Mini Game, a wheel spin and eight free games on special reels, including the Mini Game symbol, poker symbols and the Super Feature symbol. The symbols added to the reels by the Mini Game are increased further by the wheel spin. Three or more scattered Super Feature symbols in a free 48

Global Gaming Business SEPTEMBER 2019

game retrigger the feature for another eight games using the same reel set and symbols. The top jackpot of 10,000 credits times the bet multiplier is awarded when a special jackpot symbol lands on all 20 spots on the reel array. Manufacturer: Aruze Gaming Platform: Muso Triple-27 Format: Five-reel, 50-line video slot Denomination: .01 through 1,000.00 (six of 23 denominations, operator selectable) Max Bet: 50 to 20,000 depending on bet configuration Top Award: 10,000 credits times bet multiplier Hit Frequency: Approximately 50% Theoretical Hold: 2.12%10.82%

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James Bond: Live and Let Die Scientific Games

his latest entry in Scientific Games’ James Bond franchise is based on the 1973 film Live and Let Die, which featured a New Orleans backdrop and venomous assassins. It is showcased on the unique Gamefield 2.0 cabinet, which features a curved 43-inch monitor positioned horizontally facing the player, like a pinball display (the “game field”) leading to a landscape (horizontally positioned) 43-inch top monitor. Live and Let Die features footage from the film weaved into a collection of unique bonus events. There are four levels of progressive jackpot plus two static awards. The game is available in near-area and wide-area versions. The top prize on the near-area version resets at $10,000. In the wide-area progressive, the top jackpot starts at $400,000 when connected to SG’s Cash Connection link, or $200,000 on the Reel Adventures link. The base game is a five-reel, 25-line video slot. Larger bets result in larger base-game wins and better upgrades in the bonus Chip Feature. Six or more scattered chip symbols trigger the Chip Feature. The player is awarded one “Chip Respin,” or two Chip Respins and a chip upgrade when making the Chip Feature Upgrade bet. Each chip symbol that lands on the screen during the initial trigger will hold in place for the duration of the feature. During the feature, an alternate set of reels is used which contains only White, Red, Black and Gold Chip symbols. Players are awarded a Chip Respin where the unlocked positions will re-spin, possibly landing more chip symbols. After all Respins and Chip Upgrades are complete, the remaining chips will award prizes up to 15,000 credits.

The Voodoo Free Spins feature, triggered at the end of the Bonus Respin, awards seven, 14 or 25 free spins. This feature can also be triggered during the Chip Feature and Wheel Bonus. Each Voodoo symbol landed during the bonus awards one additional free spin. In the Tarot Bonus, players pick from a field of 12 card symbols to reveal one of four symbols corresponding to the four top progressive jackpots. Players pick until matching three symbols. Scattered bonus symbols on two or more reels expand to fill each column with bonus symbols. During the base game, if the player lands three or more bonus symbols, free games are awarded. If scattered bonus symbols on two or more reels expand to fill each column with bonus symbols, they lock and the player gets a re-spin with bonus-symbol-only reels. If one or more bonus symbols land, the player is awarded free spins. During the free spins, the reels may randomly expand and/or have random wilds added to the reels. At the end of the bonus, the game goes back to the base game. However, if the free spins were awarded by the Chip Feature, the free-spin bonus is played, and then any further events in the chip feature occur before returning to the base game. Manufacturer: Scientific Games Platform: Gamefield 2.0 Format: Five-reel, 25-line video slot Denomination: .01, .02, .05, .10 Max Bet: 540 Top Award: Progressive; $400,000, $200,000 (WAP) or $10,000 reset (NAP) Hit Frequency: 24.57% Theoretical Hold: WAP—10.73%-15.53% NAP—6.16%-13.32%

Money Ball Everi

veri is kicking off this new series of games on the 8-foot-plus Empire MPX cabinet, which features a 43-inch 1080p HD portrait display, game-controlled lighting, and a charging station for mobile devices. The two inaugural games in the series are Money Ball and Money Ball Inferno. Both games feature a cascading reel presentation that creates anticipation as large symbols stack up awarding either credits or free spins. The main Money Ball feature on both games is a primary-game mystery event that awards a mystery credit prize on one or more of the first four reels, and adds a multiplier on reel 5. Credit values roll down reel-by-reel with the reel 5 multiplier augmenting the award by 2X-100X on the total credits.

