GGB Magazine Podcast: Recent Episodes
GGB Magazine
GGB Podcast with Maureen Beddis, senior vice president of membership and events at the American Gaming Association, and Korbi Carrison, event vice president, G2E, for RX USA.
Jan Jones Blackhurst, Executive Director, Blackfire Leadership Initiative, University of Nevada Las Vegas
This week the GGB Podcast sits down with Kara Fox-LaRose, the president and general manager of the ilani Casino Resort in Washington state, on how the property is beginning its transformation away from its management relationship with Mohegan Gaming.
Vice President G2E Event, RX; Senior Vice President, Membership & Events, American Gaming Association
When Eldorado Resorts bought Caesars Entertainment, New Jersey regulators required that Eldorado invest at least $400 million in its Atlantic City properties, which regulators believed were undercapitalized. John Koster was brought in to bring Caesars Atlantic City, Harrah’s Resort and the Tropicana up to snuff. When GGB first met with Koster he was explaining how he would achieve his goals. Last year, Koster proudly boasted of the plans for Harrah’s and Caesars and this year, the plans have been completed at all three casinos. Caesars recently opened a new show by the Vegas-based Spiegelworld with a new revue called The Hook. Other restaurants have also debuted, such as Gordon Ramsey’s Hell’s Kitchen and Nobu. Koster spoke with GGB Publisher Roger Gros via Zoom from his office in Atlantic City in August.
For nearly thirty years, Table Trac President & CEO Chad Hoehne has been at the forefront of casino management systems and related technology. The company’s CasinoTrac and Table Trac systems have long been a hit with operators everywhere, but now the company is taking another step forward, with plans to dive into cashless, a new enrollment kiosk and a shiny new office located directly in Las Vegas, Nevada. GGB He spoke with GGB Managing Editor Jess Marquez from his office in Minnetonka, Minnesota in August.
Bart Blatstein is a developer, with his main focus being in Philadelphia and later in Atlantic City. He arrived in Atlantic City about 10 years ago and bought development rights for the Pier at Caesars, which he dubbed the “Playground.” When that venture failed because of various economic and operational issues, he bought the former Showboat Hotel Casino and Atlantic City’s Garden Pier. He recently opened the Island Water Park adjacent to Showboat and it’s been a huge success. He talked about his Atlantic City developments, a possible Showboat casino and his faith in the future of the city with GGB Publisher Roger Gros from his home in July.
Few gaming executives in the world today have had a wider range of commercial, tribal, domestic and international experiences than Michael Silberling, CEO of Metropolitan Gaming. In 2021, when Silver Point Capital took over Caesars’ European, Middle Eastern and African operations to form Metropolitan, Silberling was tapped to take the reins, and he and his team are looking to take Metro to the top of a U.K. market that finds itself very much in flux. He spoke to GGB Managing Editor Jess Marquez from his London office in July.
This week’s podcast features Domenico Pastia, who is senior vice president of global product for gaming supplier IGT. Pastia, who has been at the center of IGT product management for nine years, talks about the company's multi-level progressive product strategy, including the new Mystery of the Lamp progressive.
This week’s podcast features David Lopez, CEO, and Julia Boguslawski, chief marketing officer of gaming supplier AGS. Both executives have been involved in the rapid rise of AGS in the slot sector for the past five years, and in the development of the GameON user conference, which just completed its sixth annual edition. They spoke with GGB Editor Frank Legato from their office in late June.
For Mark Birtha, it seems like he was always destined to work for Hard Rock International. That company’s corporate culture fits Birtha’s experience and philosophy toward operations like a glove. His previous experience with companies like Mirage Resorts, Las Vegas Sands, Marriott International, Starwood and Station Casinos was prologue to his hiring to run the Hard Rock property in Northfield, Ohio, just outside Cleveland. He quickly made that racino the most successful property in the state and that success attracted interest from MGM Resorts, which purchased the property in 2019. Birtha has since gone on to develop Hard Rock Sacramento for the Enterprise Rancheria tribe in California. He spoke with GGB Publisher Roger Gros in June.
For Mark Birtha, it seems like he was always destined to work for Hard Rock International. That company’s corporate culture fits Birtha’s experience and philosophy toward operations like a glove. His previous experience with companies like Mirage Resorts, Las Vegas Sands, Marriott International, Starwood and Station Casinos was prologue to his hiring to run the Hard Rock property in Northfield, Ohio, just outside Cleveland. He quickly made that racino the most successful property in the state and that success attracted interest from MGM Resorts, which purchased the property in 2019. Birtha has since gone on to develop Hard Rock Sacramento for the Enterprise Rancheria tribe in California. He spoke with GGB Publisher Roger Gros in June.
The life of a professional gambler can be very complicated now that sport betting is legal in the U.S. Once a sports book or online casino labels a “sharp” bettor, they impose rules and limits that make it impossible for the sharp bettor to win any substantial amount on their platforms. Spanky, a sharp bettor who escaped a job on Wall Street, has a team of analysts that look at all contests and decide which ones are beatable. Spanky’s clients get their recommendations and Spanky decides on the bets he will place but it’s mostly offshore books that accept his action. Spanky also runs a conference on sports betting, this year being held at Circa in Las Vegas on August 8-12. This year they will honor the first inductees to the Sports Betting Hall of Fame. He spoke with GGB Publisher Roger Gros from his home in New Jersey in June.
Legends Bay may have been the first new addition to the Reno-Sparks market in over 20 years, but it took more than a decade of trials and tribulations to finally open its doors in August of 2022. Ryan Walker stepped into the role of general manager earlier this year with decades of operational experience, including stints in Laughlin, Nevada overseeing the Edgewater and Colorado Belle Resorts as well as executive-level roles at Southern California’s Tortoise Rock and Spotlight 29 casinos. Walker sat down with GGB Managing Editor Jess Marquez at Duke’s Steak House inside Legends Bay in June.
Our guest for this week's GGB Podcast is Keith Kruczynski, vice president of studios for North America at Ainsworth Game Technology. Kruczynski is a veteran game designer and R&D executive, having spent 12 years as director of game development for the former Bally Technologies, followed by stints at IGT and, most recently, as the first vice president of game development for Gaming Arts. He joins Ainsworth as that company's game development efforts are expanding.
This week’s podcast features Acres Manufacturing, a company that is changing the way casinos market to and serve their customers. Noah Acres, a principal of Acres Manufacturing, speaks with Global Gaming Business Editor Frank Legato about Acres’ new cashless technology and new capabilities of the company’s Foundation casino management system.
In gaming, the voice of the regulator is seldom heard, which in some ways is part of the job. This episode, however, is lucky to have two such voices—Susan Hensel and Joseph Grad spent years together at the Pennsylvania Gaming Control Board (PGCB) overseeing one of the fastest-growing markets in the industry. Now, they’ve joined forces again to form Hensel Grad, a gaming law firm with world-class experience and expertise. The duo spoke about those formative PCBG experiences, the regulatory environment of today’s market and their future plans for Hensel Grad with GGB Managing Editor Jess Marquez in May.
Jeff Jordan is a slots guy through and through —he worked in slot operations for some of the highest-profile names in the industry, he teaches college-level courses on the subject at the University of Nevada, Reno, and now he’s developed SlotCycle, a revolutionary new platform for operators to buy and sell slots and other casino equipment. Akin to eBay and other online marketplaces, the company has also expanded greatly since its launch to include procurement services and other offerings. Jordan spoke with GGB Managing Editor Jess Marquez from his Las Vegas office in May.
In this week's podcast, Dean Ehrlich, executive vice president and games business leader for Everi, speaks with GGB Editor Frank Legato about the supplier's new Dynasty Vue cabinet, the company's hardware roadmap, and its entry into the historical horse racing market.
Since Andrew Burke took the reins as CEO of slot manufacturer Bluberi in January 2020, the supplier has grown from what had been a Canada-based Class II supplier into a significant player in the Class III slot sector, winning two awards in this year’s Eilers & Krejcik Slot Awards. Burke has augmented a strong team based in Drummondville, Quebec, Canada with many veterans of the Class III market, including IGT veteran Michael Brennan, now Bluberi’s chief product officer. Burke (along with Michael Brennan, now Bluberi’s Chief Product Officer) spoke with GGB Editor Frank Legato from Bluberi’s Las Vegas offices in April. (Listen to complete podcast above or see video below).GGB: Tell us what went into forging a new team at Bluberi that has so quickly expanded into the Class III market.Burke: Bluberi’s sort of an overnight success story that was about 30 years in the making, going back to the founding of the company on a rich legacy of high-quality graphics, entertainment-based games, and a really sound technology. We had this amazing core group of folks in Drummondville, Quebec, who have been working on this business for a really long time with a tremendous amount of talent. When we paired that with some of our newer key additions, Bluberi’s become a superpower for us. So, it does feel quick, but it’s been a long time in the making.What are you doing differently than past operations?I think there are quite a few things that we’ve been doing differently, but our culture lies in having the Canadian team and the U.S. team really finding a tremendous amount of common ground and working together. It’s blended together to create one culture... Everyone is really working together and is in sync.How have investments in research and development, and other areas, helped?We’re making a ton of investments in R&D, but I think for a company our size, you’d be shocked by the investments we’ve made in product management, gaming operations, analytics—tools to tie all of our data together and to make better decisions. We really pride ourselves for being a small company in over-indexing in all of those areas of the business, which are extremely important to take a little company and make it big, and to get where you want to go faster.To that point, you are now poised to grow. What is the plan for expansion in North America, and what’s next for Bluberi?We want to keep expanding. I think we will have access to roughly a third of total jurisdictions in the U.S. By the end of 2026, we’d like to be in every market in North America. We actually just started the process here in Nevada, so that’s about a 15-month timeline. So, our goal is to really keep pushing. We actually doubled the business year-over-year last year, and we’re on track to more than double the business this year. It’s surprised some people maybe, but we don’t view ourselves as underdogs anymore. We view ourselves as coming out of that emerging tier of suppliers and moving our way up into the next tier. And that’s really our goal—to build this into a long-lasting, really big business that competes in all segments of the market.With your higher profile, your products are getting more notice. Is there any concern you’re becoming more of a target for copy by other suppliers?We know it’s happening. We saw our first iteration of Devil’s Lock (award-winner for Top-Performing Game from an Emerging Supplier at the EKG Awards) at the Indian Gaming trade show, and people are taking notice of what we’re doing, and want to swim in that same lane that we we’re carving out and creating. We’re not going to lose too much sleep about it; we know it’s going to happen. We’re trying to be diverse in our approach, and we welcome folks to make (other) versions, as everybody in this industry does, and we’re excited about all the next things we’ve got.
Sequoyah Simermeyer was appointed by the President to a three-year term after the United States Senate unanimously confirmed his nomination in November 2019. As chairman, he is responsible for the federal regulatory agency’s daily operations including its eight regional offices as well as its national and local training and technical assistance efforts. He has taken some bold steps as chairman and kicked off some impressive programs designed to benefit Native Americans and operators alike. He spoke with GGB Managing Editor Jess Marquez at the IGA trade show in San Diego in March.
The El Cortez Downtown Las Vegas casino hotel and the operator Kenny Epstein are legends in the industry. Founded by Bugsy Siegel, later owned by Jackie Gaughan, Kenny Epstein has been in charge for at least 50 years. The Downtown renovation has given new life to the old lady, and constant renovations have made it a “hip” destination who’s demographics are largely 50-50 instead of the previous 70-30 local. He was jointed in the discussion with his longtime partner Mike Nolan. He spoke with GGB Publisher Roger Gros at the El Cortez last fall.
Sal Semola has almost 30 year experience in gaming management, with companies such as Greektown Casino in Detroit, Cannery Casinos and Warner Gaming in Las Vegas and several tribal and riverboat casinos. But it wasn’t until Semola was hired at Gun Lake Casino in Wayland, Michigan that he really hit his stride. He was able to advise the owners of the casino, the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, how to grow their casino while helping to diversify their economy. The tribe is about the complete phase 5, and most spectacular of its expansion project. He spoke with GGB Publisher Roger Gros from his home in Michigan during a winter storm in February.
London’s Hippodrome casino is one of the most unique in the world. With a history dating back over a century, the Hippodrome was a theater for much of its existence, hosting such events as vaudeville shows, circuses, aquatic extravaganzas, nightclubs and more. When Simon Thomas and his father Jimmy, who recently passed away, took over the property in 2009, they embarked on a complete restoration project that transformed the property into what it is today: one of England’s finest casinos. Simon Thomas sat down with GGB Publisher Roger Gros at G2E in October to talk about the past and the future of the Hippodrome.
Industry veteran Harald Neumann was named chief executive officer at Ainsworth Game Technology in September 2021, following a five-year tenure in the same position at Novomatic, Ainsworth’s majority shareholder. Since his appointment, Neumann has been focused on growing the North and Latin American markets, and the company’s historical horse racing (HHR) revolution has been a big part of that growth. Neumann spoke with GGB Editor Frank Legato at the Ainsworth booth at the G2E trade show in October.
While Bally’s is a very recognizable name in the casino industry, it’s current iteration is relatively new and has a much loftier goal that previous versions. Soo Kim bought the brand from Caesars when he was running Twin Rivers, a relatively small casino company based in Rhode Island. Kim has set a path to Bally’s becoming a true omnichannel gaming company that excels in online gaming, sports betting, land-based gaming and sports entertainment. Kim says it’s been more difficult and has taken more time than he originally estimated, but believes his company is on the right path. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Shape Games has been developing websites and landing pages that have been viewed by thousands of sports bettors for many years. Morton Tonneson, the CCO of Shape Games, explains how his company has been working with the sports betting platform provider Kambi on specific projects, but the time has come for the two companies to join together. The recent acquisition by Kambi will benefit Shape by providing its customers with state-of-the art player-facing technology. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Seasoned gaming veteran Joe Billhimer was named executive vice president of Cordish Gaming Group two years ago to direct the expansion of the company into Pennsylvania with the opening of the Live! Philadelphia and the mini-casino Live! Pittsburgh. Building the Philadelphia project during the pandemic was a challenge but well worth it as both casinos have achieved remarkable success over a very short period. He talks about how sports plays a huge role in the property’s plans since it is located in the Stadium District in Philly. Billhimer spoke with GGB Publisher Roger Gros in a suite on the top floor of Live! Philadelphia in September.
Mark Nerenberg began his career in finance, before jumping into the world of fantasy sports a decade ago. He co-founded DraftStreet, which was eventually sold to DraftKings, where he went on to serve as vice president of game operations and development. Now, as COO for Simplebet, a microbetting provider, he’s looking to revolutionize the way sports bettors interact with the game. Essentially, Simplebet’s technology provides bettors with a new breed of fast-paced, incremental wagering options—instead of betting on spreads or on totals, users can now wager on individual at-bats, drives, and other quick outcomes. Nerenberg spoke about the future of microbetting with GGB Managing Editor Jess Marquez at G2E in Las Vegas in October.
David Rebuck has completed over a decade on the job leading New Jersey’s chief regulatory body, the Division of Gaming Enforcement. Rebuck is the longest serving director in DGE history. During his term he has been responsible for the introduction of online gaming, the disruption of the Covid 19 pandemic, the quick implementation of sports betting following the Supreme Court’s PASPA decision, and the shuttering of four, and the reopening of two new casinos in the Boardwalk. He spoke with GGB Publisher Roger Gros at his offices in Atlantic City in August.
Todd Haushalter had risen to the pinnacle of his profession in 2015 when he served as vice president of table games for MGM Resorts. That followed years of working for table game suppliers, where he became one of the top experts in the industry. SO it was a surprise when Haushalter resigned to join Evolution Gaming, a small, at that time, European company that offered “live dealers” for online casinos. Since then, live dealers have exploded on the internet and Evolution is clearly the market leader. Haushalter has expanded the Evolution product offering to include betable game shows and explains why the live element of online gaming is still in its infancy. He spoke with GGB Publisher Roger Gros via Zoom in August.
Imagine This has been serving the casino industry for 20 years with more than 300 casino customers. Adam Bullock, the senior vice president of sales and operations, explains how the company’s incentive programs work by creating events that encourage players to visit a property over and over again due to the aspirational element of the Imagine This gifting programs. The company’s Casino Continuity Program is offered risk-free to any new client, leveraging the program to create incremental revenue at every turn. Bullock spoke with GGB Publisher Roger Gros via Zoom in July.
The Eastern market, particularly Atlantic City, has been a tough one for Caesars Entertainment. Prior to its purchase by Eldorado Resorts two years ago, Caesars had not reinvested in its resorts in the city—Caesars Atlantic City, Harrah’s Resort and the Tropicana—for some time, resulting in lower revenues and fleeing customers. John Koster was appointed president of the region just over a year ago and has overseen a renewed investment in the city. He spoke with GGB Publisher Roger Gros in a suite at Caesars Atlantic City in August. (See video below for complete interview, or listen to the podcast above.)
GGB: When Eldorado bought Caesars Entertainment, they promised regulators it would spend $400 million to upgrade the three Atlantic City properties. How much of that has been completed? John Koster: When we talked last year, it was a lot of talk from the company and myself but now the rubber has truly hit the road. We have seen a lot of progress. We just opened up Bobby’s Burgers the other day over at Harrah’s. It was a pleasure meeting Bobby Flay, and who knows? There might be future opportunities with him.
Hell’s Kitchen will open up to the general public on September 21. It’s a bilevel, 235 seats, and it is absolutely beautiful. In about a month we’ll be opening up the 185-seat Nobu restaurant. That is coming along beautifully. I’ve dined at the Las Vegas location several times and I must say that Caesars Palace does not have the view that Caesars Atlantic City is going to have of the Boardwalk and the Atlantic Ocean. It’s just fabulous.
We just talked to our partner on the Nobu hotel suites, and we’ve made some minor adjustments there, but that project’s going to begin very shortly. So we’ll have 83 rooms and suites in our Centurion tower on the top floors. And that will round out Caesars, and I think we’ll soon see that we don’t have enough Nobu hotel suites. That will be a future expansion project for sure.
We’ve also opened several more restaurants and outlets at Harrah’s and the Trop, and still have a few to go that will open before next summer.
What else is left?
We haven’t quite finalized the entertainment component. We’re still working with Spiegelworld, the company responsible for Absinthe and the Atomic Saloon shows at Caesars Palace, but Gary Selesner, who is helping us with all of our entertainment and higher-end restaurant concepts and used to be the regional president for the Western properties, will be out here soon, so that deal should be signed very shortly. And once it is, it will be all systems go, and then we will be hoping to get that project open by next July. That will be a unique show here in Atlantic City. And there will be a unique Italian restaurant concept included in that development.
There are lots of celebrity chefs in the Caesars properties in AC, at the same time the Borgata seems to be headed in a different direction. What is the strategy behind a celebrity chef restaurant?
We’ve had very successful relationships with our most recent celebrity chef arrangements. Hell’s Kitchen is on fire, to use a really bad pun, in Tahoe and Rincon—you can’t get in.
The Chef Nobu cache is very, very powerful. He has two restaurants in New York City and then with us having the first Nobu hotel and suites here on the East Coast, that will be very powerful. And added to Gordon, we all know how he does in terms of the celebrity. And then we’ve got Bobby and Guy Fieri. They all carry a lot of national branding all by themselves.
Are buffets dead in Atlantic City?
Caesars Palace has the Bacchanal. That’s the model. But it’s Vegas, right?—45 million people a year walking by with no seasonality.
We’ve had to right-size the whole company, so in terms of buffets there is a direction that the company is going to continue to follow. In Atlantic City, having a variety of quick-service, medium to high-end caliber outlets matched what our customer demographics are. If there’s a better model, we’ll find it.
You have the biggest sportsbook in town at the Wild Wild West. Is it sometimes hard to figure out how to utilize all that space?
I think with our mobile Caesars sportsbook, we’ve got 1.5 million people signed up, which is a massive growth with a huge amount from the New York City area. So we are beginning to see the cross-pollination of the digital and sports customer into brick-and-mortar. Was it too big a footprint to begin with? Probably. But is it going to be something that we can grow into Wild Wild West? I would say yes. Especially now that it’s football season.
Tropicana, by the way, has got a perfectly sized sportsbook. It’s surrounded nicely by gaming. That really is a great model, by the way. Our president and COO, Anthony Carano, came up with that model. The Harrah’s one is nice. It’s a little bit smaller. So you’ve got the three different sizes, if you will.
So with all these great changes at the Caesars Atlantic City properties, how are you going to inform the public?
By the time we get to next summer, everything should be done and open, so stay tuned. We want to make sure that people are aware of what we’ve got here. We really do need to relaunch Caesars in Atlantic City.
I must say our air program is continuing to flourish here in Atlantic City. We’re bringing people in from 49 locations around the country. That’s worked very successfully, bringing them right into the Atlantic City airport. We have the biggest air program here in Atlantic City, and that’s going to continue to grow.
As a media executive for the past 25 years, Anthony Gaud has an idea what people want. He won an Emmy for an innovative children’s TV program and now has set his sights on esports. His company, G3, is focused on advancing esports’ connection with gaming and has some unique ideas about how that’s going to happen. While he believes that betting on esports will largely be an online wager, he says esports an still play a role in the land-based casino by potentially working with the casino’s sportsbook. He spoke with GGB Publisher Roger Gros via Zoom from his house outside Atlantic City in September. (See video interview below, or listen to podcast above.)
When Korbi Carrison was named by RX as event director of G2E five years ago, she was the first person with a gaming background to take that position. With more than 20 years’ experience in gaming, now Event Vice President Carrison understands the concerns and issues that exhibitors and attendees bring to G2E. In her five years with G2E, she has helped to navigate the most disruptive business interruption in modern tradeshow history when Covid struck. When the 2020 show was cancelled, she helped RX partner American Gaming Association to produce a virtual show that made sense of both exhibitors and attendees. When G2E returned last year with major restrictions due to Covid mandates, exhibitors and attendees returned with lower expectations. But 2022 is different. With most Covid protocols set aside, expectations are sky high and Carrison is determined to deliver. She met with GGB Publisher Roger Gros via Zoom in August to explain what to expect at G2E 2022.
The Association of Gaming Equipment Manufacturers has had only three executive directors in more than 15 years. The bulk of that time was used by Marcus Prater, but when he retired last year, the choice was evident. Daron Dorsey had been a member of the AGEM board for several years as general counsel for Ainsworth, so he’s familiar with the organization and its processes. As gaming grows, Dorsey believes AGEM has a chance to grow just as quickly as the need for a group to represent the gaming suppliers and their issues becomes more crucial. He talks about AGEM’s new offices at the UNLV Blackfire Center and why he believes that puts the organization in the center of it all. He spoke with GGB Publisher Roger Gros from the Ainsworth Game Technology offices in June.
The competition of companies providing platforms services for iGaming and online sports betting operators has always been very fierce. As the chief commercial officer for Kambi, which is arguably the leader in that space, Max Meltzer learned all he could about the U.S. market and how to penetrate it. One year ago, he was named CEO of Strive Gaming, another European platform provider that has that special something, according to Meltzer. The company offers superior player management while being able to satisfy all the regulatory and compliance aspects of online gaming and delivering unique and innovative content. He spoke with GGB Publisher Roger Gros from the Strive Gaming Vancouver offices in August. (See video below.)
Regional casinos, particularly those owned by the major gaming companies, often need more to fill their rooms and increase their gaming revenues. MGM Resorts’ Beau Rivage in Biloxi is one casino that has perfected the process. Just last week, the casino welcomed its 1,000,000 customer in a program that started in 2008. Brandon Dardeau, the regional president for Beau Rivage, explains that a partnership with Sun Country airlines in 2014 has allowed the program to blossom and has welcomed visitors from 90 cities as far away as Minneapolis and New Hampshire. He also comments other marketing efforts and the recent sale of the Gold Strike resort in Tunica to the Cherokees of Oklahoma. He spoke with GGB Publisher Roger Gros via Zoom from his offices in Biloxi in August.
The future of iGaming in the U.S. is really open for discussion. For Oliver Bartlett, he believes he’s seen the future with the Evolution Gaming products he helped to develop. Now, as the director of gaming for BetMGM, he gets to implement those products into a company that has one of the largest market shares in the online casino space. He says the “live” dealer product is just in its infancy and the possibilities for the development of different products are endless. He spoke with GGB Publisher Roger Gros from his offices in New York in August.
As the gaming industry is about to publish record revenues for 2022, there are storm clouds on the horizon and the president and CEO of the American Gaming Association, Bill Miller, has his antenna up. Whether it’s higher gas prices or soaring inflation, he believes the industry will endure, however, because it showed amazing resiliency during the pandemic. He talks about issues that are important to the industry such as illegal gambling, whether it be online or in convenience stores, human trafficking and a possible smoking ban. Miller also discusses the much-anticipated G2E scheduled for Oct 11-13 at the Venetian Expo Center in Las Vegas. He spoke with GGB Publisher Roger Gros at the AGA offices in Washington D.C. in July.
Josh Swissman is a former gaming executive with deep experience in marketing after more than 15 years with MGM Resorts and Station Casinos. As a founding partner of the Strategy Organization, which is focused on developing strategies that drive meaningful results, enhance customer loyalty and create unique experiences, Swissman is a much sought-after consultant to gaming companies across the U.S. and Canada. He gives his thoughts about the recovery from Covid, the looming recession and inflation, and the spread of iGaming throughout the land-based casino world. He spoke with GGB Managing Editor Jess Marquez at his office in Las Vegas in August.
Higher gas prices and inflation are bound to hit the casinos at some point. So how do you show your customers you care about them and want them to continue to come to your casino? Paul Gordon, the senior vice president of sales for Rymax Marketing, gaming’s most successful gifting agency, says that gas cards don’t work. When casinos considering the kinds of gifts to give to their players, Gordon believes that it takes a lot of research and understanding your player base. He spoke with GGB Publisher Roger Gros via Zoom from his office in New Jersey in July.
The Council on Compulsive Gambling of New Jersey (CCGNJ) is one of the first responsible gambling organizations set up as gaming spread across the United States. Felicia Grondin was appointed executive director of the agency a year ago after a long career on the regulatory side. She has recently negotiated the use of one of the unforgettable phone numbers in the business—1-800-GAMBLER. Along with the Nation Center for Problem Gambling, CCGNJ will coordinate the use of the number on a nationwide basis, throwing desperate and troubled gamblers a lifeline just when they need it. She spoke with GGB Publisher Roger Gros via Zoom from the CCGNJ offices in New Jersey in July.
One million chairs is nothing to sneeze at and the folks at Gary Platt Manufacturing are justifiably proud of reaching that milestone. Founded by Gary Platt more than 30 years ago, the company basically invented the concept of chairs at slot machines and made the table game experience that much more comfortable. Despite the million chairs, Joe Esposito, the CEO of Gary Platt Manufacturing, explains why quality always trumps quantity in his company and how it is ramping up to reach the 2 million mark a lot sooner than 1 million. He spoke with GGB Publisher Roger Gros via Zoom from the Gary Platt offices in Reno in June.
Derik Mooberry spent most of his career with Bally/Scientific Games/Light & Wonder, eventually leading the gaming division of Scientific Games. Six months ago, he was named president of Zitro USA, a company founded by Johnny Ortiz and led by corporate CEO Sebastian Salat. Mooberry is charged with spreading the word about the Zitro games in the United States. He spoke with GGB Publisher Roger Gros at the GGB offices in Boulder City, Nevada in June. (See video below).
GGB: Those of us who cover gaming know what great games Zitro makes, but there are quite a few operators who didn’t get the memo. How are you going to change that?
Mooberry: Yes, there are a lot of people who don’t know who we are. And now that we’re just entering the U.S. market, we need to emphasize that we’re a very well established international company with over 1,000 employees around the world. The company started back in 2007, and Johnny Ortiz has a tremendous passion for games and content and making great products that make customers happy. We have bingo roots where we had tremendous success throughout countries in Latin America, primarily in Mexico, and there are still some people who see us as a bingo company.
So when did Zitro begin making Class III games?
A lot of our recent success and expansion are in the Class III video slot area. It was probably about 2016 that the company started making the transition to doing video slots in addition to bingo games, and that’s really taken off. Our goal now is to get customers in the U.S. market familiar with who we are and what our products are.
Why do you think the time is right now?
It’s what we’ve seen in other markets around the world. In places like Mexico and Argentina and other key markets, we go head to head with the biggest and best—the Aristocrats, the Light & Wonders and IGTs of the world. And we saw that our products could perform and then in some cases outperform those competitors’ products. So that gave us the confidence. I think that our content, our games and our cabinet strategy are ready for the U.S. market.
Tell us about the Zitro R&D department, which is often the heart and soul of any slot company.
Yes, you’re right. R&D is the foundation of everything for every slot company. We have over 300 people working in the R&D department primarily based in Spain today. Our products are developed over there, but they’re developed in such a way that we have global aspirations when developing the products. So we’re looking at what the market requirements are in the different regions of the world that we operate in. And then even here within the United States, within the different states. You can see dramatic differences in how a product needs to get set up within something that might go in Oklahoma versus what might go in a casino in Southern California. So it’s a growing R&D team with a number of resources behind it, focusing on all the normal elements you would expect to build the great slot content.
Tell us about your cabinets. We saw them at the Indian Gaming trade show in April, and they really popped.
Our new Glare product line features four unique cabinets, all different form factors, four different content streams to go on each of those cabinets. The Glare line has enhanced side lighting so you see 4K resolution on the monitors, which really bring the characters to life. I think maybe the ultimate compliment for us was the number of competitors that came to the booth to look at some of our products.
The Cordish Companies is a family business that stretches back for five generations. David Cordish is the chairman of the company that has been a pioneer of urban development in cities around the world. Ten years ago, Cordish got directly involved in gaming with the opening of Maryland LIVE!, one of the most successful casinos on the east coast. The company has since expanded into Pennsylvania and has grand plans for the future. He spoke with GGB Publisher Roger Gros from his offices in Baltimore in June.
Sports betting was legalized in Canada about six months ago and was recently launched in the country’s largest province, Ontario. Michael Lipton is one of Canada’s leading gaming attorney where he’s a senior partner in the Toronto office of Dickinson Wright. He explains how the legalization process went and how it will be implemented in the different provinces of Canada. In Ontario, dozens of sports betting sites and technology providers have been licensed but there are still a few areas where it’s uncertain what is legal and what is not or how it will be implemented. Lipton spoke with GGB Publisher Roger Gros from his home in Ontario in June.
Acres Manufacturing has made a splash since its launch two years ago. Founded by Gaming Hall of Fame member John Acres, the new company has updated the concept of loyalty programs—initially invented by Acres—with Foundation, a program that makes it easier to understand and apply player data. Now, its latest product, simply called Cashless Casino, allows operators to go cashless seamlessly. They only need to pick a payment processor and provide a mobile app. The casino’s app becomes the user interface, ensuring that branding is fully compatible with the rest of the operator’s player-facing options. The goal of all Acres products is higher loyalty engagement. Acres COO Noah Acres spoke with GGB Editor Frank Legato from Las Vegas late last week.
A recent restructuring of divisions of Aristocrat Technologies established three sections devoted to iGaming, social gaming and land-based gaming. Hector Fernandez was elevated to CEO of the gaming division at that time. He joined Aristocrat in 2018 as CFO for the Americas and EMEA after a long career in finance. With Aristocrat producing many of the most popular casino games, Fernandez could just steer the ship, but he understands that to stay on top, the company must continue to lead with innovation and compassion. He spoke with GGB Publisher Roger Gros at the company’s Las Vegas headquarters in May. (See video below).
You’ve been president and now CEO of Aristocrat Gaming for about two years now. What’s the most important thing you learned during that time here at Aristocrat?
Hector Fernandez: It’s all about our people. At the end of the day, every single thing we’ve accomplished over the last two years is because of our people and their resilience. Their commitment to the business. Our commitment back to them. And overall, quite frankly, it’s about picking the right people, setting the right expectations, setting the right rewards system, and setting the right accountability metrics.
At your last earnings call, Aristocrat Gaming produced a 41 percent increase in profits, and more impressively on your part, it was a 61 percent increase in the North American market, which, of course, you’re responsible for. How did you do that?
We talked about this through the pandemic—this concept that companies that continue to invest through economic shocks can actually leapfrog the competitors. And it’s one of the things that we, as a business, understood was important. We were fortunate that we had a strong balance sheet, and we just continued our D&D investment.
If you look at the number of games that we sold for the half, it was an all-time record half for us. It really is a byproduct of the choices we’ve made through the pandemic, starting with being there for our customers, through our Aristocrat Assist program. As we saw the world start coming back, we realized that there were going to be some supply chain challenges because those companies had kind of hunkered down, not spending as much money. So we saw that early on, and one of the things that we did is we were aggressive and took long positions of inventory. If you look at our results for the half, the reason we were able to fulfill all that demand, and the reason we had a very profitable business is because of our forward investment into inventory, that proved to be the right decision.
You’ve got a financial background. How does that help you manage the successful bottom line but also the creative side?
Having a finance background allows me to worry a lot less about the numbers on a day-to-day basis. I think when folks come up through different paths without a finance background, that’s where they have to spend the vast majority of their time because it’s a very hard skillset, and it requires a lot of experience. What really helped me is I’ve been able to spend more of my time on our people and our customers, and far less time on the P&L, if you will. Because within a 15-minute meeting, I can have a grasp of what’s happening, and what the future kind of looks like, based on trends, without having to spend hours of discussions.
Aristocrat has had a lot of breakthrough products over the last few years, the Buffalo series and Lightning Link, just to name the two that are most copied in the industry. How important are these products to the success of the company?
They are the backbone of what we’ve been able to build. If you think about Aristocrat seven or 10 years ago, if you think about our entry into the U.S., we were not anywhere in the top five.
We were able to take some of the lessons from the Australian market, which is where our roots are. A lot of the products that have been successful there, a lot of the math that has been successful there, some of the volatility from a game performance standpoint, we were able to bring it to this market, and over time, really accelerate the growth. So, today we’re the undeniable No. 1 player globally, not just in the lease market, but also now in the for-sale market. And it’s really behind these investments and some of these proprietary brands that we have built over time.
One of the new products we launched almost a year ago was Buffalo Link. And Buffalo Link is essentially Buffalo, with Lightning Link math behind it, and we believed it would be a fantastic combination. It was the most-anticipated game. It was the fastest-ramping game we’ve ever put out there. And we continue to have installs out in the marketplace. And so that’s been a very important part of our portfolio, this diversification element.
We were at the groundbreaking of your new manufacturing facility in Henderson, Nevada in April. There were over 100 employees there that will work in that building and they were clearly excited. How gratifying is that?
Honestly, every day I wake up—particularly in this new role—there’s over 4,000 families that depend on the decisions that our team makes and that’s the first thing I think about. And I think that people can feel that. People can feel that commitment for their personal well-being, their personal progression—the ability to create wealth over a lifetime of work. And they give us that love back. This is what I love about coming to the office—that gives me a ton of energy. It makes it so we want to win every day. And we want to win the right way.
Virginia Valentine has led the Nevada Resort Association, which represents Nevada’s largest resort casinos since 2011. As the pandemic winds down, she reflects on how the industry has rebounded and what this rebound says about the future of gaming in the state. But there are still areas that have not recovered and Valentine discusses the challenges facing the industry going forward. She talks about the increasing importance of sports and sporting events to the town now that it’s home to several professional teams. She spoke with GGB Publisher Roger Gros at the NRA offices in the Summerlin section of Las Vegas in May.
Bluberi was a small Canadian slot manufacturer that specialized in Class II games when Andrew Burke was hired to take them to the next level. With expertise in game development, he immediately began working with Bluberi’s design teams to make a splash in the Class III market. With a background in Class II and experience at AGS as their vice president of slot products, Burke brings a vision and strategy to Bluberi where he hopes to build the company into a powerhouse along with a vastly experienced team he’s assembled. He spoke with GGB Publisher Roger Gros at the Bluberi headquarters in May.
The payment industry has been evolving and PayNearMe had undoubtedly the most basic option when sports betting and iGaming were first legalized. In the early days of iGaming and mobile sports betting, at a time when credit or debit card transfers were difficult, where direct payments from banks were suspect, PayNearMe allowed players to head to a local shop or convenience store, deposit money in their account—for a fee—and go home and play. Leighton Webb, the vice president for iGaming and sports betting for PayNearMe, explains how his company has evolved and is now offering a full range of products and services for cashless transaction both online and inside betting locations. He explains how the PayNearMe strategy is to keep it simple for the player and profitable for the operator. He spoke with GGB Publisher Roger Gros from his home office in April.
David Lopez took over as president and CEO of AGS in 2014 and has led the company on an amazing growth trajectory. Previously the CEO of Global Cash Access and COO of ShuffleMaster, Lopez uses an unusual management style to get the best of his executives and employees. AGS table games and slot machines have created a wide variety of interest across the industry. This week, the company hosts its annual users conference at the Hard Rock casino in Hollywood, Florida, which is a unique event that educates customers not only on AGS products but more importantly on trends in the industry whether or not they are directly related to AGS. GGB Editor Frank Legato spoke with Lopez via Zoom from the AGS offices in Las Vegas in May.
As the founder of Ellis Island Casino Hotel in Las Vegas, Gary Ellis knows old-school gaming. He attracts players to just property, just off the Strip by the Vegas marketing tradition of cheap good food and a good gamble. But Ellis is also very tech savvy, and always wanted to be able to offer casino credit to players, but also to make sure they did use those funds for an interest-free loan. That’s where MarkerTrax was born and today it’s sweeping the industry. MarkerTrax is a simple tool that allows casinos to lend a limited bankroll to players but when it’s time to cash out, the player can only withdraw the amount they won. The system automatically settles the player’s marker before issuing the winnings. In partnership with Konami and other suppliers, MarkerTrax is available even in some jurisdictions where credit is not permitted. Ellis spoke with GGB Publisher Roger Gros at Ellis Island Casino in Las Vegas in early May.
The Wheel of Fortune is probably the most iconic slot product ever made, and it certainly is the most successful. In the 25 years since it was introduced IGT’s Wheel of Fortune slots have awarded billions of dollars in jackpots. The game’s 25th anniversary celebration culminated in “Big Money Week” in early May on the TV program, which boasts 25 million weekly viewers. During the week, hosts Pat Sajak and Vanna White highlighted several IGT WOF games as the centerpiece of each show. Jennifer Fales is IGT’s vice president of global licensing and a former 40 Under 40 honoree at GGB, and she explains the allure of the game and why it will continue to be one of the top casino games for years to come. She spoke with GGB Publisher Roger Gros at the IGT headquarters in Las Vegas in April.
Eldorado Resorts bought the Tropicana in Atlantic City in 2018, and it became part of Caesars Entertainment when Eldorado bought the gaming giant in 2020. Soon after that, Jacqueline Grace was named general manager of the property. A longtime executive with Caesars, Grace got her start in gaming as a President’s Associate in Atlantic City, a prestigious program at Harrah’s/Caesars that has produced many top leaders in the industry. She spoke with GGB Publisher Roger Gros via Zoom from her office in Atlantic City in May. (See video below).
GGB: You’ve been at the Tropicana now for about two years. What has been the most important lesson you’ve learned during that time?
Jacqueline Grace: My first two years at the Tropicana have been dynamic, to say the least. I started shortly after the Eldorado and Caesars merger, and smack in the midst of a pandemic. So there have been lots of complexities in addition to managing an already complex operation. We’ve been really busy on everything from integrating casino systems to reimagining our food and beverage footprint to driving employee engagement. That said, it has also been really fun.
But probably one of the most important things I’ve learned is about the pride of this Tropicana team. We celebrated our 40-year anniversary back in November and we had 54 day-one team members, and quite a few not far behind them. So what I really learned is how passionate and dedicated this team is to the Tropicana. People often use the word family to describe it. And it really is that.
You had the disadvantage of starting during the pandemic. How did you navigate your way out of that?
That was indeed a bit challenging to start at a property during the pandemic. The easy part was implementing all of the health and safety protocols that were required at the time, and by no means was that easy work. There was a lot of heavy lifting, but the team did a fantastic job. So I’m particularly proud of that. The more difficult work in my mind was navigating through and managing the morale of the team. So I really focused on two things—trying to get the message out to the team about what you can control what you can’t, and then practicing gratitude. And I think that went a long way with helping us ride that wave and then come out on the other side, a stronger and even more resilient team.
How important is retail and the dining and entertainment section of the hotel, the Quarter, to the success of the Tropicana?
The Quarter is incredibly important to the success of the property. With over 15 restaurants, 20 shops, 15 bars and lounges between the Quarter and the rest of the property, there’s so much variety there, and the lion’s share of those options are located in the Quarter. It gives us an opportunity to attract a pretty diverse crowd—folks who are just looking to do everything gaming or folks who may not be interested in gaming, but they want to have a good meal, a great drink, or do some shopping.
You just announced a lot of new food and beverage outlets and entertainment features. How are they going to fit into your current mix?
We are so excited about the new food and beverage concepts. The additions are part of the Caesars Entertainment commitment to invest $400 million into its Atlantic City resorts by 2023. And building on the Tropicana success over the last four decades, we are really thrilled to expand our offerings. And we are offering and introducing an unparalleled eight new concepts throughout the rest of the year.
When Eldorado took over Caesars, there were adjustments to the Caesars Rewards program. Some customers have been a little critical of that, so you how do you explain those changes?
As we integrated the Tropicana database into the Caesars Rewards network over the last year, it was quite a tremendous undertaking. I am really grateful to our team for doing an incredible job on that.
Overall, I’d say these changes are overwhelmingly positive and I hope our customers would agree. Caesars Rewards has been, and still is, the most prominent loyalty program in the country. Here in Atlantic City, we can now offer our guests more ways to earn and more ways to redeem rewards. Not only is the experience the best of what AC has to offer at the Tropicana, Harrah’s or Caesars, but also by being a part of Caesars Rewards, we have the opportunity to offer our customers really great gaming and entertainment experiences across the country at some of our other destinations, including Las Vegas, Lake Tahoe and New Orleans.
When the San Manuel Band of Mission Indians went shopping for a Las Vegas casino to buy, it wasn’t long before they settled on the Palms, which had been closed for two years after a half-billion dollar renovation under the previous owners, Station Casinos. Latisha Casas, the chairwoman of the tribe’s gaming business arm, the San Manuel Gaming & Hospitality Authority, explains why the tribe decided to venture into commercial gaming and what they hope to achieve. Former MGM executive and now general manager of the Palms Cynthia Kiser-Murphey talks about the strategies to build the database, attract the loyal Southern California players of the tribe’s Yaamava’ casino and contribute to the Las Vegas community. They spoke with GGB Publisher Roger Gros just a day before the property reopened in the Hardwood Suite in late April.
Sequoyah Simermeyer, a member of the Coharie Indian Tribe of North Carolina, was appointed to the National Indian Gaming Commission in 2015 as an associate commissioner. In 2019, he was elevated by President Donald Trump to chairman and confirmed by the Senate. His term will expire in 2023. Prior to his role with NIGC, he worked as an advisor to the Senate Committee on Indian Affairs. He began his career with the National Congress of American Indians, a national intertribal organization focusing on the protection of tribal governments’ rights and status. He spoke with GGB Publisher Roger Gros at the Indian Gaming ’22 trade show and conference in Anaheim, California in April.
GGB Podcast sponsored by IGT.com
Richard St. Jean is a veteran leader in the gaming industry, working for Caesars, Station Casinos, Penn National Gaming and now as the chief operating officer of the Morongo Casino Resort & Spa. He joined Morongo two years ago just prior to the pandemic and as the casino resort was being renovated. He spoke with GGB Publisher Roger Gros via Zoom from his offices in Morongo, joined by Simon Farmer, the property’s executive director of marketing. (See video below).
GGB: Why don’t we go back to the time when you joined the property—you arrived about halfway through the renovation process, is that right?
Richard St. Jean: Yes, I got here in Q4 of 2019. So, I’d say it was about 50 percent to 60 percent completed. The renovation of the existing casino space was materially under way, but we still had a long way to go.
Did you have any influence in the design and the operations of the process at that time?
In the main casino, I think the program was pretty much baked in. But as we get into the expanded area—65,000 square feet—we had lots of opportunities to really improve the connectivity, sightline, circulation. But as far as the box itself, that remained pretty much the same.
So, you got there right before Covid hit. That must have been a little disappointing for you.
I came out of retirement going on two years to take this job. And I told my wife, “I do not want to open a property. I’ve done enough of those.” I knew I was coming into the renovation and expansion, and I enjoy those projects. But then Covid hit and shut us down. We probably worked harder when we were down trying to formulate the plan for reopening. We opened with about five days’ notice, and we were also first to market at the significant casinos in the L.A. area. So it was like New Year’s every single day, post-opening. We opened with 1,700 team members; we could have had 2,400 or 2,500. But it was all hands on deck; we made it happen. But it certainly wasn’t without a lot of pain.
But even with the shutdown, we were thrilled with our overall performance for 2020. We were relatively flat, even after being closed for two and a half months, compared to 2019. The team really pulled it off. As I tell them: They moved mountains and pulled off miracles. So, it was a pretty strong way to end the year.
Explain how the resort has changed, with the renovations, and new food and beverage outlets, and the larger casino.
We renovated the hotel rooms, the suites, the casinos, the cabanas. So, really the entire property has a new feel and then, in conjunction with that, we started to deploy technology—beautiful TVs, electronic keys and all the other items you take for granted in a modern hotel.
Tell us what happened with the buffet.
I think this is probably one of our favorite stories about the renovations. Our buffet was very dated, and then obviously with the onset of Covid, a lot of these questions about buffets came back. And we had already been in concept discussions with a number of people, on what this could look like going forward. And we looked at numerous iterations, and what it could be, what it should be. We started taking inspirations from places like Faneuil Hall in Boston, Eataly in Chicago, the Ferry Building in San Francisco, and the list goes on. So we partnered with Fabio Viviani to create the Marketplace. It transports you from Cabazon, California to literally any state or city around the country. But then our customers told us, quite succinctly, that they wanted a quality product at a reasonable price, that was fairly quick. And I think the Marketplace hits all those points.
In April, Morongo opened a new poker room and a bingo room, at the tribe’s original casino, now called Casino Morongo. Tell us what those are going to bring to your property.
When that property was opened, as we began construction on the renovation, originally it was with a pure intent of supply and demand for construction disruption. And the place did better than we expected, and we kept it open, particularly with the demand that we had post-opening from Covid.
There had been consideration years ago about putting bingo and poker back there—it frees up space in the main casino where we had a temporary poker room set up. So, we jumped in with both feet, and we came up with a design of the right size program, and it’s really created a full-service property.
The original casino looks like a brand-new facility. So, we are really, really excited about the potential that has. And I think, too, that our tribal members and elders, they love to play there. They grew up there, to a degree.
Morongo has always had some great leadership, and with the recent retirement of the former chairman, Robert Martin, and his successor, Charles Martin. And the tribe was involved in the birth of Indian gaming as a participant in the Cabazon decision that legalized tribal gaming across the country. What does that mean for the tribe?
It’s so humbling, because they’re doing it for all the right reasons. This has been passed on to this current generation, and they really want to perpetuate it, diversify it, so we’re ready for what comes next. The people you see getting involved on tribal council, the members, they definitely have this common core value of how we perpetuate this. For the tribal members, the elders, and even some people on our council to this day that were very instrumental, they take tremendous pride in pulling that off.