There also is a Progressive Wheel Feature that offers a unique twist on the standard progressive wheel. Instead of the wheel spinning, the player spins pointers around a fixed wheel, its slices representing five progressive jackpots. When the player lands three pointers on a wheel slice, that progressive is awarded. Reset values for the progressives are $30 (Mini), $100 (Minor), $400 (Major), $2,500 (Grand), and the top jackpot of $10,000 (Ultra). Manufacturer: Everi Holdings Platform: Empire MPX Format: Five-reel, 40-line video slot Denomination: .01, .02, .05, .10, .20, .50 Max Bet: 500 Top Award: Progressive; $10,000 reset Hit Frequency: 19.6%-22.74% Theoretical Hold: 2%-15% SEPTEMBER 2019 www.ggbmagazine.com

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REGULATION

Looking Inward Embracing internal investigations By Jennifer J. Gaynor and Jacob S. Frenkel

n recent months, we’ve seen several large gaming companies take hits in the form of major investigations, fines and sanctions, for a broad range of compliance issues (including #MeToo, advertising to minors, and failures regarding AML compliance), with potentially significant regulatory consequences. Although the underlying conduct that led to the sanctions varied, there is a common factor: gaming companies failed to investigate properly with requisite independence and to self-police, especially at the highest levels. The recent record fines are a reminder to all gaming licensees to gut-check their policies and procedures and make sure their employees— including C-suite executives—all receive the proper training and follow set protocols. A few key takeaways: • Have clear policies. Start with a clear set of policies that define acceptable behaviors and practices within your company. • Compliance policies are not shelf-warmers. Your company has a compliance policy that’s passed regulatory muster. Great. Now make sure you actually utilize that policy manual. Ensure that you are properly training and holding all officers, directors and employees accountable for following such policies. • Make sure your employees know how and to whom they should report issues. Have a clear system for reporting misconduct, where employees are assured they can safely report without fear of retaliation, and that they can retain their privacy, as appropriate. • No one is too important. No one at a licensed gaming company is above training or immune to a properly conducted internal investigation. In fact, the more powerful the individual in question, the more critical it is to thoroughly and properly investigate allegations of impropriety. • Be clear who is responsible for investigations and the chain of command for reporting. Guidelines should be clear about when it’s time for experienced, outside professionals to conduct

an investigation. • Learn from your mistakes. Regulators do not take kindly to repeated mistakes. We have seen cases of gaming licensees receiving steep fines for failing to follow procedure about the same issues on multiple occasions, especially for anti-money laundering and regulatory filings compliance. This includes some instances after the licensees have received lesser fines or warnings for the same mistakes. • Have experienced outside help on tap. In certain situations, it may be necessary to engage outside experts, such as forensic accountants or outside legal counsel, to avoid conflicts of interest or to provide specialized expertise. It is important to preidentify and have agreements in place with such experts to avoid unnecessary delay when such outside assistance is needed. Here are a few key considerations related to internal investigations: • Recognize that internal and external stakeholders will take a keen interest in the planning, conduct, reporting and remediation as a result of the investigation. A properly conducted investigation provides long-term benefits, well beyond the ever-important perception of a credible, independent and thorough investigation. • No two internal investigations are the same. Understand fully and upfront the ramifications of the allegations and the full range of issues that they may force to be addressed during the internal investigation. • Identify early all persons, including supervisory and senior corporate officials, whose actions or inactions could be scrutinized in the investigation. When allegations may implicate senior management, the dynamics change immediately, giving rise to active board (or board committee) participation and oversight, considerations in retaining outside and independent professionals, and a recognition of a different level of intensity and expectations around the investigation. • Many outside counsels recommend voluntary reporting to regulators, typically suggesting that discovery of the allegations is inevitable. Voluntary

Global Gaming Business SEPTEMBER 2019

disclosure to external stakeholders may present risks, however, so following a precise analysis and decision matrix always is the most prudent course before making a hasty decision to report externally. • Internal investigations of all sizes, significance and scope can impact business operations, employee morale and the entity’s reputation. Managing these critical issues is central to conducting a thorough investigation with minimal business disruption. • Understand how to manage the cost of an investigation, particularly if the matter requires retaining outside professionals. Also, staffing of investigations matters. An investigative team of less expensive professionals may appear cost-conscious initially but, in the long run, prove far more costly than a targeted and knowledgeable team of more senior professionals who are capable of identifying and handling issues with considerable efficiency and credibility. You want an investigation conducted by professionals who are capable of identifying issues quickly and are not afraid to make the “hard call,” offer constructive recommendations, and frame interim and longer-term solutions with a sensitivity to the company’s business. Even with the best compliance policy, training and protocols in place, issues can still arise. But even after the worst has happened, taking the proper steps to perform diligent internal investigations and then act promptly to correct the problem can show regulators that you can be trusted to self-regulate and report without heavy-handed treatment. So remember to follow best practices in conducting and documenting the investigation, establishing and implementing remediation, and reporting to regulators. The gaming industry is too large and complex for regulators to manage without the assistance of self-regulation and self-reporting. Prove them right to trust you, or your company will face the consequences. Jennifer J. Gaynor is a member of the Gaming and Hospitality practice for law firm Dickinson Wright LLC in Las Vegas. Jacob S. Frenkel is the chair of Dickinson Wright’s Government Investigations and Securities Enforcement practice in Washington, D.C.

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EMERGING LEADERS Ski Bum To Oxford Kit Szybala Partner and Executive Director of Research and Operations, Global Market Advisors it Szybala is a learned man, with a degree from Southern Methodist University in finance and international studies and a minor in history. He studied abroad in Oxford. So how come his initial job out of college was at a Vail ski resort? Simple. Vail introduced Szybala to the hospitality industry that he then chose as a career. “At Beaver Creek Resort, I was trained to provide world-class service to guests and learned the intricacies of resort operations. I believe it’s important for anyone in our industry to have firsthand hospitality experience, as I still rely on what I learned there in my job today,” he says. The Clayton, Missouri native parlayed Vail and his extensive education into a position with Denverbased Global Market Advisors, his home since 2012. As a Hunt Leadership Scholar at SMU, Szybala met distinguished leaders in various fields. “My professors at SMU were also key in helping me develop a skill set that would be useful in my future career,” he says. At the University of Oxford, he took part in the tutorial method, which focused on very small group teaching sessions. Students completed weekly essays, read them aloud to the professor, and received immediate feedback and critiques. “You’re encouraged to defend your findings,” Szybala says. Szybala grew with GMA to his current position as a partner and executive director of research and operations, where he oversees, among other elements, feasibility studies, due diligence assignments, strategic planning assessments, and market assessments around the world. He leads seminars to industry stakeholders at the University of Nevada, writes articles for gaming publications including Global Gaming Business, and authors white papers such as “Gaming in India: An Evaluation of the Market’s Potential and Japan Integrated Resorts.” “I frequently participate in industry conferences as a panelist, moderator and presenter,” he says. If Szybala experienced an obstacle in his rise in gaming, it’s because he entered the industry without prior experience and connections. “The gaming and hospitality industries have their own unique characteristics, not well understood by outsiders,” he says,

“I believe it’s important for anyone in our industry to have firsthand hospitality experience, as I still rely on what I learned there in my job today.”

Internationally Innovative Yosh Rubinstein Vice President, Strategy and Operations, Las Vegas Sands Corporation osh Rubinstein is responsible for supporting Las Vegas Sands (LVS) President and Chief Operating Officer Rob Goldstein in the execution of key global strategic initiatives and analysis of new development opportunities. He assumed the role after serving in a variety of gaming strategy and marketing roles in Las Vegas, Singapore and Macau. Raised in Southern California, Rubinstein graduated from the Cornell University School of Hotel Administration in 2009, with a concentration in real estate and finance. Upon graduation, he joined LVS as a financial analyst in Las Vegas. In this role, he was exposed to the many different business lines of an integrated resort and began to gain an appreciation for the size, scale and complexity of the operations. As LVS expanded further and grew its operations into Asia, Rubinstein was asked to join the company’s new corporate team responsible for analyzing global gaming operations. In this role, he served as the primary research analyst, analyzing macro and competitor global gaming trends and supporting management’s efforts to introduce a more robust and global operating model. In January 2012, Rubinstein went on a business trip to Marina Bay Sands (MBS) in Singapore. What started as a short-term project ultimately turned into a life-changing opportunity. Rubinstein was asked to move to Singapore to work under Andrew Macdonald and