Tom O’Brien was named president of Aristocrat for the Americas and the EMEA region after spending two years as general manager of the company. O’Brien has a long history in gaming, starting as an operator in Atlantic City and later moving to the supplier side. In addition to Aristocrat, he has held senior roles at Interblock and Scientific Games. He discussed his new job with GGB Publisher Roger Gros at the Aristocrat headquarters in Las Vegas in April. (See video below)
Congrats on your new role as president of Aristocrat. Give us some idea of your responsibilities in this role.
The roles and responsibilities have changed dramatically. As general manager, I was pretty much doing customer relations. I would visit the customers and talk to all the bigger customers we had. I’d take Hector (Fernandez) to introduce him because he was primarily new to the business. So now Hector moves to CEO of land-based gaming. I move into the president spot, and the responsibilities have changed.
This is your second go-around with Aristocrat. What convinced you to come back?
It’s a great story. I was asked to come back, and before I agreed, I was asked to meet Hector. I went out and met Hector for a cup of coffee for 30 minutes. It turned into three hours. So the rest of it was history. Hector and I started working together on March 2, 2020, and we’ve never stopped. We’re closer than we’ve ever been. Even when Covid changed things dramatically, it was a good time for us to get together and do all the hard work we did.
Even though the world shut down that March, Aristocrat did not.
We did not shut down design development. We didn’t shut down our service teams. As a matter of fact, we went out there and started talking to our customers about what we could do for them during this down time. How can we help you? Customers were scrambling to try and move their slot machines from rows of machines to pods. We were there to help them for that. And on top of that, our design development teams just kept on working tirelessly every day. And the proof is in pudding now, as you can see we keep coming out with product after product making the top 10, top five and even No. 1 in several categories.
Aristocrat has had a lot of breakthrough products in the past few years, such as the Buffalo series and Lightning Link. How important are those products to the success of the company? Is it the math?
They mean everything to us. Dragon Link is the No. 1 game right now. Our job is to keep giving the customers what we they want. So we keep refreshing those games and it seems to be working well for us.
As for the math, I’ve been doing this a long time, and everybody asks that question. What I’ve learned from this company is, it has a lot to do with game mechanics along with math. Math is one way to make your customers happy, but the game mechanics themselves have to be pretty exciting as well. If they’re not, you can usually lose a customer pretty quickly. We just continue making game after game and the customers seem to be enjoying it. So we’re happy about that.
How do you keep that innovation going? Is it all in the game studios?
I’d like to know the magic sauce myself. They don’t exactly give it all away to us. But I will tell you after being with the studios that they just don’t stop. Whatever they’ve done in the past, they look at it and say, how can we do a better job? Our studios are very intelligent. They test the games, put them out in the field, they see what the customers like, what they don’t like. And we try to help them with that commercially as well and give them the feedback that we get.
As major gaming companies cross the threshold between land-based and online gaming, with sports betting thrown in for good measure, they have to adjust their loyalty programs. At Penn National Gaming, Jennifer Weissman and Todd George are in charge of that effort. Being able to reward customers for all their play whether it’s in the casino, online or on the Barstool sports book app, Penn takes a holistic view of its customers and provides the service and recognition that is necessary to keep pace with this rapidly expanding technology. They spoke with GGB Editor Frank Legato via Zoom from their offices in Las Vegas for a story he wrote about the fast-changing world of loyalty programs in the May issue of GGB.
Sega Sammy is a Japanese company with divisions that include developing innovative video games and pachinko machines that serve the massive appetite for those games in Japan. The company has been trying to penetrate the slot machine industry for over a decade with fits and starts. Two years ago, Sega Sammy created a U.S. division, Sega Sammy Creation, to accelerate that effort and hired former IGT executive Scott Winzeler to run it. Winzeler explains how he’s been methodically approaching slot development in the U.S. and why tribal gaming and HHR racing machines are big parts of the plan. He met with GGB Publisher Roger Gros at the Sega Sammy Creation office in Las Vegas in March.
One of the major changes in gaming in recent years has been the move to cashless transactions on the casino floor and elsewhere in the resort. Global Payments Gaming Solutions is one of the leaders in the field and President Christopher Justice explains why. The company’s VIP Mobility product allows players to fund their accounts, transfer money to slot machines or table games, or make any other purchase in a casino resort. The system is agnostic and can be used in almost any gaming situation, including online. It can also provide operators with information that will help them with AML processes and responsible gaming information. He spoke with GGB Publisher Roger Gros at the Global Payment offices in Las Vegas in March.
Derek Stevens arrived in Las Vegas in 2006 when he and his brother purchased the Golden Gate casino at the entrance to Fremont Street. A few years later, they added the former Fitzgerald’s casino, now known as the “D” casino hotel. And just last year, Stevens opened the crown jewel of his properties, the first brand new casino on Fremont Street in more than 50 years, the Circa Resort Casino. Circa features the world’s largest sports book and a pool experience unlike anything in the world. GGB Publisher Roger Gros sat down with Stevens at his offices in Circa in February. (See video below).
GGB: How has Circa performed since you opened in the midst of the pandemic? Has it hit your benchmarks?
Derek Stevens: Everything has played out pretty well overall. This was a five-year project, and when the pandemic hit in March of 2020, we knew we were going to be opening in 2020. So we couldn’t halt a project when you’re 85 percent of the way done. In retrospect, I feel very fortunate that we didn’t halt. We were never really going to, but those questions came up from lawyers and other bankers and folks like that. We really never considered it. But in retrospect, if we would have held off, what a calamity that would have been for a lot of different reasons.
First, the last eight months of the build we had to procure quite a bit of material. We would have had to let our staff go, and if you don’t have a crew, you can’t just snap your fingers and round up the team again. Then we would have had massive, massive supply chain issues. If we had shut down, the actual cost of the project would have probably increased a couple hundred million dollars, and the big thing is, we probably couldn’t get it done in three years.
Operationally, we did just fine. And we had a big, big step that happened in September last year, and we were able to refinance our original construction loan, and turn it into a normal conforming bank loan. That’s a real big step for an organization like ours because we effectively reduced our interest rate by 8 percent. Everybody understands what it’s like to refi your mortgage at a lower rate.
Your sportsbook was the talk of the town when you first opened, along with the pools. What kind of reaction did you get from your customers when they first showed up, and has it continued to really do well?
Everything we designed here is (because) we really wanted to create those “wow” moments. And the world’s largest sportsbook is one of them. When you come out of the door at Legacy Club on the roof, that’s another “wow” moment. And then when you walk into Stadium Swim, you get that “wow” moment. That’s how we designed them, and they’re working out as they were designed. So, it’s been great.
Circa Sports also runs the sportsbooks at Joe DeSimone’s Pass casino in Henderson and the Tuscany. Has that been working out for you?
Yes, at the Pass it gives some customers the flexibility, if you happen to live in that area, to pop in. Our location at Tuscany has been really just outstanding, to go along with our three here Downtown. We’re looking forward to adding another location here shortly.
How is Circa Sports performing in states where you’re operating it?
Right now, we’re in Colorado and Iowa, and we’ll soon be in several other states. It’s going great there and we expect to become a respected brand in the sports betting world very quickly.
In terms of the hotel, is your occupancy rate what you projected?
Yes, since the day we opened. I mean our ADR is a little higher than what we thought we would be able to get, and the occupancy has been great. The bookings have been solid, and I’m back to the old days, where I can’t wait to go to my casino host meeting tomorrow. That’s full of arguments, because we don’t have enough suites.
It’s been kind of a chilly winter here in Vegas this year. Has the pool concept worked as you thought it would when you first started?
When it’s cold and windy in Vegas—which doesn’t happen all that often—it can get pretty chilly. But when it’s cold and windy, and you’re in the water, you hold your beer at your neck level; it’s beautiful. Let’s say there’s a big hockey game, or a basketball game on, and there’s a lot of people at the pool. With the dark sky in Vegas, and that big 143-foot screen, and you’re hanging around with some friends, it’s pretty cool to be out in a body of water in Vegas watching a great game.
What’s next for you? Are you happy Downtown? Are you interested in ever looking at the Strip or beyond?
When I first bought the first property on this square block where Circa is now, the Las Vegas Club, that was August of 2015. It took five years trying to get this up and going. And remember, I’m really not a developer. I’m an operator. And I’m proud to say I’m an operator. So after five years on the development side I’m just enjoying operating this property.
We just finished our first year. So, I’ve only gotten one lap under my belt here. One Super Bowl, one March Madness. I’m looking forward to having the opportunity to say, “OK, we’ve done this once. Now make it better.” We’re all about continuous improvement, and I’m going to enjoy operating here.
Many experts in the sports betting world believe that streaming games live on sports betting platforms will boost revenues and increase participation. Fubo Sports has the unique ability to do that because of its connection to Fubo TV, a streaming video service that specializes in live sports. Scott Butera, who has experience in all aspects of the gaming business from tribal gaming to commercial to online and sports betting, is CEO of Fubo Sports and explains that the company can draw from Fubo TV subscribers, who are the exact demographic that enjoy sports betting. He says that the live streaming aspect of Fubo Sports will also bring subscribers to Fubo TV making it a win-win for both division of the same company. He spoke with GGB Publisher Roger Gros from his home office in Las Vegas in February.
When the Twin Rivers company of Rhode Island bought Bally’s Atlantic City in April 2020, it changed the entire company. Already a fast-growing gaming company, the purchase of Bally’s, and a few months later, the brand Bally’s, it gave Twin Rivers classic gaming identity and since then the company has rebranded all of its casinos. Helping to make that happen are the father-son team of Phil Juliano, Bally’s executive vice president, casino operations and chief marketing officer, and Paul Juliano, the senior vice president of operations. While the Bally’s Atlantic City buy was important, the property required a complete renovation, something that Phil says will happen by Memorial Day. Paul, meanwhile, outlines the changes in Atlantic City and across the Bally’s portfolio of properties. They spoke with GGB Publisher Roger Gros via Zoom in late February.
Matt Wilson was appointed the CEO of the gaming division of Scientific Games in 2020, right before the pandemic. He explains how the name change from Scientific Games to Light & Wonder Inc. was accomplished and why. He talks about the structure of the company and how it is now laser-focused on creating great games. He spoke with GGB Publisher Roger Gros just days after the name change was announced at the Light & Wonder headquarters in Las Vegas. (See video below)
GGB: The new name is almost a direct opposite of the previous name. How did that happen?
Matt Wilson: Well, it was almost our intention to do that. We’re saying we’re out of the laboratory and into a world where we create great games. There was nothing really scientific about the way we created games. Game designers have these brilliant ideas. They’re creative, and there’s no science involved.
What was the driving force behind the rebranding?
So much has changed here in the last two years. I started in March 2020, walked straight into the pandemic, and it’s been a roller coaster ever since for everyone, for every part of the industry, for every supplier and operator. Probably the biggest thing was we had a new chairman and a new vice chair come in at the middle of last year, Jamie O’Dell and Toni Korsanos. And they initiated a strategic review of the business. One of the big challenges that we had was that we came together through acquisition, and with that came a heavy debt burden.
What did you find?
We looked at all the assets in the portfolio. We had a very diverse portfolio across all the gaming segments. The strategy was wherever a player wanted to place a bet, we wanted to be there to facilitate that, whether that was a scratch lottery ticket or a sports wager or a slot machine or a table game product—we wanted to run the full gamut.
But we made the bold decision to divest lottery and sports, and we thought that those two businesses would be very good as stand-alone organizations. The core competency of the lottery business is building scratch lottery tickets, and distributing those into retail locations all around the world. That couldn’t be more different from building a Willy Wonka slot machine with animations and sounds and graphics. So we sold the business, and with that went the brand, because the brand had a whole lot of equity with those lottery customers. That left us in a position where we had to rebrand out of necessity.
Did you have a list of names that you were considering?
The last thing we wanted to do was have a bunch of executives in a board room coming up with names that they thought were cool to rename the company. So we went through a stakeholder-led process. We did a lot of surveys and engagement with employees. It’s largely an employee-facing brand. That was the primary focus for us, but we also interviewed customers, and asked them what’s important to them. And obviously, great games are important to them.
Then we engaged a company called Lexicon. Their whole business is built around naming companies. They came up with 2,700 names, and we started to whittle them down. Obviously, one of the key things is trademarking. We came up with a lot of great names that ultimately couldn’t be trademarked, so it’s a small universe of names that are applicable. We just narrowed them down through natural selection and we ended up with Light & Wonder, which I think everyone will warm to over time.
With sports betting and lottery gone, how does it change the corporate structure?
The things that are left in the portfolio now are businesses that actually really fit together and belong together, and in a very competitive world, that’s what you need. You need a flywheel where all these businesses actually fit together, belong together and can add to each other. So what’s left is the land-based gaming business, which I run. Then we have the social casino business, SciPlay, that’s all about building great games, deploying them in a social format. And then you have the iGaming business, which is all about slot games for real money.
Earle Hall has been ahead of the gaming industry for much of his career. His embrace of technology and analytics has led the way and resulted in the creation of his company, Axes.ai. Hall has long been an advocate of using the cloud to store and analyze gaming data in order to protect it and provide up-to-date suggestions for gaming operators. With the embrace of cashless transactions, Axes.ai has streamlined the process and allows operators to use it with confidence. He spoke with GGB Publisher Roger Gros at the Axes.ai offices in Las Vegas in January.
Real estate investment trusts have been used in many industries, including the hospitality industry, but gaming remained untouched until Peter Carlino spun off Gaming & Leisure Properties, Inc. (GLPI) from Penn National Gaming in 2013. When the transaction immediately produced value for both Penn and GLPI shareholders, the race was on and both Caesars and MGM created their own REITs. Carlin and Matthew Demchyk, the senior vice president and chief investment officer for GLPI, explain why REITs make a lot of sense in the gaming business and why the potential for gaming REITs is still growing. They joined GGB Publisher Roger Gros and editor Frank Legato in early February from the GLPI offices in Reading, Pennsylvania.
The phrase “skill games” means many different things in different parts of the industry. In mobile gaming, it can be play-for-free games, but the real gold mine is in real money games. Peter Gan heads a company called Royal Wins and has developed mobile real-money skill games that have had great success in the jurisdictions where they are offered. He points out that because there is skill involved, there are different regulatory environments, which sometimes aren’t as onerous as games that depend wholly on chance. He spoke with GGB Publisher Roger Gros in January from his offices in Australia.
Anthony Cabot is one of the most effective gaming attorneys in the industry, so it was no surprise when he was named Distinguished Fellow in Gaming Law by the Boyd School of Law at the University of Nevada, Las Vegas upon his retirement. But you can’t keep a good man down, so he’s been able to promote the law school and recently was included in an announcement that Entain, the British iGaming provider, would launch an online gaming program for operators, regulators, lawyers and others who work in and around the global gaming industry. He spoke with GGB Publisher Roger Gros via Zoom from the law school in January. (View Video Below)
GGB: What does it feel like to be able to shape the next generation of gaming attorneys with this new program?
Anthony Cabot: It is actually quite a lot of fun because one of the great advantages of being at UNLV and particularly at the law school is that they bring in people from all over the world. So now I get the opportunity not only to deal with a lot of young students, but also a lot of people who have experience in gaming and regulation in countries throughout the world. So it’s been very rewarding.
How did the program come about? Was it Entain’s idea?
They told us that they were interested in helping us sponsor an executive education program. One of the things we always hear at our G2E booth from people from other jurisdictions is that they don’t have time to go back to law school and become a lawyer, but gaming law is really important to what they do. They could be compliance officers or internal audit officers or regulators. So we’re going to have a program that’s going to be for non-lawyers.
What are some of the classes you’re going to offer?
I will be teaching a class called Intro to Gaming Law, which is kind of an overview of how gaming law covers all sorts of topics—licensing, anti-money laundering, internal controls, technical standards, and many other things. But at the same time, the students can take a number of other classes.
Bill Buffalo, a longtime industry member, is teaching Gaming Operations in the Law. That will be more applicable to somebody who’s an executive and wants to learn more about how gaming law impacts operations. Katherine Rand and Steven Light, very well-known professors in the area of Indian gaming, are going to be teaching a class on Indian gaming law. And Alan Feldman and Dayvid Figler will be teaching a class on problem gambling and responsible gambling.
That’s our first four. We’ll probably end up with a total of about eight to 10.
What will be the format?
It’s all online. About 80 percent of it is pre-taped, so they can go through the lessons at their own pace, along with the materials to read, quizzes and things of that nature. And then about 20 percent of it will be online, so we can have interaction with the students.
You wrote an article for GGB in our January issue on responsible gaming programs in Nevada. For a state that depends so heavily on gaming revenue, you said it had become a big problem for state regulators. What has the response been so far to that article?
It’s interesting. I’ve actually gotten some response, but I haven’t heard anybody from Nevada specifically. But I’ve heard from regulators in other states who’ve told me this is worth talking about and that there’s a need for a different approach. They like the idea of having some carrots instead of going back to the old method where you punish people for not meeting certain standards.
One of the big problems is that the state is awful with regard to funding. They give a funding amount of about $1.5 million per year. For an industry that’s generating $12 billion a year that is very little money. We try to get the majority of that money into treatment, and that’s fine, but we don’t even understand the scale of the problem because we haven’t done any prevalence tests. Right. We don’t know where the needs exactly are in the communities that need these services. But the legislature has not responded.
When the deal was struck to sell William Hill to Caesars Entertainment last year, Joe Asher, the president of William Hill US—the part of William Hill that Caesars really wanted—had to find another job. It happened sooner than expected as Asher accepted a position with IGT to lead the company’s sports betting division. A pioneer in U.S. sports betting, Asher rose from a humble beginning in the Delaware horse racing business to experience the full roller coaster that was the legalization of sports betting in the U.S. He spoke with GGB Publisher Roger Gros at the IGT headquarters in Las Vegas in February. (See Video Below)
GGB: You had just completed the massive deal selling William Hill to Caesars when you got another job. What really attracted you to IGT to become president of the sports betting?
Joe Asher: After the Caesars deal closed, I had no idea what I was going to do next, other than being dead set on taking the summer off and going to Del Mar (racetrack in Southern California), which was great. I got a call from Enrico Drago, who’s now my boss. I’d been friendly with Enrico because William Hill and IGT had partnered to win the sports betting contract for the Rhode Island Lottery. He called me over the summer, and my attitude at that time was listen to everything, commit to nothing. I told him to call back after the summer when the kids are back in school. So on the first day the kids go off to school, it’s quiet in the house. It’s 9 o’clock, what am I going to do? Right then, Enrico called me. He had remembered that was the first day of school. So we started a discussion that eventually morphed into a full-time job and started October 1.
IGT obviously has a great reputation in the industry. Is the PlaySports program what sets it apart from your competitors?
To set the foundation, it has all the hardware and software you need to operate a sportsbook. You have two choices when setting up a sports betting operation. If you’re a big enough operator, you can own your own technology, but that comes with great cost. If you’re not, or you don’t want to own your own technology because of the cost, you can use third-party technology. And an IGT is an obvious place for a lot of people to look because they’re already using IGT products today. The customer base is a mix of pure online sports betting companies, like FanDuel, and big companies and organizations like the Rhode Island Lottery or casino operators like Boyd Gaming or Resorts World in Las Vegas.
Then all these tribes across the country that got the right to offer sports betting under their compacts are obviously familiar with IGT. The technology is very modular so it facilitates integrations quite easily. And once you learn how to use it, it’s fairly straightforward.
How many more states do you expect to legalize sports betting?
My prediction is that sports betting will be legal in all 50 states. I know people say, “Oh, it’ll never happen in Utah,” but I truly think it will be all 50 states. I’m not going to give you a date, but the public clearly likes to bet on sports. The leagues have embraced it firmly. Through advertising, the knowledge of its availability is quite apparent to everyone. They’re having record ratings for the NFL playoffs. Yes, the games have been great, so people stay engaged, but the tuning in to begin with is some aspect of that because they can now bet on it.
There are so many sports betting operators with market share in single digits. Consolidation is coming at some point, so when is that going to really start?
It started a little bit last year with Penn buying theScore, and DraftKings buying Golden Nugget Online. As consolidation continues, there’s going to be a handful of major operators who have the ability to compete. There will be niche opportunities for others in particular regions and particular markets. Some of them will throw in the towel or be acquired for less than they’ve invested. I think that’s inevitable.
What do you think is going be the big accelerator of revenue growth in sports betting? How much will in-play betting contribute to that?
In-play betting has always been an important and growing part of the business. But what people principally are betting in play, by the way, is on the outcome of the game, not on whether the next play is going to be a run or a pass. That’s very granular, frankly. It’s disruptive to the viewing experience.
I think video streaming integrated into the sports betting app is clearly one area where the business is going to grow. So if I’m watching a game on my phone, the betting options will be overlaid on the video.
Personalization is another area where I think we’re not anywhere close to where it ought to be. For example, I like to bet the under on the Golden Knights hockey game. So if I log in a half hour before puck drop, the first betting option I see should be that, to make it more efficient.
You mentioned some of your clients—FanDuel, Rhode Island Lottery and others. How do you scale what you offer to these big clients so smaller clients can also afford it?
It’s a function of trying to keep the infrastructure costs relatively low so we can offer something directly for that customer on a cost-efficient basis. Folks realize that sports betting brings people into the property. There’s no doubt about it. And then once you get them into the property, you have a shot to get them to do something else, whether it’s play the tables or slots, eat at a restaurant or go to the spa. I’ve said this before. I think sports betting is the single greatest customer acquisition tool in the history of the casino industry.
Andrew Cardno is a legend in the gaming industry. For years, he has been an advocate of being able to access and interpret the millions of data points in the data banks of every casino operator. Cardno has joined with another legend, Ralph Thomas, to create their groundbreaking company Quick Custom Intelligence or QCI. The company has created platforms that enable casino executives to access and interpret data about customers, slot activity, marketing applications and loyalty programs so they can give their players what they want. QCI makes extensive use of artificial intelligence along with blockchain technology to create programs that gaming operators can easily understand and apply. He spoke with GGB Publisher Roger Gros in January from his office in San Diego.
Cynthia Kiser Murphey had a long and distinguished career with MGM Resorts, leading its human resources efforts for 15 years and later as president and CEO of New York-New York in Las Vegas from 2008 until May 2020. She was recently hired as the general manager of the Palms Casino Hotel in Las Vegas, which is now owned by the San Manuel tribe of Southern California, the first Las Vegas casino resort owned and operated by a Native American gaming venture. The Palms will reopen in the spring. Murphey sat down with GGB Publisher Roger Gros on the day after the deal with previous owner Station Casinos closed.
GGB: What attracted you to the Palms?
Cynthia Kiser Murphey: I think the Palms is a very unique, and a bit of a boutique asset for our community and for our industry, and there are tremendous opportunities to leverage everything that the Palms has. A meticulous job was done to remodel and to carefully think about how to reenergize and refresh it. So it’s a real opportunity to take what’s here.
Station bought the Palms three years ago, and they were able to put half a billion dollars into renovating it. It’s a beautiful property; it’s still almost brand new. What do you have to do to open the doors?
Well, first and foremost, hire back 1,200 Las Vegans—get 1,200 Nevadans back to work. That’s super important.
There’s a bit of work to do operationally too. When we were with the Gaming Commission yesterday, I made reference to “If you leave your TV turned off for a couple years…” So the sportsbook needs technology as well as other areas of the resort.
We also need to do some work in the back of the house to refresh some of the employee areas, and make that more consistent with the values of the San Manuel organization. The tribe’s values are a really important message to the employees.
There have always been these great themed suites on the property. They had the Playboy suite, they had a basketball suite. They’ve got swimming pools in some of the suites. Are you going to continue still to offer those kinds of themes?
The suites are a really exciting thing, and when we bring on a new executive to send them on the tour they are very impressed. They’re outstanding, and they are in great condition, and just the experiences we can bring to guests will be really, really amazing. So, I look forward to that.
You must appeal to locals to be successful. Will you offer what they want—good video poker, reasonable table game rules, a buffet and a progressive players club?
Very much so. We’re looking at that, and I think what I’ve learned so far about the Palms is there was a lot of geography based on the different entryway doors, so that will be kind of an interesting play on how to merchandise the gaming floor, and really to look at different day parts and look at different customer segments. Embracing the Las Vegas community will be extremely important.
Obviously you didn’t get the Station database when you bought the place, but how are you planning to build a new database of customers?
We’re working on some plans right now to start building that, and that’s obviously going to be a core component of the Palms. And doing it deliberately. This market has changed a lot. The pandemic changed all of the market conditions, so what do we do to respond to that and really come out with something fresh and new for the customer? That will be a very big focus of our team.
Another thing that the Palms has always been famous for is its food and beverage. When Station opened, they had a couple of celebrity chefs like Michael Symon Mabel’s BBQ. What kind of plans do you have for the food and beverage outlets here?
Well, Michael Symon is definitely a big part of it. He actually came to see us; we just met with him recently in Mabel’s. A few members of our team went to Cleveland a few months ago to enjoy his amazing barbecue.
We’re also very excited about the steakhouse, Scotch 80 Prime. And really adding an element that I believe was initially intended—we know what Scotch 80 means if you live in Las Vegas; it’s in a historic neighborhood of Las Vegas, and we’ll celebrate that, tying that to the fame of that steakhouse. I’m super excited about doing that.
Tell us about how you plan to build an executive staff. You have this great background in human resources, so what are your plans to recruit some of the executives you want to bring in here?
We’re going to be a small and mighty team of people, working hard to bring together people with the right skill set with the right approach and philosophy. It’s very important for us to be completely aligned with the values of San Manuel, and the rich history and the culture, the real commitment to people, the real humble approach to how we do business, and finding the right people will be crucial. And that’ll be my job in the next 90 days—to get that group fired up and get everybody lined up with all the things we needed to do to get open.
This is the first hotel casino in Las Vegas that’s owned by a Native American tribe. Actually, their hospitality arm, we have to make that designation. But that must be exciting, to be able to take the lead in something that’s really groundbreaking like this.
The moment of history is not lost on me. It’s very symbolic and very important for San Manuel and for GHA—the Gaming and Hospitality Authority—it’s very important that we do this right. And we have a legacy to create for them, and we own that. And we’re going to do everything we can to honor them and to represent them and to be the kind of property that they can be proud of.
VizExplorer was one of the first companies in the industry to focus on analytics and how they can be interpreted for the benefit of both the operator and the customer. David Patent joined in 2018 after a career in the operations side of gaming, including stints with Rush Street Gaming and Harrah’s Entertainment. Using his experience as an operator, he has been able to fine tune the VizExplorer products in ways that have produced results for his clients. He explains how VizExplorer can use information contained in the databases of all casinos to improve player development and create actionable strategies. He spoke with GGB Publisher Roger Gros at the VizExplorer offices in Las Vegas in November.
Inspired Entertainment was a groundbreaker in virtual sports, simulated games with great graphics and unique betting systems. The company also has operations in several European countries and is incorporating its games in many of the lottery platforms around the world. Brooks Pierce has been president and chief operating officer of Inspired since 2018 and along with the CEO Lorne Weil, a former leader of Scientific Games, has directed the growth of the company into new and synergistic parts of the gaming industry. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
After 25 years as a deputy district attorney and a judge in the Nevada District Court, Jennifer Togliatti has a new challenge. She was appointed in October 2021 as the first woman to chair the Nevada Gaming Commission. The commission is the final step in the regulatory process whether it’s licensing, regulations or sanctions. The Nevada Gaming Control Board makes recommendations that the commission can either affirm or deny. Togliatti says she’s use her judicial experience and rely on the staff of the control board to educate her on the sometimes complicated technology of gaming. She spoke with GGB Publisher Roger Gros via Zoom in December.
GAN has been involved in social gaming, iGaming and now sports betting for more than 10 years. But it’s a new division focused on sportsbetting has brought in some cutting-edge technology with the purchase of Coolbet, a European B2B and B2C company. Richard Veltri, one of the founders of Coolbet is now the COO of GAN Sports, and Rob Lekites, who came over from Twin Spires, the sports betting arm of Churchill Downs, is the vice president for GAN Sports. While Coolbet has some B2C activity in Europe, in North America it’s strictly concentrating on B2B, with a technology that will allow clients of GAN Sports to stand out from their competitors. Lekites and Veltri joined GGB Publisher Roger Gros on Zoom in November to explain what makes their platform so different.
Ray Pineault was promoted to president and CEO of Mohegan Gaming & Entertainment, in May 2021. He took over a company with ambitious projects and an operational expertise second to none. Pineault explains why the Inspire project in Incheon, South Korea, will be his focus for at least the next two year, and why MG&E backed out of a partnership to build an integrated resort outside of Athens, Greece. He talks about the company’s first involvement in gaming in Las Vegas, operating the casino at the new Virgin Las Vegas hotel, and how milestones were reached at the Mohegan Sun flagship hotel in Connecticut and Mohegan Sun Pocono in Pennsylvania. He also reveals why the company has a head start in iGaming due to their experience in New Jersey where they operate Resorts Atlantic City. He spoke with GGB Publisher Roger Gros via Zoom from his offices in Connecticut in December.
When it comes to esports, the casino industry is confused. While it’s a demographic casinos would like to attract, the method of bringing them in is still uncertain. Whether it’s esports arenas, lounges or tournaments, the success of those elements are still in doubt. One area that has much potential is betting on esports. Marek Suchar is the co-founder and managing director, partnerships of Oddin.gg, a Czech-based company that provides the framework for esports wagering. He explains why betting on esports is largely done online and how casinos can capitalize on these opportunities. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Jason Ader has a long history in gaming starting as a Wall Street analyst in the 1980s. He later became the chief gaming analyst for Bear Stearns and then moved on to the investor side of the business. He formed SpringOwl Asset Management a few years ago and has played a major role in the development of companies like Las Vegas Sands, and has recently turned his attention to online gaming. His membership on the board of Playtech has resulted in the company becoming a sought-after acquisition target and is now helping Japan’s Universal Entertainment, owner of the Okada integrated resort in Manila, to go public. He spoke with GGB Publisher Roger Gros from his home in Florida in November.
Art Paikowsky was recently named as president of the International Center for Responsible Gaming (ICRG). He brings decades of experience in charities and non-profits, and is rapidly getting up to speed on gaming. Paikowsky assumes his duties as concerns about responsible gaming ramp up with the rapid spread of sports betting in the U.S. He explains that the new participants in this side of the industry need to get committed to research and treatment of problem gambling by funding the work done by the ICRG. He spoke with GGB Publisher Roger Gros at G2E in October.
Arnold Snyder is a legend in the gaming industry. A professional gambler and one of seven original members of the Blackjack Hall of Fame, Snyder launched the magazine Blackjack Forum, which was the bible for blackjack players for over 20 years. He recently published his ninth book on gambling, Radical Blackjack, in which he outlines his strategies, locations and individuals that were previously not mentioned in any of his other books. He’s speaking at the World Game Protection Conference, February 15-17 at the Tropicana in Las Vegas. He spoke with GGB Publisher Roger Gros at the Las Vegas offices of his publisher, Huntington Press, in October.
Kambi is recognized as one of the leading platforms in the world for sports betting operators due to its long history in Europe. When the company decided to enter the U.S. after the legalization of sports betting, it hired Sarah Robertson to lead its sales efforts. The Canadian native quickly landed some major accounts and continues to drive the company’s growth. She previously worked for affiliate manager Income Access and is based in London. She spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
If you’ve been to G2E any of the last half-dozen years, you undoubtedly saw protests and demonstrations by Americans for Nonsmokers’ Rights, an organization dedicated to ridding the world of the evils of secondhand smoke. Cynthia Hallet has been involved in the organization for more than 20 years, and now serves as its CEO. She sat down with GGB Publisher Roger Gros at G2E in October to talk about how the pandemic has helped to spread the non-smoking message and why it’s now time to act. (SEE A VIDEO OF THIS PODCAST BELOW)
GGB: Your organization has made a lot of progress recently. How much of that was helped by the pandemic?
Cynthia Hallett: I think the Covid pandemic increased the awareness of the public, key stakeholders and elected officials about public health laws and how they can help protect public health, as this is a respiratory-born virus. And I think the science has improved that perception as proven by the number of casinos, whether it’s by state law, tribal policy or voluntarily opening smoke-free. And we now have lessons learned, and the fear that they’d lose substantial revenue is not accurate.
In New Jersey, Governor Phil Murphy said he was most concerned about citizens’ health, then allowed smoking to return to the Atlantic City casinos after the mask mandate was removed. Why did that happen?
Well, that’s an excellent question. I don’t know that I can answer that for the governor or for the state of New Jersey or even Nevada. But I do think that sometimes there’s pressure from other sources, and whether it’s one industry or another, whether it’s tobacco, or gaming or something else trying to say we need to get back to what the old norm was. But this pandemic has taught us that things are changing, and they need to change in order to protect health and safety. And if you look at Atlantic City, their revenues went up when compared the first quarter to 2019—they went up by 11 percent when it was temporarily smoke-free. So if people truly love gaming or the amenities that are in those buildings, they will show up anyway.
Atlantic City seems to be the poster child now for the non-smoking movement. You’ve got an organization of employees there that is pushing for it. How is that effort going right now?
It’s amazing. As a grassroots organization, we are always looking for the individuals who want to speak up and speak out about this because they’re affected by it. So this group of casino workers organized themselves because they were so upset that on July 4, 2021 smoking was reintroduced into the casinos, and they had that sweet moment of being able to go to work, not having to breathe the smoke. So now they’re angry. And that’s the worst type of employee to have to deal with, because they had that good experience and now it’s gone. Their effort now is to address the state legislature and try to get them to pass a bill that would ban smoking. And to his credit, the governor has said he would sign it if it came to his desk.
In the meantime, we’ve seen several tribal casinos that have reopened with a smoking ban. Have you spoken to any of those executives about what their experience has been?
We have. Over 160 tribal casinos, sovereign nations, have reopened smoke-free, which was phenomenal. Most of them have remained smoke-free, and we are hearing lots of positive remarks about it. The Navajo Nation recently passed legislation that made their casinos smoke-free. The tribes showed leadership early on in the pandemic and have paved the way for commercial casinos to follow suit.
A Wisconsin casino, Ho Chunk Gaming Madison, went smoke-free way before the pandemic and is doing just fine. Tell us that story.
Their decision was courageous. It’s now going on six years being a smoke-free casino. They adapted and are more successful than when they permitted smoking. They had this conversation about worker health and safety, and also about parity and equity. When you have executives on higher-level floors in smoke-free offices but everybody on the gaming floor is exposed to known carcinogens, that’s not equity. So it’s about worker health and safety, and then it is about the guest experience and their safety.
In nearly six years as chairman of the National Indian Gaming Commission, Jonodev Chaudhuri is credited with bringing some stability to the federal regulatory process overseeing tribal gaming. His emphasis on education and training brought a new level of professionalism to the tribal regulatory boards. Following his resignation, he became an ambassador for his tribe, the Muscogee Creek Nation of Oklahoma, where he represents the tribes in ceremonies and negotiations. He recently founded Chaudhuri Law, which gives him the freedom to pick and choose his clients and dedicate his time to causes and issues that are close to his heart. He spoke with GGB Publisher Roger Gros from his home office in Washington D.C. in November.
The development of hardware in the slot machine industry is advancing at a rapid pace and IGT’s Peak family of cabinets are at the head of the class according to leading positions on industry performance reports. The first cabinet to launch was the PeakBarTop cabinet, which continues to be a success and recently debuted with sports betting content. Since then, IGT has launched five more Peak cabinets: PeakSlant49, PeakSlant 49 + Wheel for Wheel of Fortune games, then Dynasty Peak Terminal for ETG, followed by the PeakSlant32, and most recently the impressive Peak65, which just debuted last month at G2E. GGB Publisher Roger Gros sat down with Roger Pettersson, Sr. Director Core, PMM, Market Research, and Cindy Honey, IGT Senior Director Hardware Roadmap to talk about IGT’s Peak hardware family, what’s driving its success and what’s in store for the future.
For 16 years, the World Gaming Protection Conference was the place to be to learn about the latest issues and trends in casino security and surveillance. One of gaming’s most interesting events, the WGPC attracts security and surveillance executives from all jurisdictions, as well as casino officials who want to understand how to improve their operations. Willy and Jo Allison talk about how the pandemic impacted the show. In 2020, it was scheduled to be held just days after the casino industry shut down for the first time ever in Nevada, and 2021 was a wash as well. Now the 2022 show, scheduled for February 15-17 at the Tropicana in Las Vegas, has added multiple speakers and sessions, and now includes a full day of training for those in the security, surveillance and any other department responsible for risk management. They spoke with GGB Publisher Roger Gros last week from their temporary home in Mexico.
For more than a decade, John Pappas was the face of legalized online poker in the United States as he led the Poker Players Alliance during a period of the introduction of legal online gaming in the U.S. and a crackdown on sites like Full Tilt and PokerStars following the passage of the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006. His positive message eventually accounted for 4 million members of the PPA who helped lobby states to legalize online gaming and poker. Today, he’s also helping to promote Idea Growth, an organization founded by attorney Jeff Ifrah to advocate legal online gaming. He spoke with GGB Publisher Roger Gros at G2E in October. (To view a video of this podcast see below).
GGB: You were involved in the legalization of online gaming, specifically online poker years ago. What was it like in those days?
Pappas: I can remember going into meetings in those days and suggesting that the legalization of online gaming would be a good thing, and just being met with a chorus of “it’s not going to happen, we don’t want it, it’s not going to happen.” We were standing alone being laughed at by most people.
Now I think everyone’s standing together trying to figure it out. There are still holdouts, especially in Nevada. It’s slow to progress there when it comes to digital anything because of the reluctance of some factions to understand this new wave of gaming and consumer interaction.
When did you begin to see the shift in attitudes toward online gaming?
I think it was when Caesars and MGM began to get on board. When they began to recognize the potential, things started to change. For Caesars, it was the World Series of Poker. That’s a very valuable brand, and you have to remember that poker was what everyone was talking about in those early days. They knew there were millions of people playing online poker, and how could they monetize this powerful asset they had? This is why you only have online poker approved in Nevada, because Caesars has the WSOP.
Poker isn’t as lucrative as online casino in states where both are legal. Why is that?
Poker is a very difficult product on a state-by-state basis. If you have mass pooled liquidity in multiple states, it becomes a lot more compelling. It’s very difficult to have a successful business, both from an operator’s standpoint and a player’s standpoint. One of the great things about playing on the Full Tilt or PokerStars sites back in 2009 was that there were 20,000 people there. If I wanted to play a $2 Sit-And-Go or a $1,000 Texas Hold ’em game, I could do that.
Is the legalization of sports betting going to be the conduit to legalizing iGaming in those states as well?
Yes, in most cases. Part of our organizational efforts with Idea is to go into these states that have successful online sports betting and point out that the next evolution of this is online casino gaming. We’re partnering with the casino industries in these states so we don’t come off as being the only ones who want it. States like Michigan, Pennsylvania and New Jersey were smart. They did it all together without piecing it out. It’s going to take an education process to get them on board. I wish I could tell you that all those states that so quickly passed sports betting would be just as quick to legalize iGaming, but I expect it will take a couple of legislative sessions for people to understand the issues.
Tell us about Idea Growth and why it was started.
Regulated gaming has changed the face of online gaming and even e-commerce because of KYC, geolocation, the data that you have to understand who a person is, where they are betting, how much they’re betting… You would never have that data available in a bricks-and-mortar casino. So casinos in every state have an interest in iGaming. It’s going to get bigger, and we need to have a unified voice—a way to speak to lawmakers and regulators to make them understand iGaming. Idea was founded by Jeff (Ifrah) and a few others, and now has grown to 30-plus members, everything from the operators to payment processors to geolocation companies, and KYC data centers. We’re all aligned together to get the word out. It’s a very powerful tool.
https://youtu.be/RE1SIJHTddw
Kent Young has a long history in gaming. He worked for Aristocrat Technologies for six years and later moved on to lead Aruze Gaming America for two years. In 2012 he founded his own company, Spin Games, and developed a remote gaming server for slot games online just as online gaming was starting to take off in the U.S. Earlier this year, Spin was acquired by Bragg Gaming Group, and will join a company expanding aggressively in the U.S. and around the world. He spoke with GGB Publisher Roger Gros at G2E in October. (See video of this interview below).
GGB: Congratulations on the purchase by Bragg Gaming, and we’re pleased you’re going to remain active.
Kent Young: I’m sort of part of the sale, so to speak, so I’ll be staying on with the company, which I’m actually very excited about. It’s a new chapter, in both my book and the company’s book. So it’s very exciting. We’ve got a terrific future together.
What was the attraction for Bragg to get Spin Games?
Bragg has primarily been operating in Europe. As part of the Bragg acquisition strategy, they acquired a company called Oryx, which has got a very good position in the European market, with excellent technology. So they really wanted to work out how they’d get into the U.S., and how to take advantage of the growth opportunities, obviously, as we’re all seeing the in iGaming space. At Spin, we have multiple licenses. We have multiple distribution points, so we operate with all the key operators. So it was a very good fit in terms of the being able to come in and acquire an already-established company. They’re extremely synergistic. So, we’re going to take a business that’s primarily European and leapfrog them into the North American market.
Does this take Spin to the next level?
Absolutely. We were a startup initially. We started literally with a couple of people out of Reno, Nevada. And you know, we’ve grown up. We’ve grown into a sizeable iGaming RGS supplier. So this now gives us a significant amount of resources. Bragg is a publicly listed company on the Toronto Exchange and on the Nasdaq. So it gives us capital—as any startup, we’ve always been somewhat limited on the capital side. We can really invest in all facets of the business. Sensibly, of course.
How long has Bragg been around?
Bragg’s been operating for about six years, originally as a private company, until they went public early last year. As I mentioned, they acquired Oryx Gaming. And then they also acquired a company called Wild Streak, which is a content company. A gentleman by the name of Doug Fallon actually used to work for me at Aristocrat, and many years ago went out and started his own content company doing both land-based and iGaming. It has done exceptionally well. They’ve got the consistent No. 3 game in New Jersey in iGaming. When they announced the purchase, Bragg also announced, as part of that acquisition, that Doug would be the chief content officer.
Has it been a smooth transition so far?
We’re still in the closing phase. We won’t close until towards the end of this year. In saying that, we’ve started to work together. The company’s got a great team. The technology is fantastic. The R&D capabilities are some of the best I’ve seen. They’ve got some great value-added products; we’ve got a product engagement tool, called Fuze, which is basically a promotional tool that sits on top of a remote gaming server, so you can essentially do marketing-driven promotions that interface with the game. It’s not RNG-driven; it’s very much promotional. It really hits the mark, in terms of the level of maturity in North America, which has primarily been just a content play so far. Fuze is what I’ll call a marketing spin play, a tool that drives player engagement.
How many states and jurisdictions are you licensed in?
We’re licensed in five jurisdictions, and that’s including British Columbia. Connecticut was our fifth. So, we’ve got New Jersey, Michigan, Pennsylvania, British Columbia, and now Connecticut. We’re live in New Jersey, Pennsylvania and Michigan, hopefully going live in British Columbia Q1. And then, depending on the timing of Connecticut, it will either be later this year or early next year.
Michigan seems like it was a big success so far.
I think Michigan has been outstanding for the industry, particularly the fact that it’s been tribal, as well as commercial. It’s really the first tribal iGaming regulated market. So, again, I’m very bullish on that because I think that can be the catalyst for more regulated tribal jurisdictions, similar to what happened with Class III games years ago. I’ve always been a strong believer that once tribal is successful in iGaming, that will be a catalyst for the local market.
I spent a lot of time this summer in New Jersey, and sometimes the amount of games some of the iGaming sites offer is overwhelming. What’s the key to developing a successful game?
In the early days, it was very much a volume play. Every operator wanted as much content as possible because that was really the competitive advantage. When you put a new game in the market, you can see it peak, because players want to try it. We’re now at roughly 1,000 games, give or take a few, in New Jersey.
A lot of the operators now are being a lot more selective. Once games fall off, they’re starting to take them off the site, and they’re being a lot more selective about what you’re offering. Look, it’s no different in land-based casinos. Games have life cycles.
https://youtu.be/AgYQ3G8Cuy4
Jonathan Michaels was hired by the American Gaming Association, a few years removed from the University of Maryland, to run the organization’s membership program in 2014. He left the AGA last year and was recently hired by Sightline Payments At Sightline, Michaels is responsible for three areas—government affairs, corporate communications and strategic development that he calls the “catch all bucket.” He says the years at the AGA prepared him for his new job because he interacted with high-level gaming executives, including his new bosses, co-CEOs Joe Pappano and Omer Sattar. He spoke with GGB Publisher Roger Gros on his inclusion in the Emerging Leaders 40 Under 40 Class of 2022 from his home office in Washington D.C.
https://youtu.be/2NzacdIAPEI
Paul Steelman has had a great year. In October of last year, the Circa casino hotel in Downtown Las Vegas debuted, the first new project in Downtown in 20 years. And then in June, Resorts World Las Vegas opened on the Strip, the first new resort there in more than 10 years. Like Circa, Resorts World has broken new ground and promises to be the model for the integrated resort anywhere in the world for the next decade at least. Steelman talks about his collaboration with Genting Chairman KT Lim and how new technology played a role in the 10 year design process at Resorts World. He spoke with GGB Publisher Roger Gros at his Las Vegas office in October.
Like all companies in the gaming industry, Casino Cash Trac closed down during the pandemic. Kurt Williams, the company’s CEO, took the time to reorganize the company and decide how it fit into the burgeoning sports betting market. With a product that does an ongoing audit of transactions in and out of the cage to the tables and slots, Casino Cash Trac can also recognize every transaction at a sports book and at online gaming sites. In addition, casinos came back from the pandemic with streamlined procedures that fit well with the service provided by Casino Cash Trac. Williams spoke with GGB Publisher Roger Gros at G2E earlier this month.
Paul Burns was instrumental in the launch of the Canadian Gaming Association in 2005 and became the vice president at that time. In 2018, he was appointed president and CEO and recently led a successful effort to establish full sports betting in Canada via a bill in Parliament. He explains how that came about and what to expect as the provinces are now acting to establish sports betting. Burns also talks about the long shutdown endured by Canadian casinos and how they survived it. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas last month. (See video of the interview at the bottom of page).
GGB: Congratulations on finally getting the bill passed in the Canadian Parliament to legalize full sports betting in the country. Tell us how that came about.
Paul Burns: Well, it was a long time coming. We first started working on passing a bill in 2011. And the success was quick… and then not so quick. We got the bill passed in the House of Commons and then it died in the Senate, where they refused to vote on it for three and a half years. This was bill No. 4. This time we had great help from the senators whose position had shifted over the years. The big difference was the professional leagues were there with us. The commissioners of the CFL and the NHL appeared before the committees. Those voices needed to be heard. We built this great coalition over the years with labor, casino workers, municipalities and the amateur athletic community in Canada all behind us. When it came to the hearings, the gaming industry wasn’t at the forefront, so we could talk about regulations and the black market in Canada.
To be clear, there was legal sports betting in Canada before this but you were required to make parlay bets, which didn’t resonate well with the public?
That was because it was legal under the lottery, where you sometimes had to make three bets. We estimated that the handle for the legal provincial sports betting in Canada was $500 million a year, where the offshore sites were doing $4 billion. And when you added organized crime into the equation, it was more like $10 billion. The product wasn’t right for the consumer, and when you can’t find what you want legally, you’ll find it somewhere else.
How much did it help when PASPA was struck down in the U.S.?
That clearly helped. And the media penetration was tremendous. Most Canadians live within two hours of the border, so this was significant. You’d turn on the TV and see sports betting advertising. That also led the gray market in Canada to do more advertising. So the volume kept going up and up, and it hasn’t stopped yet.