“and a small network of stakeholders.” But a relevant background and strong mentors helped him surpass this obstacle. GMA Managing Partner Steve Gallaway and Senior Partner Andrew Klebanow have been his biggest mentors. “They provided me with the opportunity to start working in the gaming industry as an analyst, and have since given me the knowledge, insights, tools and direction to succeed as a consultant,” says Szybala, who hikes and fly-fishes with his fiancée and dog for recreation. Szybala expects his role with GMA to grow as business expands for existing clients and extends into new sectors. He also hopes to work more with academic institutions. For budding industry consultants, Szybala suggests an education that is analytically focused and writing-intensive. “As a consultant, I’ve found that it is equally important to have both of these skills, allowing you to quickly and accurately analyze any given situation or data set and clearly articulate your findings in a written report,” says Szybala, who is still an avid skier. “I also think they should participate in activities that provide new experiences and different perspectives.” —William Sokolic

Global Gaming Business SEPTEMBER 2019

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Jeremy Bach as part of the Marina Bay Sands casino team. Rubinstein says this period was transformational in his professional and personal development. Professionally, he not only deepened his technical knowledge of casino operations and marketing fundamentals, but also was able to be part of what he believes to be the best-run casino operation in the world. The MBS leadership team has created a culture of continuous learning that celebrates diversity and is constantly striving to be innovative. Personally, living as an expatriate allowed Rubinstein to become a more globally conscious, culturally sensitive and empathetic person. In May 2015, he was presented with the opportunity to move to Macau to add strategic and analytical support to the Premium Mass team. Rubinstein was the only expatriate in a department of nearly 1,000 team members across sales, service and marketing, and cites his genuine interest in and appreciation for other cultures as a critical element of his success. He notes that the integrated resort business is first and foremost a people business—focusing on both team members and customers. Asked about Emerging Leaders of Gaming, Rubinstein offers three pieces of advice. First, find great mentors. Rubinstein’s mentors have encouraged him to venture into new territory and stretch himself professionally. Second, be as geographically mobile as your personal circumstances allow. The growth and the best opportunities for the foreseeable future will be in Asia. Third, be kind and likeable. Integrated resorts require significant coordination and collaboration to be successful. In order to move projects forward and develop good team dynamics, people must enjoy working with you. When discussing life out of work, Rubinstein mentions he’s a new father and discussed the centering influence of new parenthood. He’s found that becoming a father altered his perspective on prioritization, increased his efficiency, and has given him a better understanding of others. —Chloe Fletcher, Manager, Data Analytics, The Innovation Group

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

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GOODS&SERVICES AGA ANNOUNCES RESPONSIBLE GAMING EDUCATION WEEK

“Educating and engaging the public about responsible gaming is on all of us. We look forward to bringing our voices together for a successful #RGEW19 in September. Feel free to reach out to Elizabeth Cronan, senior director of gaming policy, and Cait DeBaun, senior director of strategic communications, with any RGEW questions or feedback.”

he American Gaming Association has announced that September 15-21 will be recognized as Responsible Gaming Education Week for 2019. The AGA uses the occasion to release research and direct the industry to new resources to recognize and deal with problem gambling. “The American Gaming Association and its members prioritize responsible gaming as an integral part of our industry’s daily operations,” said AGA President and CEO Bill Miller in a release announcing the 2019 effort. “We are pleased to announce Responsible Gaming Education Week (RGEW) from September 15-21, 2019 and release new resources for participating. RGEW brings together industry, advocacy, regulator and other key stakeholders to promote transparency and gaming literacy while showcasing our everyday commitment to responsible gaming.

ARISTOCRAT RELEASES MARSX CABINET

ristocrat has debuted its latest cabinet, the MarsX, at the Graton Resort & Casino in Rohnert Park, California. The innovative MarsX cabinet gives operators an entirely new way to illuminate their players’ experience with both game sales content and premium content lease options. “At Aristocrat, we have an unequaled passion for play,” said Nathan Drane, vice president of commercial strategy, game sales and Class II for Aristocrat. “We never stop thinking about our customers and their players, and how we can bring the game to out-of-this-world levels of fun and entertainment.” The MarsX cabinet fits easily into any standard cabinet space. When placed back-to-back, its unique shape opens sight lines across the casino. Additionally, its ergonomic design pro-

The MarsX cabinet, featuring the game Buffalo Gold Revolution, at the Graton Resort & Casino in California