The devil is in the details, of course. Are you happy with the final shape of sports betting now that the bill is law?
The great part is that once the bill was passed we were done with the federal government’s involvement, so now it’s up to gaming regulators to do their work. The association has a committee where industry and regulators can talk through issues. Together, we set standards for cashless technology in casinos and then moved on to sports betting. So we were able to share knowledge with everyone. We invited regulators from the United States, professional handicappers, sports leagues, operators. We talked about fantasy; we talked about everything.
How many provinces are considering sports betting?
Ontario was the first to get their standards out. All the products are available in Ontario, from daily fantasy to online to in-game betting. Other provinces are now working on it. In Canada, the provincial lottery corporations always have an upper hand with their products, so most of their online sites have been launched. There’s no retail open yet, and we’re a little concerned about how long that’s taking because we think that will drive business back into the casinos as we start to recover from Covid after the long shutdowns we’ve endured.
Richard Schwartz co-founded Rush Street Interactive in 2012, before any online gaming was legal in the U.S. Initially RSI focused on social gaming, but it ramped up quickly as online gaming was legalized in New Jersey in 2013. When PASPA was repealed and sports betting was added to the menu, RSI spent time getting their app right, and today it is one of the fastest-growing apps in the industry. RSI recently was approved for mobile online gaming and sports betting in Connecticut and New York, where it already operates the most successful retail sportsbook in the state. Schwartz spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October. (View Video of this Podcast Below)
GGB: Rush Street Interactive has been doing some real interesting things since the last time we talked. You had a very successful year. Tell us some of the milestones that your company hit.
Richard Schwartz: First of all, the financial highlight is that we went public in December. Every quarter since we went live, we’ve been able to beat the market projections and raise our projections. We’ve been able to progress a lot of our efforts to diversify our business. We’ve not only grown casino—which we’re known for—we’ve also been growing our sportsbook business as well, which is exciting. Secondly, with market access, we announced five new deals in the last year. We’re about to launch in about five new markets. So we have a lot of expansion.
We also really focused on responsible gaming this year, something we’re really proud of as well. We’ve put a lot of effort into that. And then the last thing I think I’d mention is just the product enhancement; we came out with a new app, and it’s working great. And features and enhancements we’re making to the user experience are something that we’re really excited about.
Congratulations on winning the New York license. The big prize is of course California, where there are least two competing sports betting referendums that will go on the ballot in 2022. Are you actively involved in any of those efforts at this point?
No, currently we’re not. We have a very well-established government affairs team that’s very involved in all aspects of lobbying around the country. At the current time, though, we’re evaluating different strategies for that market. We haven’t committed to any strategy. I think there’s a lot of dynamic parts moving there, and for us it’s important to evaluate and assess each opportunity and be very careful and cautious of what we do before we commit to a strategy. So, right now, we’re sort of neutral.
Michigan was a big success for RSI. How have the operations been going so far?
It’s great. We’re No. 4 in online gaming revenues there. Online casino has always been a strength for us there, and we’re really the strongest of anybody who doesn’t have the existing database. We’re doing it from scratch, and we’ve been able to show that we’ve been growing market share pretty consistently in that market.
There have been a lot of big mergers in the iGaming business. Golden Nugget was bought by DraftKings, and plenty of other deals that we could mention. RSI seems to be in a really good position, if you want to be acquired. Is that part of your goal?
No. Our goal is to build the best user experience you can, for casino and sportsbook. To constantly improve it, so that it gets to the point where we offer something that is unique in the marketplace. We’re focused on building the business and running it. However, obviously, there are rumors like this all the time in our industry and right now our name is coming up quite often. It really goes back to why we built the business, why we’re focusing on things like market access, building in-house platform technology, which is very important in this industry. We have a casino focus, which a lot of companies are now recognizing as important. But at the end of the day, this is a very early stage of this industry. So, it’s exciting to hear that, but we’re just building this business to run it.
This market is super-competitive right now, with all the players throwing money at the customers and pulling out all the stops when it comes to advertising. How long can this keep up? Is it sustainable?
No, it’s not sustainable. It’s going to have to rationalize at some point. The investors won’t let companies market and bonus at these levels forever. And I think when that happens, though, RSI is going to shine even more. Because we are doing things, right now, fundamentally the way they should be done long-term.
When you go from bonusing your players at 80 percent, and you go down to a more sustainable level, those players are going to notice that difference and may no longer play with that brand. So for us, it’s about earning the players’ trust because we’re doing the right things, we’re treating them well. And I don’t think what you’re seeing right now is sustainable. I don’t know how long it will last, but at some point, it will change.
Do you think the growth of sports betting is going to spur further growth of legalized iGaming in the other states that already have sports betting?
We do think so. I can tell you, I get more calls from our peers in our industry, all talking about how we’re going to legalize online casino markets, like Illinois and other markets around the country. But you have that land-based casino support, which didn’t exist in the past, pushing in a positive way. You have the state governments realizing their revenue base would be much larger for casino, and I think the need for additional tax revenue is going to spur some positive momentum.
The legalization of sports betting in 2018 has brought many different players in contact with the gaming industry as each tries to put themselves in the best position. But what strategy should they use? KPMG Las Vegas leader Rick Arpin has put together a blueprint for any company wishing to enter this explosive market with the report, “Capitalizing on the Convergence of Sports, Media and Gaming.” The report talks about the importance of partnerships, technology and understanding the regulations, offering suggestions on how to make the enterprise profitable and transparent right from the start. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas in September.
IGT has been the major slot manufacturer in the gaming industry for over 40 years now. That’s being reinforced this year by the new technology being developed by the company for lotteries, iGaming, sports betting, systems and great games. Nick Khin, the senior vice president and chief operating officer, and Domenico Pastia, senior vice president of global product explain how the new Peak cabinets have helped the company to maintain its dominance on the casino floor and why the hardware remains as important as the content of the games. They spoke with GGB Editor Frank Legato from their offices in July for the cover story of the October issue of GGB.
John Acres is already in the American Gaming Association’s Gaming Hall of Fame. He got there by inventing several breakthrough technologies that today are widely used in the industry, such as the first player tracking system, progressive jackpots, bonusing, and more. He sold his previous companies to major manufacturers, but now he’s back with another idea and founded Acres Manufacturing Company (AMC) to promote Foundation, a system that reports data from every slot machine in real time and can change any slot machine’s credit meter on command, allowing executives to reward players immediately. AMC also has other products that make the way a casino interacts with customers easier and more transparent. Acres spoke with GGB Publisher Roger Gros from his offices in Las Vegas in July. See below for a Zoom podcast of this interview.
GGB: What makes the new company, Acres Manufacturing, different from EDT, Mikohn, Acres Gaming, and Acres 4.0?
John Acres: Well, it’s very different and very much the same. We’ve always been about creating fantastic experiences for players, that are simultaneously profitable for casinos. And there’s always opportunity to improve that, especially as technology improves. We’re technologists; we create hardware, and write software, that connects the equipment and the systems to the player, for the casino’s benefit. And as that technology changes, we come up with new opportunities.
There is a whole lot of data coming in through all the systems, and it’s difficult to know how to interpret that. How is your new Foundation system able to do that better than anything else in the past?
We started with the premise that it’s not enough to do a weekly email or a monthly email; we needed to know in real time what’s happening with that player. So existing systems were designed to measure your total play, and then report in descending order, by theoretical win, and call the top group the platinum, and the middle group the gold, and the bottom group the silver. And what we found in the age of Amazon and Google is that people expect a lot more personalization. We have opportunities to deliver bonuses in real time, but part of what we need to know is, “Are you almost out of money or do you have a lot of money left?” Because when we deliver a bonus, it’s very contingent upon that.
We also need to know if you are winning in the moment, or losing in the moment. If you just won $100, it’s probably not a very effective thing to give you another $10 in a bonus. On the other hand, if you’re down to three credits left, a $10 bonus might well be appreciated at that moment. So, we wanted to have this very careful timing of the delivery of what we call free play and things like that right now.
We know that there’s a lot of inefficiencies in how players are bonused. That seemed very reasonable 25 years ago, but that needs to be updated. And our system Foundation is designed to collect literally 100 times more information per game play, including the timing of each button pressed, if you pressed bet one or bet max. Are you starting with a $20 bill or a $100 bill? And to report all of that, within half a second of the time that it occurs.
Is Foundation designed to replace the legacy casino management systems?
Over time. But right now it’s meant to supplement. Foundation is first system that can be installed alongside another system.
Let’s say the casino wants to implement cashless wagering. They can take Foundation and put it in, and keep everything that’s running on the existing system. Everything. And then have cashless on top. Then they can move one application at a time from the existing system, over to Foundation. And the other difference with Foundation is that the whole thing is designed with mobile in mind. All the other systems were designed in the desktop era. Our view of the world is that’s all going to be handled on a mobile device. We already have our Kai mobile dispatch system installed in almost 40 casinos around the country. So we’ve got a lot of experience with that; we know that it works.
How scalable is Foundation? Can you get it in a small Indian casino, versus a huge corporate entity?
The smallest installation that we could do reasonably is two machines, and the largest… well, there’s no limit. We’ve got sales going on with casinos with 4,000 to 5,000 machines, no problem. We’ve got sales going on with casinos that have 20 or 30 properties that are all connected.
A lot of the issues with the previous casino management systems have been training of the casino employees. How are you helping the casino employees to really understand how to use Foundation?
One of the first steps is to stop presenting raw data to the employee, and saying “make sense of this.” Instead, we have these intelligence agents embedded in our system, that will assign a problem to the nearest available qualified person to do that task. So, by turning it into specific directions, instead of a bunch of information from which they have to absorb, we get rid of a lot of that training problem.
So, it sounds like Foundation has some applications for responsible gaming as well, right?
Yes, and you can also give players the opportunity to set their limit before they even arrive at the casino. Just like, “I only want to be able to transfer $80 from my bank account to the casino in one night.” The player can control his own spending at that time.
For the Association of Gaming Equipment Manufacturers, the pandemic hit hard. When casinos closed around the world during the lockdown, no one was thinking about buying the equipment or services provided by AGEM members. AGEM cancelled dues payments for a year, but still provided its members with the information they needed to prepare for the reopenings. Dave Lucchese, the executive vice president of sales, marketing and digital for Everi, became president of AGEM just as the pandemic was winding down, but the challenges remain. He spoke about the difficult times and the bright future he sees for AGEM members and the entire gaming industry in an interview with Roger Gros, publisher of GGB.
G2E is back and hopefully better than ever. Korbi Carrison, the event director for G2E, explains how the pandemic and the cancellation of last year’s in person event, has informed organizers about what is needed at this year’s show. She explains the health and safety concerns, reveals the keynote speakers and explains why this year’s show will be important to show the resilience of the gaming industry. She spoke with GGB Publisher Roger Gros from the UNLV Blackfire Innovation Center in Las Vegas in last week.
When Penn National Gaming bought 36 percent of Barstool Sports, the logic was the gaming company got access to more than a million members of Barstool, most of whom are the exact demographic that casino companies want. And with its focus on sports betting, Barstool was the perfect partner for Penn. Now well into their relationship, Barstool CEO Erika Nardini explains how it’s going and what she expects to happen when Penn’s option to buy the entire company comes up in a couple of years. She explains why Barstool connected with the younger generation and how the company sets a goal even before they know how they’re going to get there. She spoke with GGB Publisher Roger Gros via Zoom from the Barstool offices in New York City in July.
When Joe DeSimone bought Railroad Pass Casino in Henderson, Nevada, just outside of Boulder City, from MGM Resorts in 2014, he was new to gaming. A real estate developer in Henderson, he saw value in Railroad Pass and invested millions in improvements. This year, he purchased the former Eldorado Casino in downtown Henderson from Boyd Gaming. Again he invested more than $7 million in upgrades and opened in April to great reviews. He recently broke ground on a new hotel at Railroad Pass and has plans to add a hotel to The Pass, which is adjacent to the practice facility for the Henderson Silver Knights, a minor league hockey team that began play last year. He spoke with GGB Publisher Roger Gros from his office at The Pass in June, just prior to the groundbreaking of his new Holiday Inn Express Hotel at Railroad Pass.
Penn National Gaming has been the industry’s third largest gaming companies for more than a decade now. Jay Snowden took over from Tim Wilmott in January 2020 and immediately embarked on a plan to make Penn more interactive. Two months later, he announced a deal to buy 36 percent of Barstool Sports and its millions of followers, creating a sports betting juggernaut that has had immediate success. Now that the pandemic is winding down, Snowden talks about the position of his company, the addition of additional interactive pieces and how he plans to guide Penn toward the future. He spoke with GGB Publisher Roger Gros at the Penn offices in Pennsylvania in July.
Bally’s Atlantic City was the third casino to open on the Boardwalk in 1980 and quickly became a success. Through a variety of owners down through the years, Bally’s wound up as a Caesars property up until last year when as a condition of licensure for the new owners, Bally’s was sold to the then-Twin Rivers casino company. After the purchase of the property, Twin River followed up with Caesars to buy the Bally’s brand. The company has pledged to invest as much as $100 million in the property, which had suffered from neglect over the past few years, and the differences are immediately recognizable. George Papanier, the president and CEO, and Phil Juliano, executive vice president, casino operations and chief marketing officer, of Bally’s Corporation sat down with GGB Publisher Roger Gros at the Bally’s offices at Atlantic City in July.
While the newest property on the Strip, Resorts World Las Vegas, is clearly one of the most attractive, compelling and unique casino, it’s what lies under the surface that is really exciting for casino operators. Resorts World has opened with a full suite of technology to enable cashless transactions, touchless contact points and a compelling way to use the loyalty program. We’re joined by Scott Sibella, President, Resorts World Las Vegas, Rick Hutchins, the SVP Casino Operations, Resorts World Las Vegas and Tom Jingoli, EVP & COO, Konami Gaming to talk about how the technology is designed to perform and how the Konami Synkros system is the lynchpin enabling various vendors to offer ways to set up a digital wallet, buy in on slots or table games with a simple phone app and a way for the casino to stay in touch with its customers 24/7. The three executives joined GGB Publisher Roger Gros via Zoom from their offices in Las Vegas in July.
Game Account Network (now GAN) entered the U.S. 10 years ago focusing on social casinos and systems. CEO Dermot Smurfit was emphatic when insisting at that time every casino needed to have a social casino site. And he’s been proven right as online sports betting and now iGaming are becoming the rule rather than the exception. Casinos that have experience in the social casino sector have a leg up on their competitors, and GAN has been adding features and platforms over the last few years. Smurfit talked to GGB Publisher Roger Gros from his offices in California in July. VIEW VIDEO PODCAST BELOW.
GGB: You recently went public on the NASDAQ exchange. What does that mean for GAN?
Dermot Smurfit: We’re very happy with the transaction. It probably was the high water mark of corporate reorganization in the 20-odd year history of GAN. Last year we raised $167 million, not just for the IPO, but also to finance the acquisition of CoolBet, an international, very well respected B2C operator in the sports betting field with proprietary sports betting technology they built from scratch.
They developed their platform knowing the weaknesses and problems with all the other sports betting applications and systems available to them. We were asked by our clients to find something better, so we looked to the far side of the planet in a place called Europe where there were different and superior mobile sports betting experiences. We evaluated 16 different candidates—some startups, some very large. The more we learned about CoolBet and got to know the team, the more we liked them.
What makes CoolBet so unique?
CoolBet is a highly social engaging offering with some highly developed end-user features that has Jason Robbins, the CEO of DraftKings, talking about maybe developing something like that in the future. CoolBet has it now. It’s being deployed and is getting results right now. It is creating enormous player retention with the social engagement features that I haven’t seen in any other app. When we launch GAN Sports, rebranded from CoolBet, we’ll lift the bar that much higher and the industry will see how we can give our clients the competitive advantage to let them succeed in the marketplace.
You’ve announced exclusive distribution for Incredible Technologies and Ainsworth. How is that going to work?
We have the leading distribution here in the U.S. for online casino content. In this case, it’s the marriage of respective strengths of each organization. This deal between GAN and two very well respected manufacturers of EGMs will allow them to focus on what they do best, which is to create great content while GAN takes care of the technology and the “plumbing” of getting them online.
One of the weaknesses of online gaming has been the connection between the online casino and the land-based casino. How will GAN help clients bring online players into the land-based casino?
We were the first ones to do this back in 2012 when we worked with Maryland Live! and the Cordish Group to create a social casino that was linked to their loyalty program. From that we learned how to connect the rewards cards to the online gambling accounts. Everything flows from that relationship. Through that we’ve patented the GAN iBridge. We’ve seen more than 160 percent uptick in online gambling revenue from those who linked their rewards card to their online account, and 140 percent for sports betting. We connect those two worlds together in a way that is very sophisticated and ultimately creates value.
For years you’ve been saying that if retail casinos didn’t have a social casino they had to do it. Have you been able to convert those properties you’ve developed social casinos for into the real-money online world?
Yes, because over the years we’ve demonstrated the complexity of the technology. Retail casino executives have a lot of complicated technology inside their buildings and recognize how complex it is. Simulated gaming gives the same executive group the ability to understand how complex it is to operate in the online world. The online world is insanely complicated. We are as much educators and consultants as we are service providers. This is the time of one of the most exciting financial industrial opportunities and we’ve been able to help our clients take advantage of it.
Gambling for profit is getting more difficult in the land-based casinos. With restrictive rules, automatic shufflers and very strict oversight, it’s almost impossible to make money on blackjack anymore. Other casino games are even worse if you’re there to make money consistently. But Captain Jack Andrews, a professional bettor and Youtuber, has some inside information on how to make money betting sports and playing casino games online. He explains that a savvy gambler can find the best rules and bonuses and promotions that can make even a losing game profitable. He’s about to launch Unabated.com, a website that will advise its visitors on where to find the best games and how to get the greatest chance to win. He spoke with GGB Publisher Roger Gros from his office in New Jersey via Zoom in July.
Since the legendary Hard Rock Las Vegas closed two years ago, its replacement was highly anticipated. The first Virgin Las Vegas was introduced in March, owned by JC Hospitality Partners. For Richard “Boz” Bosworth, CEO of the company, it’s the culmination of a unique multi-operational concept that is quite new to Las Vegas. His vision and commitment to that plan have resulted in a unique, highly branded property just off the Las Vegas Strip that introduced Mohegan Gaming and Entertainment to the city as the operator of the casino. Bosworth spoke with GGB Publisher Roger Gros from his offices at Virgin in July. (SEE VIDEO BELOW)
GGB: Congratulations on opening Virgin Las Vegas. Tell us how the acquisition of the former Hard Rock hotel came about.
Richard Bosworth: Our ownership group was in pursuit of the Fontainebleau, dating back to 2016 and 2017. We were actually in due diligence in 2017 specifically. I literally happened to get a call from the owner of the Hard Rock at the time, saying that they heard that we were in town and we were just looking to acquire a casino hotel. He had heard a little bit about our multi-operative business plan and he thought their property, the Hard Rock, would actually suit itself well to our strategies. At that point, we just switched gears and thought it would be much easier, more functional, more economic and faster to market to acquire the Hard Rock and rebrand it and transform it per our plan. And a year later, we closed the transaction.
Was there any discussion of keeping the Hard Rock theme?
No, there was not. We had a very specific plan to introduce two new brands, or underrepresented brands, into Las Vegas, that being specifically Hilton and Virgin, and ultimately, Mohegan. And of course, we’re supplemented by AEG and our restaurant partners as well. But the plan was always to transform and rebrand the property.
How did you get involved with Virgin and Richard Branson?
Well, I was pursuing projects throughout the country with Virgin Hotel Group, specifically in Chicago and Las Vegas. And we liked him, and the Virgin Hotel Group liked our structure of bringing in a third-party experienced gaming operator. Letting Virgin focus on what they do, having a very successful gaming operator focus on what they do, because that would have been a new business to them. So that multi-operator environment was a bit different and they liked that.
Why do you think the Virgin hotel brand is really a powerful brand to introduce into Las Vegas?
I think not only is the Virgin Hotel brand, but I think Virgin as a brand, and the entire travel consortium, whether it be Virgin Holidays, whether it be the Virgin Airlines, whether it be the Virgin cruise ships, whether it be Virgin Galactic. It’s a brand that resonates very well, internationally. It resonates very well in North America. And it resonates very well in Las Vegas. We’ve really been embraced by the local community, which is such an important part of our business.
Tell us why you chose Mohegan as the gaming operator. How influential was your gaming adviser, Bobby Soper, a former Mohegan CEO, in that process?
We actually ran an RFP process with gaming operators around the world—many of them Native American; many of them not. The multi-operator plan really was birthed with Bobby Soper, myself and Hilton, frankly. Bobby spent a lot of time with me, going to visit the folks at Hilton talking about the protocols. How these two very successful operators can work together, utilizing their databases. What would be important to their customers. What does the gaming customer need from a hotel, what do hotel customers need as relates to food and beverage, and interaction with gaming and entertainment? So, Bobby was incredibly critical to the entire process.
Let’s talk about the property. Did you renovate the entire property? Every hotel room?
We renovated actually every inch of the front of the house of the property, including the five-acre pool deck, as well as the sense of arrival, the landscaping. You can see in the front, even the café. And there was a broken structured building in front that we took down; we opened it up to two acres so you have truly a true resort sense of arrival when you come into the property.
Tell us about your plans for meetings and conventions.
It’s really one of our most important investment pieces. We want to grow what was already a successful event business for the Hard Rock, but taking it to another level—which is why we’ve added about 30,000 square feet of additional event space. It’s a very, very important part of our business. Another reason is that we’re affiliated with Hilton. Hilton has 16 national sales offices that drive group business as well. A significant part of our business is driving groups and events. Not only, of course, to service the citywide events, but also the self-contained group events at the property.
How has the current uptick in business in Las Vegas helped Virgin? It seems like you really opened at just the right time, when people started to come back to Vegas.
Sometimes it’s better to be lucky than smart, right? We are clearly feeling the impact of the increase, and the traffic flow up to Las Vegas. It was a great time for us to open fully activated. I’ve never experienced a property that has gotten to 100 percent of its fair market share so quickly. We literally are there already, and my expectation level is that sometimes it can take anywhere from six months to a year. We’re selling out every weekend. Our midweek business is increasing two-fold every week, and now we are very close to market occupancies for midweek as well. And we are seeing a significant uptick as well in our group and event business.
Dave Rebuck is the longest-serving director of New Jersey’s Division of Gaming Enforcement, with his term now exceeding 12 years. In this exclusive podcast, he talks about how the DGE has operated since the legalization of sports betting in 2018 and how it navigated the pandemic. He spoke with GGB Publisher Roger Gros via Zoom in July. VIEW VIDEO BELOW.
GGB: When the pandemic hit in March 2020, casinos were forced to close within 24 hours. How did New Jersey respond to this?
David Rebuck: Unfortunately, we had some experience with this before. Prior to my tenure, casinos had to close down for budget reasons, and then twice while I was here. In 2011, we had to evacuate the island for Hurricane Eileen, and we closed the casinos for one day. The second was a little more significant with Super Storm Sandy. Fortunately, Atlantic City and the casinos were not seriously impacted, but we shut down for five days because of the impact on the infrastructure in the state. So we’re very familiar with anticipating closing and following the procedures to safely and securely shut down the casinos.
When the casinos reopened in July 2020, there were major restrictions on how they could operate—no indoor dining, capacity limits, social distancing and other things. How did the DGE enforce that?
This is one of the most highly regulated industries in the state, and the industry knows it. When the governor gave them the opportunity to take a risk and reopen, they knew they had to take their responsibilities seriously and if they didn’t follow the rules strictly, that opportunity would quickly be taken away. I was very encouraged by their aggressive approach to enforcing the restrictions. We had state troopers and investigators in there every day and had very little cause to cite violations.
New Jersey was the state that led the challenge to the Professional and Amateur Sports Protection Act (PASPA), so it was obvious it would become the first state outside of Nevada to offer sports betting to its citizens when it was successful. How were you able to get up and running so quickly?
You have to remember that New Jersey passed sports betting by a referendum in 2011 and drew up regulations that would have permitted it in 2013, but the federal government slapped an injunction on us and that shut it down. But as the case wound through the courts, I thought we needed to take a deeper dive into the regulations because I was not comfortable with the original set of regs. So obviously, we relied very heavily on Nevada, but then realized we had to go overseas to see how they regulated modern sports betting. We had teams of people go to Europe and Australia to not only learn from regulators but from operators as well.
How important was it to get the online aspect of sports betting correct?
We quickly realized by visiting Europe that we’d miss a big opportunity if we used sports betting simply as an amenity to bring people into the casinos like they do in Nevada. It works fine for Nevada, but we realized that sports wagering was going in a different direction, and when we looked at the technology behind sports betting, what we had in the United States was vastly inferior to what they offered in Europe. So we changed our regs to reflect that.
How does New Jersey handle the “skins” factor of both iGaming and sports betting?
When we first heard this term in Europe, it was very confusing, but eventually realized it consists of partnerships with licensed entities. In New Jersey, we set a limit of five skins for iGaming. And only the casinos can offer skins for iGaming, not the racetracks. There still are plenty of skins available for iGaming. For sports betting, it’s different. Both casinos and racetracks can only offer three skins, and they are all maxed out.
When Terry Glebocki arrived at Ocean she found a series of owners and senior management that has failed to utilize the property to its full potential. When she was first appointed interim CEO and later permanent CEO, she began to turn the property around by a series of physical changes and innovative marketing campaigns. Then the pandemic hit. Turns out it was a bump in the road because once Ocean reopened, it has continued to increase revenue and market share. She explains how the property navigated the pandemic and how it is performing now with all restrictions removed. She spoke with GGB Publisher Roger Gros for the cover story of the August issue at Ocean in June.
Joe Lupo joined Hard Rock International in 2016 where was assigned to guide the expansion project for Hard Rock Tampa property, one of the most successful casinos in the world. Two years later, he was transferred to Hard Rock Atlantic City where he helped to improve revenues and performance at the property. Lupo knows Atlantic City like the back of his hand. He spent over 12 years as an executive with Borgata, still Atlantic City’s most successful casino. Lupo talks about how his property and his company navigated the pandemic, how it managed the reopening process and why it’s gaming market share every month now that all restrictions have been removed. He spoke with GGB Publisher Roger Gros at his office in the Hard Rock for the cover story of the August issue of GGB in July.
Richard Sneed was elected vice chairman of the Eastern Band of Cherokee Indians in 2015 and principal chief in 2017, and re-elected in 2019. Sneed is dedicated to diversification of the tribal economy, and has led an effort to enter commercial gaming, which has occurred with the purchase of Caesars Southern Indiana.
GGB: How did the Cherokees get into gaming, and how have you achieved the success that you’ve had so far?
Chief Richard Sneed: We first began around 1994, when the initial approval was given by tribal council to go into Indian gaming. It wasn’t something unanimous, even among our tribal citizens. There was some pushback; in fact, there was a group that said they, point-blank, did not want gaming. But I don’t think anybody could imagine our tribe without it today, some 26 years later.
What was the economic state of the tribe prior to engaging in the gaming industry?
Prior to gaming, really our only source of revenue was tribal bingo, which we were very proud of. It was the world’s largest; it seated 5,000 players at the time. That was only open two weekends a month. And so, other than that, tourism was our economy, and of course, that’s seasonal. So, really, once the last leaves fell off the trees in October, that was it. Everything shut down. It was a ghost town, and there was a lot of unemployment, and a lot of poverty as well.
Tell us why you decided to partner with Harrah’s initially.
There was an RFQ sent out, and there were three firms that had responded. At that time, Harrah’s wasn’t part of the Caesars family. Casino Magic responded, and I don’t even remember who the third respondent was; I’d never heard of them either. And interestingly enough, I grew up in New Jersey, because my mom’s from there. I’ve actually worked on the Atlantic City Boardwalk, as a teenager. So I was familiar with Bally’s and Harrah’s and Trump. And so it seemed to me to be a no-brainer to go with Harrah’s, and I was very grateful that the tribe did at that time.
Has anything changed now that Harrah’s is a member of the Caesars Entertainment family?
We still have a tremendous relationship with Harrah’s, even under the Caesars umbrella, which is why we’ve stayed with them in our management agreement for 24 years now.
Harrah’s Cherokee was a success right from the start. It was clear that this was going to be a big revenue stream for your tribe.
Absolutely. I don’t think anybody could have anticipated how successful it was going to be. I think on the opening day, the casino actually ran out of cash. So, that’s a pretty good problem to have. We were not prepared for the influx of people, and thought it would develop over time. But it happened right out of the gate, and it really hasn’t stopped since.
Let’s talk about Caesars Southern Indiana. There have been a few tribes that have successfully entered the commercial market. Why did your tribe decide to pursue this opportunity?
It’s a matter of looking toward the future and understanding that the attitudes toward gaming in this country are changing rapidly. And we wanted to be well-positioned, so that when those markets opened up, we would be able to compete for gaming licenses in those emerging markets.
So this could lead to other opportunities, if this one is successful?
Absolutely. The idea that we can just rest on our laurels with our very successful Indian gaming operation isn’t wise. Our people are dependent upon the services that we provide, and we have a very robust health care system here, a very robust education system, and we’re very proud of our post-secondary education system, where we pay for our tribal citizens to go to university, all the way through Ph.D. We want to ensure that those benefits exist seven generations into the future. And so we can’t just rest on our laurels and expect that things will always remain the same, because everything’s always changing.
You decided to retain the Caesars brand. Is that because the Harrah’s brand in North Carolina has been so successful for you?
Well, there are several factors. Obviously, the very successful relationship we’ve had with them. But more importantly, the Caesars Rewards program. We want to continue to retain our players, and ensure that we’re not losing our players to other brands. And so, the brand loyalty is important, the rewards program is important, and the relationship has just been phenomenal over the years, and we want to continue to foster that relationship, because it’s mutually beneficial.
You put together a great team, starting with the former Caesars regional president, Scott Barber. He’s got a lot of experience, and the team itself has a lot of experience, particularly in your specific market. What is your expectation when you do take over the property?
We want to keep continuity with the existing staff. We didn’t want to come in and create upheaval by changing leadership. So, we’ve kept the leadership team that we have there, and all the employees. There are some improvements we want to do on the property—just some upgrades, capital improvements, especially the hotel, because the hotel is older. We’ve been very successful at our property here in Cherokee, with very high customer satisfaction ratings. And so, we wanted to foster that same type of behavior and outcomes at the CSI property.
John Koster began his career in hospitality and after some experience on the Pacific Rim, he returned to the U.S. to work for several gaming companies. He joined Eldorado Resorts several years ago, and oversaw the company’s property’s in Lake Tahoe both before and after the Caesars transaction. Just recently he was tapped to replace the retiring Steve Callender and now oversees the three Atlantic City properties, as well as Harrah’s Philadelphia and Horseshoe Baltimore for Caesars Entertainment. He explains how he navigated the pandemic in Lake Tahoe and what he expects of the Atlantic City properties, where Caesars has committed to reinvesting millions of dollars. He spoke with GGB Publisher Roger Gros for the cover story of the August issue of GGB.
One of the figures who defined the modern integrated resort, Don Brinkerhoff, passed away peacefully at home in California on July 16 at the age of 91. Brinkerhoff founded his own firm with his wife Barbara. His firm got its first recognition in gaming when he was hired by Steve Wynn to create “an oasis in the desert” at the Mirage which opened in 1993. He also created the 140-foot volcano that remains the signature of the resort to this day. He later went on the design the Conservatory at Bellagio and the mountains at Wynn Las Vegas.
Brinkerhoff was elected to the American Gaming Association’s Gaming Hall of Fame in 2016 and achieved the highest honor for landscape architects becoming a Fellow of the American Society of Landscape Architects as voted by his peers.
In addition to working for major casino companies like MGM Resorts, Caesars Entertainment, Las Vegas Sands, Golden Nugget, Genting, and many more, Lifescapes was employed by the Clark County to design and install the palm trees and landscapes in the middle of the median on the 4.5 mile stretch of Las Vegas Boulevard that today defines the Strip.
Lifescapes also was a sought-after designer in the non-gaming world and worked on such notable projects as California’s the Grove, Majestic Mansions in China, Diamond Cliff Resort in Thailand, and Fontainebleau Miami Beach among many others.
Brinkerhoff took pleasure in delighting the guests of the properties he helped design.
“Never underestimate the role of discovery and surprise in the design process. Exceed expectations, yes, but more importantly, provide an experience or a detail that is unexpected, and you will delight your guests more than you can ever imagine,” he said.
Listen to the GGB Podcast with Brinkerhoff recorded in 2013 at Mandalay Bay Casino Resort in Las Vegas.
Sightline Payments has been developing unique cashless systems and strategies for over 10 years. When the pandemic made cash transactions disagreeable, casino operators finally began to understand the importance of going cashless. Omer Sattar, a co-founder and executive vice president of Sightline, explains why the move toward cashless transactions is accelerating and why the debut of Resorts World Las Vegas, with a full suite of cashless procedures, is so crucial to the success of the industry. He spoke with GGB Publisher Roger Gros from his Las Vegas office in June.
GGB: Just within the last year, the drive toward cashless technology picked up quickly. Is that because of the pandemic?
Omer Sattar: There’s been a fundamental shift, and there’s a series of things that have happened. In 2007, the iPhone comes out. No one had ever heard of an app before that, right? Now there’s an entire generation of kids that are growing up who know nothing but an app. Subsequently, a number of years later, Apple Pay comes out. Before that, there was no such thing. Now it’s used by tens of millions of people. In March of last year, when everything shut down, none of us knew what was in store for us. In May, we started getting calls from operators around the country. Since that time, contactless payments and digital payments have skyrocketed. So definitely the pandemic has been an inflection point for us in the gaming industry.
Let’s focus on your most recent installation at Resorts World, the complete version of the Sightline products, especially the Play+ system. Can customers go completely cashless at this resort for the first time ever?
That is correct. What Resorts World has done is truly remarkable. They’ve launched a handful of products all at once. The pedigree of Resorts World is obviously incredible. They have been doing forms of cashless in their overseas properties for the better part of a decade. So, they understand the economics of cashless, and how it works, and what drives consumer adoption. In fact, at their Genting Highlands property in Malaysia you cannot play with cash. So, in partnership with us and Konami and with others, we’ve worked to deploy the system. It’s gone a step further. It’s actually full mobile cashless, cardless cashless, and contactless cashless.
I was able to participate in one of your beta tests at Mohegan Sun several years ago. It was a bit clunky. What improvements have you made?
Firstly, we’d always thank Mohegan Sun for being truly the first in the marketplace. But that was not a mobile-centric solution. You still had to have a card, you had to put a card in the slot machine, and the world is going beyond that. In this case, you’re downloading an app. The app is taking all your information in. So, we’ve taken a lot of the lessons from sports and from iGaming, and we’re bringing them back into the brick-and-mortar casino. It’s all within the app. Whether it’s slots or tables, it works with the app.
Do you need more than one app? Of course you get the Genting Rewards app, and then do you need a Sightline app on top of that?
That was a critical piece for Resorts World, and the beauty of it is there’s only one app. The provider of the app for Genting is a company called Joingo, which we just, in fact, purchased a few weeks ago. Your loyalty is integrated, your payments are integrated, and all your rewards are integrated. So, from a consumer standpoint, you’re not hopping between apps. All your account balance is available to you in that single app, and so, it is a very seamless consumer experience.
A big hurdle over the years has been the regulators. They didn’t want players to access their bank accounts or use credit cards to gamble. How did you get them on board?
We’re working with regulators around the country in seven or eight commercial casino jurisdictions and just as many tribal jurisdictions. The regulators are taking more time to understand that digital transactions are safe and secure, and you do not have to drain your credit card accounts or your checking accounts. There are ways of putting limits, and in fact, in many ways, they’re much better than cash.
In observance of International Women In Engineering Day (June 23), GGB asked three GLI engineers to talk about their careers, the paths they took to get there, and their ascent in what was once a male-dominated profession. Sangeeta Reddy, vice president of engineering, is based in Las Vegas. Virginia Hollis, senior manager of engineering, works in the Denver lab. Melissa Aarskaug is vice president of cybersecurity at Bulletproof, a GLI company. They spoke with GGB Managing Editor Marjorie Preston via zoom in June.
The legalization of iGaming and sports betting in Michigan may not have been pretty, but it has been efficient and effective. As the prime sponsor of the bill, Brandt Iden struggled for several years to get it passed only to see former Governor Rick Snyder, a Republican like himself, veto the bill. Starting from square one with new Democrat Governor Gretchen Witmer, Iden was able to form a bi-partisan coalition that collected the best practices of iGaming legalization to help pass a law that has been successful from the start. After leaving the legislature, Iden joined SportRadar to help other states realize that realities and possibilities of legalizing iGaming and sports betting. He spoke with GGB Publisher Roger Gros from his home office in Michigan in June.
For a regulatory body, the National Indian Gaming Commission had several important challenges during the pandemic. Chairman Sequoyah Simermeyer says his agency used the pandemic to focus on streamlining processes and procedures to better serve the tribes and operations depending upon them. Now that the commission has its full component of three members for the first time in several years, Simermeyer is enthusiastic that his agency will exceed expectations in the primary function: the integrity of the industry. He spoke with GGB Publisher Roger Gros on Zoom in May.
GGB: Less than a year after you were appointed chairman of the NIGC, the pandemic hit. Explain what kind of challenges you had to the operation of the NIGC.
Sequoyah Simermeyer: One thing we did, soon after having to deal with the pandemic, was to focus both on our operations and on how we meet our mission. We really divided our focus into projects that were internal and external. And because of that, we’ve been able to be somewhat innovative in how we’re meeting our responsibilities. And we plan to keep addressing those by both continuing to support the staff at NIGC, who have been working hard to make the most of these circumstances, and also really remain dedicated to our partnership with tribal communities. We’ve prioritized operational work that addresses issues early so they don’t become unmanageable problems. We’ve really focused on prioritizing policies and practices that are transparent and consistent.
Tell us how technology assisted staying in touch with the tribes during this period.
Even before the pandemic, we dedicated all of our technical assistance—which is part of our statutory requirement for the agency—to being virtual. We typically will hold in-person region-training conferences, and we moved all of that to a virtual platform, and we’ve had a good amount of success at reaching a broad audience with that. We had to make adjustments and upgrade some of our virtual formats, so that we could use it not just for our technical assistance that we provided through our trainings, but also in keeping communication through region and focus meetings with tribes, and through commission outreach with tribes, at the commission level.
How did you oversee the closing of casinos in Indian Country?
Well, the Indian Gaming Regulatory Act sets up a little bit different framework for how we approach an issue like this. It definitely was a closure that we had never seen before in the industry, and a Northwest tribe was one of the first ones to make that decision, and tribal decision-makers, tribal lawmakers were leading that decision-making process. They were doing it based on circumstances at the local level, that were put in place to protect employees, and make sure that customers were safe—it was driven by local conditions. It was important early on for the NIGC to help support that decision-making process, by monitoring and assisting tribal decision-makers. We also emphasize the expectation that the tribal gaming regulatory authorities, under our regulations, and under IGRA, are part of that decision-making process, and encourage coordination with local jurisdictions to be able to make that assessment that tribes were making.
This is the first time in a while that you have a full complement of commissioners. Is this the first time that all three commissioners are Native Americans?
I think in the past there’s been three Native commissioners serving at the same time. All three members of the current commission are proud to be Native, and proud to be serving on the commission. I’m a member of the Coharie tribe from North Carolina. My family has also got strong roots in northern New Mexico. So, I think that shapes my identity, but I know that Vice Chairwoman Isom-Clause and Commissioner Hovland come from tribal communities and are active in their communities, and they bring their own perspectives from Indian Country, that kind of help to inform our decision-making. But having a full complement on the commission I think is what the Indian Gaming Regulatory Act contemplated. It helps to have a broader process and really improves the work of the agency. We’re excited to have a full commission.
What is the NIGC role in overseeing sports betting in Indian Country?
One of the things we did early on was to put out guidance on sports betting, and what some of the considerations were for the NIGC, as tribes were contemplating this. As tribes contemplated if that’s an option that they wanted to pursue under their restrictions through a compact on Class III gaming, we tried to make clear that our interest was in looking at the management contract approval requirements that are laid out in IGRA, and whether or not arrangements that were being made had implications for the sole proprietary interest requirement that’s in IGRA.
But with the different options that tribes were pursuing, we try to help put that information out so tribes and their partners can consider what role the NIGC might play in there. But it really does depend a lot on how they’re structuring that relationship, and how they’re providing it. So there’s something like four different models that we saw that were laid out in that guidance. I think the most common approach that we’ve seen is that a tribe with a licensed operation will hire a vendor or a consultant that provides discreet information or advice to the tribe but allows them to hire someone to provide advice on setting the line for the wager, or to whether or not they should accept the wager. So, those are some of the considerations that go into whether or not management is occurring, or whether or not there’s a sole proprietary interest, which are the concerns under the Indian Gaming Regulatory Act.
Jennifer Shatley is one of the leading experts on problem gambling in the U.S. She spent almost 20 years with Harrah’s/Caesars Entertainment leading that company’s responsible gaming programs. As a member of the UNLV responsible gaming effort, Shatley authored a white paper on sports betting and online gaming marketing and the dangers of encouraging problem gambling. The widespread and rapid growth of online sports betting and iGaming puts pressure on companies to gain market share and use any methods available to acquire customers. Shatley spoke with GGB Publisher Roger Gros from her home office in Las Vegas in May.
The legalization of sports betting in the U.S. following the repeal of the Professional and Amateur Sports Protection Act in 2018 brought many new players into the game. But it also focused attention on people who have been involved in U.S. sports betting in the one legal jurisdiction—Nevada. Art Manteris arrived in Las Vegas in the late 1970s, working at such legendary books as the Stardust, Caesars, Westgate (formerly the Las Vegas Hilton) and finally 20 years with Station Casinos. Manteris is a contrarian when it comes to sports betting and understands the realities of operations. Even though he’s retired from the casinos, Manteris plans to stay engaged in the industry. He spoke with GGB Publisher Roger Gros in May at the GGB offices in Boulder City, Nevada.
GGB: Congratulations on your recent retirement from Station Casinos. How is your life going to change?
Art Manteris: My life has already changed in significant ways. I’m trying to de-stress and ratchet down the intensity that becomes a part of your life on a daily basis. It’s hard to activate the off switch. It’s been less than two weeks but I’m already enjoying myself. I’m walking, hiking, biking… Doing all the things I never had time for in the past.
What has surprised you about the growth of sports betting since the repeal of PASPA?
There have been a lot of things that have surprised me. First of all, PASPA becoming the law of the land 28 years ago. It was a mistake and was imposed for reasons that were not valid. I was with Hilton Hotels at the time and we had just merged the operations of the Las Vegas Hilton and the Flamingo for the first time. We had the idea to go to racetracks around the country to set up sportsbooks. There was some interest from the tracks, although others were adamantly opposed. So PASPA ended that, but it didn’t affect our business in Nevada at all.
I was surprised when PASPA reached the Supreme Court. That was the hard part. But I wasn’t surprised when it was overturned. Those who pushed it were relentless. And when they reached the highest court in the land, then the momentum shifted. They went from a longshot to a favorite.
Each state seems to have a different model they’re using to operate sports betting. Why is that?
I have been disappointed that they haven’t used the Nevada model in most cases. We have gone through growing pains here and now have a very efficient and profitable system. I won’t point fingers at any state when it comes to regulations, but I’ve seen some that are really misguided.
Lots of sportsbook operators like to play the games too. Some become professional handicappers. Were you ever tempted to make the jump to the other side of the counter?
Once I got into management, no. When I became the sportsbook manager at Caesars Palace, I decided I’m going to be on one side of the counter or the other. I’m not going to try to do both. I was not going to try to capitalize on any information that came my way. Once I made that decision, I never looked back. But now that I’m not working full time in the industry, who knows? (laughs)
Tell us what you think of the sports betting apps. They are pretty rudimentary. Will there ever be a great leap forward?
I have a different perspective than most. With the apps today, there’s so much emphasis on messaging and promotions and contests. And those things are great. I don’t mean to diminish or belittle those efforts, but as a lifelong career bookmaker, an app has one function at the end of the day: Take a bet and pay a bet. That’s why they exist. An app can have all the bells and whistles, but if a guy can’t bet when and where he wants and what he wants to bet on, then it’s failed. The most reliable apps that allow you to make a bet quickly are the best to me.
Resorts World Las Vegas promises to be a game changer on the Strip. The first new casino to open in 10 years, RWLV will take advantage of all the technology advancements in hospitality while delivering a fresh new product to Las Vegas. Scott Sibella explains how he spent the last two years honing the attractions of the property and Doni Taube talks about how the marketing of the property will appeal to international visitors once they start returning to Las Vegas. They spoke with GGB Publisher Roger Gros in April for the cover story of the June edition of the magazine from hotel rooms at RWLV.
This month IGT celebrates 25 years of Wheel of Fortune Slots, the brand players seek on every casino floor for its life-changing jackpots. Learn more at IGT.com/WOFSlots25
It seems like just yesterday, but the debut of the Wheel of Fortune slots took place 25 years ago. As the director of premium content for IGT, Boris Hallerbach is responsible for keeping the product fresh and profitable. He explains the roots of the Wheel of Fortune game, how important it is as brand, and why players continue to gravitate to the games. For the 25th anniversary, IGT has special promotions planned for players and will display all the new Wheel of Fortune slots at the Indian Gaming trade show in July and G2E in October. Hallerbach spoke with GGB Publisher Roger Gros from his home office in May.
From Silicon Gaming to WagerWorks, and from Wynn Resorts to PlayStudios, Andrew Pascal is one of gaming’s most entrepreneurial individuals. As an operator and a supplier, he brings a unique approach to any effort he considers. His tenure with PlayStudios has been his longest, as he helped to pioneer the field of social gaming. PlayStudios recently announced it is going public as a special projects acquisition corporation (SPAC) with former MGM CEO Jim Murren, and Pascal explains what the means for the company and its future. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas in April.
The emergence of analytics and big data has opened the study of how slot games are consumed by players. When Nick Hogan founded Reelmetrics along with John Boushy and William Schoofs, he pledged to use analytics and big data to help operators and manufacturers streamline their knowledge of the games business. Reelmetric’s mission is to map the slot genome and in the process supercharge the returns of its subscribers, employees, shareholders and the industry at large. He spoke with GGB Editor Frank Legato in March.
The third anniversary of the U.S. Supreme Court decision overturning the Professional and Amateur Sports Protection Act (PASPA) was celebrated in May. The American Gaming Association then took the lead in a campaign to legalize sports betting in jurisdictions across the U.S. Sara Slane took the lead in that effort, and was hugely successful. Today, 30 states and territories have active or legal sports betting. Slane now heads up her own consulting company advising jurisdictions and companies about how to enter the U.S. sports betting market. She spoke with GGB Publisher Roger Gros about the rapid deployment from her home office in Maryland in April.
GGB: It seems like an eternity, but it has only been three years since the reversal of PASPA. How surprised are you that so many states have legalized sports betting in that time?
Sara Slane: I’m shocked that so many states have legalized sports betting in such a short time. At the end of the day, we thought that we’d have around 43 states that would legalize sports betting, but we didn’t expect it to go so quickly.
One of the major states, New York, just legalized mobile sports betting. What’s your assessment of that law?
I’m pretty passionate about this piece of legislation because I think it’s terrible for the industry. On one hand, I’m glad New York finally got the full legalized sports betting. On the other hand, it’s a “be careful what you wish for” situation. This has set up a race to the bottom on tax rates. It wasn’t a thoughtful process. It doesn’t look at the holistic picture for the industry. If New York had done some interesting things it would have moved their entire gaming industry forward and would have been a much larger economic driver for the state.
We’ve seen some hiccups with the state lotteries running sports betting, certainly in Washington, D.C. and in Tennessee. Is it a bad idea to have the lottery in charge?
I wouldn’t want to paint a broad brush stroke against the lottery. I don’t think that’s the issue. Let’s not forget sports betting is a new industry and states aren’t used to it. Adopting best practices and looking at what other states have done is the best way to go. You don’t have to recreate the wheel. There are some very good examples of how states have handled this, so you just need to rinse and repeat. I’m not sure why Tennessee has stumbled out of the gates, but I don’t think you can blame it on the lottery or any individual.
Is it because the lotteries are used to huge profits? Several lotteries have required that they make a 10 percent profit, when in the real world a 5 percent profit is a banner year.
I think when you set a monetary goal of the most amount of money possible in very black-and-white terms, it’s going to lead to very bad policies.
When will states realize that the taxes they can make from online gaming will dwarf sports betting taxes?
I wish I had the special sauce to answer that question. I’ve spent 10 years explaining the numbers and it’s tough. There is still belief, although there is no proof, that cannibalization is going to occur. There’s still the perception that having a mobile casino will mean people will be less interested in going into the bricks-and-mortar operation. It’s a tough sell. The ease of access is also a hurdle to overcome. The flip side is that it’s happening around the world, and we’re making progress with online sports betting. And done the right way, it really completes the package on an omnichannel delivery system.
The San Manuel Casino is the most successful casino in Southern California. The chief reason for this success is that it’s the closest casino to the Los Angeles metropolitan area. But with increasing competition from tribes with renovations, new additions and more of everything, San Manuel has responded by building a new hotel, adding a showroom and meeting space, and expanding the casino floor. GM Peter Arceo explains how that will impact the tribe, employees and customers. This interview was conducted just prior to the announcement that San Manuel was buying the Palms casino in Las Vegas so Arceo declined to answer any questions about that transaction. He spoke with GGB Publisher Roger Gros from his office in Highland, California in April.
As attention turns to the first Native American Interior Secretary Deb Haaland, John Tahsuda looks back on his time with Interior under the Trump administration where he served as principal deputy assistant secretary for Indian affairs and senior counselor to the secretary. Tahsuda, who previously served as a staff member on the Senate Indian Affairs Committee, takes a deep dive into the inner workings of the department and how its wide oversight over many federal issues makes it sometimes difficult to navigate. He explains how the department truly impacts the lives of individual groups and citizens in the U.S. and tribal nations. And he reviews the challenges ahead for the Biden administration. He spoke with GGB Publisher Roger Gros from his home office in Washington D.C. in April.
Roy Student arrived in Las Vegas in the early ‘70s and immediately got involved in technology that moved the casino industry forward. He was an early participant in CMS systems, server-based technology and an advocate for non-gaming amenities at a time when only gaming revenue was valued. But Student’s long career included interacting with some of the greats of gaming, and his recollections remind people that if you don’t understand the past, you can’t prepare for the future. He spoke with GGB Publisher Roger Gros from his home office in April.
From a small casino in Rhode Island to a national brand encompassing every way gaming is consumed in the 2020s, Soo Kim has directed the explosive growth of the new Bally’s Corp. over the past several years. Kim is embracing the disruptive elements of interactive gaming and extending the company’s efforts into technology, media and entertainment. Kim explains how the plan has evolved and how he’s been busy implementing it with purchases of new casino properties, gaming technology companies and joint ventures with media and entertainment companies and reviving the classic Bally’s brand. He spoke with GGB Publisher Roger Gros in April for the May cover of the magazine. The interview was conducted prior to the purchase of the Tropicana in Las Vegas in late April.
https://youtu.be/_yygSgAlhvM
Cashless payments have been on a roll since the beginning of the pandemic. Not only are people more used to electronic transactions, they also are hoping to avoid contact with cash or devices that used to be the only way to make a payment. Jacob Lanning returned to IGT last year to lend his expertise in developing the IGT Resort Wallet, which allows customers at a casino resort to easily load money onto slot machines, purchase chips at table games or many any transaction across the resort without any physical contact with a person or device. He spoke with GGB Publisher Roger Gros from his home office in Las Vegas in March.
https://www.youtube.com/watch?v=g6RQgBO45bw
Hard Rock International has been on a roll lately. After opening the Guitar Hotel in Hollywood, Florida in 2019, the company has opened or gained licenses/agreements in Cincinnati, Gary, Indiana, northern Illinois and southern California, and added a collection if iGaming veterans to elevate the company’s online operations. Jim Allen has been directing the company, owned by Florida’s Seminole Tribe, for 20 years, and sat down with GGB Publisher Roger Gros to talk about these developments and more.
GGB: The last time we talked, we were at the opening of the Guitar Hotel at Hard Rock property in Hollywood, and it was a fantastic development. Before the pandemic, what was the response of your guests to that property?
Jim Allen: Very humbly, the response was tremendous. People are just blown away at the architectural design, the fit, the finish. I’m very proud of all of our employees providing world-class service. And frankly, it was actually exceeding our expectations.
Let’s talk about when the pandemic hit. What was your concern at that point, when you were forced to close down?
We were like the rest of the world. We wondered, how long will this last? Initially, we thought maybe it’s a few weeks. But we were a little bit ahead of the curve, because of our operations in China. We have a hotel in Shenzhen, which already had been closed down in January, and we saw that this thing was maybe a little bit more than just a week or two. But the ripple effect here in the United States certainly exceeded what we anticipated. But, like everyone else, we were looking at all the covenants of our debt, and looking at cash, but most importantly focusing on the safety of the tribal members and all of our employees.
When did you determine it was safe to reopen, and what were some of the steps you took there to reopen?
We made the determination literally within weeks of when we closed that we were going to go back and review all of our standing operating procedures on an individual and line-item basis. So, myself and a core group of around 20 to 30 people went over all our procedures, whether it was in the cage, or food and beverage, or housekeeping, security or other departments. Most importantly we were looking at technology, at how we could create something that gives the perception of being safe. And clearly, that’s how we created SAFE + SOUND, and it just has been a game-changer. We’ve had literally prime ministers, four or five governors, including Governor DeSantis in Florida and Governor Murphy in New Jersey, say that SAFE + SOUND is truly world-class. We were the first to do it in the country. Many have followed suit. But we know by communicating with our database on a daily basis, it was a game-changer.
So, let’s talk about outside of Florida. You’ve got a couple of new properties. You took over the Jack casino in Cincinnati, rebranded it as a Hard Rock. You’re on the way to opening in Gary, Indiana. What kind of expansion are you expecting in those places?
Cincinnati, pre-Covid, was frankly extremely successful. Business was up over 30 percent once we took it over, by implementing our database, our technology and marketing programs. Around mid-summer we’re looking at a grand opening to celebrate the rebrand. As far as northern Indiana, the building is done. We just received all of our approvals recently, from the Indiana Gaming Commission, and we announced a May 14 grand opening. If you look at this location, it’s directly on the interstate, about seven or eight miles from the Illinois border. This truly is northern Indiana/Illinois play, obviously at a very competitive tax rate, compared to the Illinois tax rates, and it’s a totally different experience than riverboat gaming.
You also signed a deal with a second California tribe, in addition to the first Hard Rock casino near Sacramento. Where will it be located?
As far as Tejon, we actually signed that deal probably seven years ago. But it took us a while, working with the tribe, to get approvals, which were finally granted by the Department of the Interior. Now that we have that done, we’re working with architects, getting the building designed, and starting the process to negotiate the compact with the state of California.
How about Las Vegas? Just last month, the former Hard Rock, which you didn’t own, opened as the Virgin Hotel. And there’s always been a lot of talk that a Hard Rock would work very well in Vegas. What’s the status on your consideration of properties there?
As we’ve previously stated, we still think Las Vegas is the gaming capital of the United States. Las Vegas has an amazing ability to continue to reinvent itself. If the right opportunity at the right time comes up, we would certainly be interested in coming back to Las Vegas, obviously under our ownership.
I thank you for mentioning that we did not own that property. We had nothing to do with it. We did not think it complemented the Hard Rock brand in any way, shape or form. Certainly I think it did when Peter Morton, the founder of Hard Rock, owned it, but its last five, six, seven years, I think the property struggled, for a whole host of reasons. So, we’re excited for Virgin and Mohegan Sun now having a new opportunity in that building, and it allows us to look at any opportunity that may come up, whether it be on the Las Vegas Strip or anywhere in the state of Nevada.
https://youtu.be/_jn8sigcp34
The Plaza Hotel Casino in Downtown Las Vegas is 50 years old this year. The property was built on the site of the former Las Vegas train station and was known as the Union Plaza when it first opened. It experienced a series of owners, including the legendary Jackie Gaughan, who owned most of Downtown at the time. Jonathan Jossel arrived in 2007 with the most recent owners, the Tamares Group. He’s been CEO for the last seven years and has guided the property through a major expansion, a pandemic and the rebound of the Downtown market. He spoke with GGB Publisher Roger Gros from Oscar’s Steakhouse in the famous dome of the Plaza in March.
GGB Podcast sponsored by IGT.com
The GGB Podcast sits down with Michael Facenda, the senior vice president and general manager of the Agua Caliente casino in Cathedral City, California, on the opening of the new property in the middle of the pandemic and how it has been performing since.
https://youtu.be/MuFmBQoSS64
Matt Wilson made his name rising up through the ranks at Aristocrat Technologies. He was involved in all aspects of the company’s success at one time or another. When he was recruited to lead the gaming division of Scientific Games, he was required to honor a non-compete of nearly a year. But when he came on finally, the pandemic hit. He explains how the company handled that challenge and why it’s poised to move forward as the crisis wanes. He spoke with GGB Publisher Roger Gros at the Scientific Games headquarters in Las Vegas in January.
GGB: You stepped into your role as the CEO of Gaming in March 2020. What kind of plans did you have before the pandemic hit, and what was the impact?
Matt Wilson: I started March 2, with a dream and a bunch of aspirations, and that quickly changed. A week later, the industry started to shut down. So, not exactly how I drew it up. I think the Mike Tyson line is, “Everyone has a plan, until they get punched in the mouth.” And we all got punched in the mouth in a pretty profound way in 2020. Like every business, we quickly went into crisis management. We had to make a bunch of big decisions, and hopefully we got the majority of those right, and I think we’re moving in the right direction.
How did you stay in touch with your clients during this time?
The world’s turned pretty dramatically, I think. It used to be you had to get on a plane or a train or a car and go see a customer. Now you’ve got this rise of the video conferencing tools. It’s very easy and efficient to communicate with customers. The first thing we thought was, how do we be of service to our customers? And we came up with this idea—a thought leadership series, which was really about getting all of our customers on the line, talking about the things that mattered to them. We have a big global footprint, whether it’s Australia, or Asia, or North America or the U.K. So, we got operators from all around the globe on a call. Initially talking about social distancing, and reconfiguring floors, and those types of things, we then evolved the topics over time. We tried to be of service to customers, and bring content to them that was going to be useful for them navigating their way through the pandemic.
You’re kind of getting the band back together here at Scientific Games. You’ve brought in a lot of your colleagues who you worked with at Aristocrat—Siobhan Lane, Connie James, Rich Schneider and others.
I actually think it’s a new band. It’s a different band. More like a supergroup! We have superstars from all these different bands, (including) the legacy employees here that have a lineage back to Shuffle Master or Bally or WMS. And then we’re bringing some people in from the operator side, like Eileen Moore, and there’s the host of people from Aristocrat, who have been drawn to this opportunity. Rich Schneider is on the way. He’s going to lead our global R&D teams. We’ve got Ted Hase, who’s maybe one of the best designers in the industry joining. And then ultimately, at the helm, we’ve got Jamie Odell, as our chairman, and Toni Korsanos as our vice chair, who were widely regarded as the architects of Aristocrat’s success—both big believers in the intersection of strategy and culture. And then finally we’ve got Barry Cottle, who’s my boss, our CEO, and he brings a gaming perspective from Zynga and EA Sports. So, it’s kind of a melting pot of lots of different executives with lots of different perspectives.
Most manufacturers have been concentrating on the established brands, rather than going out and getting the licenses that cost so much. What has your strategy been?
We have a few large tent-pole brands in-house—evergreen franchises, like The Wizard of Oz, Willy Wonka, James Bond, Monopoly, these types of brands. Ones that really kind of cut through social consciousness. And then we have a lot of in-house proprietary brands. I think the part of the business that most suppliers are moving away from is that kind of middle-ground, these kind of second, third-tier licenses, that don’t have the same panache with players. I think it may be a consequence of the fragmentation of media. In the ’60s and ’70s, you’d have shows like MAS*H on TV, which 50 percent of the population would tune into. But now you’ve got Netflix with a million different offerings, and cable TV with 300 different channels, and so, the audience is fragmented across a ton of different brands. So, it’s hard to find those big tent-pole brands that reach the mass audience now. That’s a dynamic playing out in the industry.
Another consequence of the pandemic has been the growth of online gaming. Scientific Games has a whole separate division, SciPlay, handling that. How do you interact with them?
Jordan Levin is my peer there. He’s the CEO of the digital division. And we work kind of hand in hand. There are two parts to that market. There’s a big European piece, which is a different market structure than the U.S., where it’s all about sports betting and iCasinos, all through the land-based partners.
What’s unique about Scientific Games compared to every other supplier in the industry is the breadth of the portfolio. We have table games and table game systems, electronic table games, cashless solutions. We have sports betting solutions, the best in the industry. And we have iCasino as well—a very forward position there, a content aggregator, which is the best product in the market. So, we have that kind end-to-end solution, and we’re able to package all of that, go to an operator and ask, why would you buy anything from anyone else? We’re a solution to all those issues.
When Richard Branson founded Virgin Hotels several years ago, he always intended to place a hotel in Las Vegas. That happened last year when, in cooperation with Bosworth Hospitality and investment firm Juniper Capital Partners, they purchased the former Hard Rock Hotel. The casino at Virgin Las Vegas will be run by Mohegan Gaming & Hospitality at Mohegan Sun Las Vegas, with Joe Hasson as the general manager. Hasson spoke with GGB Publisher Roger Gros in a Zoom podcast from the casino in March.
GGB: It’s an exciting time to open a new property, but you’ve been through that a few times. What’s different opening this casino?
Hasson: We’re excited and proud to bring the Mohegan brand of gaming to the Las Vegas Strip corridor. I feel the appropriate pressure of that—which is a good thing to feel. This is different because this is truly an integrated resort. They’ve had this opportunity in place for a long time, and they’ve brought together a bunch of great brands. In addition to Virgin, they brought in the power of the Hilton Curio database, they have AEG Presents running what will be a great entertainment and events center, and then a fabulous array of restaurant entrepreneurs who bring all the pop, pizzazz and sparkle that you can imagine all under one roof.
We were very familiar with the Hard Rock casino. What will be different at the Mohegan Sun casino?
You’ll find a complete re-imagination of the resort. For the casino, the Mohegan brand will bring all the popular slot games. Anything that is new, we’re going to have it. But we will also populate the floor with the old favorites, whether it be reel games or video poker-style games. We want this to feel familiar as well as new at the same time.
You won’t find the infamous center bar. We’ve replaced that with the center of the casino, a combination of slots and table games. The bar has been moved to the entryway of the resort, which is essentially the lobby bar now, which also includes the ultra-lounge. I think people will enjoy it. People will find old and new at the Mohegan Sun casino.
How are you going to interact with the other partners?
We want this to be a seamless experience for the guests, so the operators need to have the coordination behind the scenes among all the partners. My job is to stay in close contact with those other businesses that are part of the integrated resort and to make sure we’re coordinated in such a way that the guests are comfortable and fulfilled.
You’ve got multiple databases that you’re going to use—Mohegan, Virgin Hotels, the database of the former Hard Rock and the Hilton Curio. How will those folks be addressed?
When I think about the power of the Mohegan database, we operate in Connecticut, Pennsylvania, Washington state, Louisiana and now we’re operating in Canada, across from Niagara Falls. We know our guests in all those regions come to Las Vegas, and now we’ve got something great to offer them.
For the former guests of Hard Rock, we’re going to reach out to them and ask them to try us again. Come visit us and let us introduce ourselves to you. We’ll place you instantly in the right tier of rewards that you were accustomed to without having to earn your way to that level. It’s a matter of respect.
Lots of the former employees of the Hard Rock have returned. How is that working out?
We honored whatever promises were made to the casino employees, so as general manager of the Mohegan Sun casino, I’m pleased and proud to welcome those employees back. It’s a matter of mutual respect and cooperation and the manner in which Mohegan Sun does business, and it’s the right thing to do. Very few general managers who open up new or reinvented properties have a veteran workforce on day one. I have the luxury and that honor.
https://www.youtube.com/watch?v=wMlN34KL_8w
Gaming Laboratories International or GLI is the industry titan when it comes to testing technology to ensure it does what it’s supposed to do. Joe Carlon has been at the forefront of GLI’s efforts to test iGaming and sports betting technology that can be even more complicated than the technology in slot machines and the systems that control them. Carlon explains how GLI has helped sports betting and iGaming companies in their compliance efforts for regulators and how the systems are constantly evolving under the guidance of GLI. He spoke with GGB Publisher Roger Gros and Editor Frank Legato from his home office in early February.
GGB Podcast sponsored by IGT.com
https://www.youtube.com/watch?v=jbrpK3pKnLg
https://www.youtube.com/watch?v=Z3JpilhsNeQ&t=2s
The National Council on Problem Gambling is an important organization in the gaming industry’s efforts to promote responsible gaming. The NCPG was formed in 1972 as a neutral organization designed to collaborate with a broad range of people and organizations to alleviate the ravages of problem gambling. Keith Whyte has been executive director since 1998 and has guided the organization to become one of the key players in responsible gaming. With a stellar board of directors and advisors, the NCPG designates the month of March as Problem Gambling Awareness Month with a variety of programs to focus on the issue. Whyte spoke with GGB Publisher Roger Gros via Zoom from the NCPG offices in Washington D.C. in late February.
GGB Podcast sponsored by IGT.com
The Cordish Companies hit an exacta early this year when it opened two Pennsylvania casinos—a mini-casino outside of Pittsburgh, and a full casino resort in Philadelphia. Rob Norton has led Cordish Gaming since the company opened its fabulously successful casino in Maryland, outside of Baltimore, and has taken the lead, along with Cordish Companies Principal Reed Cordish, on the Pennsylvania casinos. They talk about the different markets, the online opportunities in the state and the future of the company. They sat down with GGB Editor Frank Legato during the grand opening of Live! Philadelphia earlier this month.
The Cordish Companies became an east coast gaming dynamo when it opened the Live! Casino in Maryland outside of Baltimore in 2012. Now, Cordish has moved into the Pennsylvania market, first with a mini-casino near Pittsburgh, and last month with the Live! Casino Hotel in Philadelphia. Gaming veteran Joe Billhimer is in charge both casinos and explains why he’s very enthusiastic about the markets on each side of the state. The Philadelphia facility is in the city’s Stadium District, where Cordish already operated the non-gaming Xfinity Live! project, so the casino carries a heavy sports theme. Billhimer met with GGB Editor Frank Legato in Philadelphia prior to the grand opening.
In less than 10 years, GeoComply has become the go-to company when it comes to geolocation technology for iGaming and sports betting organizations. Co-founder Anna Sainsbury says success means that she must give back to the community, and helped to develop Conscious Gaming, a nonprofit enterprise dedicated to spreading the word about responsible gaming across the industry. Conscious Gaming’s PlayPause tool allows players to understand how to employ responsible gaming strategies. But a possible universal self-exclusion list will make it easier for the industry to identify players with problem gambling issues at all gaming touchpoints. She spoke with GGB Publisher Roger Gros from her home in Vancouver in January.
GGB: Please explain the genesis of Conscious Gaming and why you believe this organization could be very important to the industry.
Anna Sainsbury: Because I’m the founder of a geolocation company, we had the ability to see how many users would cross the border to gamble wherever we operated. As I joined the board of the American Gaming Association, where they have a lot of initiatives supporting research and education into responsible gaming, I realized we have a need for products and technology to help support the research that is coming out and to create what the regulators want to see. We’ve seen some really great research coming out, but no one has been able to take that science-based knowledge and develop it into a technology.
Because we have that oversight, we knew the need. We know that at this moment, self-exclusion is handled on a state-by-state basis. So if you’re in New York, you just have to go across the river to be able to gamble in New Jersey or go to Vegas twice a year. As more states legalize sports betting, casino, poker, lottery, the exposure is greater. So our goal is to expand self-exclusion from the primary state where they are excluded to all the states that would participate.
You’ve reached an agreement with Pennsylvania to bring your programs to that state. Are you talking to other states as well?
We’ve had a tremendous amount of interesting and insightful conversations with state regulators and legislators in numerous states about what the capabilities are. We’re also talking to multiple operators and platforms.
We don’t want this only to be Conscious Gaming. It only works if we all recognize that this is something we want to improve.
Lots of operators are putting into place their own responsible gaming programs, but they are proprietary and individual. Would you like to see a universal program put into place?
Philosophically, there’s no way that we should be competitive on responsible gaming. The only way we will all win is if we’re actually taking care of people’s needs.
For Conscious Gaming, we are more than happy to be a platform that integrates multiple different methods. We want to build confidence in this approach. We’re trying to get the greatest participation by emphasizing that there is no cost for anyone to participate. It’s completely free, completely open. We want it to be community-based, so we’re taking feedback from anyone that has an interest in this issue.
So, is this just about operators and suppliers?
No, we’re reaching out to everyone involved in the space. For example, some regulators have told us there’s a need to block players in professional and amateur sports leagues from participating, so we’ve extended the free solution to all the leagues so they can use it as a centralized database share with their members so operators would know not to accept bets from anyone on that database.
What about cashless payments? There’s a concern that this could exacerbate problem gambling. How would your system assist in the effort to combat that?
We’re doing a lot of research about what cashless means to responsible gaming efforts. We believe we can directly integrate into those cashless solutions so that someone who has self-excluded anywhere in the U.S. would not be able to participate with cashless gaming.
Table games were once the staple of the casino business, which brought in the bulk of the gaming revenue. Slot machines were something you offered for the wives of the high rollers. Obviously that dynamic has shifted and Roger Snow has followed it throughout his career. A senior vice president at Scientific Games, Snow has developed and encouraged new table game development in many capacities. He understands the operators and the players and his opinions on the sector carry much weight. He spoke with GGB Publisher Roger Gros at the Scientific Games headquarters in Las Vegas in February.
Sponsored by Vector Solutions, formerly Casino Essentials, the leading eLearning provider of AML compliance training for the Gaming Industry. For more information visit casinoessentials.com.
https://www.youtube.com/watch?v=JITXRt8r9HE
When Si Redd founded IGT back in the mid 1970s, video poker was the company’s cornerstone. When it went public in 1981, IGT dominated the video poker market. Not much has changed 40 years later. IGT is still the 800-pound gorilla in the video poker market. Darnell Johnson, the director of video poker product management, explains why video poker is one of the staples of the casino gaming market. He spoke with GGB Publisher Roger Gros via Zoom from the IGT offices in Las Vegas in January.
GGB: People forget that video poker was really the first skill-based game, and people enjoy it because they have some sort of control over whether they’re going to win or lose. How do you keep interest in video poker with the new skill games hitting the casino floor?
Darnell Johnson: The casino industry as a whole is constantly expanding. So, sports betting, casual games, skill-based games, all these things are just additional offerings that we as casino manufacturers provide as a means of entertainment for the player. We don’t really see poker as anything less, now that more of those games or venues are starting to expand. We just want to continue to provide the best type of content and product offerings for our customers that we can. We want to make sure that the player’s experience is the best experience that they have when they go on their casino floor. We want to make sure that it’s memorable, so that they can come back and play again.
IGT has a really diverse lineup of games. You are always introducing new versions of video poker. How do you decide how to tweak them, and what kind of other options to give to the players?
When we first introduced video poker several decades ago it was very straightforward. And we started to do a lot of evolutions, working with internal resources that we have, and other partners, where we can create a lot of different types of opportunities for more favorable experiences to the players. Introducing a triple/five/10-play game mechanic, where a player now has the opportunity to play not just one single hand, but three hands, five hands, or 10 hands, at any given time just creates a lot more excitement from a player’s perspective.
That’s what we continue to try to do. We look to see how we can innovate things, but we also have to be very mindful that poker players are very loyal, and they don’t like to see a lot of change. We understand that and we respect that. We’ve seen those Jacks or Better players start transitioning over to different game families, whether that’s a Bonus Poker play, or Double Double Bonus, or even Triple Double Bonus, depending on what type of volatility they’re looking to get out of their experience. We also talk to the operators, because they know their players way better than we do, as to what they’re looking for, and continue to drive content that meets that need.
The hold percentage on a video poker game is really pretty low, when it comes to the casino, and pretty high for the player, if you play the correct strategy. The better they learn the strategy, the better they’re going to do at the game. But I’ve noticed a lot of players don’t really know this strategy.
There are a few players out there that play really, really well, but there are not many that play perfect strategy. It takes a very disciplined player to be able to do that. Though there are definitely some advantages, I think the properties are well-versed in understanding how to leverage that to their benefit as well.
One of the great things about video poker is that you can sit at a bar and play it. And that was really a lot of the attraction of it in the beginning, especially here in Nevada when they had the small casinos. IGT has just introduced a new PeakBarTop cabinet that is doing very well. Explain the strategy behind that.
A few years ago, we started the exercise to look at creating a new type of form factor for the bar area. We were getting a lot of feedback from customers, that they believed that it was time to start looking at a new form factor. So, we took the challenge to create something.
We wanted to create something that is definitely going to resonate with today’s players, but could also resonate with future players as well—something that can evolve over time, to offer everything that video poker offers today. I think IGT is a clear leader in that space of innovation. I think we’ve shown over the last couple of years now that we’re looking to continue to push the envelope.
We introduced a curved monitor to the bar area. That was not something that had been considered previously. There are a lot of issues with the bars from a glare perspective, where a curved display, positioned the right way, can absorb that glare and not redirect it back into the player’s eyes.
Ergonomics was a big part of this. We wanted to create a solution that is much better ergonomically for the player as well, where the customer can play and be comfortable. The buttons are a key element of our bar-top as well. Players love those buttons, and know those buttons, so we want to make sure that we would keep that same interaction, while, at the same time, try to create more innovation to make it more appealing, from both a hardware perspective and a software perspective. And thankfully, I think we’ve done a pretty good job of that so far.
The people at Rymax Marketing Services are the experts when it comes to providing incentives for casinos to reward players for their loyalty. But like all companies that supply casinos, Rymax shut down when the pandemic hit. Now that the casinos are slowly reopening, we talk to Rymax Senior Vice President of Sales Paul Gordon explains why casinos should up their game when it comes to providing incentives for their players. He also explains how the new sports betting companies are in very competitive environments and believes the creative use of incentives would allow them to steal market share from their rivals. He spoke with GGB Publisher Roger Gros via Zoom from the Rymax offices in New Jersey in November.
Sponsored by Vector Solutions, formerly Casino Essentials. For more information visit casinoessentials.com.
When Brooke Fiumara was working as a casino executive for Station Casinos or Warner Gaming, she was frequently frustrated by the inability of casino operators to effectively use the data they collect for the good of their customers and the gaming enterprise. But it was that experience that caused her to create OPTX, a company that has figured out the “secret sauce” when it comes to interpreting and implementing effective plans based on that data. The OPTX systems improve player development and operational management by allowing operators to make real-time, data-driven decisions that improve profitability and player loyalty. Fiumara spoke with GGB Publisher Roger Gros at the OPTX offices in Las Vegas in November.
When Hector Fernandez was named president of the Americas division of Aristocrat Technologies, the company had already experienced a long period of success. As the company moved into its new Las Vegas headquarters, Fernandez was charged with keeping up the momentum. And when the pandemic hit, he doubled down on game development by keeping his staff employed and creative. Speaking with GGB Publisher Roger Gros over Zoom from his home in Las Vegas in December, Fernandez explained why that decision was made and what benefits he expects will flow from it in the future.
GGB: Before you were appointed to your position as president of the Americas, you worked in finance for quite some time. How did that help you when the pandemic hit, and you had to reevaluate how the company was running?
Hector Fernandez: Obviously, a strong finance background and training allows you to really look at numbers, dig in and understand trends and what’s happening. But more importantly than my finance background, to be honest, it was really around some of the broad-based experience that I’ve had across different industries. I’ve been very fortunate in my career to work in services at Deloitte, at the premier marketing company at Proctor & Gamble, in biotech at Amgen and at a tech company, Western Digital.
I’ve been through lots of economic cycles and shocks as well. In life you have skills and experiences. You can never substitute experiences. It really allowed us and the team to focus. So when we looked at the impacts of the pandemic, we needed to keep things very simple. Every decision we made would be around three principles. It would be around our people, our customers and our business. And we picked those in that exact order.
We felt if we could get our people and our customers right, the business would be there. Those experiences that the team and I have gone through in the past allowed us to keep it simple and focus on the three guiding principles.
One of the things you decided to do was keep your studios operating during the pandemic. Are you going to continue to do that, or are you going to slow down a bit when casinos start to come back and buy your products again?
You know, great companies invest during times of uncertainty and economic downturns. We’ve seen that throughout history, throughout the various economic shocks we’ve had. The companies that have doubled down and invested are the ones that come out stronger. We knew that was a guiding principle we needed to follow.
Innovation and having the greatest content is what‘s driven the success of Aristocrat, so it was not even a debate. Early on, we knew that slowing down any content development would just hurt the company in the long run. That’s not something we wanted to do. And quite frankly, we were fortunate that we had been conservative financially, so we could. We had the resources to invest, to risk, if you will.
You don’t just oversee Aristocrat operations in the U.S.; you also control Canada and Latin America. Have those two markets been approached any differently during this time?
It’s been fascinating, the pandemic. Because even in the U.S., each state has had a different impact and different reaction. And then when you elevate past the U.S. and you look at Canada, it’s obviously more government-controlled, so there’s a different reaction there. Then if you look at Latin America, they’ve lagged behind us from an impact standpoint and are also lagging behind us from a recovery standpoint.
The nice thing about Aristocrat is, because we’re truly a global company, it allowed us to actually leverage some of our coworkers and fellow employees from around the world, for example, Asia Pacific, on the impact (the pandemic) was having there, and some of the steps they were taking to address those things. We’ve learned a lot from our Asia Pacific colleagues.
The other thing that’s happened since the pandemic is that the European business has also come under my purview, which is fantastic because there are lots of similarities and things that we can leverage from Latin America across Europe. How do we make sure we think globally but act regionally? (We want to) develop these global principles, leverage the resources globally and then tailor to the regional specific problems that we’re trying to solve.
With all those different jurisdictions under your purview, there are different preferences in terms of games and themes, whether they want more volatility, and so on. How do you prepare your studios to introduce games in each of these markets?
Our roots are Australian roots. That’s incredibly important because gaming really took off in Australia and that part of the world before it came to the U.S., Latin America or Asia. So they’re ahead of us from a maturity standpoint.
Player preferences center around math and volatility, game content and other things. We’ve really taken what we learned from Australia and said, “How can we apply those here in the U.S. and across the other jurisdictions?” We focused on having the best content across the globe, then customizing it for a specific jurisdiction, whether it’s a route market, whether it’s a destination casino, whether it’s a casino in Argentina. We’ve never lost that focus around content, and we’ve leveraged our Australian roots to ensure that we have the best content in the industry.
When Erika Nardini joined Barstool Sports in 2016, it was a small blog attracting a few fans in New England. Fast forward several years and fueled by the irreverent blogger David Portnoy, Barstool Sports became a phenomenon with millions of followers and fans across the country. When PASPA was eliminated in 2018, it was the opening Barstool Sports was waiting for. A year later, a joint venture with Penn National Gaming launched Barstool Sports into the sports betting business. Penn owns 36 percent of the company with options to buy the entire enterprise in the future. Nardini explains why that deal made sense and why the future is unlimited for Barstool Sports. She spoke with GGB Editor Frank Legato from her offices in New York City for inclusion in the 25 People to Watch feature in the January issue of GGB.
Eileen Moore Johnson has already has a full career in many roles for operator Caesars Entertainment, including leading several properties on the east side of the Las Vegas Strip during many changes and developments there. Now as chief human resources officer for Scientific Games, she has transitioned to the supply side of the business. Moore Johnson explains how she approached her new position, how she is dealing with the pandemic, and what she sees in the future for her new employer. She spoke with GGB Publisher Roger Gros from her home in Las Vegas in December for her inclusion in the 25 People to Watch feature in the January issue of GGB.
Before becoming a casino owner, Derek Stevens used to fly from his hometown of Detroit to Las Vegas to bet on sports and make a weekend of it. So it’s not surprising that the first casino he’s built from scratch has an emphasis on sports betting. Circa has been open for three months now (the hotel rooms open this week), and Stevens talks about how his guests have been responding to the sports book, the betting options, and the spectacular Stadium Swim, the pool area that remains open during the winter, whereas most other casino pools are closed. Stevens spoke with GGB Publisher Roger Gros overlooking the sports book at Circa for a keynote session and the Betting on Sports America virtual conference, held in early December. With the final GGB Podcast of 2020, we wish all our listeners a Happy New Year and much prosperity.
Global Gaming Women was founded under the auspices of the American Gaming Association more than 10 years ago with a goal for female gaming professionals to learn from one another, create lasting connections and nurture emerging women leaders. In 2016, Global Gaming Women became an independent charitable organization and upped its game on its services to its members. Lauren O’Brien has benefited from the efforts of GGW via its “lean in” program that offers mentorship opportunities from senior female executive in the industry. Now the regional sales manager for gaming operations at Aristocrat, O’Brien has worked for several gaming suppliers including Interblock and Bally Technologies. She spoke with GGB Publisher Roger Gros about her experience with GGW in December.
Podcast sponsored by IGT. The new PeakBarTop poker cabinet from IGT will put your bar over the top, built with an emphasis on player comfort and game variety. Learn more at IGT.com/peakbartop.
Back in March when the pandemic began, Tom Cantone remembers sitting in his darkened offices in the Mohegan Sun Arena grasping for ways to bring back the jobs that were on hold. One call to Viacom produced a “residency” for their MMA and boxing shows. That set the stage for “Bubbleville,” a plan to host four pre-season basketball tournaments usually held at other locations. Cantone explains how each of these plans came about and how the procedures had to be designed from scratch. As some of the first sports to return during the pandemic, the arena became the only indoor venue offering sporting events in the U.S. Cantone spoke with GGB Publisher Roger Gros from his home in Connecticut during a snowstorm in December.
Podcast sponsored by IGT. The new PeakBarTop poker cabinet from IGT will put your bar over the top, built with an emphasis on player comfort and game variety. Learn more at IGT.com/peakbartop.
MGM Resorts International has changed quite a bit over the past few years. When the company instituted its MGM 2020 program that was aimed at reducing costs, creating efficiencies and streamlining the corporate structure, there was no vision of the pandemic. But when it hit in March of last year, MGM 2020 had the company prepared for the worst. But when Jim Murren resigned as chairman and CEO of MGM in February, Bill Hornbuckle was elevated to CEO. A inspirational leader who learned his trade working under Steve Wynn, Terry Lanni and Murren, Hornbuckle has set his priorities on his employees first and the future of the company soon after that. He spoke with GGB Publisher Roger Gros for the cover story in the January 2021 issue, 25 People to Watch, at Hornbuckle’s office in the Bellagio in December.
Podcast sponsored by IGT. The new PeakBarTop poker cabinet from IGT will put your bar over the top, built with an emphasis on player comfort and game variety. Learn more at IGT.com/peakbartop.
The technology developed to run cashless transactions has improved markedly over the past 10 years. Sightline has been at the forefront of that development and its new CEO, Joe Pappano has spent his entire career preparing for this moment. With 29 years in the business, Pappano changed jobs recently when Sightline reorganized its executive structure and received a substantial investment from a private equity company active in the payments arena. Pappano explains how the company is now poised to move cashless payment in the gaming industry into the mainstream. He spoke with GGB Publisher Roger Gros in the Sightline offices in Las Vegas in December.
Podcast sponsored by IGT. The new PeakBarTop poker cabinet from IGT will put your bar over the top, built with an emphasis on player comfort and game variety. Learn more at IGT.com/peakbartop.
Sega Sammy is primarily a Japanese pachinko company, but began looking seriously at the casino industry when gaming first was mentioned for Japan. Almost a decade ago, Sega Sammy tried to break into game manufacturing with some very large—and very expensive—multi-position games. Now, Sega Sammy Creation is back with smaller and more manageable slot games. Scott Winzeler, a veteran of IGT and other slot companies, has taken the reins and explains the Sega Sammy strategy. He spoke with GGB Publisher Roger Gros at the Sega Sammy offices in Las Vegas in November.
GGB: Sega Sammy is a multi-national company that plays in a lot of spaces. How does it relate to gaming?
Winzeler: Probably the most recognizable part of our company is the Sega brand. We celebrated the 60th anniversary this year. In 2004, Sammy, which was the No. 1 pachinko manufacturer in Japan, acquired Sega. The company has a history of developing gaming products, whether it’s arcade products, console products, pachinko products, or since a few years ago, casino gaming-style games.
Because they made great pachinko and pachisuro machines, was that the reason Sega Sammy thought they could make gaming machines?
I think that’s part of it. They knew how to make great spinning-reel games, even though the regulations and mechanics are different. Also that was about the time they began discussions about integrated resorts in Japan, so I believe it was a combination of things that focused their attention on gaming.
And one of the resumé builders, I guess you would say, to make an application to run a casino in Japan was to say we’re a licensed entity. Many people told us you don’t go after the Nevada license as your first step into the U.S. There are many easier ways to get into the market, but they wanted to have that flagship license. At the end of 2017, we got our manufacturer license, and last year we got our product license.
In terms of R&D, how much has the pachinko/pachisuro business influenced game design for the slot machines?
We have about 70 engineers in Japan, and the majority of those come from the Sega side of the business. We also used a few third-party content developers, some of them here in the U.S. And, another facet of our game design comes from the Sammy side, even though we’re totally separate entities under the same umbrella.
Explain where Sega Sammy is now in the market.
When we started Sega Sammy Creation four years ago, the first thing we had to do was design a product, which took a couple of years, and then the approval took a couple of years. So when we finally rolled out a product we could sell, it was basically a 4-year-old game and cabinet. So we knew we had to refresh, and last year we designed a new product that we had planned to launch at G2E 2020.
What we are showing clients now is a new cabinet called the Genesis Crest, and we have a suite of great games we can install. We think it’s a game changer for our company. We have 300 percent more visible display space than the original cabinet. There’s a 13-inch player interface, a 49-inch display, which we believe is the largest “for sale” display in the business, and a 27-inch topper above that, which can present game content or just be an attractor.
Where would you like to see Sega Sammy Creation going over the next five years?
I have a directive from the parent company to grow this company to be a stand-alone entity so over time we’d bring more of our development resources here in the U.S., be licensed everywhere in North America and placing products in all of those jurisdictions. After that was accomplished, we’d look to South America and Europe. World domination is the ultimate goal (laughing).
Lifescapes International is a legendary company in gaming. When the Mirage in Las Vegas was first being imagined, Steve Wynn turned to Lifescapes founder Don Brinkerhoff to design and build the famous volcano. Since then, it’s attracted millions of visitors each year.
Through the years, Lifescapes has been the go-to company when casinos consider their landscape architecture. Andrew Kreft, director of design for Lifescapes, explains how a well thought-out and designed concept can bring the outside in and create an environment that’s not only pleasing to the eye, but safe and secure in this difficult time. He spoke with GGB Publisher Roger Gros from his office in California in November.
GGB: How has landscape design changed over the years?
Andrew Kreft: Prior to the Mirage opening in 1989, the concept of landscape design was, you drive past the landscape to get to the parking lot, and then you go inside. And that was about it. Steve Wynn changed that. His idea was to create an environment where you’re transformed to a different place the minute you enter a property. That’s the very idea of resort. He wanted to continue that experience from the curb, through the resort all the way to the back of the property.
The concept of the volcano was that you could see it all the way down the Strip. It really drives you into the property. You make a promise when (visitors) come into the property, and you have to keep that promise all the way through.
In today’s casino, particularly during the pandemic, how important is it to bring the outdoors inside?
There shouldn’t be such a hard and fast line between what’s inside and what’s outside. We try to create a more undulated differentiation between indoors and outdoors to blur that line. We create more windows. Back in the day, there were no windows in casinos, but now it softens the appearance and makes it easier for people to stay longer.
Now we’re creating these outdoor rooms you can see from the casino or restaurants that have these unique experiences. They’re each curated for very different experiences.
How early does your company get involved in a project?
We like to start on a project as soon as possible, so we can create an integrated design. We need to be part of the master-planning process. We’ve been very fortunate with our clients, especially with the Wynn organization, in that they see value in that idea. It’s not just about the great architecture; let’s just make it look pretty around the edges. It’s how can we influence the architecture to create a more unique experience for the guests. That kind of thing isn’t possible if you come in at the last minute.
Let’s talk about the pool area, always a key component of a casino resort. How does that come together?
For resorts, the pool area can be the heart of the project. If you’re looking at multi-night stays, you want people to stay on the property as much as possible, so let’s give them an environment where they have choices.
How do you create an environment where you can create enough outdoor rooms that can speak to the different interests of your guests? Some people don’t want to be on display. They want it a little quieter, with more privacy. Other people want to be front and center and part of all the activity. So we try to create a pool area that’s interesting for multiple days. And the pool area shouldn’t be seen as something that can only be used during the day.
So you’re saying landscape architecture isn’t just icing on the cake, it can be a revenue stream. How do you communicate that to casino owners?
If we can get in there early and bake this into the design, we can create revenue or value in places where you might not have thought it was possible. It won’t end up costing you anything extra if you do it early on. But if you come in late, you end up reacting and playing catch-up.
Ainsworth Game Technology has had a rather tumultuous couple of years. In 2018, founder Len Ainsworth sold the majority of the company to Novomatic, but that company has remained a passive partner except for a few cooperative ventures. Deron Hunsberger joined Ainsworth in 2017 as senior vice president of sales and marketing with a 25 year track record in the slot busines. Now, as chief commercial officer, he is responsible for the company’s activity in the North American market. He has increased the company’s penetration into the tribal gaming market, is planning to enter the VLT market and directed a strategy that has made Ainsworth a leader the historic horseracing machine market. He spoke with GGB Publisher Roger Gros at the Ainsworth offices in Las Vegas in December.
Podcast sponsored by IGT. The new PeakBarTop poker cabinet from IGT will put your bar over the top, built with an emphasis on player comfort and game variety. Learn more at IGT.com/peakbartop.
Jorge Perez has been with MGM Resorts for 25 years in a variety of positions, most recently president of the company’s regional resorts, a title he still holds in addition to being president and COO of MGM National Harbor. Perez joined National Harbor after a reorganization of corporate leadership in May 2020. He explains what it means to lead one of MGM’s leading regional properties during the pandemic and how it has fared since reopening in late June. He spoke with GGB Editor Frank Legato from his offices at National Harbor in November. For a full podcast of this interview, visit GGBMagazine.com.
GGB: Maryland casinos have rebounded from the Covid shutdown better than most jurisdictions. How have the state’s casinos in general, and MGM National Harbor in particular, managed to perform in these conditions?
Perez: Obviously, it’s a difficult operating environment for any leisure and travel company. But health and safety is paramount no matter what. And I think as an industry, we’re doing a really good job. Outside of gaming, the entertainment options are limited—concerts, stadium-sized sports events, even your local restaurants or bars, and the restrictions that they have. The entertainment dollar is being a little bit more limited to where it can go. So, I think the casinos generally—and we’re seeing that not only in Maryland, but all the other jurisdictions in which MGM operates—(are garnering) a larger share of the entertainment dollar.
The other thing is that travel—air travel, specifically—is down considerably. So people are staying closer to home, versus making that big trip, either domestically or internationally.... So I think that’s the biggest driver.
Did you also see a lot of pent-up demand when you opened?
Yes, we did, absolutely. In some markets, it was a slower ramp, in some markets it was a big pop, and then it slowly came down and then sort of stabilized. So, it’s a variation. But yes, we were quite surprised by the interest and demand shortly after opening.
Headline entertainment has always been a strong point at MGM National Harbor. Obviously, you can’t do shows like Cher now, but what’s the plan to phase entertainment back into your operations?
We’re an entertainment company. So the fact that there is no headline entertainment is painful. We can’t wait to have it back. But we’ve got to be respectful of the government restrictions and executive orders that are in place. As far as mass gatherings, or gatherings of groups, we just have to wait until conditions improve. And right now, trends are not moving in the right direction. But I think we’re all hopeful, for sure, that entertainment will come back next year. And as soon as we’re ready, enabled, and allowed to do so, we’ll be back at it.
What non-gaming amenities have you managed to ramp back up?
Most of our restaurants are open. From our Voltaggio Steak House to our TAP Sports Bar, to our National Market, which has multiple F&B quick-service venues. Saigon Street, Shake Shack. So, most of our F&B is open. But as far as non-gaming, that’s pretty much it. Our lounges and bars are also open.
Online gaming is usually not far behind in some sports betting jurisdictions—as Maryland will soon be. Have you been involved in lobbying efforts to bring this additional gambling option to the state?
The focus right now is on sports. The legislative process will start in January specific to sports. And that’s really what we’re focused on right now, both on the retail front and online. That’s where we are focused, and that’s where our energy has been. And what comes down the road is yet to be determined.
Virginia just approved four casinos. Are any of them close enough that it’s going to affect your market?
We’ve been monitoring that for a long time. And I’d be naïve to say that it won’t have some impact. The good thing is it’s geographically further away, towards the southern part of the state of Virginia. And most of our business, just like a lot of regional casinos, comes from an hour’s drive.
We’re very localized. But will there be some impact? There will be. What I will counter with that is, what we will gain with sports betting will far outweigh what we will lose from expansion of gaming in southern Virginia.
As far as competition within the Baltimore/Washington corridor, you’ve always distinguished yourself to maintain the top position among the three casino properties. How have you managed to do that, coming late to the market, as you did?
Obviously, Maryland Live! is the largest competitor, if you will. They’ve got a great team there. I’ve had an opportunity to meet some of their top executives. They’ve got a great facility. So, they’re formidable competitors. But we’re extremely proud of what we’ve built here. We invested heavily—over $1 billion into National Harbor. But we’re in a great market. We’re the benefactors of a large population.
But as you know, besides having a beautiful facility, it all comes down to the employees and our guest service. And that is something that you have to maintain. You have to work on it every single day. It’s not easy. The service component is big. We have a beautiful facility. We continue to invest in it. We continue to invest in the best games, so we’re constantly looking to have the best in attractive games on the floor, be it slot operations or table games. We are constantly tweaking our food and beverage offerings. We listen to our guests. We talk to them individually; we’re on the floor, and get their feedback. And to the extent that we have a lot of feedback in a certain direction, that’s where we move. We try to accommodate.