ICE Lands in Philippines

SiGMA Group and Clarion Gaming join forces for gaming show in Asia

iGMA Group and Clarion Gaming have jointly announced they will partner on ICE Asia, the 2020 gaming trade show in Manila, Philippines, which is set to take place June 8-9 next year. The B2B event will cater to both the land-based gaming sector and the iGaming sector, with online suppliers, operators, affiliates, regulators and blockchain businesses all being housed under one roof at the SMX Convention Center situated in the heart of Manila, as well as the adjacent Conrad Conference facility. As Asia tempts leading brands from the global gambling sector to expand business opportunities in the region, it’s fast becoming clear that Asia is the new frontier for both land-based and iGaming industries. Recent figures from Global Gambling Statistics 2019 reveal that seven of the top 10 locations for gambling revenue based on visitors are in Asia (including Australia). In Macau alone, revenue could reach as high as $53 billion by 2022. As these jurisdictions look to capitalize on the global opportunities flourishing in the gambling

Global Gaming Business SEPTEMBER 2019

sector, it’s crucial to bridge the business divide between East and West, addressing considerations such as regulatory environments in different territories, payment processing methods, the integration of emerging blockchain technologies, and even bandwidth problems for mobile gaming. It’s precisely these issues that next year’s show in Manila will address by bringing the biggest brands and jurisdictions in the sector together in one venue. Kate Chambers, managing director of Clarion Gaming, commented, “The opportunities for growth in Asia are increasing exponentially year on year, and the time is right to cement new and existing relationships between the gambling industries in both East and West. To combine the expertise of Clarion courtesy of the world famous ICE brand and SiGMA ensures both the landbased and iGaming sectors will find synergy in Manila in 2020. This is an exciting time as we extend the reach of the ICE brand following the

The inaugural ICE Asia will be held at the SMX Convention Center in Manila, June 8-9, 2020 launch of ICE Africa in 2018 and ICE North America in May 2019.” Eman Pulis, founder and CEO of SiGMA Group, added, “As we take the SiGMA brand to global markets, we’re proud to facilitate the biggest gaming expo to bring East and West together. It is unprecedented for two such established events to join forces in Asia this way, so this will be a must-attend calendar event among C-level gaming executives, whether they have existing business activity in Asia or are looking to expand their operations in the Far East.”

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vides more efficient accessibility for field service technicians, decreasing service time in the field. Game-complementary corona sync-edge lighting creates a unique play environment. LCD toppers are supported with game-driven content for added entertainment. For players, the new MarsX cabinet has two 27-inch 4K displays and new Gen 9 internal components drive performance and allow for uninterrupted high-speed game play. A premium virtual button deck offers a high definition and a minimalistic way of wagering. Incorporated into the deck is the latest in wireless charging technology, allowing players to charge their phone by simply placing it onto the deck. A 4:1 speaker system optimally projects audio from around the displays, providing crisp, balanced sound. The MarsX cabinet is launching with five industry-leading titles leveraging Aristocrat’s biggest brands and bringing innovation to the games sales space, including Buffalo Gold Revolution, the latest installment in Aristocrat’s Buffalo franchise.

SCIENTIFIC GAMES PARTNERS WITH JUMBO TECHNOLOGY

cientific Games and Jumbo Technology have announced a non-exclusive partnership which enables SG to purchase and connect Jumbo’s automated sic bo dice shakers to SG Quartz ETG terminals in all regions except Macau. Unlike other automated dice shakers, Jumbo’s sic bo dice shaker is uniquely designed and based on the traditional sic bo concept, in which players place bets after the dice have been shaken in an enclosed golden dome container.

shaker to connect with 45 Quartz terminals at Korea’s Seven Luck Casino.

SEGA SAMMY LAUNCHES IN U.S.

apanese game supplier Sega Sammy Creation announced that its Genesis Star cabinet will begin deployment in Nevada this month, marking the supplier’s first product footprint in the U.S. The Genesis Star cabinet was approved by the Nevada Gaming Control Board in June.

The cabinet will provide a rich library including titles themed on Sega’s iconic games already popular around the world. “We are excited to introduce our state-of-theart slot cabinets to Nevada, where legalized gaming started in the United States,” said Scott Winzeler, chairman and CEO of Sega Sammy Creation USA, Inc. “This milestone represents a huge opportunity for us to extend our presence in the worldwide gaming market.” The Genesis Star, with its patent-pending LED lighting system, creates a classic look and feel. The LED lighting that resembles neon lights give the cabinet a nostalgic feeling and distinguished look, providing players with a more immersive experience.