SOSH Architects is a partnership of four very talented individuals that started in Atlantic City around the time casinos were legalized. Therefore SOSH has become one of the go-to firms when casinos are looking for unique design for new properties or innovative ideas for expansions and renovations. Tom Sykes and Bill Salerno have been there for the entire ride and their perspective on casino design is second to none. And they both agree that the Covid-19 pandemic will change forever how casinos are designed and operated. They discuss ways casinos can make their customers feel more safe and secure and what the changes will look like. The spoke with GGB Publisher Roger Gros at the SOSH offices in Atlantic City in early October.
In the four years since Lorne Weil became chairman and Brooks Pierce was appointed president and chief operating officer, Inspired Entertainment has become a bigger player in the gaming industry. The company’s diversified product offering has played well during these uncertain times, and the recent growth of distributed gaming in the U.S. has positioned Inspired Entertainment in a great place. Pierce spoke with GGB Publisher Roger Gros over Zoom in November.
GGB: How has Inspired weathered the Covid-19 lockdowns?
Pierce: Like everyone in the industry, we’ve had to adjust and adapt. For us, there is a mix of our business that is both retail and online. Our retail business, as you might imagine, shut down on a worldwide basis almost overnight in the middle of March. By the middle of May, we started seeing some of our markets coming back and by the middle of June, we were almost at full capacity.
At that same time, our online slots business and our online virtuals business grew dramatically. And now that we’re back on schedule in terms of the retail business, both of the online businesses have maintained most of their increases.
Can you break down what your business consists of? There are several different aspects, correct?
Yes. There are a couple of different channels.
One is our gaming machine business. We are primarily in the slot route business. It’s server-based, and we put our machines into an establishment for a percentage of the play. It’s not primarily a sales market, it’s more of a recurring revenue market. In this distributed gaming business, it’s a large number of locations with a few machines in each location.
Then we have our virtual sports business, which is what Inspired is most known for. This year we’ve done some amazing events virtually like the Triple Crown Showdown, around the time the Kentucky Derby was usually run. And then just recently we did a virtual Melbourne Cup. We had the opportunity to do some very unique virtual sports events when there was a lack of live sports.
And the third leg of the stool is our online slots business, primarily in the U.K. but getting bigger and bigger in the states. The acquisition we made from Novomatic gave us a different distribution channel in the U.K. So in addition to the betting shops, we’re also now in pubs, holiday parks and motorway services, which are like truck stops in the U.S.
So it must have been beneficial to Inspired when real sports shut down. How did that go?
Amazingly well. We didn’t really want to take advantage of that situation but frankly, the players were demanding it. They were very interested in watching sports events, live or virtual. We did a virtual Grand National where something like 5 million people watched it in the U.K.
Our biggest product in the U.K. is football. With the Premier League being shut down, our products have really resonated with the players.
Explain what your relationships are with lotteries.
Many of our biggest customers are large lottery operations—OPAP in Greece, the Pennsylvania Lottery and others. We just went live with Sisal in Italy. Strangely enough, they have a license in Turkey, so you can now sit in your apartment in Istanbul and have virtual American football on your computer. The numbers coming out of Turkey have been astounding.
Tell us about what’s happening in the U.S. for Inspired.
We just had our one-year anniversary in the Illinois distributed gaming market. That’s been great. Virtually every location we’re in, we’ve been the No. 1 or No. 2 performing machine. We’re also working with the Western Canada Lottery Corporation, which is our entry into the Canadian market. We’re also involved in Oregon and West Virginia.
In terms of virtuals, just about all the operators in New Jersey have signed deals with us.
Paul Steelman has been involved as an architect in many of the iconic properties in gaming. From the Mirage to Resorts World Las Vegas to many of the most impressive Asian properties, Steelman’s expertise and gaming knowledge is unmatched in the casino design world. For his latest project, Downtown Las Vegas’ Circa Casino Resort, he teamed with owner Derek Stevens to allow Circa to stand out, yet blend in with the historic Downtown area. But it’s the Stadium Swim—six pools on different levels—and a massive sportsbook that truly mark Circa as something special. Steelman talks about Stevens and his vision and how Steelman and his team worked together to create the project Stevens desired. Steelman spoke with GGB Publisher Roger Gros at his Las Vegas offices in September.
GGB: Circa is the first new project in Downtown Las Vegas in 40 years. What were some of the differences between Circa and some of the other projects you’ve designed?
Paul Steelman: I think number one, we have a superstar in the making with Derek Stevens. Derek’s vision of this property is unlike anyone else’s. And Circa has a unique spin on it. One of our unique challenges on this design—and Derek’s challenge, of course—was to design, from the ground up, a facility that was compatible with Fremont Street. And Fremont Street is a fantastic place—free entertainment, a world-class digital show, free entertainers in the circles, and parades from NASCAR, and the football and hockey games, and so forth. It was a very interesting exercise to see how any building would relate to this. We’re very pleased that Derek, in fact, did that. So, it’s the first one in 40 years, and it’s filled with unique technology design, and integrating technology with Fremont Street is a sure winner to me.
Derek told us that before they decided upon Steelman, he did a little competition. He chose four or five architects and paid them to do a conceptual design. Why do you think he chose Steelman Partners as the winner?
We competed against some very reputable firms for this project. I think that Derek chose us because we got it. We are firm believers that Las Vegas has a style. And that gambling style is not necessarily based in Rome, or even in Tahiti or whatever. It has a style all its own. I think we’re the architect who actually gets that. And we also are a business-based architect. So, consequently, our success is not necessarily based on the beautiful design. And of course, we want to create new gambling adventures for almost every single thing. Derek wanted a building that looked new and modern, but it looked like it belonged on Fremont Street. And that was really important to Derek. And I think that Derek chose us just because I respect it, and I believe in Las Vegas, and I believe Las Vegas has a style, now influenced by Derek Stevens.
Even before the pandemic hit, there was a movement to spread the slot machines out across the floor. And now, of course, they’ve got every other machine shut off, which is not a good look. How is that going to impact the way you design a casino floor in the future?
I think those casinos that do, in fact, have every other slot machine shut off will probably have to consider some serious reconfiguration. There were many studies down over the years: what is the proper length of a slot bank on the basis of “How much do you win at each machine?” And of course, the ends always win more. The slot machines are much more successful at the ends. So, I would suspect that we’re going to have a lot more ends in the casinos.
Another area that’s been impacted by the pandemic has been food and beverage. Is this something that’s impacting your designs as you go forward?
You know, casinos used to be a dark box in a big building. Steve Wynn would say, “I need brilliance and a bright casino.” But over time, we have started to see a lot more integration of outdoor spaces. Now, they weren’t necessarily integrated in accordance with the virus that we currently have. But they have proved useful now, during this virus type of situation. I’d be surprised in the future if we do a lot of indoor restaurants. I think a lot of the restaurants will have that indoor/outdoor activity.
Mohegan Gaming has received a license in Greece, for the old airport project there, and you’re the designer of that project. And what a fantastic building it looks like, in just the renderings. Tell us about what you went through to do that, especially since Greece is one of the centers of architecture in all of history.
I was an architect before I was a casino architect. So, obviously, to me, this was a unique opportunity. We’ve worked in Athens for the last 25 years. I think it’s a great place. And fortunately, I was teamed up with a great company, Mohegan Sun, and a great team led by Mario Kontomerkos and Richard Lindsay, just a marvelous group of people that were really inspired by the site, the sea, and the sky.
What we wanted to do was take a lot of our experience in Macau, and our experience in Sochi, in Russia. Put them together, and assume that we’ll have some Asian clients who will want to visit this spectacular resort. And there’s a very large market in Russia who already visits Greece. I fully believe that the project in Greece has the capacity to do to Greece, and to Athens, what the Singapore projects did to Singapore, and really increase the tourism industry there.
Derek Stevens came to Las Vegas from Detroit in 2006, when he and his brother purchased the Golden Gate Hotel, the oldest operating casino in Las Vegas. He later bought the D (the former Fitzgerald’s) and created the Downtown Las Vegas Events Center. Last month, he opened Circa Resort & Casino at the foot of Fremont Street, a new concept that relies heavily on sports betting and a premier pool experience. He spoke with GGB Publisher Roger Gros at his offices in the D in October for the cover story of GGB’s Casino Style magazine due out in December.
GGB: Explain how you got to Vegas and are now about to open Circa.
Derek Stevens: I started coming to Las Vegas a long time ago, in the ’80s. I came for pleasure. I’m a sports fan, so I came out to a lot of fights. I came out for a football weekend, basketball, things like that. But I never envisioned—forget about owning a casino—I never envisioned working at a casino.
I was pretty happy working in the manufacturing business, out of the Midwest. And, you know, as time goes by, you come out here for a lot of things. And eventually it became for business and conventions and things like that.
When we had an opportunity to get into this industry, it was 2006. I’ve always loved Las Vegas. I’ve always loved the state of Nevada, from the business perspective. It took me 18 months to get licensed. So I got my first license in March 2008. And remember, that’s when the economy just completely tanked for about a year and a half, which, ironically, was probably the most fortunate thing that ever happened to us. Because a lot of real-estate values in Downtown Las Vegas became far less expensive.
It also ushered in a new group of people. A new group of entrepreneurs. A new group of people that were willing to put equity in. Predominantly, along Fremont East and such, it was sweat equity. Tony Hsieh spurred on the development of a lot of small businesses. And it really developed into a community of people that got to know each other and were all really aligned in a manner where everyone was rooting for the growth of Vegas.
The thing that stands out most of all about Circa is the sportsbook. Sports betting is now something you can walk around with in your pocket. Why did you decide to build such a massive sportsbook?
I have always thought in years past that a significant brick-and-mortar sportsbook was something that could bring people together. Obviously betting on an app is not just the future; it’s the present. It’s easy, convenient and quick. It’s more efficient. But there’s still an element of going to a sportsbook, and the camaraderie with all the people, that creates a unique excitement that you can’t get elsewhere.
I would say there’s still something inside of a Las Vegas brick-and-mortar sportsbook that’s different. It’s not an experience they can get at Hometown USA. We’ve created a stadium effect. And for us, this isn’t really all that new. I own the Downtown Las Vegas Events Center where we’ve been throwing concerts, EDM events, food festivals, boxing matches, UFC matches, and watch parties.
We learned a lot in doing watch parties at our events center. The psychology of someone that goes to a watch party, it’s much different than someone that’s going to a live sporting event. It’s a different angle, a different perspective. People feel differently when they go to a watch party. There is more social demeanor as they come into the game—a little bit more upbeat and willing to socialize. We’ve really tried to create our sportsbook to be something where you end up picking up a lot of the energy of all the rest of the fans and customers who are there.
The sportsbook is in combination with your pool experience. What’s going to make the Circa pools so different?
First, really, the scale. Stadium Swim will be a key feature in Circa Las Vegas, with a capacity of around 4,000. And this is a stadium to watch events and enjoy the sun. We’re going to have programming that will be far more musically oriented throughout most of the day. So, as opposed to us designing a pool as an amenity for a hotel, with 512 rooms and suites, you could almost say our hotel is designed as an amenity to Stadium Swim.
So there will be six pools, and all kinds of different environments at each pool?
Yes, six pools. Two upper-deck pools. Maybe a little more privacy. Four lower-deck pools, two of which have big walk-up bars at the end of the pools. And these pools are pretty big, by the way.
How about in the winter? It’s only a short winter in Vegas, but the pools still close down for a few months.
That was another thing I always thought about over my many trips to Las Vegas. Obviously I’d been out here Memorial Day, Fourth of July, Labor Day, you know, all throughout the summer. But you come out in December, January, the pools are always closed. I always wondered why the pools close in Las Vegas, but they can stay open at Vail, or Park City, or Aspen.
Our pools won’t close. It’ll be the greatest pool in Las Vegas. It’ll be the greatest pool in America. This will be the greatest pool in the history of the world! That’s what Stadium Swim’s going to be.
Dave Peña came up with the concept for Boogie Nights when he realized there was no place for people who enjoyed the ‘80s culture in the nightclub scene. When he introduced the concept at Resorts Atlantic City years ago, it was an immediate success and he’s expanded his empire to many gaming jurisdictions. And now, he’s starting another venture along with ‘80s pos star Tiffany that will be more restaurant focused but just as retro. He spoke with GGB Publisher Roger Gros at the GGB offices in Atlantic City in September.
While FSB is somewhat late to the party for U.S. sports betting, CEO Dave McDowell says the wait will be worth it. FSB has developed some of the most cutting-edge sports betting technology, which will vault online sportsbooks clients years ahead of their competitors. Founded in 2007, FSB has innovative platform and CRM systems, as well as expertise in casino aggregation. The company has also developed a sophisticated wallet and is currently making inroads in the U.S. online gaming market. McDowell spoke with GGB Publisher Roger Gros from his offices in London in September.
GGB: Give us some background on FSB.
David McDowell: The company was founded in 2007 with my co-founder Sam Lawrence. We had spent six years working together in the online industry already, so we came at this with a really good idea how systems integrated with online gaming technology. Even then, we realized that live data feeds coming from the stadiums could be delivered more quickly and more reliably, and that those data feeds would drive real-time pricing models. We knew that this would cause a fundamental change in the architecture of sportsbook technology and the way you operate a sportsbook. Those real-time data feeds did not exist, and the systems weren’t designed to access them.
Over the subsequent years we became experts at handling these data feeds. We covered 35,000 live events last month, providing real-time data to our clients.
How were you able to bridge the gap from sports betting to online casinos?
We could see the business model around casino, bingo and poker all had a service supply business where the supplier was providing a turnkey solution. But nobody could do that in sports betting because the technology was too complex, and you needed 250 traders to run your sportsbook. We felt there was a market for what we know of today as an MTS or managed trading system. We sat down and built an MTS for sports betting, but the vast majority of casino, bingo and poker sites were run with that business model. Our strategy was to take the biggest sector and reinvent the business model using our technology.
Did you have clients on the casino side of the business?
Actually early on it was more in the fantasy sports side of the business. We were doing player ratings, we’d give advice on which players would score more fantasy points in the game, that kind of thing.
In 2012, we signed up Genting Casinos as a client for our full-scale sports betting platform. We worked with them for several years to set up their online sportsbook and integrate it into their online casino.
What kinds of services does FSB offer?
Today we offer a full turnkey service, which covers both retail and online sports betting, and it also includes our entire iGaming suite—the player account management and casino aggregation tools. It also includes the user interface—the customer experience, fully responsive website and the various apps that go with it. We back that up with employee-manager training service, AML and responsible gaming tools, and marketing support.
Did you anticipate how quickly U.S. sports betting would be legalized when you started FSB?
I’ve been in online gaming for many years, and our saying was that sports betting legalization in the U.S. was always 10 years away. When the Unlawful Internet Gambling Enforcement Act was passed in 2006, I read the entire bill, which created the opportunity for daily fantasy sports. When you watch it every single day, it moves like a glacier, but all of a sudden, pop, and it’s happening. It’s been amazing to see how so many states have moved forward with positive legislation allowing sports betting.
The GGB Podcast features a discussion with Bo Bernhard, the executive director of UNLV’s International Gaming Institute, on the 2020 edition of the Executive Development Program, a long-running educational effort created by the late Bill Eadington, who was essentially the founder of high-level gaming education.
Podcast sponsored by FSBtech.com
Tom Reeg is a dealmaker. He landed in the right place in the 1990s when he got involved with a small family owned company called Eldorado Resorts. Reeg helped the Carano family guide the company outside of its native Reno, Nevada on a journey that saw it buy several smaller regional gaming companies, MTR Gaming, Isle of Capri and Tropicana Entertainment. However, when he set his sights on Caesars Entertainment, few thought it was possible. But when Reeg demonstrated the savings Eldorado could bring to the gaming giant, the experts began to listen. If the Eldorado operations model has worked following every other acquisition, why couldn’t it work for Caesars? And the deal got done. Reeg spoke with GGB Publisher Roger Gros from his offices at Caesars Palace in Las Vegas in September for the cover story of the October issue of GGB.
Podcast sponsored by FSBtech.com
Aristocrat Technologies has held the top position as slot manufacturer for the past five years. Despite leadership changes and the covid lockdown, the company is not resting on its laurels, according to Jon Hanlin, who leads commercial strategy for the company during a special GGB Podcast.
Podcast sponsored by FSBtech.com
Marty Small has been mayor of Atlantic City for almost one year, when he was selected by city council to fill the vacancy created when the previous mayor, Frank Gilliam resigned after being convicted of corruption while in office. Small won the Democrat nomination for mayor in the primary and now faces a nominal Republican opponent in November’s general election. During his term, he has worked with city council to keep property taxes down, grappled with the Covid 19 shutdown and dealt with the BLM protests where he has kept his city violence free after the first unfortunate incident in May. He spoke with GGB Publisher Roger Gros in the Mayor’s conference room in the Atlantic City city hall in September.
Sally Gainsbury is one of the world’s foremost researchers into problem gambling, so it’s no surprise that one of the first studies on the impact of the Covid-19 pandemic came out of her group at the University of Sydney.
With no funding, Gainsbury, co-investigator Alex Blaszczynski and a team of researchers were able to gather nearly 800 gamblers to ask how their gambling habits changed during the coronavirus lockdown in Australia, one of the most restrictive in the world. She spoke with GGB Publisher Roger Gros from her office in Sydney in July.
GGB: You came up with this research study rather quickly, because it was done in the month of May, just two months into the pandemic. How long did it take you to design it and get it off the ground?
Sally Gainsbury: The Covid shutdown in Australia occurred officially on the 26th of March. That’s when all land-based gambling venues across the country were closed by the government. There was no access to electronic gaming machines, which are our poker machines. Also, casinos, keno and wagering in venues all were prohibited. There was still lottery through retail outlets, although there was a stay-at-home order in place, pretty much across the country. So, it was quite restrictive, and (gambling) was mostly online.
In Australia, online gambling is limited to purchase of lottery tickets (but not scratch tickets) and online wagering. However, since all of the sports matches were shut down in Australia and mostly around the world, obviously that was very limited.
I’m the director of a treatment clinic, and we also pivoted immediately to seeing clients online. We’ve got a research team, so once we got ourselves set up in our online environment, we really started thinking, “Is this an opportunity we can’t miss?” In Australia, gambling has always been so accessible, in every neighborhood. So this was a once-in-a-lifetime opportunity to study what happens when you take all of that away. What are the unintended negative consequences? Will everyone just go online? So, we put this survey together.
Along with the shutdown of venues, obviously a lot of people were out of work, so we wanted to look at the relationship between gambling, gambling problems, financial well-being and also psychological distress. Because this was a really uncertain, stressful time for a lot of people.
How many people were involved in the survey?
We had 764 people who were recruited to complete the survey, then sent a second survey to those who agreed to be followed up. At last check, around a quarter of those had completed a follow-up survey, which is going to be more interesting, because then we can look at the longitudinal effect, particularly because in Australia we now have a differential situation. Some states have opened up. Some states are sort of opened up, but still have a sense of trepidation. And one state is still entirely locked down. So, now we’ll really be able to start seeing differences between people, based on the different availability of gambling as well.
How did you find these people?
We didn’t have any money to pay for recruitment, so essentially we begged and borrowed favors. We used social media ads. We got everything approved by (the Ethics Office), so that’s a really important step. Even though it was rushed, we made sure we went through that full process. We put ads up on social media, on Twitter and Facebook. We sent ads out to various groups through e-newsletters, and we ended up with 764 completed surveys that were usable, with no missing data. That was quite good, in terms of our response rate.
But this isn’t representative of all of Australia, and we didn’t use any kind of quotas or a panel sample. So, it’s a self-recruited sample, and that’s one limitation. It’s not going to capture everyone or everything.
It seems to be heavily skewed toward male respondents. Does that make it a problem?
Possibly, because that would be similar to the fact that 78 percent of our participants had gambled online. What that really means is, since we used online to recruit, we didn’t really capture all the people who gamble traditionally in venues. We mostly captured people who were already active betting online, and in Australia, it’s already a predominantly male sample.
What were some of the findings?
We looked at the frequency of gambling, which is a quite good proxy for understanding overall involvement. We found that nearly three in four participants actually reported spending less time gambling during the shutdown.
Some gambled more—11 percent said they increased gambling. But specifically for online gambling, most people were reducing their time gambling online. About a third had minimal change; 18 percent increased their gambling, and just 1 percent were gambling online for the first time, which again, suggests that this was already quite an active online sample.
A large number, 63 percent, said they stopped gambling online completely. That’s a pretty significant number.
I think this reflects the fact there wasn’t as much to gamble on. You’re right, there was some Belarusian soccer, Russian table tennis, there were some esports. But for people who (prefer) betting on more traditional sports, none of these were occurring.
How can people get a copy of the report?
It’s available at the University of Sydney Brain and Mind Centre research site (sydney.edu.au/brain-mind). There’s a subcategory of our gambling research within the Brain and Mind Centre.
You could email me; my email address is available on the University of Sydney website, and I’m on twitter, @DrSalGainsbury. We’re really excited to be able to share this research.
It was the biggest, and maybe most improbable, deal in the history of the gaming industry. When Eldorado Resorts announced its intention to purchase Caesars Entertainment, it was like a minnow swallowing a whale. Probably the most recognizable brand in the gaming industry, Caesars was worth multiples more than any company Eldorado had previously bought, but company executives, including Chairman Gary Carano, were confident that the deal could be accomplished for the benefit of shareholders on each side. Carano explains Eldorado’s path to acquiring the gaming giant and how they plan to turn around a company that had become bloated and complacent over the last 10 years. He talks about the future of Caesars, as well as recognizing the past and the debt owed to the Reno founders of each company. He spoke with GGB Publisher Roger Gros at the company’s offices in Reno in August for the cover story of the October issue of the magazine.
Reno, Nevada has a strong locals market that fuels many of the major casinos there. While Grand Sierra Resort, the former Reno Hilton, does well in that market, it is one of the few that also caters to travelers and destination resort visitors. With a plethora of attractions, the Grand Sierra is well positioned for a quick recovery from the Covid 19 lockdown. Senior Vice President of Marketing Chris Abraham explains how the resort is positioned in the Reno market and why its many attractions draws a wide range of visitors. He also talks about the owner Alex Merulo and his commitment to the property. He spoke with GGB Publisher Roger Gros at the Grand Sierra in August.
Podcast sponsored by FSBtech.com
The March shutdown of the Atlantic City casinos during the Covid 19 emergency was only supposed to last two weeks, but three months later the casinos were still waiting for the OK to reopen from New Jersey Governor Phil Murphy. When that approval was given, some of it was quickly snatched back when Murphy decided that indoor dining was not included. Atlantic City executives came up with innovative ways to feed their customers in their rooms, with takeout or in venues quickly set up outside. Marie Jones, one of the leading gaming lawyers in the city, explains how the regulators got involved, what were some of the questions that her clients had about the new procedures and how the casinos reopened to surprising success of the first month. Jones is part of a feature in an upcoming issue of Gaming Law Review that includes four Atlantic City casino CEOs on how they all grappled with the closure and the subsequent reopening. Jones spoke with GGB Publisher Roger Gros from her offices in Atlantic City in August.
Podcast sponsored by FSBtech.com
If there’s anyone with a finger on the pulse of Las Vegas, it’s Nehme Abouzied who came to the town nearly 20 years ago and has held executive positions with Las Vegas Sands, Wynn Resorts and the Vegas Golden Knights of the NHL. Several years ago, he formed LaunchVegas to help companies looking at the coming boom in town to get acclimated and hit the ground running. But then Covid 19 hit and the world changed. Las Vegas became a ghost town for three months and even now it’s attracting a bare minimum of visitors to keep the casinos running. Abouzied talks about how the city will rebound and what key elements are needed to return to profitability and a semblance of normalcy. He spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas in July.
Podcast sponsored by FSBtech.com
When the Covid 19 lockdown began in March, Steve Callender had oversight of just one Atlantic City property, the Tropicana. When it was over in July he had added three others—Caesars, Harrah’s and Bally’s—as a result of the closing of the purchase of Caesars Entertainment by Eldorado. Callender, a longtime Atlantic City executive, explains how he navigated the lockdown given the certainty of the merger and how they plan to slowly reopen to full capacity. This interview will be part of feature in the September edition of Gaming Law Review, where a panel of AC leaders discusses the lockdown and its impact. Callender spoke with GGB Publisher Roger Gros from his Atlantic City offices in August.
Podcast sponsored by FSBtech.com
The Borgata has been Atlantic City’s 800 pound gorilla for years. It consistently records at least double the gross gaming revenue than it’s nearest competitor. Melonie Johnson has only been in charge since late May, but it didn’t take her long to get up to speed and recognize what needed to be done to provide Borgata’s special customers with the level of amenities and service they expect, even though they opened almost three weeks later than the other casinos in Alantic City. She spoke with GGB Publisher Roger Gros for a feature in the September edition of Gaming Law Review about how the reopening and restrictions on normal casino service have impacted her operations. She also discusses diversity and what it means to be the first African American women to run a property in Atlantic City.
Podcast sponsored by FSBtech.com
Earlier this year, as virtually the entire gaming industry shut down amid the Covid-19 pandemic, one of the very few operators that remained in growth mode was the Cordish Companies.
Despite a few Covid-related interruptions, Baltimore-based Cordish managed to keep construction going on two major projects that will open within the next year. Through its Pennsylvania-based subsidiary Stadium Casino, Cordish is on track to open that state’s first Category 4 “mini-casino,” Live! Casino Pittsburgh, by end of this year.
By early 2021, Cordish will open Live! Hotel and Casino Philadelphia in the heart of the South Philadelphia Stadium District, home to all four of the city’s professional sports teams.
Meanwhile, the company is launching its iGaming platform in Pennsylvania with leading provider GAN, along with an existing sports betting deal with FanDuel. Rob Norton, president of Cordish Gaming Group, spoke with Global Gaming Business Editor Frank Legato in August about how the company keeps growing during a difficult time.
GGB: You just launched your online gaming site, PlayLive! In Pennsylvania, becoming the first online gaming site to operate before a bricks-and-mortar facility was open. How did you get the Pennsylvania Gaming Control Board to agree to this?
Rob Norton: We approached them about launching the site in advance and talked about the benefits to the bricks-and-mortar facility. There was nothing in the legislation that prevented it. The PGCB has been an incredibly good partner in helping us get through the launch of this online site. It’s the first time we’ve ever done it, and we couldn’t have done it without their support.
What went into the decision to choose GAN as your partner?
We’ve been partners with GAN for nearly 10 years in operating a social casino gaming site. We did this exact same play when we were opening the Live! Casino in Maryland, only it was a social casino, not a real-money operation. We used the GAN platform for that site to recruit potential players for the bricks-and-mortar facility. We had a relationship with GAN, and they were already active with other customers in Pennsylvania. We wanted to do this quickly, (so) it wasn’t a tough decision.
FanDuel is your other partner in Pennsylvania. Is that because they were also active in that state?
Yes, but quite candidly, we believe they’re the best-in-class operator in the sports betting business right now, and we believe we’re the best-in-class operator in bricks-and-mortar casinos. So, in this case, one plus one equals three. When we bring them on board for the Live! Casino in Philadelphia, it’s going to be one of the most exciting products to ever hit the East Coast.
There’s a lot of competition in the Philadelphia area for sports betting—not only the casinos that all have books now, but the Greenwood Turf Club as well, which is right across the street from your casino. How will you differentiate the FanDuel sportsbook from others?
It’s part of our corporate DNA that we don’t shy away from competition. We believe competition makes you better. In this case, I’m very excited what we’re bringing to the market. Our sportsbook in Philadelphia is being developed in a way that will be a market leader.
How were you able to maintain construction of the Philadelphia casino throughout the Covid crisis?
It really started at the corporate level. We took the Covid-19 situation very seriously, starting in late January, when it was becoming apparent this would become very serious. We started working on plans on the operations and construction side to deal with this. We did have some modest closures on the construction side that were mandated, but we implemented “Play It Safe,” which is our brand for how to respond to Covid in both our operations and construction divisions. Safety and health is our top priority, because if we do it right, everybody benefits.
“In the case of the theater, you can’t build it for 5,000 people and then plan to operate it with only 2,000. It’s not built that way.”
—Scott Sibella, president, Resorts World Las Vegas, who hopes to be “past all this,” meaning Covid-19, by the time the $4.3 billion resort opens in summer 2021
When it comes to casino design, Brett Ewing has seen it all. From the themed casinos of the 1990s to boutique hotels and ever-changing trends, he has been on top of them all. But then when Covid 19 forced the casinos to close, he opened his mind and has assisted clients in re-thinking the very operations of their casino resorts. Although more distance between slot machines was already being considered before the virus, Ewing believes that social distancing will allow designers to make the casino experience more fun and efficient, and the entire resort experience will bring a new and brighter palate for operators to consider. He spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas in July.
Podcast sponsored by FSBtech.com
It was almost four months that Atlantic City casinos closed their doors, enduring the effects of the Covid-19 pandemic. When they reopened in early July, there were strict guidelines on what they could and could not offer—inside dining being the most crucial. Terry Glebocki had only been CEO of Ocean Casino Resort since late last year when the shutdown order was given in mid-March. She explains how they closed down, how they stayed in touch with customers and employees during the shutdown, and how the reopening has performed. Players are flocking to Ocean with incentives provided by the casino and a pent up desire to gamble. Glebocki spoke with GGB Publisher Roger Gros in July for an Atlantic City leaders roundtable to be published in the September issue of Gaming Law Review.
Podcast sponsored by FSBtech.com
In 2018, when Joe Lupo took over as president of Hard Rock Atlantic City, he had just finished a stint in the same position at Hard Rock Tampa, one of the most successful casinos in the U.S. Due to his many years as an executive at
Atlantic City’s Borgata, Lupo was able to grow revenues, increase loyalty and capitalize on a market he knows like the back of his hand.
When Atlantic City reopened, casinos scrambled due to a prohibition on indoor dining that was announced just before customers returned. But according to Lupo, the properties are making it work. Lupo spoke with GGB Publisher Roger Gros over the phone for an Atlantic City executive panel to be published in the September edition of Gaming Law Review.
Podcast sponsored by FSBtech.com
GGB: You’ve had a tough time in Atlantic City over the last few months. Why don’t you fill us in on how it’s been going since it opened up in early July?
Joe Lupo: We’ve been making the best of the hand that we had dealt to us. People are pleased with what we’ve been able to provide. It was important for us to be transparent, specifically about what we could not provide. I think that’s been really helpful, to set that expectation.
Here at Hard Rock, we have some great outdoor balconies that look over the ocean, and we’ve set up some great dining for our customers to sit outside. We’ve tried to do the best job we can. We’ve got probably as much Plexiglas around the property as anyone, if not more. We were quick to jump on that. It’s been important that we really impress this—our “Safe and Sound” protocols with the help of our Hard Rock corporate protocols.
It’s been really important that we set that tone, that we’re safe, we do have a clean property, we’re enforcing the wearing of masks. As far as playing, you can play safely and have a nice experience here at the Jersey Shore.
Let’s go back to the beginning of the shutdown. How much guidance did you get from the regulators when the order was given?
We heard a lot of things from the regulators and the governor. Obviously, we were working closely with everyone. We started having meetings the week before, and I got the management staff around the table to anticipate what might happen.
When we did get that notification—I think it was on a Monday morning—we literally were shut down by 2 o’clock that day. It was a tough issue for everybody, but we had good guidance, and we’ve been working well with the New Jersey Division of Gaming Enforcement. The governor’s office has been communicative as well.
What was your strategy to stay in touch with your customers throughout the lockdown?
That was really important. We kept on some of our player development staff, and we were in touch with a lot of our customers. Obviously, it wasn’t about promoting the business, it was just making sure they were OK and asking if they needed anything.
You develop some strong relationships in a high-frequency market like Atlantic City, where many customers know how many kids I have, their names, and saw them being raised over the years. You really develop friendships.
Hard Rock has one of the best online casinos in the state. Did you direct people to that if they still wanted to stay active in gambling?
We did if they were interested. We weren’t pushing it too much. Obviously, a lot of people were out of work and going through some tough times. Here in New Jersey, when it started out, New Jersey’s (online gaming) numbers were through the roof.
We wanted to be sensitive to the issues that people were going through. The online team did increase their spending on advertising, on TV and some other advertising mechanisms. But I didn’t think it was the time to push too hard.
It was more about how people were doing, concern over friends and family that we’ve known for years here in Atlantic City.
Another group you wanted to stay closely in touch with was your employees. How did you stay engaged with them through this period?
They’re the backbone, aren’t they? We heard from them a lot. I kept on a few human resources individuals. We really went over and above to try and communicate with them, both through email and direct mail, and we set up some phone systems so they would have direct access to ask us questions. We wanted to hear their feedback and see how they were doing.
We heard a lot of feedback, and we could not be more thankful to our owners showing their support. They wanted to make sure our employees had food on their tables. We gave away over a $1 million in ShopRite (grocery) gift cards over a few different periods. Everyone wore masks, and they drove through the porte-cochère, and we would hand those out. I’m telling you, it was dramatic. People were just in tears and thankful and could not have been more happy.
How much of a curveball were the dining restrictions, which were announced just prior to opening?
We just took a very aggressive approach towards trying to be ready. Cleanliness was not an issue. Our rooms were clean. The real scramble was for outdoor dining. I believe we didn’t get that notice until Monday, and we opened on Thursday. At that time, we believed we were going to have 25 percent indoor dining.
That was a little bit of a scramble to come up with. We currently have three outdoor balconies where we can serve food. Our food and beverage team had our toughest challenge, but they came through and worked hard.
Then it was more about hotel rooms. How many should we book? How many can we feed? What’s the experience going to be like? What about the promotions? People cannot stand on line. They cannot congregate. So what kind of promotions can we do?
We didn’t have a lot of notice—just over a week, but we were able to get the job done. I really could not be more proud of the team for doing so.
The GGB Podcast assembles the team behind Marker Trax, a groundbreaking credit app that allow customers to access a pre-approved credit line at a slot machine or table game in seconds. Joining the discussion are: Gary Ellis, the owner, Ellis Island Casino, Hotel & Brewery, Charlie Skinner, the COO of Marker Trax and Tom Jingoli, executive vice president and COO of Konami Gaming.
Podcast sponsored by FSBtech.com
The pandemic claimed another important conference early in July with the International Center for Responsible Gaming announced that the 21st Conference on Gambling and Addiction would go online. ICRG Chairman Alan Feldman and Executive Director Chris Reilly explain the reasons for that decision.
Podcast sponsored by FSBtech.com
James Maida is a legend in the casino business. As a lawyer in the New Jersey regulatory system, he quickly saw that his agency was getting overwhelmed with requests to test slot machine systems, and began to do it himself out of his spare bedroom in his apartment. Today, GLI has grown into an international company serving the needs of the gaming industry and regulators alike. The recent coronavirus pandemic has changed the world and GLI is leading the way. Maida recognizes that remote access to games is going to be a major change, and regulators are going to want to be assured that transparency and integrity can be maintained. Maida spoke with GGB Editor Frank Legato for the cover of the magazine’s August edition.
Podcast sponsored by FSBtech.com
As a prime catalyst behind the growth of AGS as senior vice president of slot products, it wasn’t surprising to see Andrew Burke named chief executive officer at Quebec-based Bluberi in January. Bluberi has been bought by the Catalyst Capital Group private equity firm, and is eyeing a significant move as a game manufacturer and system provider. Burke’s expertise with slot product and Class II systems makes him a natural for the Bluberi role. He spoke with GGB Publisher Roger Gros at the Bluberi offices in Las Vegas in June.
Podcast sponsored by FSBtech.com
GGB: Congratulations on the new position with Bluberi; it’s such an interesting company. Why don’t you start with just giving us a little background on the company?
Andrew Burke: Bluberi’s a business that’s been around for almost 30 years, in various kinds of formats. For many years, it was run by the founder of the company, Gerald Duhamel, who started it in Quebec, in a town called Drummondville.
It was primarily technology and game development—a heavy focus on that. It had never really taken a foray into manufacturing. The roots were this Class II gaming system. It was great technology and great games. In the mid-2000s, they tried to become a full-scale manufacturer. Unfortunately, they ended up bankrupt in 2015. Out of that, they became owned by a private equity firm that is taking a different approach with the business. They had a CEO before me, and had various initiatives they were going after. But they just couldn’t get the traction that they really wanted. I’ve known the company for a really long time, from a distance. At AGS, when I started there, we didn’t actually have a game development studio, and all of our product was Bluberi product.
How did you get involved?
I got a phone call saying, “Bluberi’s looking for a CEO; are you interested?” I said, “absolutely.” So it was a very natural fit for me. I grew up in the Class II business, and I think there’s just so few of these businesses left, that have really good bones, some really great technology, and just need a cohesive strategy and some discipline.
I believe our technology is some of the best in the space, and our Class II business is amazing.
We really see a parallel between the ramp-up of AGS and your role at Bluberi. AGS was mostly a Class II business when David Lopez took over, and this seems to be the same thing for you.
Yes, the playbook’s similar—find a good asset that has good people and good technology, and then fill in skill gaps with smart people that have lots of industry experience. We recently hired Casey Whalen as our chief commercial officer. He’s got a tremendous amount of Class III knowledge, as well as Class II experience. And so, the more we bring those types of skill sets on the manufacturing and sales side of the business, the better off we’ll be.
Your expertise is in game development. I understand the Bluberi game development lab in Quebec is pretty strong.
They have a great team there. The things that they’re really good at and strong at, I can just help from a distance, and help our strategy. That’s always been my biggest strength on the commercial side of the business, thinking about how those two things marry up. I really am excited about the game plan they have. I feel like the team there has just never been given the chance to run it themselves. They’ve had a lot of outside consultants brought in, and for some reason it never worked. And so I think it’s really good for them to have a shot to run it, and create something special.
What are your main markets right now?
We do mostly tribal-based businesses—no surprise on the Class II side. Alabama is a large market for us. Washington state, the TLS market is very big for us. California is starting to come along and develop. The Class II business down in Florida is also big for us. We have very little business in Oklahoma, which was very big for me in my previous roles, so there’s a lot of opportunity there. I feel like I was a partial Oklahoma citizen. So I think there’s a lot of white space in front of us—a lot of opportunity to grow the business.
How has the pandemic affected Bluberi? I’m assuming you were shut down like everybody else.
Yes, that’s right. And it was very difficult. But we have a lot of great people who made a lot of sacrifices for the business, and that’s not lost on me. I told everybody that was staying, it’s our job to make sure that there’s a Bluberi for people to come back to. And that’s the most honest thing I can say—that we can’t waste that time. While everybody else is at home or people have been furloughed, our obligation is to maximize the amount of work and effort we put in during that time. And I feel like we’ve really been able to achieve that.
Your new Las Vegas office is taking shape, and they’ve been in Quebec for all this time. What will be the ratio of employees in each office?
It’s interesting. People up there ask me that question. “Are we closing the Quebec office?” And I said, “No, look; when I started at AGS, we had 100 employees. And when I left AGS, we had 700 employees, and all over the place.”
Despite the COVID situation, I came here to grow this business. And I think we’ve got a lot of great, talented people there. I hope to add a lot of great talented people here. Also there. So, I think we’re just really getting started. We’ve got really good technology and R&D up there. We’re building the stateside infrastructure you need to run one of these businesses.
Twin River Management Group got its start in a little casino in Rhode Island and today is growing into one of the largest regional operators in gaming. The recent purchase of Caesars Entertainment by Eldorado Resorts was something of a catalyst for the growth of the company. Twin River was able to buy several properties in different areas of the company at bargain prices to lessen the market share of a Caesars-Eldorado entity. CEO George Papanier and senior marketing VP Phil Juliano explain how the company plans to capitalize on these new properties, including Bally’s Atlantic City, which they bought on the cheap at just $25 million. They spoke with GGB Editor Frank Legato over the phone in July.
Podcast sponsored by FSBtech.com
With every other slot machine turned off, three seats maximum at blackjack tables, similar limitations at other table games, no buffet, temperature checks and dozens of other changes large and small, casinos that have reopened following the Covid-19 lockdown look and feel different. Mike Larson has visited dozens of these reopened casinos, mostly clients of JCJ Architecture, and has come away with some strong feelings on how casino design ha to change in the short term and the long. Space is sometimes limited within a casino environment so social distancing can be difficult—but not impossible, says Larson. Larson talks about all the elements of change and how he’s seen and advised casinos to approach it. Since the Tao Group is a JCJ client, he’s right in the middle of reimagining the nightclub and dayclub experience. He spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas in June.
Podcast sponsored by FSBtech.com
Rick Arpin knows what he’s talking about. After 16 years with MGM Resorts, followed by a stint with payment processor NRT Technologies, Arpin has the experience needed to direct his KPMG clients in the right direction. Arpin believes the coronavirus recovery will be very nuanced and dependent on individual markets. In Las Vegas, Arpin says the recovery of gaming will be framed by the recovery of the airline, tourism and conventions industries as well. He spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas in June.
Podcast sponsored by FSBtech.com
GGB: What are some of the things operators are concerned about and how does KPMG advise them?
Rick Arpin: The main concern, on the human resources side, is how we can make sure that our employees are protected, which includes things like temperature checks, understanding the symptoms, and how do we track their whereabouts should they become infected? We have high-risk populations that we have to treat differently when they come back to work.
We look at it on a risk basis. Something as simple as scheduling teaches us how we can segregate our population so that this doesn’t spread, even years from now, when we might have a bad flu season. There are lots of applications here to control an outbreak.
How do you think the Las Vegas casinos have responded so far?
I think the jury’s still out, to be frank. The governor, health officials and the Gaming Control Board have said they would closely monitor how it’s being handled. I think the additional requirement that everyone, including guests, wear masks is indicative of that oversight. The results need to be used to make decisions going forward.
But I think that they’re throwing everything at the wall here to make sure the employees and the customers feel safe. We’ve seen this in the past, with security tightening up after an incident with a visible presence. This is no different. We want visible measures, to make sure the customers feel safe.
Would the current trend of smoking bans in casinos be part of those visible measures?
Certainly. We know not everyone agrees with it, but now is an opportune time to do it. This period will also give us a good chance to rethink how we operate.
Las Vegas was poised to break out in 2020 with new properties, a new football stadium, an NFL team locating here and more. The NFL Draft was supposed to be held in Vegas, but of course was presented virtually instead. How should Las Vegas approach the future, since this is all so disappointing?
When you take some of the emotion out of it, we have to consider this as just a pause in what was a very good strategy from the visitor-tourism perspective. Sports and entertainment as a big element of a diversified long-term strategy makes sense, and we should continue to pursue those goals.
People have different predications on when we’ll be back to “normal”—three months, six months, 18 months, three years. No one knows what that will be. And let’s not forget, people will still want to be entertained, people still want to see sports, people are still going to want to have meetings and trade shows.
Will the industry look different? Do we have some changes to make? Of course, but this is temporary and we’ll come back stronger than ever with those changes. We just have to think carefully of what that future will look like.
How do we look at the changes we have to make?
At KPMG, we’re looking at previous events and how we responded to them, and whether those changes were temporary or permanent. When you consider 9/11, we now have the TSA (Transportation Security Administration), which is clearly permanent, but that continues to change. We now have pre-check, so we can get through faster.
So I think we’ll see the same thing in gaming. Can they sustain extra staff for cleaning? Possibly, but I believe we’ll find ways to do that in a more automated fashion. So we’ll see new ways of doing things, whether it’s cleaning or social distancing. You’ll see a lot of innovation and technology in these areas.
One of the side effects of Covid-19 is a rush toward contactless payments throughout society to avoid handling currency. But with casinos still lagging behind in the area of cashless transactions, Mike Rumbolz says the time is right to begin the transformation. Everi has developed a series of technological advances, starting with QuikTicket, which allows a guest to buy a ticket at an Everi kiosk that can be used throughout the casino to a complete eWallet system that transfers funds from the players account to wherever he plays or buys by a simple wave of a mobile device. But Rumbolz points out that the transparency of cashless payments will have additional benefits as well, such has helping those afflicted with problem gambling. Rumbolz spoke with GGB Publisher Roger Gros at the Everi offices in Las Vegas in June.
Podcast sponsored by FSBtech.com
While credit goes to New Jersey politicians Ray Lesniak and Chris Christie for pushing the landmark Supreme Court decision that overturned the Professional and Amateur Sports Protection Act (PASPA), part of the credit must go to Sara Slane, then vice president of the American Gaming Association, who led the organization’s efforts to support the lawsuit. Slane was effective and convincing in her arguments and, in the end, the campaign was successful.
Slane now runs her own consultancy for organizations looking to bring legal sports betting to new jurisdictions or get into the business. She spoke with GGB Publisher Roger Gros from her home in June.
Podcast sponsored by FSBtech.com
GGB: We just passed the second anniversary of the repeal of PASPA, certainly a landmark in the casino and sports businesses. What does it mean to mark this second anniversary of the repeal?
Sara Slane: I feel like the gaming industry has kicked the door open now on sports betting. I definitely feel like this has moved a lot faster than anyone had anticipated, certainly with states enacting legislation. And with that there’s been a huge discussion now—really understanding how it works, the benefits of legalizing sports betting, and tremendous growth now for the industry. And so it’s been incredibly exciting to be a part of it.
Of course the coronavirus threw a real curveball to the sports betting industry, with the shutdown of all major sports around the world. Do you believe there’s a real pent-up desire for bettors to get back into action?
Yes, without a doubt. And even during that time when sports around the world essentially shut down, some very creative stopgap measures were put in place. Who would have imagined that we would create a whole new market around table tennis? But I think that there is, without a doubt, a huge pent-up demand.
Now being able to be back to the typical sports people bet on, it’s going to be interesting to see the numbers that come out as a result. Because I think everyone was looking for some entertainment when they were locked in their homes.
Since the introduction of legal sports betting, the dominant sports betting companies have been the same companies that were leaders in daily fantasy sports: DraftKings and FanDuel. Did the casinos understand that this was a possibility when the AGA was pushing this bill? Was there any indication that they would become so dominant so quickly?
That’s a tough question. Certainly FanDuel and DraftKings are dominating the marketplace right now. And at the time, when we were looking at PASPA, they were in the daily fantasy sports sphere, but they did quickly pivot to offer legalized sports betting.
It’s a question that comes back to regulations, honestly. On one hand, the industry has kept out a lot of competition because of the high bar of regulation and how hard it is to cross that threshold, and how expensive it can be. On the other hand, there have been some complaints that it’s not really led to a lot of innovation.
DFS was in this massive gray area for a couple of years. And they did the work, they legalized DFS and were continuing to operate. Casino operators had known for years that this could be a potential opportunity. It’s a double-edged sword; I get it, on both sides. I’m empathetic to the fact that the casino operators feel like they were sidelined from an opportunity to participate in a gray market with daily fantasy sports. I also understand from the daily fantasy sports side, when they were shut down, they did all the work they needed to do to legalize it, and took advantage of the sports betting opportunity that came along.
Another thing that happened really quickly—more quickly than people would have thought—was the spread of mobile sports betting. In New Jersey, within a year, 75 percent of the market came from mobile devices. Did you think that would happen so quickly?
Not at all. I’m not surprised that mobile has overtaken retail sports betting, certainly given the locations of retail operations in New Jersey and the easier accessibility of mobile in the state. No, I wasn’t surprised. That’s where the customers are, that’s where the industry should be heading, and I think that that will continue to happen in other states.
One of the goals of legal sports betting was to eliminate illegal offshore sports betting operations. This hasn’t happened to the extent that the AGA wanted. Do we need to concentrate on this to really get rid of illegal sports betting?
We had long said that the most effective way to shut down the illegal sports betting market is to have the most competitive legal sports betting market out there. But in order to compete with the illegal operators, you’re going to have to have a good regulatory model in place and a good tax structure. That’s going to empower that operator to thrive and offer good odds to compete with the illegal market. I think that truly is going to be the way that you’re going to shut it down.
Are there other simple tactical things that should be happening right now? Absolutely. Legitimate media companies that have deals with gaming operators should not be taking advertising dollars from illegal operators. I think the leagues have done a good job at educating their owners about illegal markets and illegal advertising, and preventing them from taking money from any of those websites.
There’s always going to be a struggle with law enforcement, and getting them to pay attention to go after illegal operators… so that will always be a challenge.
But, all in all, I think that the most effective way to do it is to be able to compete with it, and empower the operators to do that.
The world of casino design has changed since the onset of Covid-19. Nick Schoenfeldt, a partner with Thalden Boyd Emery Architects, joined GGB from the Fort McDowell casino in Arizona, which is making last minute changes to an expansion designed by TBE as a direct result of the Covid-19 stipulations. Those changes include removing a new poker room, spacing the slot machines out in regards to social distancing, a new plan for the buffet and more. While some of these changes may only be temporary, Schoenfeldt says many of them will have to be engrained in every casino project from now on. He spoke with GGB Publisher Roger Gros from the Fort McDowell casino in June.
Some of the big gaming companies have borrowed hundreds of thousands of dollars to increase their liquidity to give them time and capital to overcome the Covid-19 shutdowns. Matt Sodl, the managing director of Innovation Capital, explains that money is available to casinos of all sizes, tribal or commercial, to help get them through this period of uncertainty. He says the costs are reasonable and the strategies to emerge from these difficulties are diverse and inventive. He spoke with GGB Publisher Roger Gros from his offices in Los Angeles.
When Virginia legalized casinos in five economically disadvantaged locations last year, Danville was the only city that went through a request for proposal (RFP) process to find a developer for a casino in that town.
The city hired Convergence Strategy Group and principals Scott Fisher and Suzanne Leckert, to handle the process, which just ended with the city choosing Caesars Entertainment out of seven original bidders.
Fisher and Leckert explain how the process was developed, who they worked with and why Caesars was deemed to have the most compelling plan for a casino at an abandoned industrial site. They spoke with GGB Publisher Roger Gros from their offices in New Orleans in June.
GGB: Why did Danville decide to issue an RFP rather than simply negotiate with one company?
Scott Fisher: There are so few opportunities in the country to develop some great properties in relatively non-competitive markets. While Caesars is a great company, by issuing an RFP Danville was able to see proposals from many other great companies to bid against them. The city got to see some great opportunities through the bidding process and ended up getting what we think is a really attractive plan by Caesars.
In addition, the city manager wanted to make sure they had an open and transparent process, so there could be no allegations of a backroom deal with a gaming company, and they clearly accomplished that.
What’s the next step in the process?
Suzanne Leckert: Danville will hold a referendum in November. While we’ll be providing some information, the campaign is mostly going to be handled by Caesars. The city itself is being neutral. They’re not advocating for or against having a casino, they just want all the information to be out there, even though the fiscal impacts will be substantial.
What was the city looking for in the proposals? What did Caesars propose that put them over the top?
Leckert: When we first got involved, the city manager of Danville, Ken Larking, told me he wanted to put any revenues they get from casinos directly into education for the town to make Danville’s school system the best in the state. So the city was most interested in the tax revenues it would earn off any casino project.
But they were also looking for redevelopment of brownfields, these abandoned industrial sites that are a very visible sign of the city’s decline. The Caesars proposal did just that, proposing a development at the Schoolfield and White Mill sites. The city also realizes it can also use some of the Caesars money to incentivize other developments on these sites.
Why is Danville such a good market, according to your report to the city? It is on the border with North Carolina, which has a couple of tribal casinos.
Fisher: We started by doing a market assessment and arrived at a pretty broad range of what the market potential was, depending on the scale of the resort that was built. But we also did an alternative model, which recognized that North Carolina as a state is also looking into the possibility of allowing commercial casinos.
Since the market potential for Danville was going to be driven very much by North Carolina residents, especially in the Greensboro and Raleigh/Durham area, that could chop the revenue potential in half. But the Cherokee properties really don’t have any overlap of the market for a Danville casino.
Caesars is in the middle of a purchase by Eldorado. How did the city take that into account when considering that application?
Leckert: We requested information about the merger to find out if Eldorado would still be on board at the end of the day. We received assurances by Eldorado and Caesars management that this project has the full support of Eldorado, and they remain committed to it going forward.
With many of the large and small Southern California casinos opening within the last two weeks, the same can’t be said for casinos in Northern California, give or take a few. At the Sherwood Valley Casino, General Manager Michael Broderick says the tribe has taken extra care in preparing for reopening. The tribe plans to test every employee for Covid-19 and institute what has become some of the industry standards—limited capacity, deactivated slot machines, masks, frequent cleaning and more. Broderick explains what the casino means to the tribe and why they are taking these extraordinary steps even though they need the revenue produced by the casino to fund government services to tribal members. Broderick is known for his innovative marketing campaigns but says at this point the principal things you can promise customers is health and safety. He spoke with GGB Publisher Roger Gros from his casino office in Willits, California last week.
Just last week, Nevada posted the highest unemployment rate in the United States for any state ever. That stat tells you all you need to know about how the Covid-19 lockdown has affected Nevada and its tourism industry. More than a quarter of Nevada’s workforce is employed, more than the U.S. average during the Great Depression. Just three months ago, the state’s unemployment rate sat at 3.8 percent, the lowest ever.
Economist John Restrepo has been studying the Nevada economy for more than 20 years and he points out the devastating impacts of the lockdown and how the state can rebound from it, although there are still plenty of uncertainties. Restrepo’s RGE Economics publishes the widest and most complete set of data on the Nevada economy. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas in mid-May.
As casinos begin to reopen following at least two months of closures due to Covid-19, how are they going to bring back their loyal customers and what messages will resonate. Josh Swissman, a former corporate marketing executives with MGM Resorts, Station Casinos and other companies, and now a partner with the Strategy Organization, says campaigns are going to have to emphasize health and safety but also stresses that the “fun” factor should not be ignored. Casinos will be seen as a way to escape the realities of the new normal and the message delivered by casinos need to be focused and consistent to stay true to the brand. Swissman spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas in May.
They say cash is king but the actual bills that make up real cash are more germ spreaders than money royalty. Omer Sattar and his payment processing company Sightline have developed procedures over the past several years to migrate cash money to and from the casino floor via electronic financial transfers. This process will eliminate the nasty cash from the hands of customers and employees alike and encourage safer and healthier transactions. Sattar says that these kinds of transactions bring other benefits to the customers, operators and regulators that will make the entire gaming experience a more satisfying and transparent event. Sattar spoke with GGB Publisher Roger Gros from his home in Las Vegas in early May.
The coronavirus pandemic has certainly been unprecedented in many ways—socially, economically, and legally. Tony Cabot is one of the deans of the gaming law field, having been active through many various developments in the discipline down through the years. Now, as a distinguished fellow of gaming law at the Boyd Law School at the University of Nevada Las Vegas, Cabot is thinking about how the casinos will reopen, what are and should the stipulations be, what is the role of the regulator, and what will be the long term legal impact of the pandemic. He spoke with GGB Publisher Roger Gros over the phone from his home in Las Vegas last week.
On April 29, Nevada Governor Steve Sisolak extended the state’s stay-at-home order until May 15. At the same time, he gave responsibility for reopening Nevada casinos to the Gaming Control Board and Chairwoman Sandra Douglass Morgan, while warning that casinos would not reopen until Phase 3 or Phase 4 of the state’s recovery plan. (Phase 1 began May 9.)
By April 30, Morgan was already deep in preparations. She spoke by phone that day with GGB Publisher Roger Gros, discussing how casinos would reopen, the rules they would operate under, and how those rules would be enforced.
GGB: Governor Sisolak, in his address to the state, said that reopening of the casinos would be determined by the Gaming Control Board. What does that process look like, in your understanding, anyway?
Sandra Douglass Morgan: We’ve been working diligently with state and local providers. I foresee the board, in short order, issuing a policy to non-restricted licensees, our large casinos, and then our restricted licensees, mainly our bars and taverns, as to what we would expect from a health and safety standpoint when they reopen.
I really have to publicly thank the University Medical Center. We had a chance to meet with Dr. Luis Medina-Garcia, an infectious disease physician there. We’ve also met with the Southern Nevada Health District, which covers Clark County and Las Vegas, and the Washoe County Health District, which covers Reno. They were kind enough to lend their expertise to review the policy and the guidance that we issue.
The guidance would require casinos to submit plans to confirm that their properties have been deep-cleaned and disinfected prior to opening, and ensuring that signage is posted so employees and patrons are reminded of proper hygiene. Employee training is obviously going to be very important to ensure that employees understand their responsibilities and knowledge of how to combat the spread of Covid-19—everything from hand-washing and sanitization (to) personal protective equipment, such as masks that may be recommended or even required by the Centers for Disease Control and Prevention.
Can you envision a process that allows locals casinos to open first, with strict social distancing requirements and the things you just mentioned?
I don’t see a legal or regulatory basis for carving out one section of the city or county. I think we’ll set out guidelines and policy expectations, and those operators will have to make business decisions as to whether or not they can operate within these parameters. I don’t really foresee saying one section of a city is opening first. If they can meet the guidelines that we’re setting forth in a safe way, then they will be able to reopen.
Even though the non-restricted casino licenses are grouped together, there are some big size differences. I imagine there has to be some flexibility there when it comes to the larger and smaller casinos.
Absolutely. This is a fluid situation. Nobody knows everything about this virus, but we’re learning more about it every day. We have more than 2,000 unrestricted licensees, and I only have 400 people on staff.
So we do what we can, and we answer questions when we can, either by email or phone. I’m very, very proud of the Gaming Control Board—not only the board members, but all the employees as well.
How deeply are the regulators going to get involved here? Are these guidelines you’re issuing, or will they be strict regulations that will be enforced?
Remember, the ability for the Gaming Control Board to do this was under the governor’s emergency directive, so there is an enforcement mechanism. But I will be very blunt. This is a pandemic. No one has gone through this since 1918. Our goal is not to go out and arrest people; the goal is truly compliance. And compliance in this new reopening phase is going to look different.
You know, our enforcement officers and our agents are going to be looking at different things. Licensees are going to have to find different ways to operate. We definitely want to make sure that we have a presence, and that the Gaming Control Board is communicating with the properties.
Obviously, the policy of the state is to have a strict regulation for gaming; we will enforce it while allowing the industry to change and flourish and kind of find new ways to reopen. The goal is ultimately compliance. But yes, we will have enforcement ability for this.
Earle Hall has a long history in the gaming business, mostly as the inventor of several innovative table games and table bonuses. His new company, AxesAI, is dedicated to blockchain and artificial intelligence in gaming.
As the vice chairman of the International Gaming Standards Association, Hall is keenly aware of the technological challenges facing the industry today. He spoke with GGB Publisher Roger Gros at his offices in Las Vegas in March.
GGB: You’ve just been appointed vice chairman of the International Gaming Standards Association. What does that mean to you?
Hall: I’m really scared right now. We’re heading into a quantum world. Quantum computers are not so rare anymore; you can buy one for $35,000, which means I can pop in and out of networks, I can put a spider or crawler on top of a server, and I can get out without anyone ever seeing me. We’re going into a phase of technology that, in my opinion, is the scariest we’ve ever seen, because we’re the most decentralized, and the ways of being intrusive inside of a network now are infinite. I’m very scared about what operators are going to go through over the next three to five years unless we can implement blockchain technology that will create the highest level of security and bring in a standard for ethical behaviors.
Isn’t blockchain as hackable as any other security system?
I’m not into absolutes, but I’m going to say a proper blockchain technology is much more secure than any other network technology we have today. What blockchain does—and I’m not talking about bitcoin, I am so not a fan of bitcoin—is that it inserts passwords inside of every single transaction. Those passwords have to match up to make a change in the information inside of any transaction. And remember, these are private transactions, not public. When you say “public” to me, I run away, because I cannot control the information residing in that network.
Why hasn’t blockchain been embraced already, if it’s so secure?
Blockchain is a new technology. It’s only been around for three to five years. And no technology ever really takes hold unless it’s been around 10 years or more. Right now, we’re in the phase where everyone lost their initial investments and they’re scratching their heads (laughs). But the core technology is still moving along.
Blockchain is confusing because 80 percent of the people who try to explain it don’t know what they’re doing, but that’s normal, because it’s new. Remember in 1997, when everyone was an internet consultant but didn’t know how to log on?
Do regulators understand blockchain?
Surprisingly, many of them do. At last year’s international regulators conference in Jamaica, I was blown away by the level of knowledge of some of the regulators from Australia, Africa and especially three or four in Europe.
The wave of regulators with blockchain knowledge is growing quickly, because they see that blockchain is more risk-averse than the way they’re doing things right now.
How would blockchain aid the industry to encourage responsible gaming?
Blockchain is capable of looking at literally billions of pieces of data. My company collects data from more than 50 countries now, and it gets very deep. If you’re in a casino and having a great time, you’re getting that adrenaline rush that makes you feel great. But once you go into a cortisol response—a “fight or flight” response—it means that what’s happening in the real world is not meeting your expectations. Like an animal, you’re going to fight to survive or you’re going to run to survive.
Inside of our database, we’ve found a pattern in every single country—speed of click, change of betting pattern, and then change of machine. We’ve got seven parameters that identify this. I don’t care who the player is, when I see the pattern, I know something is wrong, and we can do something about it.
There is no state or jurisdiction which is harder hit by the coronavirus pandemic than Nevada. Virginia Valentine has led the Nevada Resort Association since 2011 and has seen some tough times but nothing like this. The numbers are staggering—Up to 360,000 jobs lost, $% billion in wages at risk, $2 billion lost in meetings and conventions cancelled, a total impact on the state of Nevada of over $22 billion. Still Valentine believes that the health and safety of state residents and visitors comes first so any reopening must be planned and discussed. She spoke with GGB Publisher Roger Gros from her home in Las Vegas on April 15.
In a sports-starved world, any kind of competition is king, and esports is emerging as a contender. Rahul Sood has spent the last five years building his company, Unikrn, which was the first to encourage betting on esports. With Mark Cuban as an early investor, Unikrn has solid backing, but has struggled to gain traction in the casino industry despite its focus on betting. That has changed since the coronavirus has shut down the bricks-and-mortar casinos. Esports is now at the front of the mind for sports book providers and casino operators. Sood explains what comes next. He spoke with GGB Publisher Roger Gros from Seattle where he’s hunkered down during this crisis.
Jeff Hwang, President and CEO, High Variance Games, wrote a piece last week on the Motley Fool website, talking about how he believes the Las Vegas Strip will not fully recover until 12 to 18 months. He explains why that might not be a bad thing in this special edition of the GGB Podcast
Bruce Merati has a long history in gaming technology. He was one of the first to develop a unique “live” dealer platform for iGaming and believes that the current Covid-19 crisis has been a wakeup call for the casino industry. Merati says that iGaming is a different product from land-based gaming and actually enhances land-based gaming instead of detracting from it. He says casino companies now realize the benefits of iGaming and once the crisis is over, they need to push for legal online gaming in states and jurisdictions where it currently doesn’t exist. He spoke with GGB Publisher Roger Gros from his home in San Diego on April 6.
John James has a long history in the gaming industry from working in Las Vegas casinos to multiple leadership positions in Indian Country. James took over at Foxwoods Casino Resort in July 2019, and has made progress moving the property forward, which came to an abrupt halt when Foxwoods closed in March in the wake of the spread of the coronavirus. James has bene one of the most proactive of gaming executives and that didn’t change in this crisis. He and his senior management team immediately worked up ideas about how to maintain contact with the many constituencies of Foxwoods. He spoke the GGB Publisher Roger Gros on April 6 to talk about how Foxwoods is approaching the situation.
GGB: Tell us how you reacted when the virus hit and all casinos across the country eventually closed down.
John James: Working in partnership with the Mashantucket Pequot Tribal Council, we monitored the breaking COVID-19 developments hour-by-hour. With guidance from the tribe’s chief medical officer and state and local authorities, we made the painful decision that Foxwoods Resort Casino would shut its doors for the first time in over 28 years. The safety of our team members, and our loyal guests, was always the driving factor.
Much like the rest of the world, we are being responsive to the changing developments of the COVID-19 crisis. We are continuing to closely partner with our chief medical officer, the state of Connecticut, and the CDC to decide when it is recommended to safely reopen our doors. This is being evaluated day by day.
It’s an unprecedented situation, and as bad as the health concerns are the economic impact is even more devastating. Explain why that is so difficult for the owners of Foxwoods, the Mashantucket Pequot tribe.
We don’t know much about what the aftermath will be, but this pandemic will surely have long lasting effects on everyone, and we are, of course, no exception. What we do know is we carry the determination and resilience to help us pave a realistic path forward.
We remain committed to our 5,500 loyal team members, who’ve shared this journey with us for over 28 years. They are the true heart of Foxwoods Resort Casino and are responsible for creating countless memories and moments of wonder for our guests throughout the years. We will continue to cover health insurance for our team members who have been furloughed.
This is the best path for us to preserve jobs at Foxwoods and the Mashantucket Pequot Tribal Nation and show compassion for our team and loved ones during these unprecedented times.
Some people seem to think that once the casinos reopen, whenever that will be, the crisis will be over. You don’t believe that. Why is that?
Lives have been dramatically altered and the recovery back to our once “norm” will be slow. With record unemployment and significant economic impacts, rebuilding our nation will take time.
You are approaching this recovery as basically a “one day at a time” challenge. What do you mean by that?
We must remain nimble and flexible to the changing environment around us. While we can plan, success includes the right reactions at the right time to substantial recovery.
You also recognize that this crisis has hit so many of your constituencies, just some of what are tribal members, employees, vendors, tenants, partners, and charities. This is obviously the human side of this crisis. How do you take care of so many people on the way back?
We recognize the significant stress this has on our team members, partners, Tribal community and beyond, and are working tirelessly to minimize the impact. We are looking to provide as many resources as we can to our teams.
Our goal is to continue to communicate new developments and to bring everyone back to Foxwoods safely and as business levels allow.
You believe that there will be a new normal once casinos reopen. Explain what you mean by that and how casinos will be able to adapt to that.
It will be a good time to challenge the status quo and think outside of the box on how we operate. With social distancing remaining in place, we’ll have to change how we do business and look for new ways and new technology to keep our guests and team members safe. The new “normal” is to react to new developments and use critical thinking to find solutions.
Decision making is going to be most important once the properties get the OK to reopen. What will those decisions be tied to?
At this point, it is all about team member and guest safety first. We recognize guests trust us and come to the Wonder Of It All because it makes them feel and experience something special. We will continue to infuse that optimism in all our programming regardless of the changes to operations.
What will some of the realities of this “new normal” be in the short term?
The impact to the future of how we responsibly gather will be one of our biggest priorities. We remain committed to offering a safe and healthy destination for team members and guests. We will stay adaptable and resourceful in the way we offer experiences.
The long-term health of the tribal enterprises are crucial for tribal members, employees and all the other constituents. How can that be achieved?
We must have our state and federal leaders work with tribal leadership to help rebuild the future. Native casinos should not be excluded from funding programs benefiting the gaming industry. It’s imperative they recognize the substantive contribution these enterprise make and those who give back to team members and their local communities.
Often forgotten in the rush to close down casinos in the wake of the coronavirus pandemic is the regulatory aspect: What procedures do you follow, what do you do with the cash and audit process, how do you reconcile slot machine records and much more. In Nevada, it’s even more difficult since the casinos have never closed since 1931, so it was uncharted territory. Someone who has seen everything in the state, until now, is former Gaming Control Board member Jeff Silver, who along with Jennifer Gaynor, his colleague from the Dickinson Wright office in Las Vegas, helped their clients navigate the minefield of compliance hurdles during the shutdown on March 17. They explain the thought process of the regulators, the concerns of the operators, and possibilities of how the casinos will reopen when the all-clear is given. They met with GGB Publisher Roger Gros at the GGB offices in Las Vegas—Gaynor in person and Silver over the phone. The interview was conducted on March 31, when the lockdown order from Nevada Governor Steve Sisolak was extended to April 30.
In today’s special GGB News report, Brendan Bussman, the director of government affairs for Global Market Advisors, describes the way Macau dealt with the advance of coronavirus by closing and then reopening its casinos. He also talks about how other Asian countries have made decisions regarding closing their own casinos in Vietnam, Cambodia, the Philippines and other jurisdictions. Are there lessons to be learned on other countries? Since Macau reopened its casinos, revenues have barely recovered, dropping 80 percent from the figures posted in March 2019. What does this mean for the possible reopening of the U.S. industry? Bussman spoke with GGB Publisher Roger Gros on March 31 at the GGB offices in Las Vegas.
They say it’s always darkest before the dawn. As the Covid-19 crisis drags on, casinos are in the trenches, employees are struggling to hold on, and everyone’s looking for a ray of light. Gaming analyst Frank Fantini takes the temperature of an industry rocked by an unprecedented shutdown.
IGT is a market leader in almost every jurisdiction they operate, but in the international space, the company had to learn about the specific characteristics of players in each region. Walter Bugno joined IGT when the company merged with GTECH, where Bugno was the CEO of the GTECH’s Spielo division. At IGT, Bugno in in charge of the company’s lottery, gaming, and interactive businesses throughout Europe (except Italy), as well as in the Middle East, Latin America and the Caribbean, Africa, and the Asia-Pacific region. He sat down with GGB Publisher Roger Gros at the ICE trade show in London in February to discuss how IGT approaches the different regions with R&D and various products. It was very early in the coronavirus crisis, which is mentioned only in passing.
Ernie Moody is a legend in the gaming industry. After finding the development of new table games too complicated and expensive, he moved on to video poker and came up with Triple Play Poker, a groundbreaking development that revolutionized the game by introducing multi-hand play. His arrangement with IGT earned him millions of dollars, which he later invested in gaming startups, some of which have also impacted the industry greatly. He inspired a generation of game developers and today continues to innovate and inspire. He spoke with GGB Publisher Roger Gros at “The Hangar,” headquarters of Action Gaming in Las Vegas, in February, soon after his induction into the EKG Slots Hall of Fame.
Earle Hall is known as one of the industry’s deepest thinkers and most innovative suppliers. His enthusiasm for gaming, data and players have earned him respect across the board, as evidenced by his recent appointment as vice chairman of the International Gaming Standards Association. Hall’s company, AXES.ai, is one of the most progressive in gaming, and is developing a blockchain technology that works for regulators and operators alike. But Hall’s vision isn’t just limited to gaming. In a TED Talk recorded last year, entitled “The Fabulous Frequency of Fear,” he talked about ways to control fear.
In this special edition of the GGB Podcast, Hall discusses the industry’s response to the current coronavirus crisis, and how people can remove or reduce fear. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas on Wednesday, March 18.
As a consultant on gaming with KPMG, Russell Mifsud focuses on new trends, licensing, strategic opportunities, compliance, M&As, competing jurisdictions, disruptive technologies, cryptocurrencies and gamification. His office in Malta organizes an annual conference that covers all things gaming around the world and online, and particularly in Europe. GGB Publisher Roger Gros caught up with Mifsud in London in February at the ICE trade show to discuss how gaming in Europe is evolving.
GGB: Explain what your role is with KPMG. And who are your clients?
Mifsud: I’m an economist and I have the pleasure of looking after all the “fun” industries for KPMG. Gambling is my bread and butter and my main focus. My role is to provide insight on gaming to our clients on a local and global scale. We try to keep our fingers on the pulse of the industry, which isn’t always easy as it’s growing and maturing. We try to give our clients a 360-degree view of the risks and opportunities for our clients.
Our clients are a combination of investors and companies in and out of gaming. When I first joined KPMG, I was scratching my head because I’m not an accountant, but I’ve been able to do everything from audits of the largest online gaming companies to the tax situation, for example, what will happen now that Brexit is a reality. My area of specialization is online gaming.
It’s been a challenging time for gaming in Europe from the regulatory perspective and responsible gaming angle. Why has this come to a head now?
Let’s take it back to 2003, when online gambling really started. The EU had just gotten up and running and Malta wanted to establish some gambling regulation that could be ported across Europe. Yes, we had a good tax regime, but a license in Malta would allow an online casino to target jurisdictions that did not have any form of gaming regulation. So Malta became a one-stop shop. The EU told countries with no gambling regulations that they either had to develop some or accept the licensed entities operating from Malta.
As time went on, whether it was for tax reasons or for player protection and responsible gaming policies, most countries have developed online gaming regulations. So what does this mean for the operator? Before all these countries developed online gaming regulations, it was easy to enter the sector, margins were wonderfully high, and they didn’t have to worry about aligning their regulations through the various territories.
The industry is now struggling and trying to change the image of gambling, but in order to do so has found itself in tricky situations, regulatory-wise.
Is part of the problem the sphere of gaming in Europe—bookmakers, small casinos, online gaming, sports betting, etc.?
Yes, and the lack of harmonization across all those kinds of gambling. Regulation has always struggled to keep up from a technology standpoint, particularly with remote gambling. Malta’s goal was to always keep pace with technology and not lag behind innovation. Of course, that’s no easy task, especially when you include esports, daily fantasy sports, skill games and the like.
As the industry matures in Europe, the big players are getting bigger, making it tougher for startups.
So Europe is becoming more like the U.S., where every state has different regulations. It seems Malta isn’t the one-stop shop anymore.
Correct. If you’re going to operate in the U.K., France, Spain, Italy… they’ve all got their own regulatory regime. Then you have the grayer markets, comprised of jurisdictions that haven’t got the regulatory landscape, and then at the other end you have your black markets, where it’s illegal for licensed companies to be targeting players, but where also it’s illegal to be placing bets online. The value of a license in Malta, now that other jurisdictions have set up regulations, has been diluted, but can be of value in the gray markets. But here is where your legal counsel is going to have to be very aware of all the ramifications.
Now that Brexit is a reality, is there any more oversight from the EU on British gambling, online or land-based?
Frankly, I’m not exactly sure. From a Brexit standpoint, we’ve seen speculation and uncertainty for several years now leading up to the final break. Over the next 11 months, we’ll find out what will happen as negotiations progress. The EU, of course, holds the U.K. in very high regard because it’s the most mature and robust online gaming market. So I believe the U.K. will play a defining role whether or not it is part of the EU.
The legalization of sports betting in the U.S. opened the door for many European companies who have experience in the field to lend their expertise and technology to U.S. operations. One of the most successful has been Kambi, the Swedish technology company that has been operating in Europe for at least 10 years. The company has signed partnerships with dozens of U.S. and European operators active in the states, with a growing reputation for integrity and accuracy. Max Meltzer, the company’s chief commercial officer, reveals why the company has been so successful and what are the keys to maintaining and growing that success in the U.S. He spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
The last several years have been challenging for Per Jaldung and the European Casino Association (ECA), which he chairs. While gaming in Jaldung’s native Sweden hasn’t changed much, the rest of Europe has experienced a sea change, both in online and land-based gaming. Jaldung explains how regulatory changes have affected his members, who focus largely on land-based casinos, and why issues with online gaming, bookmakers and gaming taxes are beyond his control. He spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
GGB: Give us a little background on the European Casino Association.
Per Jaldung: The European Casino Association has been around for about 15 years. It started as a loose network of casino operators, and has developed into more of a professional trade organization, year by year. It is built on the membership of 30 European countries. It’s more than just European Union countries. It’s also a couple of countries outside the European Union. But we are all united in the common interest of the land-based casino industry, and the regulation of this industry. We speak for about 1,000 casinos in Europe.
Let’s talk about the image of the gaming industry in Europe. There’s been a lot of negative publicity about the gaming industry; some studies found that about 75 percent of all media coveage is negative. Why?
I don’t know the number, but it does not surprise me. The absolute majority of articles are negative at this point. And most of the time, the articles are about lack of responsible gambling and money laundering problems. It’s not only on the local level, where the regulators are working with the industry, it’s also on the pan-European level, where there are different opinions on how gambling should be regulated.
There are some parts of the industry, like the online industry, that would like to have a harmonization and a European licensing system, where they can operate across all countries. But the regime right now—the decision that’s been made in the European Union—states very clearly that each country has the right to regulate and make laws about gambling, on the national level. And that’s a principle the ECA defends. We want each country to be able to manage its own gambling, depending on the culture, history, and relation to gambling.
A complicated part of the European industry is that there are many different parts. You represent land-based casinos, but as you mentioned, there’s an online industry, a betting-shop industry, not to mention the lottery, which is always a very big part of the industry here. Is there a chance everybody can get together and speak with the same voice?
On some subjects, for sure. You know, we are open to speaking with everyone, and also to debate with everyone. We don’t need to agree on everything, but certainly on some areas we definitely can join forces. We all agree about fighting crime in the industry. Nobody wants that.
And responsible gaming? Is everybody on the same page with that?
Everybody’s on the same page, but then it’s a question of ambition. I would say that in the land-based industry, which goes 100 years back, we have a lot of experience in this field, and we have worked with it for a very long time. I know there are companies also, in other parts of the industry, that do a tremendous job in this area.
But there are also examples where this is not sufficient at all. And it’s more window-dressing and whitewashing going on. But the politicians and the regulators and the media, they can see through this.
The American Gaming Association has reached out to tell the good news about the industry—the taxes produced, jobs created, community involvement, those kind of things. Has the European Casino Association endeavored to do that as well?
Yes, we have, actually—we’re in the middle of an information campaign right now. I really think that the land-based, regulated and licensed industry has done a tremendous job creating value in society. Not only job opportunities, but also a lot of tax money, or surplus, if it’s a government-owned company, which it is, in some cases.
So, a lot of times the casino in a community is really an economic and financial motor, with a lot of different services that it attracts.
In the U.K., there seems to be a pretty big crackdown going on, and a lot of fears of over-regulation that will impact all parts of the industry, not just the casino end. How are the regulators approaching that, and how are you approaching the regulators?
We are very happy to consult regulators, lawmakers and other stakeholders, and we do that in a lot of different cases. We are all involved in a lot of policy work, in the EU institutions, with good contacts. And we feel that they are listening to our voice.
We are not trying to fight regulation in any way. We need regulation. But we need fair regulation, a level playing field, and the respect of the law. That’s all. Everybody that has a license, we are happy to talk to and work with anyone, for the good of this industry.
Hard Rock International runs casinos around the world, so a major responsible gaming program like Players Edge will make a difference. Paul Pellizzari was recently hired as Hard Rock’s vice president of global social responsibility and is responsible for implementing the program. Pellizzari discusses the different aspects of Players Edge, from the education of the players to the recognition by employees of symptoms of problem gambling. He talks about the research that went into Players Edge and why he believes it will be an important cog in the wheel that will be able to truly help patrons afflicted with problem gambling. He spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas soon after the program was announced in December.
When Macau opened up casino gaming, several gaming suppliers became market leaders, including Paradise Entertainment. Chairman and CEO Jay Chun was very connected to Macau leadership. He developed an electronic table game that fulfilled all requirements of Macau regulations, and eased the crunch on live table games. Chun’s Paradise is now making aggressive moves into the U.S. with Empire Gaming. He spoke with GGB Publisher Roger Gros at the GGB offices in Las Vegas in January. (This interview was conducted prior to the outbreak of the coronavirus in China.)
Over the past year, we’ve been reading about a lot of difficulties that Macau is suffering, but what is the reality on the ground there?
Jay Chun: We just had a new government take power on December 20. In a speech by the new secretary of the finance and the economy, he talked about the casino market and the forecast for 2020. He was thinking the mass market would be getting stronger, and he is very confident about the entire market. This is also very good news for our gaming equipment side, because expanding the mass market will be very favorable for the gaming equipment and EGMs.
It seems that we’ve seen the VIP segment shrinking quite a bit. Is it because the Chinese government is being a little stricter in terms of visitation to Macau, or transfers of money, or some other factors?
This one is a little bit more complicated. I think the most important thing is the entire regional economy, because we saw a little bit of a slowdown overall. But the things you mention all impact the VIP sector.
How about the trade war between the U.S. and China? What impact has that had on Macau companies?
Well, for the Macau side, half of the operators are American companies. But the signing of the first stage of the trade agreement is good news for everyone. I think it will benefit the Macau market.
Has the opening of the bridge between Hong Kong, Macau and Zhuhai helped?
Yes, very much. From the Hong Kong airport to Macau, about 40 minutes. So I think this bridge has really helped those visitor numbers grow.
What’s the opinion of the new chief executive, Ho Iat-seng? Did he have a view on gaming before he came into office?
No, he didn’t talk too much about the gaming sector before his election, but in his early statements, he said he wants to continue business as usual for now. I don’t think there will be too much change.
The Chinese government has always been interested in growing the non-gaming amenities in Macau, so it’s not all focused on gaming. How do the casinos respond to that?
For the long term, the conditions of any license renewal will focus even more on non-gaming attractions, and how to diversify the economy. There are plans for theme parks, esports arenas and more meeting space.
Paradise Entertainment was one of the first companies in Macau to introduce electronic table games (ETGs) and electronic gaming machines (EGMs). How has that helped the casinos in Macau?
Typically, the ETG sector is the only sector still growing in the past 15 years. And it’s still growing.
The Macau casinos face a lot of the labor issues—mainly the cost of labor, which is extremely high for table games, but also because they can never find enough dealers. Because of that, the minimum bet must be very high. In most Cotai casinos, the minimum bet is 100 Hong Kong dollars. It’s very expensive.
ETGs give the operator the chance to offer a much lower minimum bet, which is helpful to the mass market and is something they can afford.
Are ETGs counted as slot machines or table games?
Those stadium ETGs are considered one big table that can be linked to up to 100 terminals.
Your ETGs can incorporate with all the systems involved in the casinos, which can often have different accounting systems or player rating systems.
Of course. In Macau, we do have many kinds of systems for the associated products and market. We also have some table systems that are similar to our slot systems. We have some cheating issues, and so we have several chip tracking systems.
How has technology improved ETGs since you introduced them 15 years ago?
There are many new developments that have come on the market in the past few years. And where we once had live dealers, there are now games where we have robot dealers that still use real cards. We call this semi-auto, because we still need a real dealer to change the cards.
You’ve been making a big push into the U.S. with Paradise and LT Game. Does IGT still distribute for you?
We sold the rights to IGT a few years ago for outside Macau, and it did well initially, but 2019 was much better. IGT isn’t distributing the games anymore, but they still get a royalty.
You were also one of the founders of the Macau Gaming Equipment Manufacturers Association and have been involved in their trade show, MGS Entertainment Show. Why is that so important to Macau?
We promote this to the Macau government because we want to encourage them and educate them on how important the gaming equipment market, specifically the EGM market, is for Macau.
When was the last time you wrote a check or pulled out cash to pay for anything? Right, I thought so. But if you’re a casino player, that’s how you roll, which eliminates a wide percentage of the younger demographic. So it’s imperative that the casino industry—both online and land-based—figure out a solution to payment processing. Joe Pappano has been involved in gaming payments for almost 30 years and understands what the consumer wants and what regulators will allow when it comes to depositing and collecting cash from casino clients. He spoke to GGB Publisher Roger Gros at G2E in Las Vegas in October 2019.
Inspired Entertainment got its start as a virtual sports gaming company serving up games for players who wanted the thrill of sports betting but without having to wait for actual games to be played. Today, however, Inspired reaches far beyond virtual sports with products that land in casinos, betting shops and online. Brooks Pierce has long experience in gaming particularly in slot manufacturing and was brought on to expand the reach of Inspired, particularly in the U.S. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Technology testing labs in gaming got their start in the late 1980s when it became clear that the regulatory agencies weren’t going to be able to tackle the problem of testing slot machines on a timely basis. BMM Testlabs was one of the first companies that arose to fill this void. Travis Foley has been COO of the company for more than 10 years and he explains how BMM works with regulators to ensure that not only slot machines but all the technology that is available to operators from gaming suppliers does what it says it does. This now includes online gaming and sports betting technology. Foley spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Kristian Nylen joined Sweden’s Unibet in 2000, and a few years later was put in charge of the Unibet spinoff, Kambi, which focuses on B2B services for sportsbook operators. So when sports betting in the U.S. became legal in 2018, Kambi was well positioned to take advantage, and has become one of the most important technology partners for many U.S. operators. Nylen spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
GGB: How important was legalization of sports betting in the U.S. to Kambi?
Nylen: In Europe, online and mobile sports betting has been very prominent, and Kambi has two and a half decades of experience of working with operators there. Because of this experience, we were ready when the U.S. came online. That was always part of our plan when we formed Kambi back in 2003.
We have been developing the product over so many years, it gave us a big advantage over what has been available here in the U.S. The depth and the breadth of the products has been much bigger in the U.S. that anything another company offers.
What are some of the Kambi products in sports betting and what are the companies that you’re working with?
We offer pricing and risk management, and we can build the front end of the sports betting site if that’s what the owner wants. In many cases, the operators have us build the front end and the back end of their sites.
We have been very successful so far in the U.S. signing some very important clients. We of course have DraftKings and Rush Street Interactive, both of which have huge market access in the U.S. We have Parx in Pennsylvania. We have a couple of our European clients who have U.S. businesses, 888 and Kindred. We’ve signed Mohegan Sun and Jack Casinos from Ohio.
Of course, your biggest deal so far is with Penn National. Why is that so important for the company?
One of our big targets when we started was to get involved with one of the multi-state operators, and except for the DFS companies, Penn National was one of the most prominent. They took their time in making a decision, about two years. We were very fortunate that we had a good, strong track record in the U.S. and a strong credit. At the moment we’re operating their sportsbooks in Indiana, Iowa and Pennsylvania.
As a European company, how long did it take you to understand American sports?
As a Scandinavian company, we’ve had lots of experience with ice hockey. Basketball has been very popular all across Europe for many years. And (American) football is growing massively in popularity in Europe. They’re selling out the stadiums in London four times a year. So on all these sports, we’ve had a strong offering for a long, long time.
The big challenge for us in the U.S. was to understand more deeply the college sports. We’ve always covered the top colleges but to manage a local offering, we’ve got to go much deeper.
Obviously, the online/mobile market is the most lucrative, but you also handle retail sports betting. How does that work?
In states where mobile is not yet approved, we try to bring technology to the casino itself. We operate retail in Indiana, Iowa, New York, Pennsylvania and elsewhere. It’s pretty much the same system we use for mobile, but one thing that has been very successful for us has been the self-service terminals. Since you don’t have to go to a cashier, you can handle many more bettors at one time. We’re also experimenting with a “bring your own device,” which is more or less mobile, but limited to the casino property.
Anthony Curtis has been assisting gamblers for more than 25 years with his Las Vegas Advisor newsletter and his publishing company, Huntington Press, which has the largest collection of books on gambling than any other company. Curtis helps gamblers get the best of it when they arrive in Vegas or any casino destination by arming them with the knowledge to stay competitive in any game. But recently he assisted the “Mattress King” in placing millions of dollars of sports bets on the Houston Astros in the Major League Baseball World Series to offset any losses that the King might suffer if the Astros had actually one the Series. It’s a fascinating tale. Curtis spoke with GGB Publisher Roger Gros at his offices in Las Vegas in December.
Julia Carcamo has a long history in casino marketing for the gaming business. Starting with four years in the Harrah’s organization, she moved to Wynn Resorts in 2004 as executive director of advertising and public relations. In 2006 she joined Isle of Capri where she served as vice president of brand marketing for almost seven years. In 2013, she launched her own company, J Carcamo & Associates, to advise clients on brand building, casino marketing and player development. The company also hosts an intense conference called Casino Marketing Book Camp, scheduled for March 9 -10 at the Hotel Mazarin in New Orleans. She spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Andrew Tottenham has a long history in gaming in Europe both in operations and development. He’s worked for some of the major gaming companies in the world helping them to explore opportunities in Europe. Now a British-based consultant, Tottenham’s expertise extends both to land-based development and iGaming. He explains how the industry is operating today in Europe and some of the challenges it will have to overcome in the future as it attempts to keep pace with the rest of the world. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Scott Butera made his name in the gaming industry early on by working as a turnaround expert. His ability to refinance and reposition companies was on full display during his time with the Trump organization, the Tropicana Las Vegas, and Foxwoods. Then he pivoted to become commissioner of the Arena Football League for a few years.
Now with MGM, Butera is in charge of the company’s interactive efforts including sports betting, social casinos and iGaming. He met with GGB Publisher Roger Gros at his offices at Bellagio in December.
GGB: You've had such a varied career. What made you take on this challenge at MGM?
Butera: This is a really important job to me. I enjoyed being an operator, and I love the gaming business. But I also had a real passion for sports. My time with the Arena Football League allowed me to understand the business of sports. I began to realize that people are changing the way they consume sports. No longer do they just watch games or matches. They want to interact—to be part of the action. You could almost see the writing on the wall for sports betting.
So this was a great opportunity for me. I had a background in gaming and sports. I’ve always had tremendous respect for MGM. I’ve known Jim Murren for years. It’s a big company and we do things in scale. So rather than just look at sports betting, we want to have a really broad interactive platform and use sports betting as a portal to many other things.
What is MGM’s approach to sports betting?
Even before I got here, MGM had realized that the sports fan is a really meaningful customer for everything we do in the resort business. People who watch sports and engage in sports betting also go to hotels, they eat at our restaurants and bars, they play our table games and slots. It’s a robust customer base, so let’s create a platform that has sports betting, both retail and online, social “play for fun” gaming in states where online gaming isn’t legal and iGaming, and then tie that into our casinos and resorts. It’s about a five-year proposition.
For us, it’s about building the brand, building the platform. We’re not in a rush. We’re not paying huge bonuses or doing extensive advertising. Our approach is that there are no billboards for Ferraris.
Tell us about Roar, MGM’s partnership with GVC.
One of the things we didn’t have when I got here was a sports betting platform. We spent a lot of time deciding how to approach this. Rather than develop one ourselves (very risky) or buy a company that already had one (an expensive proposition), we decided to partner with GVC Holdings, which was the largest sports betting company at the time, based out of London. They have their own proprietary technology.
They have thousands of developers and 600 traders, so now we have that proprietary technology that few other companies have. It’s an important joint venture for us.
IGT helped develop a sports betting app in Nevada for MGM. Are you still working with them?
Not in sports betting, but we have a great relationship with IGT across the board. They’re one of our biggest partners. They did a great job in the sports world, but we couldn’t pass up this opportunity with GVC.
What has been MGM’s experience with online gaming in New Jersey?
We’ve been very successful in New Jersey, but it’s very competitive. They’ve done everything right, from a good regulatory process to a reasonable tax rate. But because they were the first and the best, everyone flocked there, and the competition is fierce. Now that we have our New Jersey app out, we’ve become more competitive.
We’ve always done well with iGaming in New Jersey, which is a great complement to sports betting. They go extremely well together. When they’re not betting on sports they’re playing casino games, either tables or slot games. It’s a great fit.
It’s been open less than a month and already the Guitar Hotel at Hard Rock Hollywood is a must-see attraction in South Florida. Steve Peck was the lead architect on the project, working alongside his partners at Klai Juba Wald Architects based in Las Vegas. Peck explains how the logistics of designing and building a guitar-shaped structure worked, what were some of the hurdles they had to overcome, and how it wasn’t just a guitar shaped hotel, but a renovation of the entire property—while it remained open. He also reveals how he worked with the design partners and restaurant and retail tenants to create the stunning property. He spoke with GGB Publisher Roger Gros in November for the cover story of Casino Style magazine, just released this week. To read the full story, visit CasinoStyleMagazine.com.
Michael Broderick has spent much of his career in Indian Country, working his way up the ladder in the marketing side of the business. Now with his first general manager position at the small Sherwood Valley Casino in Willits, California, Broderick recalls some of his unique and sometime crazy marketing campaigns at his previous casinos. Now at the one casino owned by the Sherwood Valley Band of Pomo Indians, Broderick has new challenges that he faces with his usual positive outlook and innovative approach to marketing. He spoke with GGB Publisher Roger Gros in Las Vegas at G2E in October.
Responsible for all gaming, hospitality and entertainment operations at the Seminole Tribe of Florida since 2001, James F. Allen has guided the development of Seminole Gaming into one of the world’s most successful casino and integrated resort operators, with six casino sites located throughout Florida, and many other around the world.
Allen led the tribe’s 2007 acquisition of Hard Rock International, the first acquisition of a major international company by a North American Indian tribe. Within two weeks in late October, Allen opened four properties: Hard Rock Los Cabos, the Guitar Hotel at Hard Rock Hollywood in Florida, an $800 million expansion at Hard Rock Tampa, and Hard Rock Sacramento.
He spoke with GGB Publisher Roger Gros during the opening of the Guitar Hotel in October.
GGB: Tell us about the new Guitar Hotel and what it means to the company and your customers.
Allen: We’ve got $1.5 billion in this expansion. Our customers have been so loyal and tremendously supportive of what we do here. But they were very patient. One day a wall was here, the next day it’s over there. We moved restaurants around, we moved roads. So to put all this major construction behind us is great for the property, but more importantly, for our guests.
The original facility was beautiful and we had a lot of success with it, but we wanted to create something that was more of an integrated resort—something more than just a locals casino. That was the goal and the budget mirrored that thought process, and hopefully the guests will love it.
Very humbly, we’ve had a lot of success with this business (both Hard Rock casinos in Florida) since I joined. Our business has increased more than 1,000 percent. We truly needed more rooms, so we looked at the options of a standard hotel tower or something different. We were trying to make a major statement.
When I came up with the idea to buy Hard Rock, I explained to the tribe that this is a long-term commitment. It will take time to grow the brand. We knew we had some work to do. This building has become the iconic statement. The tribe owns Hard Rock and we’re creating something we want the whole world to see. And now the brand is coming up on its 50th anniversary.
How difficult was it to build this hotel?
I went to the legendary structural engineer DeSimone Consulting Engineers. I know Vince DeSimone back from my days with Kerzner and Trump. He called me up and asked me if I was out of my blanking mind—how we were going to design a building that has structural integrity in the shape of a guitar? But it worked out and it looks great!
How were you able to open all these projects so quickly?
We’re a glutton for punishment. We just finished an $800 million expansion of the Hard Rock in Tampa. We took over Jack Casino in Cincinnati. The same day we opened the Guitar Hotel, we’re opening our brand new Hard Rock Hotel in Cabo. And we’ll open Hard Rock Sacramento next week.
We were really able to restructure the company. We expanded the hotel and casino divisions. We never want to forget the cafes and the relationships with our franchise partners, but the restaurant business is very difficult on a global basis.
And now you’re going international with integrated resorts.
We were selected in Barcelona after a very competitive process. We’re still working with the government of Catalonia, but frankly, there’s uncertainty with that government again, so we’ll navigate through that. We’re 100 percent committed to Spain and Catalonia.
We are competing in Athens. Two have qualified to be the finalists, ourselves and Mohegan Sun. We respect Mohegan. I worked directly for Sol Kerzner when we built it, so I know what was created there back in 1995. We know their facility and respect them, but we have a lot more experience internationally. We’re in 75 countries around the world and have been doing that for almost 50 years with experience working with local culture, government and currencies. When the dollar is strong, people think that’s good for our business. The opposite is true—it’s better when the dollar is weaker. When companies haven’t experienced that, it’s a learning curve. There’s no learning curve with Hard Rock International.