IGT PLAYDIGITAL FUELS MULTI-CHANNEL FANDUEL SPORTSBOOK

S Jumbo, which holds the patent rights for this automated game flow in Macau, Singapore and the United States, originally developed the dice shaker exclusively for its own multi-game ETG stadiums, which include games like Long Dragon Baccarat, roulette and sic bo. These ETGs feature Jumbo’s signature Random Pay feature, which is also patented in multiple jurisdictions around the world. By utilizing Jumbo’s technology, Scientific Games can now offer additional live streamed, automated sic bo games to its players. In its announcement, Jumbo said that SG recently purchased its first unit of Jumbo’s dice

upplier International Game Technology Plc. has announced the recent deployment of the FanDuel Sportsbook online and mobile betting platform in Pennsylvania. The FanDuel Sportsbook is now leveraging the full, omni-channel capabilities of IGT PlayDigital’s sports betting platform. In partnership with Boyd Gaming and Valley Forge Casino Resort, FanDuel is bringing an online sports betting experience that is simple, secure and more convenient than ever to bettors located in Pennsylvania. The state of Pennsylvania joins New Jersey as the two states where the FanDuel Sportsbook online and mobile platform is available since the federal Professional and Amateur Sports Protection Act was struck down last year. IGT PlayDigital’s omni-channel solution now

enables connected play by providing patrons of the Pennsylvania sportsbook the option to place prematch and in-play wagers over the counter, at selfservice betting kiosks, and via FanDuel’s simple, secure and convenient mobile app. “By leveraging IGT PlayDigital’s sports betting platform, FanDuel Group can confidently offer choice and convenience to players in Pennsylvania when they are placing sports bets,” said Enrico Drago, senior vice president of IGT PlayDigital. “Our sports betting platform continues to prove its effectiveness in delivering seamless player experiences across channels, and when paired with the FanDuel brand, has emerged as a market-leading solution. “The introduction of mobile sports wagering in Pennsylvania marks yet another meaningful milestone in IGT PlayDigital’s partnership with FanDuel Group, and reinforces the quality and multi-state scalability of the products and services that we offer to operators who are looking to offer sports betting.”

MERKUR’S RAPID THUNDER ROLLING ACROSS MEXICO

apid Thunder, the in-game jackpot bonus feature that was a sensation at the Indian Gaming Tradeshow, Juegos Miami and the recent Peru Gaming Show, has successfully completed a series of development tests in Mexico. From Tijuana and Ensenada to Guadalajara and Queretaro, development test events were run in five operations. Four of these were run with promotional support and one, Casino San Nicolas in Ensenada, was run purely as a “blind” test with a bank of machines simply installed and switched on to await players. The players did indeed come and, with their choice of six highly popular base game titles—plus the built-in Rapid Thunder Jackpot Bonus feature—the play was intense, with all machines being played repeatedly and often with other players waiting for a vacant slot to take their turn. With the added attraction of the Merkur Mexico officials helping to build the atmosphere and also giving away prizes and running cash draws each evening, Rapid Thunder had a very special buzz

Merkur officials celebrate the ribbon-cutting of its Rapid Thunder installation in Guadalajara, Mexico

SEPTEMBER 2019 www.ggbmagazine.com

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PEOPLE WILMOTT TO STEP DOWN FROM PENN

im Wilmott announced last month he is leaving Penn National Gaming. He joined Penn in 2008 when it Tim Wilmott was a relatively small regional casino company, controlled by Peter Carlino, who was the chairman and CEO at that time. The company had completed the purchases of Hollywood Casino Corp. and Argosy Gaming before Wilmott came on board. Wilmott worked his way up through the Harrah’s organization, first as a prestigious president’s associate and later as a regional vice president. He was the perfect candidate to establish the organizational efficiencies that were required following those mergers. Wilmott has also been chairman of the American Gaming Association since 2018, and his term is about to expire. In 2012, Carlino set up the first gaming real estate investment trust (REIT), Gaming and Leisure Properties Inc. (GLPI), which set the stage for subsequent acquisitions. Under Wilmott’s watch, the company bought the M Resort at the far southern end of Las Vegas Boulevard and in 2015 came closer to the Strip with the purchase of the Tropicana. The big buy came in late 2018, when Penn bought Pinnacle Entertainment for $2.8 billion in cash and stock. Several other properties were sold to obtain regulatory approval, but the GLPI connection made that deal possible. Last year, Penn went to another REIT, Vici Properties, a Caesars spinoff, to buy the Margaritaville Casino in Bossier City, Louisiana and the Greektown casino in Detroit. Replacing Wilmott will be Jay Snowden, another Harrah’s/Caesars alumnus, who joined Penn as COO in 2014, becoming president in 2017.