How about sports betting in Florida? Is the law that says no expansion of gaming without the voters’ approval going to apply?
Yes. Disney and Seminoles are two big names in the state of Florida. The voters spoke. They overwhelmingly—by more than 70 percent— said they no longer want the legislative body to be involved in gaming. They hadn’t been able to make a decision or set a clear direction in how to use that $400 million they got from us each year. The voters spoke. We’re a little surprised that now (the legislature) is saying they’re not going to listen to the voters. We’re happy to work with the state, but their ideas seem to change on a weekly basis.
When we were discussing different options with the state last year, sports betting was 100 percent on the agenda. We weren’t sure what they wanted to do with internet gaming, but we think internet gaming is the future, and any state that hasn’t figured that out is making a mistake, in my opinion. So we do believe it will continue to be a topic of conversation between the tribe, the sports teams, the parimutuels and others.
The Louisiana gaming industry has gone from bad to good, and much of that must by credited to Ronnie Jones, who has been chairman of the state Gaming Control Board since 2013. Before that, he was a key member of the State Police, investigating ownership and incidents involving the riverboat gaming in the state. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
GGB: What was the state of gaming regulation when you took over?
Ronnie Jones: It was fairly stable. It was 180 degrees from where it was when it first began. I was a frequent critic at the time, because I was in State Police, and we had actually voiced our concerns about legalizing any forms of gaming, until the governor told us to shut up. And we did.
In 2013, I would not have taken the job had it not been a stable industry. I was able to see that it was a legitimate industry. We weren’t fighting the same battles we were in ’93. So, it’s stable, but there’s room for growth in the industry for sure.
What is the scope of your oversight? There’s a lot of different forms of gambling in the state. Are you overseeing all of them?
Yes. This board was created out of the mess that had been created in ’93. This was recreated in 1996, by Governor Mike Foster. He saw that there was some dysfunction in the regulatory structure, and so he created this board. We have oversight of all legalized gambling in the state, except for the lottery and charitable gaming.
I think it’s a good structure because it relies on the supervision of two elected officials: the governor and the attorney general.
How about tribal gaming?
There are three tribal casinos in Louisiana, and we have very limited interaction with them. They are sovereign nations; I understand all that. I get that. I’m not here to intrude. But I want to be able to call them if there is an issue, and talk. So we’ve got a good relationship with them, but we have very limited responsibility with respect to the regulation.
You are considered one of the enlightened regulators in the industry. Explain why people view you this way.
Well, one of the first things that I did after I was appointed, I reached out to the American Gaming Association. Geoff Freeman was there at the time, and I just called him one day, and got him to call me back. I said, “I’m the new chairman of Louisiana, I’m trying to learn a little bit about the industry, and I would like to come visit and meet your staff.” And that was beneficial. And those relationships, I have sustained in the last six years. I remember a meeting I had with some of my fellow regulators. A couple of them said, “Why are you meeting with those guys? That’s the industry.” Well, how do you regulate an industry without having some dialogue? I find that there are more areas of agreement that I have with the industry than disagreement. And it’s OK to disagree.
What happened with the legalization of sports betting in Louisiana last year?
My staff and I have been attending every sports betting forum that’s been conducted. We basically copied a lot of what New Jersey had in terms of the rules. In Mississippi, Alan (Godfrey, gaming commissioner) has been very gracious about helping us. So, we were ready with rule development, promulgation. We knew that it was going to be a close vote, but we did not anticipate that it was going to crash and burn the way it did.
It was really surprising. You can bet on just about everything in that state. Most people don’t realize, Louisiana—within the last five years—finally outlawed betting on cock fights. I mean, you could bet on a cock fight in Louisiana, but not on the Saints.
So sports betting didn’t pass because the legislature today is comprised of people very different than the people who were there in 1991. It’s much more conservative, there’s a lot of bias against expansion of gaming, and they saw sports betting as an expansion. And if it’s an expansion, they’re against it. But sports betting is a reality. People are going to Mississippi, they’re going online, they’ve got their barber who’ll take a bet. I think it will come up again.
I’ve shared with every CEO that I’ve talked to, “Between now and next year, you need to figure out what you’re going to get behind, and everybody needs to be on board, if you want this done.” We all know that sports betting is not a cash cow, in terms of revenue. There’s risk involved for the operators. We also know that New Jersey has done it the right way; they have a mobile application. But I counseled those who asked me, I said, “Go with brick and mortar, go conservatively until the state feels more comfortable with it, and then we’ll move to mobile.”
Are you concerned about Texas getting gaming?
Oh, absolutely. Absolutely. But Tilman Fertitta is a smart man. And I don’t think he would have invested in the Golden Nugget property in Lake Charles—which is a world-class facility—the way he did, if he reasonably expected that Texas would legalize it in the short term. I think long term, they’re going to get there. But if what I read is correct, there’s still an awful lot of church opposition to expansion of gambling there. That’s what I’ve been told, so we’ll have to wait and see.
Konami Gaming is a division of the Japanese video game giant that focuses on casino gaming in the U.S. and beyond. Konami has some of the most original games and content in slots but has fallen behind some of the larger companies in the era of consolidation and acquisitions. Tom Jingoli, the senior vice president and chief commercial officer for the company, explains how a new strategy deployed by CEO Steve Sutherland has brought fresh blood into Konami’s leadership and has the company poised to compete in sectors it had not previously emphasized. He spoke with GGB Publisher Roger Gros at the Konami offices in Las Vegas soon after the November cover story on the company was published.
During the early days of gaming expansion, The Innovation Group was one of the major consulting companies that casinos turned to for feasibility studies and marketing analysis. Michael Soll spent several years with the company in those days, and returned five years ago after stints with Caesars Entertainment and Hard Rock.
Now, as president of the company, Soll is navigating a new world of market saturation and limited expansion to provide tribal, commercial and international casino companies with a path forward to organic growth. Soll spoke with GGB Publisher Roger Gros.
GGB: The Innovation Group has had an exciting year, with lots of success and accomplishments. What stands out for you?
Michael Soll: We really solidified our fourth partner and our Las Vegas presence through Brian Wyman. His joining us as a partner is symbolic of the major shifts we’ve had under way for the last four or five years, moving into data analytics and marketing analytics, which has become our window into most new technologies and gaming platforms, whether it’s online, sports betting or traditional operations.
We also were honored to be selected by Virginia’s Joint Legislative Audit and Review Commission to provide, with our partners at RMC Legal, much of the background research they relied on for their “Gaming in the Commonwealth” report. Market analysis and feasibility has long been the bread and butter of this company, and it was fulfilling to bring that expertise to a new category of client.
And, of course, through our relationship with GGB, we’ve had a stellar response to this year’s Emerging Leaders program. These young leaders are really starting to interact with one another through get-togethers and meetups at different conferences all over the world. It’s very organic.
The class this year was really special. The fact that we had to choose from 200 nominees was pretty amazing, and the level of people who were nominated, or even nominated themselves, was really high. I’m really happy with the way it turned out this year.
You mentioned Brian Wyman. Who are your other partners?
Interestingly, we have a partner per office. Brian is in Las Vegas. Tom Zitt, a longtime partner with the company, still works out of our original office in New Orleans. He drives the majority of our domestic business. He’s in tune with about half of the tribes we work with, particularly in the Eastern U.S. In Denver, the office is led by Michael Zhu, our partner who handles most of our business in Asia.
I’m still based in Orlando, handling both Latin America and Europe from there. So, we have a geographic approach to handling the industry’s global needs.
What major challenges will operators, manufacturers and governments face in the near future?
Starting from the government side, which affects everything else, and a lack of new greenfield markets—places like Virginia, Japan and maybe one day Brazil—you’ve got governments that are looking at their gaming product and asking how much they can squeeze in. This is what we saw in Illinois and Pennsylvania last year. The key questions they’re asking are reciprocal to what the industry is asking: How much capital can we invest? Where can we invest it? And how much additional exposure in a market is an advantage to us, as either a defensive strategy or an offensive strategy? Governments are asking: How much can we absorb, and what types of gaming should we be offering, even if it’s just layering in sports betting?
How about players? Can you expand the pool of players from any one group?
I don’t find the characterization of the new group of players as millennials useful anymore. It’s almost become a term that’s too vague to explain the challenges the industry faces. We’ve done some survey work on this recently, about what amenities are valued now, outside of gaming. How popular are they among guests? Who are the drivers? Also, we included all kinds of questions about skill games and esports.
Our view is: Be flexible, have enough floor space to try things that are hitting the market, and don’t assume that every potential future player is the same as every other potential future player.
How can a company like The Innovation Group help established casino companies and manufacturers understand these challenges and develop solutions, particularly if they don’t have those kinds of experts in-house?
There are several routes. The tools we use are relatively similar, although they’ve evolved in terms of how we deal with data, database analysis and loyalty programs. But as far as answering these questions, it’s about research, in the sense of survey research and taking temperatures and benchmarking.
It’s also about qualitative research—sitting in rooms with people from different demographics and player groups in different countries, and seeing what they believe a gaming property should offer. What do they believe the online experience is like, compared to the bricks-and-mortar experience? And where do they draw lines around a social experience versus a personal experience?
The research we do builds a database of research around these areas. So, as we did with our early feasibility work and tracking penetration, we’re building a history and benchmarks around these attitudes and trends. When we start to segment them by age group, by nationality, by jurisdiction, by ethnicity within the market, we start to have trends that we can watch.
Connecticut’s Mohegan Sun is one of the great casino resorts in the U.S. In fact, it was recently named the top casino in the USAToday poll. Ray Pineault has been running the property since 2015 and before that was chief operating officer for three years. Pineault talked about recent development phases at the hotel, which has added rooms, meetings and convention space, restaurants and retail attractions. He spoke with GGB Publisher Roger Gros at the G2E trade show, held in Las Vegas in October.
GGB: What are some new developments at the property within the last couple of years?
Ray Pineault: In our market we’ve had over $2.5 billion in investment by competitors coming in. So we’ve been working on things and solidifying the property and solidifying our player loyalty. Two years ago, we added 400 hotel rooms. We added the largest expo center in Connecticut, which has been a tremendous success. Our hotel is still running at over 97 percent occupancy. In addition to that, we’ve been working on non-gaming amenities, like the new Roadhouse comedy club and a new lounge. So we’re looking to continue to enhance and grow our non-gaming amenities and give people more reasons to visit the property.
MGM opened last year in Springfield and Wynn opened Encore Boston Harbor. What’s been the impact of those openings?
We’re talking about $2.5 billion in investment in Massachusetts, and both of those markets were feeder markets for Mohegan Sun. But when we look at our top-line revenues, we’ve been pleasantly surprised with the loyalty our guests have shown to Mohegan Sun. Obviously, they’re going to try those places, but many are coming back to visit us. They may not visit as often, but they’re still coming to Mohegan Sun because of the offerings we have.
Entertainment has always been a big part of the Mohegan Sun experience. How important is the arena?
This is a huge driver for us. Every time we run a show, we have the opportunity to bring 8,000 to 10,000 people to the property. And while a few may not be gamers, they may stop and spend $20, $30 eating or drinking. We know they’re using the hotel. They’re certainly using the spa and shopping at our retail, so we’re getting additional spend from them.
And of course we’re very proud of our WNBA team (the Connecticut Sun). Unfortunately, they lost the championship, but they battled really hard. They had a tremendous season and we look forward to bringing them back next year and hopefully finishing it off.
We saw a change in the tribal leadership earlier this year. Is there still a big commitment from the tribe to the success of the entire gaming enterprise?
I can’t be prouder or happier to work with the tribal council that we have. But we have an election for our tribal leadership every two years. So there’s always some transition, whether it’s through retirement or people coming up through the ranks, like any politics.
The tribe has always been committed to Mohegan Sun. It’s their property, it’s their homeland, and they are exceptionally committed to the growth and overall well-being of the company.
What about sports betting in Connecticut?
From my perspective as the operator, we need to come to the realization that we now have Rhode Island and New York doing sports betting. And it’s not that sports wagering is the economic panacea that people were dreaming about, but it’s a competitive disadvantage for us. So if a guest has a spouse or family members who want to go enjoy a facility, but they want to lay a wager down on any particular game or sporting event, we could lose that guest, at least for that trip. So when you don’t have the full complement of product it’s a lost opportunity.
Tom Hoskens has seen it all in the casino business. An architect with the Cuningham Group since 1991, Hoskens and his company have participated in almost all aspects of design in gaming. A long-standing relationship with the Cherokees in North Carolina has yielded impressive facilities and experiences. Hoskens talks about sports betting venues, tribal gaming renovations, and trends in the casino design business. He spoke with GGB Publisher Roger Gros at G2E in October.
One year ago, the GGB Podcast sat down with Charles Cohen and heard him talk about the potential for the IGT PlayDigital sports betting platform. This year, we hear about the successes that IGT has had across the U.S. Cohen talks about how players have taken to the IGT platform and why more and more sports books are selecting IGT as a partner. He details the lessons learned over the last year and gets down in the weeds a bit about how sports betting is actually conducted in the U.S. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October 2019.
Two of the three founders of Duetto, Patrick Bosworth and Marco Benvenuti, have extensive experience in the gaming industry. That experience led them to develop the revenue management system that has created the Duetto success story. The company is ready to take the next step as Bosworth is elevated to chairman of the board. He was joined by the new president of Duetto, David Woolenberg, when he met with Roger Gros, the publisher of GGB, at the Duetto offices in Las Vegas in September.
GGB: What was the state of revenue management when you left Wynn Resorts to form the company nine years ago?
Bosworth: Revenue management has been around since the mid-1980s. It’s just that they haven’t been used to their full potential, partially because, particularly in gaming, the systems didn’t reflect the way casinos actually run their business. You were using technology like Excel, which had a hard time handling all the data, and you had to ignore most of the recommendations. It was one of the reasons we decided to start the company. So we built the company using the tools for the purposes that were intended. You’d use most of the recommendations suggested by the tool instead of overriding them. And frankly, our timing was good. It was a time when gaming and the overall hospitality industry was looking toward automation and using analytics to a greater extent. That tailwind has helped us.
How much has changed since those days?
Unfortunately, many of the big companies still use Excel spreadsheets. Employees spend the entire day hand-keying in overrides and doing things manually when intuitively you know there should be a better way.
So what are you doing differently than other companies were doing at that time? How did you fix what was broken?
You pull together as much relevant data as you can. You configure the system to match the strategy of the casino resort. And then you develop algorithms to help automate, first the most routine decisions, because the vast majority of your day looks like other days. There’s a lot of commonality between certain days of the week at certain times of the year. Then you have to empower the people at the properties to take a hard look and understand more deeply the exceptional days.
You still need to have a prediction about the future, but you’re arming your people in your revenue meetings with the information they need to exercise their own judgement to interpret the more exceptional things they see.
Duetto was recognized in the hospitality business early on, but you had some great experience on the casino side, too. Why did it take longer to get noticed in gaming?
The short answer is that casinos are the most complicated part of the hospitality business because of their size and complexity. It took us some time to build the products necessary to take into account all of the variances in gaming.
For example, casinos had a very inflexible system where you were either a comp customer or casino rate or cash customer. That was costing the casinos a lot of money, and providing a worse customer experience.
Say you’re a borderline casino rate customer who the casinos would love to comp on certain days. Under the old system, that wouldn’t have been allowed. With our system, you can show your borderline customers that they are valued and offer them comps on days when it makes sense, but other days they might have to pay the going rate. That way, you’re sure you have the right players in the building at any given time.
How important is real-time data to your products and services?
It’s crucial. The goal is always to get as close as we possibly can to real-time data that’s wider and deeper than any external analyst has sent before. We have to make sure it’s always accurate. We’re constantly running data checks to assure data quality. That becomes the key to establishing trust from our customers. The data has to be accurate, as do our predictions for the future.
Resorts Atlantic City was on the verge of closing several years ago until Morris Bailey bought the property for $30 million. After the death of Dennis Gomes, his first CEO, Bailey brought in Mohegan Gaming & Entertainment to run the property. Mohegan appointed longtime Atlantic City executive Mark Giannantonio as president and CEO.
In addition to adding meeting space, renovating hotel rooms and casino space, and introducing more F&B outlets, Giannantonio has guided the casino through the openings of two nearby casinos. He spoke with GGB Publisher Roger Gros at his offices at Resorts in July.
GGB: It’s been one year since your neighbors opened last year, Hard Rock and Ocean. What kind of impact did that have on Resorts?
Mark Giannantonio: Well, it’s an unprecedented amount of capacity to open all at one time. It’s unlike anything I’ve ever seen.
The great thing is that we’re attached to Hard Rock (via a pedestrian connection). Jim Allen and Joe Lupo are great operators. And you have the commitment from the Jingoli family and Jack Morris family. So it took that type of brand and that kind of leadership to take over that property to get it up and running so quickly. They’re doing a really good job there. So we’re happy that we’re connected to them. We try to work collectively, and we’re working as a group with Ocean as well, to try to rebrand this part of town. We think that’s very important.
You were up here on your own when those two properties at the end of the Boardwalk were closed. Does the opening of the two properties give you critical mass now?
There were pros and cons about being the only one. Clearly, when the five casinos closed, there was a lift in everybody’s boat. But at the end of the day, Atlantic City’s about bringing as many people to town as possible. So having Hard Rock connected to us, it just makes the synergy so much better.
But you just didn’t wait for the new properties to reopen. You make preparations.
When Morris (Bailey) was looking to buy something in Atlantic City, he looked at a number of different properties. He selected this property with the vision of bringing it back to life, but he needed to spend money here to bring this property back, which he’s allowed us to do. We really prepared for this day with the new casinos opening.
How do Morris Bailey and Mohegan Gaming & Entertainment work together?
After the unfortunate passing of Dennis Gomes, a dear friend of mine, Morris was about a year and a half into this, and he had to decide exactly what to do, and whether he was going to sell and get out, or double down.
He brought in Mohegan after a pretty extensive search for a management company. So, Mohegan is responsible for the management of the asset. They own 10 percent of the company. It’s like a match made in heaven. (Mohegan CEO) Mario Kontomerkos and his team do a great job. They’re doing a lot of expansion elsewhere, but this was one of the first assets that they took under management, so it’s important to them. They really have helped us and guided us about how we deploy capital.
Probably the most important thing is that we have the access to their database. They are a very good partner and with Morris, there’s no better person in the business.
The competition in Atlantic City has always been tough, and this round is no different. You’ve got these crazy tier-matching programs in all the casinos. How can you respond to that?
It really is crazy. I think it’s just everybody’s reaction to what is an extremely difficult period of time. Organically, the same store is just not growing where we’d like it to be. We’ve been bucking the trend a bit, where our tables are actually growing, and you know, we have great Asian business as well. But at the end of the day, it’s a hard market, and I don’t think it helps with all these aggressive offers. Some people think it’s a race to the bottom, and I can’t disagree.
You’ve been lucky enough to have DraftKings under your roof as one of the leading sports betting sites in New Jersey. How much has that helped bring new customers in here?
DraftKings are professionals beyond belief. Morris cut a great deal with them, and we’re excited about their success. We partnered and opened up what we think was the nicest and best sportsbook in Atlantic City back in November, and it’s immediately transformed our property. It’s a state-of-the-art sportsbook, but it’s coupled with a great sports bar, great food, and then we opened a sushi restaurant right next to it, and refined our Asian restaurant. So, that whole area has been livened up, and there’s no question, a whole new customer is coming to the property now. And that helps in so many ways. The ancillary revenues and gaming revenues are all going up. So we are thrilled about the success. And we’re certainly thrilled that DraftKings is doing so well online, too.
New Jersey’s Casino Reinvestment Development Authority (CRDA) was developed in the early 1980s to help redevelop Atlantic City and other parts of the state. The CRDA is funded by a 1.25 percent tax on casino revenues. Matt Doherty, a former mayor of Belmar, New Jersey, was appointed to lead the agency 18 months ago. He explains how he is doing his job at a time when the state has taken over the Atlantic City government. He spoke with GGB Publisher Roger Gros at the CRDA offices in Atlantic City in August.
GGB: The CRDA has been an important tool in the development of Atlantic City. How are you helping to direct the CRDA funds to the places where they do the most good?
Doherty: We work with the mayor, city council, along with Leutenant Governor Sheila Oliver, who is also the commissioner on the Department of Community Affairs, on what the priorities are. And those were laid out pretty broadly in the Jim Johnson report (authored by a former Treasury under-secretary and the leader of the state takeover of Atlantic City government) that was issued in 2018. We use that as a guideline for how we should appropriately allocate CRDA funds within the four corners of Atlantic City.
Over the years there have been degrees of dissatisfaction with the CRDA from the casino perspective. What have you done to shore up the agency’s relationship with the casino industry?
We have 17 members of our board of directors and two of them are casino executives appointed by the governor. They have adequate representation on the board.
I’ve had meetings with the top casino executives around town. Overall, it’s been a positive response to recent CRDA activities.
The Tourism District was established about 10 years ago. How do you work with the city in the CRDA oversight of this area?
When the CRDA was given authority over the Tourism District, I thought it was very odd. When I was mayor of Belmar, myself, the council along with the planning and zoning boards controlled land use. About 45 percent of the land is Atlantic City is controlled by the CRDA. I’m very cognizant that this is a city that has a mayor and a council, and has a planning board and a zoning board. So we take special care to inform them on what we plan to do and get their feedback on whether they think it will be a positive or negative step. If it’s not seen as a positive, we re-evaluate it.
The CRDA is also responsible for public safety in the Tourism District. How do you work with the Atlantic City Police Department in that regard?
We’re now up to $3 million in grants to the police on an annual basis. That’s for Class 2 officers, who are not full-time police officers, and for NCOs, neighborhood coordination officers. These are officers who are out of the car, who walk door-to-door, who talk to residents and businesses to address quality-of-life issues.
We also interact with land-use, planning and development, code enforcement and others. Any projects that come to us, we take it to the city and vice versa. We also have responsibility for the Special Improvement District (SID), which does a lot of public works-type of functions in the Tourism District.
Some casinos have criticized the CRDA’s efforts to bring entertainment to the city. They believe it’s the casinos’ responsibility.
Well, Hard Rock has really changed that dynamic. They’re extremely aggressive in bringing high-class entertainment to town. I don’t see CRDA’s role as competing with the private sector. Having private-sector dollars bringing in entertainment is a good thing.
Where we do run into a challenge is the operations of Boardwalk Hall. This has a capacity far exceeding any other venue in Atlantic City. Because we own and operate Boardwalk Hall, we have to generate as much money as possible to defray the costs. So there’s a delicate balance there between not interfering with the private sector and at the same time recognizing that we do need to operate Boardwalk Hall as a business to generate revenues to decrease the costs there.
Bill Miller became the third leader of the American Gaming Association in early 2019. A former executive of the U.S. Chamber of Commerce and other business organizations, Miller hit the ground running at the AGA—he had to, as the U.S. Department of Justice struck down a previous DOJ memo that said the Wire Act applied only to sports betting, not online casinos or lotteries.
Miller has accomplished much in a few months. In August, he sat down with GGB Publisher Roger Gros in his Washington, D.C. office for a GGB Podcast.
GGB: You weren’t an unknown quantity when you were appointed to head the AGA. As a lobbyist, you worked hand-in-hand with the AGA. But there were people that you hadn’t met on the board. How did you go about introducing yourself and explaining your agenda?
Bill Miller: One of the really exciting things is we have a diverse but reasonably limited membership. We have commercial operators, tribal operators and suppliers. We have our friends from the U.K. and Europe who have become more interested in sports betting that aren’t actual members. In total, you’re talking about 100 or so different entities.
I know how the American Gaming Association started, where it started, the importance of Las Vegas as kind of the epicenter of the gaming world. I made a couple trips to Las Vegas to meet with people both during the search process and before I started, in order to try and have them get to know a little bit about me and about my agenda.
The first two leaders of the AGA had different styles. Frank Fahrenkopf’s job was to keep an eye on Capitol Hill and make sure no bad legislation was coming out of there. Geoff Freeman was more proactive about getting the good news about gaming out into the community. What’s your philosophy?
I think I take some good from both. I know that both Geoff and Frank shared the same view, that our industry is so well-regulated at the state level, any kind of federal interference or federal regulation is something we should work to defeat. And that has continued to be the mission, whether it was Fahrenkopf, Freeman or Miller. We all share that view.
What happens on Capitol Hill matters a great deal to us (but) we’re not under constant assault. In fact, most members of Congress recognize that the gaming industry is an economically powerful driver. And we’re in 40-plus states. What I try and bring to this job every day is the ability to tell the story to the right audiences, and many of those audiences that are most important are up on Capitol Hill.
Sports betting has been the big story in the industry over the past couple of years. Are there some hurdles we have to overcome before it’s completely accepted?
Prior to the Supreme Court’s ruling, there was one state where you could bet on sports. Now there are more than 20. We’re learning from each of those.
One of the most important reasons that the AGA was involved in the sports-betting lawsuit was we recognized how much sports wagering was being done illegally. Our contention all along was if you’re able to legalize sports betting in states, you’re going to begin to destroy the illegal offshore online market that funds other criminal and illicit activities. People have always bet on sports. They’re going to continue to bet on sports. And it’s a better dynamic when they bet on sports in a legal and transparent manner. That’s a worthwhile goal for all of us, including the Department of Justice.
Geoff Freeman forged a great relationship with Ernie Stevens at the National Indian Gaming Association; I think both being from Wisconsin and Packer fans helped. Are you planning to continue that relationship with Ernie as a person and NIGA as an organization?
I spoke to Chairman Stevens on my first or second day here. I believe very strongly that that the 11 tribal operators we have as members are critically important. The story of gaming in the tribal nations is an incredibly important one.
I spoke at NIGA in San Diego. I’m planning to go speak at their mid-year conference in Connecticut. I was on a panel with Chairman Stevens at ICE in London. I’m not a Packers fan, but we’re both big boxing fans, and we’ll talk about boxing. We figured out our connections, and I have great respect for him as a leader of NIGA. And I have a personal affection for him; he’s been very kind and very welcoming to me.
The new AGA State of Play campaign not only looks at commercial gaming in each state, but includes tribal gaming also. Is that because people see gaming as one industry that, whether it be tribal or commercial, still benefits the state in various ways?
Absolutely. Most people who enjoy a regional casino property don’t necessarily care that it’s commercially operated or tribally operated. What they want is an entertaining experience, with good amenities and good restaurants, nice hotel, maybe a golf course. They want an atmosphere that’s lively and fun.
We’re proud to have Native American tribes as part of our membership, along with our commercial operators, the suppliers and manufacturers. We are one. We want the American Gaming Association to be that one source—an honest, clear and transparent source for information.
Korbi Carrison is entering her second Global Gaming Expo (G2E) as event director. With a long history in the gaming industry, Carrison has been well received by exhibitors and attendees alike. G2E is presented by the American Gaming Association and organized by Reed Exhibitions. G2E 2019 returns to the Sands Expo Center in Las Vegas, October 14-17. Carrison spoke with GGB Publisher Roger Gros in August.
GGB: Now that you have a year under your belt, how have you been able to plan for G2E 2019 now that you’re familiar with all the exhibitors and processes?
Carrison: As you can imagine, the G2E team begins planning for the next event edition even before the current show ends. We hear feedback on-site and are always looking for ways to improve year-over-year. Following an amazing 2018 event and jackpot year for the commercial casino gaming industry, there has never been a more opportune time for G2E to keep growing and improving. G2E must continually deliver content and experiences that are relevant and exciting to our attendees. We strive to make G2E a better platform every year.
Sports betting has been front-and-center on the past two G2Es. Now that almost 20 states have legalized it, what are you planning to offer to attendees on that side of the business?
Sports betting continues to be important with many states still considering legalization, and for those that have legalized it, learning how to implement and regulate. States are deciding whether or not this opportunity is right for them and if it is, who the technology providers are that match well with for their particular jurisdictional needs. So we are looking to build on the education that we presented last year, and dig a little bit deeper into all of the different questions that the operators may have.
This will be the second G2E Sports Betting Symposium, and it has eight dedicated sessions, including a tour of several technology vendors that make products specifically designed for sports betting markets.
This must be an opportunity to attract exhibitors and attendees who have never been to G2E in the past. How are you reaching out to these people?
With the gaming industry always evolving and changing, there is always an opportunity to attract new exhibitors and attendees. A lot of international sports betting companies are bringing their technologies and programs to the U.S. market to help states implement sports betting in each area. Another growth area that is taking the gaming industry by storm is alternative payment applications. We’re focusing a lot on growing this segment with both exhibitor and attendees because those technologies are already used by consumers in their daily lives. Their casino gaming experience should be no different.
Tribal gaming has always played a large role in G2E. It looks like you’ve expanded the tribal gaming track. With Victor Rocha curating it, I’m sure it’s going to be very informative. What’s in store?
G2E will once again present a robust lineup of tribal gaming-related content for this year, including a Monday keynote speaker, D.J. Eagle Bear Vanas, the internationally acclaimed motivational storyteller, leadership speaker and member of the Odawa Nation of Michigan. Vanas, who is a celebrated author and former military officer, shows organizations how to practically apply the power of the warrior spirit to perform at their best, and stay resilient and thrive in tough, changing environments. He is a pioneer in the tribal community.
Tribal gaming education will again take place over all four days of G2E including feature sessions on sports betting, esports and tribal leadership.
It seems that technology is the byword of the year for G2E. Tell us how you’re stressing that in 2019.
We are not only stressing innovative technology, but disruptive technology. Attendees come to expect new technology across the expo hall floor, but it’s also a theme in this year’s Innovation Lab. Our theme in the Innovation Lab on Tuesday is Disruptive Technology, and Wednesday is New Uses for Existing Technology. Each day features a series of quick, 15-minute presentations and discussions that promise to really get outside the box with the thought processes related to technologies. Many of the concepts that will be discussed here are not yet ready for the expo hall floor, but we will be sure to see them there in years to come.
Speaking of technology, the G2E app is new and improved. How can you improve the attendee experience if they use the app?
The mobile app, once again sponsored by Konami, is the best resource to find all information G2E-related. It not only has the most up-to-date education sessions and exhibitor list, we’re launching new features designed to empower the attendee to personalize and maximize their experience at G2E.
This year, we’re launching direct messaging in our mobile app, where attendees will be able to reach out directly to exhibitors to set up appointments and begin conversations. We’ll also be building on the success of the G2E Recommendations Program, delivering a personalized list of exhibitors, education sessions and special events based on search activities within the app.
Attendees will also be able to look up booth-to-booth directions and have access to interactive show floor maps, or visit Ask G2E, for real-time answers to questions.
We recently did a survey on the GGB website asking our readers to tell us what trade show or conference they considered the most important in the industry. The winner was clearly G2E with nearly 60 percent of the vote. Other shows didn’t get half that much. To what do you attribute that?
The networking and business opportunities at G2E are second to none. The industry convergence on a single venue to meet up with current and former associates to conduct business and socialize is unparalleled. We continue to push the envelope, look at the current landscape and see how we can best activate G2E in a way that’s most valuable to the gaming industry.
The 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.
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 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.
So that will give you close to 3,000 games? And you’ve got approvals for 10 locations.
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.
Encore Boston Harbor opened on June 23 in Everett, Massachusetts, across the Mystic River from Boston. Formerly contaminated with over 100 years of chemicals, the site was cleaned up and restored by Wynn Resorts in a complicated but satisfying process. Bob DeSalvio, the president of the property, explains that process and the lengthy and sometimes contentious path to opening. He describes the bumps along the way, the design and construction process and the dedication of the Encore team members. He spoke with GGB Publisher Roger Gros in his office at Encore Boston Harbor in July.
Joe 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.
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?
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 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.
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?
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.
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 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.
Used to be, the only relationship between those advocating the elimination of smoking in casinos and the casino industry itself was bad. Protests and shaming were the tools of the supporters of non-smoking and were met by annoyance and avoidance from casino executives. The American Nonsmokers’ Rights Foundation has changed tactics, however. The group seeks to work with the industry to slowly remove smoking from the casino floor by designing methods to minimize the financial damage and maximize the health benefits. President and CEO Cynthia Hallet explains this strategy and how it’s working in today’s casino industry. She spoke with GGB Publisher Roger Gros from her offices earlier this year.
Jane F. Bokunewicz has made it her mission to examine how millennials respond to gambling. An associate professor of hospitality at Stockton University in Atlantic City, Bokunewicz previously released “The Millennial Entertainment Preference Study” in 2016. In July she released a new study on the gambling prevalence of college students at Stockton. The students were asked them if they gambled and if so what kinds of games they enjoyed playing. The study was commissioned by the Council on Compulsive Gambling of New Jersey to gauge if there’s been any dramatic change in gambling behavior of students in the wake of the legalization of sports betting. Bokunewicz spoke with GGB Publisher Roger Gros at her offices at Stockton University in Atlantic City in July.
To obtain a copy of the study visit Stockton.edu/light/research.
The saga of the Revel/Ocean property in Atlantic City took a major upturn earlier this year when Mike Donovan, a former marketing executive at the Tropicana, was hired by the new owners, Luxor Capital, to lead the Ocean marketing team. Donovan has wide experience in Atlantic City and other jurisdictions, and has delivered some tried-and-true formulas to turn around the fortunes of the struggling casino. And it seems to be working, with the property posting the highest gross gaming revenue ever in June. He spoke with GGB Publisher Roger Gros at Ocean in July.
GGB: What did you find when you first arrived at the property in terms of a marketing plan?
Donovan: Over the last 100 days, we’ve taken the property in a much different direction. When I got here at the beginning of March, the property had historically had good table games business, good non-gaming business, but it lacked slot business, which we all know is the core of every property in Atlantic City.
I saw several things that we were not doing or we were doing poorly. We weren’t communicating with the 1 million-plus people we had in the Revel database. We knew exactly who they were, we knew how much they spent the last time they were here, but we weren’t talking to them. We are now. And we’re talking to them in a very influential way. Before, they were getting weekly offers that were lower than other places in town. Now they’re getting daily offers that are better than anyplace in town.
So we’re combining a value piece with the exceptional product we have here, and people are responding.
What other things did you change?
Just from a physicality standpoint, we saw other improvements we could make. One of the complaints was that it was too big, too cavernous and you can’t find your way around. We installed simple-to-understand wayfinding signs that direct people easily. We put in a new elevator that makes it easier to get from the hotel to the casino, so you can get to the casino much faster. We built a separate promotions area that eases the burden on the main desk area, and made it easy to find. We added kiosks like most other Atlantic City casinos. So, we’ve addressed key deficiencies of the property and brought it up to a level that makes people comfortable.
Ocean has some great meeting and convention space. Is that a focus in the new regime as well?
Yes, and it’s getting easier the longer we’re open. The largest segment of your meetings book a year or two out, and with the uncertainty around the property before, they didn’t know if the place was going to be open that long. But now there’s a lot more certainty.
It’s always been a great setup for meetings with great rooms, accessibility and amenities. And now they have the understanding we’ll be here for a while.
Ocean has also been set up for great entertainment with Ovation Hall and the smaller venues.
How important is that for the property?
Incredibly important. The property is big, so you can definitely see a difference when there’s a major event going on. We’ve had entertainment in Ovation Hall pretty much every weekend since the spring and plan to continue with that for the rest of the year.
We have a great partnership with AEG Live where we’re beginning to get some big-name acts.
Food and beverage has always been an important element to this property. How have you begun to use it?
The property has always had great food and beverage—we need to tell more people about it, but it’s always been there. In some of the surveys we did, however, people complained that it was too expensive. Now we give weekly dining comps so people can come in every week, which softens that blow a little bit. And we’ve added some more casual dining options that are affordable, like a food court that will open soon. We’ve opened up Sky Café on the hotel lobby level, along with a coffee shop. We’ve got a frozen daiquiri bar on that level. So we’re starting to add components for the peak season.
Winnie Wong has been with Sands China for almost six years. Prior to that, she was CEO of the Guandong Group, a junket operator in Macau. At Sands China, she has been the vice president of corporate communications and vice president of operations for Sands Cotai Central. In her most recent role as chief responsible gaming officer, Wong oversees an aspect of supreme importance to the company and the government of Macau.
Wong spoke with GGB Publisher Roger Gros at the Gambling and Risk Taking Conference (the “Eadington Conference”) in May.
GGB: You were recently appointed to a new role at Sands China, as head of the responsible gaming efforts there. Why is that such an important issue for your company and the officials in Macau?
Winnie Wong: Macau sees responsible gaming as very important. The Macau government has a committee that is made up of scholars, researchers, public officials—not only regulators, but also the social welfare bureau. They have regular meetings and give the casino operators guidelines and regulations to follow. They really see responsible gaming as all stakeholders’ responsibility—not just the government, not just the patrons themselves, but everyone who has a part to play in the industry.
Are these regulators and public officials educated about responsible gaming?
Yes, they do a lot of research, primary data collection, which is done by the local government for policy design purposes. At the same time, I do see them attending international conferences from time to time.
Las Vegas Sands has always had a very robust responsible gaming program. What kind of expertise did they bring to Macau?
In 2004, when my company opened its first casino—Sands Macau—we already had our own self-exclusion program. The Macau government’s self-exclusion program didn’t start until 2012, so our exclusion program was well before that. Today, the government requires casinos to train their front-tier staff for responsible gaming-related issues, but we go beyond that. We train 100 percent of our staff, be they casino-related, non-gaming related, admin staff or operation staff. We train every one of them.
Las Vegas Sands also has developed a global training program. We call it the Responsible Gaming Ambassador’s Training Program. Every year, we rotate and train about 100 staff members in each region. And this goes beyond the training that I mentioned, which is included as part of orientation training. It is eight hours of intensive university-level training, developed by University of Nevada, Las Vegas Professor Bo Bernhard. These team members are on the floor 24 hours a day, and they are there to see if any patrons may have a gaming disorder problem. If they see that, they will help and refer these customers to seek professional help.
We don’t replace the government. We are not treatment centers. We are not counseling experts. But we are there to help, and to provide help when customers need it.
Is there a cultural difference between what is considered problem gambling between Asian gamblers and American gamblers?
From a practitioner’s perspective, I would say people in the Asian culture don’t normally reach out for help. They are quite laid-back. So we’ve used a lot of community support. And the reason why we see training as so important is because Macau has about 600,000 population, with a working population of roughly 380,000. Of that, about 110,000 work in the gaming and hotel industry. So, 30 percent of the working population works in the gaming-related industry. If we train our staff to have high awareness of problem gaming behavior, they can reach out to people, and those people could be their family, their friends or someone they believe needs help.
Part of responsible gaming education is informing players about the odds of winning—that every game has a house edge. Do Asian gamblers understand that?
We as an operator design a lot of training programs for our staff where we mention about what is a game of chance. What is probability? What is the house advantage? So we help teach people to play with a sense of having fun. It is entertainment, instead of a tool to make money. In short, we help people make informed choices.
How much research is being done in Macau to understand problem gambling in the SAR?
My job requires me to do research regularly, to keep myself abreast of responsible gaming trends. And I must admit that I find much more information on Australia and Canada and the U.K. There aren’t too many studies that focus specifically on Asian people. There are scholars from universities in Macau who are now doing lot of research which is Macau-specific. But I do see opportunities to do more.
Do you think Macau is doing a good job at making sure that people gamble responsibly?
I think we are. There is always more that can be done, but Macau has been doing a lot. And I think the government cares, and the operators care, so that makes up a very good ecosystem.
Last year, the government did research to understand people’s awareness on what is meant by responsible gaming. The percentage has increased dramatically since just a few years ago. Over the last five, six years, it went up from single-digit awareness to last year, more than 60 percent of people are aware what is meant by responsible gaming. So yes, I would say Macau is keeping up.
Gaming Arts is the world’s leader in bingo and keno games. But that wasn’t enough for company founder and CEO David Colvin. He wanted more, so he convinced gaming veteran Mike Dreitzer, formerly with BMM and Ainsworth, that the time was right for Gaming Arts to take the next step. Dreitzer explains how he has been moving the company towards slot creation and manufacturing, and how he believes that by blazing its own trail, Gaming Arts will soon become an innovator and disrupter in the slot business. He spoke with GGB Publisher Roger Gros while he was on the road in Kansas in June.
Designing a casino is a little bit of art and a little bit of science, complicated by changing business conditions and trends in technology. Bob Gdowski, the director of hospitality for JCJ Architecture recognizes that conditions and flourishes in them. JCJ is one of the most noted architectural firms covering the gaming industry with projects that include the Choctaw casinos and resorts in Oklahoma, Resorts World Catskills and New York City, Wild Horse Pass in Arizona, the Seneca casinos in New York state, Plainridge Park in Massachusetts, the Oxford casino in Maine and many more. Gdowski explains what attracted him to casino design in the first place and how it has evolved over the years and continues to evolve. He spoke with GGB Publisher Roger Gros at the JCJ offices in Las Vegas in May.
For many years, Alan Feldman was the spokesman for Mirage Resorts and later for MGM Resorts. He recently stepped down from MGM, but is still consulting for the company, and in May was appointed a distinguished fellow at the University of Nevada, Las Vegas International Gaming Institute.
Feldman has long been the industry spokesman for responsible gaming, and is chairman of the National Center for Responsible Gaming. He spoke with GGB Publisher Roger Gros at the Gambling and Risk-Taking Conference—the Eadington Conference—in Las Vegas in May.
GGB: You had an incredible run at MGM Resorts, and at Mirage before that. You played a huge role in the development of both of those companies. Congratulations on what you accomplished there.
Feldman: Yes, it was 29 years. I was incredibly lucky to come into the industry just as the Mirage was being born and to have seen the incredible growth—not just in Nevada, but globally.
You’re certainly not retired. You’ve still got a lot on your plate.
Oh, no. As I’ve told my family and friends, I’m working the same number of hours; they’re just a whole heck of a lot less stressful.
First of all, you’re still a consultant for MGM. Are you still working in their responsible gaming area?
I’m working mostly right now on the responsible gaming component of MGM's bid in Japan, which is going to be critical. And I continue to keep my hands involved in responsible gaming across the rest of the portfolio. But it’s really the UNLV work that’s taking over, and I hope to take on an even bigger role as time goes on there.
Explain what you’re going to be doing with UNLV.
I’ve been given the opportunity to work with the team at the International Gaming Institute: Bo Bernhard, Brett Abarbanel, Jennifer Roberts, Becky Harris and others who really are leaders in their areas of expertise. I’m going to start working with them on responsible gaming programs and policy development.
think what’s most important for the industry is the notion of changing the culture of responsible gaming from one that’s compliance-based to one that’s customer service-based. That’s going to require a lot of work, some research, some academic development and curriculum development. But all of that is possible. With the incredible team of professionals at UNLV, I think we’re going to end up with a pretty amazing program that we can then travel around not only the United States, but jurisdictions all over the world.
It’s a crucial time in the industry when it comes to responsible gaming. Some countries in Europe have banned gambling ads, reduced stakes on slot machine-type of devices, things like that. The United States really needs to sit up and pay attention, because that could happen here in a heartbeat.
It absolutely can, and we must pay attention to it. In that cultural change I spoke of earlier, there are too many parts of the industry that have taken a look at responsible gaming and seen it as a minimum-standard objective—that they need to meet the minimum standard that the jurisdiction they’re in has outlined. And that’s not the way it ought to be. We ought to be taking control of this topic, marketing this topic, being assertive and aggressive with this topic, if for no other reason than that now we have the benefit in the U.S.—and Canada as well—of more than 20 years of research on this topic.
There are a couple of things that come shining through over and over again, and the real key to research becoming policy is to be able to replicate it over time. You can do prevalence studies across all kinds of time frames; you’re still going to find about a roughly 1 percent addiction rate. Of those folks, casinos aren’t the place that they generally tend to go. They generally tend to go into other forms of gaming.
It doesn’t mean that casinos are left out of it. I think we’ve been too defensive about this topic. The industry needs to just go out there, take this subject by the collar and own it. Tell the public about it, tell policymakers about it. Act responsibly when it comes to advertising. We have to.
I think the AGA has done a wonderful job not only with the original Code of Conduct, but more recently updating it. There’s now a responsible gaming task force that’s doing a lot of work. I’m hopeful that’s where this all is going to lead, and that you’re going to see more and more companies here literally advertising responsible gambling on their casino floors.
So the casinos have a pretty good handle on problem gambling. But we’ve got a new type of gambling coming up with the legalization of sports betting and mobile sports betting. Is that something the NCRG and all these gambling organizations should pay attention to?
Everyone needs to pay attention to it. The NCRG is trying to put together funding for a center for research and study of sports gambling to specifically understand whether or not there is in fact any difference. We’re all walking out there assuming that there is. Well, no one really knows. Maybe there is, and maybe there isn’t.
The other part of it is whether or not—in an online form, whether it’s slot machines online, or sports betting online—you can detect problematic behaviors and patterns. There’s the theory that you can. But I would suggest rather strongly that this is entirely unproven. Having said that, I think that there’s some truth in it; we’ve just got to get to what that really is.
Carol O’Hare has been executive director of the Nevada Council on Problem Gambling since 1996, and prior to that served as a problem gambling consultant for Harrah’s Entertainment. The council has played an important role in researching and helping those afflicted with problem gambling, despite having no direct regular funding from the state. A passionate advocate for responsible gaming, O’Hare spoke with GGB Publisher Roger Gros in the council offices in Las Vegas in May.
GGB: Nevada has had gambling longer than any other state in the country. Having been around that long, is there a payback in terms of knowledge and experience in problem gambling?
O’Hare: I guess there is and there isn’t. Gambling’s been legal in Nevada since the 1930s and the council didn’t come along until the 1980s, so after 50 years of experience with gambling, the last 30 we’ve been able to study some of the consequences of problem gambling.
How is the council funded?
I like to tell people that we’re a private nonprofit and we’re funded any way we can get it. We’re fortunate that we have support from several of the big gaming companies, who are corporate sponsors with an annual membership contribution. We also receive grant funding from the state of Nevada. We have fundraisers. We accept contributions, and we do generate some revenue from fees for services such as training.
What kinds of numbers are you dealing with in terms of the people you treat?
It depends upon how you find the numbers. The number of people who are accessing treatment is increasing as we make that more available.
We’ve been running the help line that is required to be displayed in all the locations in Nevada. What we see there, however, is a decrease in calls. But that’s true across the country.
How many people dial 1-800 numbers for help anymore?
We’re getting more people accessing our website for problem gambling information, and we’re not sure how many of them actually show up for meetings or even seek help.
A gambling court has now been set up in Las Vegas. What role does the council play in this court?
We’ve been advocates for the law that made this possible for a very long time, and now it’s finally become a reality. It took 10 years to get this up and operating.
When a crime is committed and that crime wouldn’t have happened in the absence of problem gambling, you need to get into treatment and not be subject to criminal penalties. It doesn’t mean you didn’t commit the crime or you don’t need to make restitution for the money that’s missing, but we know that these are folks that if we treat the addiction, there won’t be any repeat of that crime.
This is a huge opportunity for us to address something that could be life-altering. Our role is to be an information provider and to link up the offender with the help they need.
What advice would you give to states that are currently rushing to legalize sports betting, particularly mobile betting?
The advice I would give is not to the state but to the gaming industry itself. There are already 35 partnerships between major sports leagues and gaming companies. So I would advise the gaming companies to educate the sports fan. This is a new industry that knows nothing of problem gambling, an entire new employee base that may have been told nothing of problem gambling.