SENATE COMMITTEE OKs SIMERMEYER FOR NIGC

enator John Hoeven, a North Dakota Republican and chairman of the Senate Committee on Indian Affairs, announced last month that the committee has approved the nomination of E. Sequoyah Simermeyer to serve as chairman of the National Indian Gaming Commission (NIGC), and sent it to the full Senate for approval.

On his nomination by President Donald Trump in June, Simermeyer received endorsements from many quarters, including Interior Secretary David Bernhardt, who called him “the ideal candidate… I urge Congress E. Sequoyah Simermeyer to confirm him quickly.” Earlier in his career, the nominee was counselor and deputy chief of staff to the Department of the Interior’s Assistant Secretary for Indian Affairs. He was also counsel for the Senate Committee on Indian Affairs. If approved by the full Senate, Simermeyer will succeed Jonodev Osceola Chaudhuri in the role. Chaudhuri, a member of the Muscogee (Creek) Nation, left to become chairman of the Indian Law and Policy Group at Quarles & Brady in Washington, D.C.

ILLINOIS FILLS GAMING BOARD SPOTS

early one month after signing an expansive gaming bill, Illinois Governor J.B. Pritzker named Springfield attorney Charles Schmadeke as chairman of Charles Schmadeke the Illinois Gaming Board and Boeing Senior Counsel Anthony Garcia as the fifth board member. The state Senate must confirm both appointments. The board will select operators for six new casinos, slots and table games at the state’s three horse-racing tracks and a new south suburban racino, and oversee more video gambling machines and sports betting. Schmadeke is partner-in-charge at the Springfield office of law firm Hinshaw & Culbertson. He was general counsel in then-Illinois Comptroller Dan Hynes’ office until 2002; currently Hynes is one of Pritzker’s four deputy governors. Schmadeke also was chief of the general law bureau in the Illinois attorney general’s office. At Boeing, Garcia oversees internal investigations involving alleged violations of anti-corruption laws. He also served as an assistant U.S. attorney in Chicago and an intelligence analyst for the Central Intelligence Agency.

NHL NAMES SLANE AS SPORTS BETTING CONSULTANT

he National Hockey League has retained former American Gaming Association executive Sara Slane as a consultant on sports betting issues. Slane recently left her position at the WashingSara Slane ton, D.C. trade organization to form Slane Advisory, a global gaming strategies firm. She will advise the NHL and its teams on sports betting strategies and the cultivation of new partnerships in the gaming and sports betting marketplace. She also will advise on current and new gaming legislation, the league said in a press release. The NHL also announced a sports betting partnership with MGM Resorts International, and has strategic relationships with daily fantasy sports operator FanDuel and William Hill US.

GGB

September 2019 Index of Advertisers

AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aristocrat . . . . . . . . . . . . . . . . . . . . . . . . . .11 Dickinson Wright . . . . . . . . . . . . . . . . . . . .25 Empire Technological Group . . . . . . . . . . .33 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Fantini . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Fifth Third Bank . . . . . . . . . . . . . . . . . . . . .39 Gaming Support . . . . . . . . . . . . . . . . . . . . .43 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Incredible Technologies . . . . . . . . . . . . . . .29 Konami . . . . . . . . . . . . . . . . . . . . .Back Cover Lifescapes International . . . . . . . . . . . . . . .23 Merkur . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 RPM Advertising . . . . . . . . . . . . . . . . . . . .10 SBC Events . . . . . . . . . . . . . . . . . . . . . . . . .45 Scientific Games . . . . . . . . . . . . . . . . . . .7, 21 Subway . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 UNLVGS . . . . . . . . . . . . . . . . . . . . . . . . . . .56

SEPTEMBER 2019 www.ggbmagazine.com

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CASINO COMMUNICATIONS

Joe Lupo

oe Lupo spent 30 years with Boyd Gaming, most of it at the Borgata in Atlantic City, where he held a variety of senior positions. Lupo joined Hard Rock International in 2017 when he was appointed to lead Seminole Hard Rock Tampa, one of the most profitable casinos in the U.S. He was brought in to run Hard Rock Atlantic City in October 2018, just four months after the opening of the property, and has boosted revenues and cut costs using his extensive knowledge of the Atlantic City market. Lupo spoke with GGB Publisher Roger Gros at his offices in the Hard Rock in July. To hear a full version of this interview as a podcast, visit GGBMagazine.com.

property, especially in a high-frequency market, where all the customers have loyalties. They’ve been going to those other properties, and they know the waitresses’ first names and have accumulated points. To draw a customer away from a loyal market is really difficult. But we’re probably gaining more new customers every day than any other property. It really takes time to build that database, and while we’re getting customers in, they’re still getting offers, and they might be staying at other properties, and we’re only seeing a part of their play.

GGB: You just celebrated the first anniversary at Hard Rock Atlantic City. You’ve had some bumps along the way, some adjustments. Are you happy with the direction that the property is headed right now?

Well, I know the market pretty well, that’s for sure. Coming from the No. 1 property across town for so long, we worked hard over there to figure it out. One of the things that we do here is that we develop all of our own promotions and look at our reinvestment. Everything about this property is done from a couple of offices. There is no direction from a corporation that says, “Do it this way.” There’s no team from Las Vegas, that are saying, “We should do this.” We have some great team members from other properties, from Caesars, from Golden Nugget, from Borgata, that are giving us some other ideas. So we’re just taking a very aggressive approach. We realize we have to do that with a limited database. But, again, being in town, the entertainment aspect that obviously we had at Borgata, there was a lot of entertainment here. And having the biggest room in town gives us a big advantage over everybody.

Joe Lupo: Yes, I’m really happy with the direction. Any time you open up a property, there’s going to be bumps, and Hard Rock worked really hard to get it up and going, especially so quickly after purchasing the property. It was a lot of hard work for the team, and you’ve got to give them a lot of credit for doing it so quickly, and the property looks beautiful. But there’s growing pains that you have, understanding the market and things like that. Obviously, we opened the same day as Ocean, and you have two properties that came into a flat market, from just a pure casino gaming revenue standpoint. I came on board about eight months ago, late October. And so during that time, we were able to look at the business over the winter. We put some things in place, and now, a couple months ago, we became No. 2 in casino revenue. And to do that before our year anniversary is a great milestone. You started from scratch, basically, with your database.

That’s probably the toughest thing to do for a 58

President, Hard Rock Atlantic City

Global Gaming Business SEPTEMBER 2019

You worked at the Borgata for a lot of years. What kind of advantage did that bring you when you came to Hard Rock Atlantic City?

Hard Rock has a unique corporate culture. After a year, how much do your team members get the Hard Rock philosophy?

It is unique, and I think we’re jelling. I don’t think we’re there yet, to be honest with you. I think it’s good that we have a lot of different perspectives from a lot of different entities. The

“One of the things that we do here is that we develop all of our own promotions and look at our reinvestment. Everything about this property is done from a couple of offices.“ same thing happened at the Borgata. We need to keep working at it. I think teamwork in the end will make us click. As you come into the shoulder season, what are you doing to maintain the momentum you’re building this summer?

We have the biggest promotion this summer; we’re giving away a $1 million to one person. And that’s coming off our car-a-day in May. Who gives away a car every single day? But we guarantee that, and we’re really trying to raise the eyebrows. What does it mean that your chairman, Jim Allen, is a native of the Atlantic City area?

Well, it’s not only Jim, but our other partners and owners are from New Jersey—Jack Morris, and Michael and Joe Jingoli. They’re very community-driven. I think the city needs to come together a little bit, and we need to work together, and we’re starting to do that with the North Beach initiative—Ocean, Resorts, Steel Pier, the Absecon Lighthouse and us and the Tennessee Avenue folks—who are revitalizing that street. We’re trying to highlight the excitement that you find at this part of the Boardwalk. Overall, we need to ensure that we work together, create more infrastructure, organization and safety—and a clean city I think is really important.

ÂŠ2019 Association of Gaming Equipment Manufacturers (AGEM). Membership list current as of August 2019.

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