So my dream has been that those folks in the casino industry who have been faithful to responsible gaming will hold their partners to the same standards as they’ve held for all these years. And then exceed them because there’s going to have to be a new approach to this new industry.
Andy Caras-Altas is an experienced gaming executive and founder and CEO of TraffGen, a company set up in 2011 to provide the tools and services required to help land-based clients drive revenue from digital convergence. Using data available through casino management systems and accumulating meta-data that isn’t captured by those systems using increasingly effective artificial intelligence. Caras-Altas stresses that casino hosts and marketing executives make the ultimate decision with the rich data provided by the TraffGen systems.
GameCo was one of the early movers in the skill-games segment of the slot industry. But Blaine Graboyes, the company’s president, has always been reluctant to use that skill games description because it skews expectations of both the player and the operator. He prefers video game gambling and explains that we are now into the third generation of games that will continue to evolve and will eventually find a valuable but different audience. He explains how GameCo has been able to balance the payouts between skillful and not-so-skilled players and why the incremental revenue produced by video game gambling is nothing to sneeze at. He spoke with GGB Publisher Roger Gros at the GameCo offices in Las Vegas in April.
California’s Sycuan became more than just a casino in March. The “resort” tag was added when a major expansion was completed which includes over 300 guest rooms, including 50 suites. Other additions include more than 10 new bars and restaurants, meeting space, a larger casino, and a pool and cabanas with a lazy river and swim-up bar. John Dinius started his career at Sycuan, and was elevated to permanent general manager in 2016. He spoke with GGB Publisher Roger Gros at NIGA’s Indian Gaming Tradeshow in San Diego in April.
GGB: Congratulations on the opening of your expansion. I have to say, it was one of the most impressive expansions I’ve ever seen.
John Dinius: Wow, thank you so much. And coming from you, Roger, I mean, that really does mean a lot. So, I appreciate that.
I particularly liked the way you seamlessly incorporated the new construction into the previous property, which always looked good. How is it performing?
We’ve had incredible results thus far. It’s only a couple of weeks in, but the kind of occupancy numbers that we’re seeing, and some of the revenue numbers—we’ve never seen numbers like this, so we’re very excited about the future.
Let’s talk about the Southern California market. Some properties like San Manuel, Pechanga and Morongo do incredible numbers, but you’re a little more remote. Where do most of your guests come from?
Actually, it’s about a 25-mile radius. We get about 80 percent of our business from that area, but we’ve never had the kind of amenities like we have today to cast a wider net and attract a different level of clientele. And one thing we wanted to be cognizant about was not alienating our current clientele, because we’ve operated a very successful property for 35 years, and we didn’t want to do anything to impact those guests that were there with us for those 35 years.
So, we really tried to create this consistent flow between the old side of the property and the new. We tried to do a lot to create that seamless connection between the two sides, and we’re trying not to refer to it as old and new, but east and west. So we think our current customers will blend well with the new players.
Do you feel like you’re competing with those larger properties now?
You know, in the past, we really haven’t shared a lot of the same customers—just being a hyper-local. But I think that these new amenities allow us to cast a wider net, and who wouldn’t want to come to San Diego, and play in San Diego? Hang out with us and float down that lazy river. But I think it really does step up the game here in San Diego in particular, and I think that the level of finishes that we have, the décor, the kind of service in all the various amenities and venues that we have, is going to force our competitors to step up their game as well.
There are lots of different market niches. Do you get a lot of Asian play?
It’s very important. I think the Hispanic market is an opportunity as well. It doesn’t feel that many of the properties in our area have really captivated either of those demographics, so, we’ve got some focus strategies to address that, and maybe in three to six months or so, I can let you know how successful those strategies were.
It’s only been a week, but how have your customers responded to the new place so far?
Incredible. And I’m not just saying this, but we haven’t had one negative comment from our guests. They’re just blown away by the level of finishes and the décor.
I think what was really important to us was ensuring that our level of service matched that level of décor. So, we revamped all of our organizational commitments as they relate to guest service, and just redefined those commitments and really inspired our team to put forth their best effort, and so far they’ve done just that.
We’ve also worked hard trying to build our executive team, and one of the gentlemen that has recently joined our team is Andrew
Kerzmann, our hotel VP. He was at Mirage for quite a few years, and that facility was 3,000 rooms... So, this was a little bit different scale, but just having him onboard from the outset of the development was really helpful.
We hired 850 new team members, and trying to get them onboard, and get them up to speed with our expectations was a massive undertaking, but our team executed at a very high level.
You’ve risen from a line-level employee, all the way to the top. Tell us about that journey.
When I started, it was back in what we referred to as the gray days: before the compacts were approved. And we had slots for a little while, but when I got hired , there were no slot machines. So I started in a bingo hall, selling pull tabs. I’m sure you remember those.
I felt like I walked into the job of a lifetime. It didn’t feel like work. When you go to work you go in and socialize, and somewhat entertain, and I just fell in love with the guests and the team members. And then when I got exposed to the tribal members, it just felt like home. It’s been an incredible journey for me. As soon as the slots came on board, I jumped over to that department and worked just about every position within slots. And then back in 2014, I stepped into the general manager role. So, it’s been an incredible ride. I’ve learned a lot. I used to say I was growing up out there, but now I’ve got to say I’m growing old out there.
Sports betting has been a real boost to iGaming companies that have already been operating. Rush Street Interactive got into iGaming early on for an American company. Richard Schwartz, the president of the company, explains why the iGaming experience Rush Street has achieved in New Jersey and now Pennsylvania, not to mention its expertise in social gaming, make it an ideal partner for tribal and regional casinos that want to eventually run their own iGaming and sports betting operations. He spoke with GGB Publisher Roger Gros at the Indian Gaming Tradeshow in San Diego in April.
GGB: What does Rush Street Interactive bring to tribal and independent casinos considering sports betting and iGaming?
Schwartz: We’ve invested a lot of effort and time in creating high-quality products for the industry—sports betting, both retail and mobile, social gaming and real-money iGaming. We want to find partners to work with to help them develop their own products in the market and train them to run their own operations.
What’s the background of Rush Street Interactive?
Rush Street Interactive was created more than seven years ago with the goal to be ready when laws were passed to allow iGaming and sports betting. We invested heavily in the development of our own technology and platforms, which is a risky proposition. Many companies that try it fail, but we’ve been able to execute on our vision. Our platforms allow us to be nimble and differentiated from our competition. We’ve focused on the user journey to create that differentiation.
What have you learned about that user experience over the last few years?
Players are very aware of what operators are doing and how you’re treating your players. Our competitors were doing things that weren’t creating a level of trust and transparency that the players want. They’re making a decision to gamble and they want to be treated fairly. When customers play on our site, they know exactly where they stand in terms of loyalty points and what those points mean. They know what our play-through requirements are. We’re trying to create player loyalty through a retention model that includes a great experience and community building.
Rush Street has a physical casino as well—SugarHouse in Philadelphia—tied to New Jersey and now Pennsylvania internet gaming. What have you seen in the crossover to the bricks-and-mortar facility?
It’s very strong. This is often underestimated in our business—the value of online gaming as a way to enhance casino play. We believe the land-based property should be the brand, and you can utilize that brand to drive traffic to both the physical and the online casino.
How has sports betting performed for you?
We surprised a lot of people in the New Jersey market. While the DFS sites have dominated because of their built-in database, we’ve been either third or fourth in the market every month, so we’ve gotten off to a strong start.
We’ve also seen the ability to cross-promote sports bettors with the online casino. It’s been an incremental growth that has been way beyond what we expected in terms of players betting on sports and then playing other products. We’ve integrated our loyalty and bonusing programs with the sports betting site, so we make it easy to jump between the two products.
Casino giveaways are often some of the most popular events on any casino’s calendar. Players flock to the casino for such items as blenders, bedding, apparel and more. Rymax Marketing Services is a leading supplier of these items because the exclusive relationships the company has with some of the largest and most desirable companies and products. Paul Gordon is the guru of giveaways and he understands why players respond to certain offers and how they should be presented. He explains what motivates players and how casinos can offer the products that players want. He spoke with GGB Publisher Roger Gros in San Diego at last month’s Indian Gaming trade show.
Clarion Gaming has been making waves in the gaming industry for the past five years since moving the ICE London trade show and conference to the larger venue, Excel Centre on the Thames in East London. Kate Chambers has been busy orchestrating that success and now has consolidated two U.S. conferences—GIGSE and Sports Betting USA—into ICE North America, scheduled for May 13-15 in Boston. ICE recently launched another edition in Africa, and its North America version is just the beginning for this aggressive strategy. Chambers also recently completed an agreement with the National Indian Gaming Association, and sat down with GGB Publisher Roger Gros at NIGA’s trade show in San Diego in early April.
Steve Hill was named CEO of the Las Vegas Convention and Visitors Authority in September 2018. A Las Vegas resident for more than 30 years, Hill founded Silver State Materials in 1987 and supplied concrete and aggregates for many projects in the community. After selling Silver State, Hill was appointed by Governor Brian Sandoval to serve as the first director of the Governor’s Office of Economic Development (GOED) in 2011, where he guided the development of “Moving Nevada Forward,” the plan for diversifying Nevada’s economy. He spoke with GGB Publisher Roger Gros at his offices in Las Vegas in April.
GGB: You had to hit the ground running when you were named to lead the LVCVA because there’s a lot of action, such as the expansion of the convention center, the development of the Raiders stadium and other changes going on in the market. How did you keep up with it immediately?
Hill: How I keep up with it is, I’ve got a great team here, and one of the easiest products in the world to sell, and I have a lot of help. So, that’s really the key to being able to operate any organization this size.
Let’s talk about the expansion. How many square feet are there in the expansion, and now overall?
The building itself is a total of 1.4 million square feet. It will be 600,000 square feet of exhibition space, and 150,000 square feet of meeting space. And then the rest of the facility is back-of-house support, and that kind of thing.
Overall, we currently have 3.2 million total square feet—1.9 million of which is exhibition space. So, the expansion will take us to 4.6 million square feet of total space. And by the time we open, somewhere between 2.4 million and 2.5 million in the exhibition space.
In addition to the LVCVA expansion, the Sands Convention Center, Mandalay and MGM have opened expansions, and Caesars is building a 400,000-square-foot convention center behind Harrah’s and the Linq. Do we ever get to the point where there’s too much meeting and convention space here in Vegas?
I suppose that’s possible. But I think what we’re seeing, and what the properties are seeing, is real demand for meetings in Las Vegas. Show managers know that when their shows are in Las Vegas, they get a pretty significant bump in attendance, because people just want to come here. And so, we’ve seen a lot of demand, and we think that what’s being built now responds to that demand.
And we’ve actually restructured a little bit here, in anticipation of those expansions coming online. We’ve worked to help the properties fill those facilities, so we’re aware that there is a lot of meeting space. We’re going to have a 30 percent to 35 percent bump in total meeting space in the destination. And we want to make sure that’s all additive, and it doesn’t become something where shows are just shifting around in the destination.
The Las Vegas convention center is so big right now; you have just announced you’re talking with Elon Musk about doing kind of a people-mover system, and that sounds pretty interesting. Give us some of the details of that.
We’re excited about that. One of the things that we’re really focused on here is innovation—both at the convention center and the destination itself. And obviously, the Boring Company project is a really innovative with the use of existing technology. What we’ll have is a set of parallel tunnels. They’ll be one direction each way. Those tunnels have a 12-foot interior diameter, and basically just a road lane at the bottom. So, you can drive anything through those tunnels. What we’re planning to do, though, is operate autonomous vehicles. There will be Tesla Model X’s, or Model 3s, or potentially an autonomous tram that can move people from the expansion hall, the West Hall, back to the Central Hall area, and to the South Hall, and cover easily the entire campus. We’re over a mile and a quarter from one end to the other, once we get the expansion built. We think this is an opportunity to easily move people around the campus, which is important, but also to do it in an innovative and fun way.
The year 2020 is going to be a big year for Vegas. How is the arrival of the Las Vegas Raiders going to change what’s happening here?
Being an NFL city makes a statement. I’ve been here 31 years. I’ve had the opportunity to watch Vegas grow and mature. And this is a recognition of that growth. It will just bring a huge amount of excitement. But, on top of that, having the stadium here opens up opportunities that we just haven’t had a place to provide in the past. It’s the one venue size that was not available in Las Vegas, and so, events that are going to attract 45,000, 50,000, 60,000 people, had to skip Vegas, because there was no place to do that. That stadium is going to bring interest from people that we haven’t had the opportunity to draw in the past. And it will make a difference in the community. This is going to be one of the turning points we’ll look back on 30 years from now, and think, “Yeah, that mattered.”
Jon Hanlin leads product and marketing strategy for the gaming operations division of Aristocrat Technologies, and he has wide operations experience with Caesars Entertainment. Hanlin explains how games were paired with the new Edge-X cabinet and why they were chosen. He spoke with GGB Publisher Roger Gros at the new Aristocrat headquarters in Las Vegas in March.
Tell us about the new Edge-X cabinet.
We’re excited about the Edge-X cabinet in the premium video category. There have been a lot of advances in the bigger slot machines, and we look at this cabinet as a smaller version of those “jumbos.” The key in this cabinet is providing the player with a more intimate experience than the very large machines.
The Edge-X has two 43-inch curved screens in the “landscape” or horizontal position placed on top of each other. If you think back to our Arc Double cabinet, which has two screens positioned vertically on top of each other, these are horizontal. And what that provides is a very cinematic experience that extends all the way across your peripheral vision. It allows our game designers a really amazing palate.
And it gives the players a little more elbow room since it’s wide instead of tall.
Yes, that’s one of the key attributes that’s going to make this cabinet popular. We’re also using our revolutionary i-Bench technology, which is a connected bench that allows couples to game together. It allows people to spread out and have a more comfortable experience while playing.
Did you want it to be grouped together in a carousel setup?
Yes, it’s the legacy of our Wonder Wheel cabinet that was wall-based and meant to be grouped together. We were very keen on making the Edge-X bankable—something that would sit in the center of the casino floor and attract attention. Casinos are being more opportunistic about putting these kinds of machines where customers can see them. We built this with the expectation we could do three-pods or back-to-back. If someone wants to go bigger, we have that capacity.
Player engagement is always what you’re seeking with new cabinets. How does that work with the Edge-X?
Even though it’s a large cabinet, it’s a private feeling because you feel engrossed in the game. It takes up so much of your eye-line and it has such a cinematic feel that you feel like you’re playing alone or with your partner.
What games are you launching with the Edge-X?
At Aristocrat, we have some great licensed titles that are a little on the darker side—Mad Max, Walking Dead, etc. With the Edge-X, we decided to go with a little more brighter palate that has a different feel.
Madonna is a great example of that cinematic feel. There’s a very acute awareness of what Madonna is, her songs, her images and her videos, which we use extensively in the game. That is key to that game. You get engrossed in her early career. The Edge-X has a very big button panel—the biggest we’ve ever made. When you try to find ways to engage players, we’ve added a karaoke screen where you can read the words and sing along with the game. It’s an example of bringing the player engagement into the panel.
FarmVille is a very successful online social and slot game. It has a huge following and a collection of great characters and art. We picked these two titles because they were vibrant and cheerful. But of course, we’ll follow it up with our newest Mad Max title and get back to the darker side.
Puerto Rico was devastated almost two years ago by Hurricane Maria and is still struggling with the aftermath. Governor Ricardo Rosselló wants to use legal sports betting, esports and online gaming to help revive the country’s important tourism industry. Rosselló believes that Puerto Rico can become a center for esports by being innovative and creative, and appealing to the younger players. He notes that the tax rate proposed for sports betting will be the lowest in the United States and that his goal isn’t necessarily to produce revenue but to bring jobs and tourists back to Puerto Rico. He spoke with GGB Publisher Roger Gros from his office in San Juan in April.
Ten years before sports betting was legalized in the U.S., Kambi launched in Europe to serve the legal sports betting market there. So when the U.S. opened up, Kambi was one of the companies with deep experience in the field, so it was a logical partner for casinos unfamiliar with sports betting. Erik Lögdberg, Kambi’s deputy CEO and chief business development officer, tells GGB how the company competes in the market and gives an outline of Kambi’s early experiences in the U.S. Lögdberg joined Kambi parent company Unibet in 2005 where he quickly became head of live betting with responsibilities including operations and product development. This coincided with the growth in live betting and the formation of Kambi. He spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
Walter Bugno joined IGT in 2010 and has risen to become the CEO for all IGT gaming management and strategies outside of North America. Although IGT is not the dominant slot company as it is in the U.S., Bugno has led an impressive growth in Asia Pacific, Europe and Latin America. Interviewed at the large ICE gaming trade show in London, Bugno explains what games and systems are popular in Europe, how the company develops games that are popular in the international market, and why technology will keep IGT at the forefront of development.
The table-game segment of the gaming industry is changing rapidly. The increasing popularity of the games among millennials has been a surprise and operators are racing to catch up to the technology advances and the opportunities awaiting. TCS John Huxley is uniquely positioned to service that market, having been a leader in table games for several decades. Tristan Sjoberg has brought an emphasis on technology since coming on board as executive chairman in 2012. He understands what players want and how to provide the equipment and service to operators. He spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
Todd Haushalter moved from land-based gaming to iGaming without missing a step. Now the chief product officer for the “live dealer” company Evolution Gaming, Haushalter has experience with gaming operators (MGM) and suppliers (Shuffle Master) but is very excited about the opportunities for the live dealer aspect of iGaming. Haushalter spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
GGB: Let’s start at the time you joined Evolution. It was a big leap of faith for you. Tell us how that came about.
Todd Haushalter: It’s actually an interesting story. I’m at MGM, I’m VP of gaming, thinking about how to grow the slots and tables business at the corporate level. And I really believed, “This is my dream job. I’m never going to leave this job. I like everybody I work with.” It was just awesome.
So Evolution called and said, “We’re public now; why don’t you come on out, and just chat with us?” So I came out and they convinced me that this is the future. They were growing at 40 percent and were going to continue to grow at 40 percent for a long time, and basically, we can do anything. They’ve got these dealers working from studios, streaming it live; it’s kind of a crazy business, but I get table game operations, and then the players play live on their phones. It felt like the future. So I moved to Malta three and a half years ago, been making games with them ever since. It’s been a lot of fun; it’s really cool.
It’s really just a table game operation broadcast out over the internet. Right?
It’s literally that. But if you came to one of our studios, you’d see 3,000 or 4,000 people working there. And it’s just studio after studio. It looks more like a television studio than a casino, but you see dealers moving cards around, and spinning roulette wheels. And what’s fascinating is, we’re not limited to physical space. We have roulette games where there’s 1,000 or 2,000 players playing at any given moment. Here’s a fun fact: All five of the biggest roulette tables in the world judged by gross gaming revenue are with Evolution now.
In blackjack, we see players in Vegas playing the 6:5 rules, and it’s migrated to other parts of the country now. Do they understand that that’s not a good bet for them, your online players?
Collectively, there’s a big group of them that are just agnostic about it. But as you move up in limits, everything starts to change. And so, for the first time in my career, I can literally see every decision a blackjack player makes, because it’s digital. And so, we can ask questions like, “How do $10 players play differently than $50, versus $5,000 players?” And literally, as you move up in average bet, the quality of the play improves.
Do you use eight-deck shoes, and do you worry about card counters?
Yes, we have eight-deck shoes, and we have this interesting dynamic where everybody is effectively anonymous, and they can all use digital equipment to count the cards, so the counter-measures that you have to have in place are severe. But we deal four of the eight decks, as the most aggressive counter-measure. But you just have to; otherwise you would get eaten alive by card counters.
How does it work in New Jersey, where everything has to be dealt inside a real casino?
That’s burdensome, but that’s the rule. We partnered with Hard Rock, and we’ve got 30,000 square feet inside the Hard Rock casino, and it’s a beautiful environment. And so, in that space, at maturity we’ll have, depending on how you configure it, maybe 30 or 40 tables. And so, from that casino, not only will we service Hard Rock, but we’ll service all of our clients online, and then hopefully we’ll also be able to service clients in Pennsylvania, from New Jersey. If you have to do that every time—add casino space and dealers, and add a whole operation—it becomes very difficult.
Looking at some of your new products here at ICE, it became evident that you’re not just about table games. Explain some of the new things you’re getting into.
We’ve started to broadcast game shows that you can bet on. We’ve recently licensed the rights to Deal or No Deal, and we asked, what if we can build a game that is literally like a game show, but you can play along at home?
So we started looking across the horizon line at all the different game shows that are out there, and what might make sense. Deal or No Deal has some heritage already in our industry, and it’s kind of a great gambling game. And so, we hired these British actors, and nobody’s ever done it before. A game round lasts three minutes. By our standards, that’s crazy. But look: not everything has to be blackjack and baccarat.
Evolution Gaming seems to be changing the industry.
Yes. As an industry, we should assume it very well could be an alternative to land-based. Everything else across our lives—the way we watch movies, the way we buy stuff—has transitioned from land-based to digital. So, we should assume that like everything else in our lives, online gambling could be a preferred way of playing, for some people.
Land-based operators are all wondering how we become more experiential. As Steve Wynn used to say, “You’ve gotta get people from over there, to come over here.” And you’ve got to have something compelling. We’ve all got the same blackjack tables and slots, but you want to be on people’s phones. That’s where they’re living their lives.
Sports betting has the largest share of mobile gaming in Europe, so the establishment of a “community” to serve that market was logical, and the Sports Betting Community was formed. And as part of that service, SBC Events was launched in 2014 to provide a forum for sports bettors and anyone interested in sports betting. Now an institution in the U.K., the company is expanding to the U.S. in April with Betting on Sports America, to be held at the Meadowlands Expo Center April 23-26, along with some networking events held in New York City. Andy McCarron is managing director of SBC, and he sat down with GGB Publisher Roger Gros at the ICE trade show in London in February to talk about the U.S. event.
GGB: Tell us how SBC came about and how you got involved.
McCarron: We’ve been active with SBC for 10 years now. It was originally set up just as a networking function so everyone could stay in touch, and it truly became a community. I joined in 2014 after a career in trade journalism. I was the editor of Betting Business magazine. During that time, I was frustrated that there was never enough emphasis on sports betting, so I joined SBC to really build a business. Poker was the big game at the time, and sports betting was a bit down the priority list. So we started a conference, Betting on Football, at Stamford Bridge Stadium, home of Chelsea FC, and it was an immediate success. And now we use seven or eight times as much space as we did originally with 2,000 attendees.
What was the inspiration for bringing the show to the U.S.?
We felt it was time to bring what we do to America. We want to help to educate the market on best practices and the like. Networking is always a big part of any of our events, and we invest quite a bit in that, so that’s a big focus with Betting on Sports America. So, it’s a mix of high-quality content and great networking.
The conference itself is at the Meadowlands Expo Center, but there are networking events across the river, correct?
Yes, we believe New Jersey is the right place for this event because it was one of the pioneers of U.S. sports betting. The Meadowlands Exposition Center is a great location because it’s only 30 minutes from Manhattan.
We do networking parties on both ends of the conference. We’re having the pre-registration party at the 40/40 Club in New York City. On the first night of the conference, we’ve hired out the rooftop terrace at the Meadowlands racetrack. And the closing reception will be held at the Sky Room in Manhattan, with great views of the city.
Tell us about the Sports Betting Hall of Fame, and how you’re going to implement it in the U.S.
We started this in 2014, and we have 11 members. It’s a bit trickier in the U.S. because there’s not that big tradition of sports betting, but we’re adding former New Jersey Governor Chris Christie as the first U.S. member.
What kinds of topics can attendees expect to see covered at Betting on Sports America?
We’ve got several different tracks that last an entire day, including betting and regulations, trading and operations, sponsorship and marketing, sports and betting, demystifying sports betting and more. We’ve got a master class on affiliate marketing, a very important element of sports betting. So we’ll cover just about everything.
Barry Cottle was named president and CEO of Scientific Games on June 1, 2018, replacing Kevin Sheehan. Cottle joined Scientific Games in 2015 to lead the strategy and growth plans of the company’s interactive group. During his time in that division, Scientific Games acquired NYX Gaming and its sports betting platform, setting the company up for the legalization that occurred last year. The acquisition of Don Best Sports late last year completed the company’s sports betting strategy. Cottle spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
GGB: Your first year at the helm of Scientific Games was pretty eventful. The Supreme Court sports betting decision made the decision to buy NYX Gaming very wise, and then the Don Best acquisition solidified your role as a sports betting provider. How did those acquisitions work in your favor?
Barry Cottle: I think it puts us in a great position, really, for three main reasons. Number one, with the acquisition of NYX and Don Best, what we have now is a best-in-class, full-service, end-to-end sports betting solution, from platform through managed trading services that we can now offer as North America begins to regulate. In fact, today we’re already in Pennsylvania and Mississippi and New Jersey with Caesars. It puts us in a great position as that market starts to unfold.
The second thing with NYX is that it brought us an iGaming platform. Today in New Jersey, around 50 percent of the iGaming bets come through our platform. As iGaming potentially rolls out, along with the sports betting, again, it puts us in a nice position as that happens.
You recently oversaw a restructure of top management at Scientific Games. What was the strategy behind those changes, and how has that worked out so far?
Just recently, we promoted Jordan Levin to be the head of digital, and Pat McHugh to be the head of lottery. And I can’t even tell you how excited I am for both of these guys to take this position. Both have proven experience within Scientific Games, within those respective fields, in driving the operations and execution. They are hungry and passionate, smart guys, and I really have a ton of confidence that they’re going drive the business. Additionally, Jim Kennedy will continue to support our lottery group as chairman.
Scientific Games has always been about the games, and particularly with your brands, WMS and Bally, certainly that’s impressive. So, how do you maintain the distribution across all the channels using these games?
First of all, when we think about building our products, it’s a player-first mentality. So, we focus on delivering games that our players enjoy and want to engage with. And we really look at it across all platforms. Whether you’re playing in land-based casinos or on a phone or device, we think about delivering that experience, for those franchises, wherever a player wants to play, on whatever a player wants to play.
And then second is the optimal combination of art and science, which is perfectly, appropriately named, since we are Scientific Games. The science piece is really understanding the player behavior and motivations, and then combining that with the fun and the imaginative execution of each game.
And the third is that we create a culture of creative passion across the organization to innovate and deliver on that. The combination of thinking “player” and using both sides of our brain, and doing it across the organization, ends up resulting in us being able to execute on our plans.
Another hallmark of Scientific Games has always been the innovation. How do you keep your R&D teams on that cutting-edge technology?
Again, it really comes down to the player focus. We don’t innovate just for innovation’s sake. But we try to think how we enable a better player experience on two different levels: on the platform or system, which enables the content, and then the content itself. An example of a player innovation is personalization. So, when we talk about SG Vision and facial recognition, that’s about understanding the player and being able to customize an experience for them. If you look at one of our recent slot games, the Cash Wizard game that just came out, that actually has social elements. So, we’re starting to see that players like the social component within the games that they play. And so, our innovations are really about delivering on what we think the player motivation is driven by.
We had a bump in the road recently with the Wire Act memo just a few weeks ago. What is your impression of how that’s going to impact your business?
As you know, we deliver our products and solutions across many regulatory environments of all sorts, which are constantly evolving. We just work to deliver the best products and services we can, side by side with our partners, and we’ll just continue to monitor it closely, and react accordingly.
What do you see as the biggest opportunity in 2019?
There are just a plethora of products and services that we’re excited about this year. We have an embarrassment of riches, I like to call it that, going into 2019. The exciting thing is that we have great opportunities across all business units.
We have a nice mix within each business in areas and markets that we can enter. We have four product business lines, where we see what we call “gap upside,” and improvements that can be made. And then we have new markets, such as sports betting, or iLottery, or a new business line that we could go into. So, it’s nice to have a mix, where you have core growth that can be accomplished across that diverse area.
Global Gaming Women has had a busy few years since the organization declared its independence from the American Gaming Association. Founded under the AGA, the group decided it would be able to work much more effectively if it were independent. Phyllis Gilland, the president of GGW—she also serves as senior vice president and general counsel for Golden Entertainment—explains how the organization has grown over that time and why it’s such an important factor in the increasingly visible role of women in the gaming industry. She talks about GGW’s robust educational conferences and why all women in gaming should be members. She’s joined by Felicia Gassen, the executive director of GGW, at the Golden Entertainment offices for a chat with GGB Publisher Roger Gros in February.
One of the industry most fascinating conferences returns next month when the World Game Protection Conference is held at the Tropicana in Las Vegas on March 3-6. The conference, which focuses on security and surveillance always changes and this year is not any different. Willy Allison, the owner and organizer of the show, is one of the more colorful members of the industry with a deep-seated dedication to his craft. At the conference he features the experts in the field and addresses the cutting-edge issues facing the risk management professionals in the gaming industry. He also talks about some of the important topics in this field in a wide-ranging conversation with GGB Publisher Roger Gros from the GGB offices in Las Vegas.
Nehme Abouzeid is president and founder of LaunchVegas, a consulting firm dedicated to brands looking to launch big in Las Vegas and other destination markets. Prior to forming LaunchVegas, Abouzeid worked in various senior capacities at Las Vegas Sands, Wynn Resorts and the NHL’s Vegas Golden Knights. He spoke with GGB Publisher Roger Gros in Las Vegas in January.
GGB: You started your career as a journalist, worked for such major companies like Las Vegas Sands and Wynn Resorts, and then, of course, you were the first marketing VP for the Vegas Golden Knights. What did you learn at each of those steps, that allowed you to make the next step?
Nehme Abouzeid: Going to journalism school and my experience of five years as a journalist really helped me become a quick study at everything—ask the right questions, learn how to flesh out a subject. So I think journalists are underappreciated, especially in their ability to tell a story and relate very complex subjects in simple ways. And then going into an industry like gaming, that has many lines of business under one roof, all of which could be independent companies on their own, and doing $20 billion in development I helped work on at Wynn and Las Vegas Sands, it really guided me well.
What is it that makes Las Vegas so special, and why do you call it your home?
I didn’t expect to be here, to be honest. I was a Boston guy, went to college in D.C., lived in the Middle East and Los Angeles when I was a journalist, and Vegas was the last place I’d expect to be. But it’s going on 15 years now, and I believe the quality of life here is sort of that best-kept secret, nationally. I’m also invigorated by Las Vegas’ constant reinvention. When you think about it, with 400 casinos in 40 states, we all could be looking at the Strip and they could be rusting hulks of steel. I’m proud of Nevada, I’m proud of Las Vegas, because we all roll in the same direction, when a project is good for the economy.
The next reinvention of Las Vegas will start in 2020, with several new projects slated to open. How can people prepare for that change that’s coming up?
If you’re talking about locals, you know, Vegas always had this real unique dynamic, where 2 million locals are spread out, and 43 million tourists are highly concentrated. We have 200,000-plus people working in gaming and hospitality, so it’s a really interesting dynamic. But it’s not your typical market. It’s not like L.A., it’s not like Chicago, it’s not like New York; it’s quite different.
How does your company LaunchVegas participate in this next phase of Vegas?
I’ve been doing this 15 years, helping big brands with big development projects launch and scale—especially with the $500 million hockey team. I personally had spreadsheets that I was cataloging for years, of how to launch a project with a critical path, how to do it right, how to launch and scale. So, I realized I kind of have this Vegas playbook, and I could give this expertise to companies that wanted to come in and enter the market the right way. So, that’s really what I focused on, and I called it LaunchVegas because really I wanted to focus on early-stage, yet big projects. Right now, I’ve got clients in the sports betting, tech and the health care spaces. So we’re really not just limited to casinos.
Why did the Golden Knights work so well for Las Vegas?
Tourists wanted to follow their team—that was obvious. But when Las Vegas locals want to brag about how good their seats are, how much merchandise they own, it really came together, and credit to Mr. Bill Foley for pushing the idea, and the Maloofs for having the vision, and then hiring the right people to make it happen. I remember, I joined the team on November 7, 2016. We unveiled the logo and name November 22. And at that time, (NHL Commissioner) Gary Bettman said, “I’ve never seen that many people come out, just for a name and a logo unveil.”
Travis Lunn has climbed the ladder at MGM Resorts for the past several years after stops at Mirage Resorts, Las Vegas Sands and Hard Rock Las Vegas. Most recently, Lunn was general manager of MGM Grand in Las Vegas and was able to get exposure to the many varied businesses that exist at an integrated resort. At Beau Rivage, Lunn plans to put into action his understanding of non-gaming amenities and the hotel operations. He talks about the people who have influenced his career and why he believes MGM Resorts is poised to become the most influential casino company in the industry. He spoke with GGB Publisher Roger Gros from his offices at the Beau Rivage in December.
Tony Rodio joined Affinity Gaming in late 2018, directly after directing the sale of Tropicana Entertainment to Eldorado Resorts. At Tropicana, Rodio increased overall financial results with net revenue increasing more than 50 percent through both operational improvements and further expansion into regional markets. Rodio also has experience with Harrah’s Entertainment and Hollywood Casinos. At Affinity, Rodio takes the helm of a company that operates 11 casinos, five of which are located in Nevada, three in Colorado, two in Missouri and one in Iowa. He spoke with GGB Publisher Roger Gros from the Affinity Gaming offices in Las Vegas in December.
GGB: Tell us about the sale of Tropicana Entertainment to Eldorado Resorts. Why did you get back into the business so quickly after the sale closed?
Rodio: Well, it was a six-month process, from the time the transaction was announced until the time it closed. The Eldorado folks were wonderful. They offered me a position to stay on. But I thought it was time for me to move on.
I’m too young to retire. I love the industry; I’m passionate about it. So, I felt like I had one more good run in me, and this was one of a number of opportunities that I looked at. This one seemed to fit me best.
What was it about Affinity that really attracted you?
I think there are a lot of similarities between Affinity today and where Tropicana was when I first got there, seven or eight years ago—a regional gaming company, operations throughout the Midwest, and no real cohesion within the company. I really look to draw from my experience at Tropicana of building a company and creating a new culture, and discovering some new ways of looking at things—with a fresh set of eyes.
You worked for a pretty demanding billionaire in Carl Icahn at Tropicana. Now you’ll be working with another one, Jim Zenni, the head of Z Capital, which is a majority owner of Affinity.
There are similarities, and there are some differences. Tropicana was publicly traded, but Mr. Icahn owned 80 percent of the company, so there was only one vote that mattered. So, for all practical purposes, it was privately held.
They’re both very passionate, obviously both great investors. I think the difference is, Mr. Icahn didn’t get involved in the day-to-day operations. Given how this company has been operating before I got here—it was four or five months without a CEO—Mr. Zenni was, in essence, the CEO. So, he’s much more intimately aware of each of the properties, each of the businesses, and the positives, the negatives, and what we need to do to move forward. So, that is a big difference. He’s passionate about it, I think his leadership is certainly a big support, and you know, he’s looking for us to grow the company.
In that sense, they’re both identical. They want me to add value. That’s why I’m here.
Affinity has so many different parts, not an overarching brand and diverse operations.
Well, they are diverse. I’ve now visited each and every business, and they are unique in the customers that they serve, the markets that they operate in, and the size of the facilities. Some of our properties have hotels, some don’t. But the philosophy that I used at Tropicana is going to be the same philosophy that I use here, which is a little different than previous management. I believe in more of a decentralized model. I will give a lot more autonomy to the general managers and the local business leaders. And I think it certainly plays well with this company, because they are so diverse. What works at Primm, at Stateline, isn’t necessarily going to work at Rail City in Sparks, outside of Reno. So, I’m getting to know each of the businesses, and again, we’re going to operate in a more decentralized function.
What do you consider the strengths of the company at this point?
I’m pleasantly surprised by the strength of the corporate staff and the management teams at each of the individual businesses. The GMs that I’ve gotten to know, I think they all do a great job. We’ve brought in some additional talent to support the people that are already here: Eric Fiocco is on board and we’re bringing in the CFO from Tropicana, Joe Long, as well.
So, the talent that was here, and really long-term loyal employees, interact with customers, and you can see that it’s a family atmosphere, in those respects.
How about the shape of the properties? Do you need a little more capital investment, or were they in pretty good shape?
They’re in good shape from a physical standpoint, but similar to what I did at Tropicana—and I think what’s incumbent upon all of this in this industry—we have to diversify the experience. You no longer can just offer slot machines and table games. We have to look for opportunities and ways to partner with brands, and to diversify the experience. It’s more challenging in smaller, regional markets, but there are definitely little things that we can do to tweak the experience and add new amenities.
When sports betting was legalized in May 2018, Charles Cohen was in a good place. As the head of IGT’s mobile services, the company involvement with sports betting started several years before when MGM wanted a sports betting solution. Cohen’s team was tasked with building a mobile solution. Three years later the PlayDigital system was released and it was an immediate success with MGM customers. But now, says Cohen, technology is progressing so quickly the company’s recent mobile app developed for DraftKings bears little resemblance to the MGM solution. He spoke with GGB Publisher Roger Gros at G2E in October.
Lots of slot manufacturing companies got their starts as producers of amusement games, like Bally and Williams, now both part of Scientific Games. Incredible Technologies became famous for its Golden Tee bartop game. Led by partners Elaine Hodgson and Richard Ditton, IT entered the slot business. They learned by doing and soon were producing top earning games with a unique feel and customer approval. Today, Incredible Technologies has some of the top performing games in the industry. Elaine Hodgson is also the only woman to lead a major slot company. She spoke with GGB Publisher Roger Gros at the IT offices in Las Vegas in December.
Cheryl Moss is a family court judge in Las Vegas. She was elected in the 2000. In 2001, with the help of the Nevada Council on Problem Gambling, she was the first judge in Nevada to institute problem gambling assessments in child custody and divorce cases. Last year, Moss finally got permission to establish a gambling court, so that those charged with crimes linked to their gambling addictions could get help from the court to control their addictions. She spoke to GGB Publisher Roger Gros in her courtroom in Las Vegas in November.
GGB: Where did the idea for a gambling court come from?
Cheryl Moss: I met now-retired Senior Judge Mark Farrell from New York—as is the case with most of the people I’ve met in the gaming world—through my mom, Dr. Rena Nora. My late mother was a psychiatrist at the VA Medical Center in New Jersey. She would go around to these conferences and introduce me to people, and I was just the young kid that was carrying her briefcase and tagging along at these conferences, so she introduced me to Judge Farrell, and Judge Farrell had the very, very first gambling court in the United States, and so, that’s how I learned about gambling court.
Is this similar to a drug court, then?
It is a certified specialty court, and I want to thank Chief Judge Linda Bell for giving me the opportunity. I had been asking for it for 10 years since the statute was amended, that we would have a gambling diversion program.
Chief Judge Bell assigned me a specialty court coordinator who also works with our other family court judge, Frank Sullivan, to handle drug court cases in the juvenile division. This guy is on top of things. He will prep the cases and staff the court, and we’ve got a couple of cases that are going to be heard in a few weeks.
What are the criteria for getting assigned to the gambling court?
Well, It goes back to the statute. Nevada Revised Statute, Chapter 458A says that if a crime is committed in furtherance of the gambling, it is up to a criminal division judge to make that determination for eligibility, subject to certain exceptions of course, but if it is found that it is in furtherance of the gambling and they have a gambling problem, then they are eligible for diversion and then, they would be referred to my court for treatment and monitoring, and ensuring that they are able to successfully complete the drug court program or the gambling court program.
How do you determine whether the person has actually stopped gambling? There’s nothing like drug testing for gambling.
Well, as they say, in the world of drug addiction and recovery, you’re never a recovered gambler or a drug addict; you’re always recovering, so it’s the same kind of concept, like the AA program and the NA program, and the GA, Gamblers Anonymous, program. But yes, it’s difficult to tell; we don’t know unless something actually happens. In my family court cases, it’s not known unless somebody accuses the other side.
I know you are just starting this court, but what do you think a typical penalty will be for somebody in this situation?
It’s a very detailed process. It’s called “sanctions”—if there is any kind of lapse or relapse, we start off to make sure that they are already in treatment, or we’ve assigned them a treatment provider. The Nevada Council on Problem Gambling will help provide a list of people that are certified problem gambling counselors that can do the treatment, and then we will have status checks every two weeks to ensure that they’re doing that. Our goal is to encourage and be supportive.
Bo Bernhard has been executive director of the International Gaming Institute at the University of Nevada, Las Vegas since 2011. He is also the chairman of the UNR/UNLV
Executive Development Program, held for 10 days each November in Lake Tahoe. He talks about the recently completed program, the IGI Innovation Lab, which encourages students to invent new games and products for the gaming industry, as well as other issues related to the IGI. He spoke with GGB Publisher Roger Gros in his offices at the Stan Fulton Building at UNLV in December.
GGB: You just completed the most recent Executive Development Program (EDP). During the welcome to the students this year, you said it was your favorite event of the year. Why is that?
Bernhard: This is a really special program. Bill Eadington started it in 1990. That first year there were 14 attendees. This year we had more than 60. But in the original event in 1990, a young Andrew MacDonald sat next to a young Mark Lipparelli. Andrew is now the chief casino officer for Las Vegas Sands, and Mark became the chairman of the Nevada Gaming Control Board and a leader in the manufacturing side. The two of them didn’t know each other but became fast friends and created a network that plays out exponentially over the years.
Every year, the graduating class sends notes out to me and others, and this year, the gentleman who just got promoted as general manger of the Star in Sydney was talking about how he was up for that position and believes one of the reasons he got it is because of his involvement in EDP.
It just builds this family where you make friends from all over the world, spending nine intense days in Lake Tahoe, the most gorgeous place in the world that you never get to see because they’re working hard 8-5 each day hearing from some of the most amazing people from inside and outside the industry, and then spend the evenings working on a really difficult team competition. That’s what makes it so special.
When you were asked by Dr. Eadington, the founder of EDP, to take it over when he was sick and dying, how did you feel?
I remember it to this day. I was in the car when he called to ask me. It was hard enough to take in the difficult news about his health, but wrapped up as it always was with a teaching moment, he asked me to take it over. My first thought was that I was clearly not qualified, but what could I say? I was overwhelmed that first year when we did it together. The following year was very emotional, and we weren’t sure about what we were doing. The final slide we show on the first morning was a picture of him just erupting into laughter at something one of the students said. It gives us the opportunity to stress that if you’re someone who just sits in the back and doesn’t ask questions, this isn’t the place for that. So another teachable moment from him.
How do people sign up for EDP?
It’s an application process, and we read those applications very, very closely. After all these years, I think the industry has a pretty good sense of the kind of person who would benefit from this. The admissions process, while it’s formal, we’ve gotten good at spotting the kind of people that would graduate. And by the way, it’s got both the UNLV and the UNR (University of Nevada, Reno) stamp on it. Like in many states, the in-state schools don’t always get along, but this is one instance where we are both on the same page.
Tell us about the Innovation Lab at IGI.
I was asked to lunch one day by Dr. Mark Yoseloff, who is himself a legend in the business. He was a prolific inventor of table games, had a stint as CEO of Shuffle Master and before that was COO of Coleco when they did Coleco Vision, which essentially transformed the American living room. He’s very accomplished, as well as having a Ph.D. in math from Princeton. He told me he didn’t want to die with this knowledge, he wanted to share it. But he didn’t want to have tests or midterms or papers. The final exam would be to invent a game or product for the gaming industry. Up until that time, there was no class on how to invent a gambling game or device and unveil it before industry leaders at a showcase presentation, kind of like Shark Tank. These games are completely creative and unique.
Unlike at other universities where the college owns the work of the students, at the Innovation Lab, the students keep the vast majority of ownership. Why did you structure it like that?
First of all, we believe it’s their ideas and hard work that make the game or product viable. And we’re here for the kids in the end. Both Dr. Yoseloff and myself agreed on that. So you don’t have to partner with some stuffy old professor, who would be paid lots of money and grab the credit.
We’re very proud that our students have been granted 12 patents on their games or devices, at a time where it’s getting increasingly more difficult to patent gaming ideas.
Everi is the 800-pound gorilla in payment processing for the gaming industry. Processing more than $2 billion every month in the industry, Everi is examining ways to improve its services. Tim Richards, a senior VP for the company, explains how payment processing is handled in both land-based casinos on online gaming and mobile sports betting. Richard will moderate a panel at the December 13 Payment Processing Episode of the UNLV Gaming & Hospitality Education Series. He sat down with GGB Publisher Roger Gros in his offices in Las Vegas last week.
An enrolled member of the Ho-Chunk Nation, Brian Decorah started his gaming career in his tribe’s casinos. He later went on to become a general manager at two of their mid-sized casinos, and later became general manager at Firekeepers Casino Hotel in Michigan, leading an expansion, including adding a hotel. He joined Snoqualmie Casino at the beginning of 2018. He spoke with GGB Publisher Roger Gros at G2E in October.
GGB: You did a great job running the FireKeepers casino in Michigan. What’s the difference between Firekeepers and the Snoqualmie Casino?
Brian Decorah: Just like at FireKeepers, I’ve got a great team here. But Seattle’s just a different market—when you go there, just the natural beauty of where you are, and the market that we’re in. We’re the closest casino to Seattle, 27 miles out. So, we’ve got some of the most affluent neighborhoods surrounding us. We’re right off Interstate 90. We say we’re minutes away, but a world apart. We have these sweeping views of the Cascade Mountains. We have elk and blackberry all around the property. It’s just a stunning location, but very affluent. And what’s a little bit different, compared to that FireKeepers market, it’s a little bit smaller property, but the win per player is substantially higher. Our market has many players employed by Google and Microsoft and other tech companies.
But we also have a very high percentage of Asian play. We estimate it’s around 50 percent, but it’s not Chinese. It’s Vietnamese and other Asian segments, and we’ve got the full offerings to target that demographic.
Does the tribe have a lot of land up there? Is there land to expand?
It’s actually a pretty small footprint—around 60 acres. And it’s built on the side of a mountain, so it gives you great views, but it’s really difficult to build on. So, we’re actually in the process of taking a look at what can we do to expand right now, and the topography is certainly one of the things you have to think about a lot.
Tell us about your competition up there. Are there other casinos close by?
Yes, there are close to 30 casinos in Washington. We’ve also got a lot of card rooms around Washington. But the closest casino to us is Muckleshoot. They’re about 30 miles south of us, but it takes about an hour to get there, with the traffic. And Tulalip, they do a great job, on the north side of Seattle. But we almost don’t compete in some respects, because of the traffic barrier—it can be 20 miles, but it’s an hour and 45 minutes in rush-hour traffic. We’ve also got Emerald Queen over on the other side of Seattle, closer to Tacoma, and they’re in the process of building a big Vegas-style casino property there.
But, you know, one thing that’s really
different is that it’s a friendly competition and serious collaboration in Seattle. Everyone works together, and they’re willing to share things. And it’s taking some getting used to, compared to where I come from, but they welcome me with open arms, and that’s not something you always experience when you go to a new market. There were a lot of different things to learn, because it’s a pull-tab-based slot product there. And there’s a lot of learning the nuances of a regulatory environment. So it’s different, but I had help.
Tell us about the card rooms, or what they sometimes call mini casinos.
It’s really the same things that you see across other card rooms—they aren’t as heavily regulated as our casinos are. There have been accusations of loan sharking, money laundering and even murder.
Some of our higher-limit baccarat players would go to those card rooms, so we’ve converted a former deli into a high-limit private gaming salon for those high-limit bacc players. And that’s because we do have a lot of those players who do like that private experience in those little card rooms. We want to be able to replicate that, but with a tighter game, more regulations, more consumer protections.
So are those pull tab machines Class II gaming?
It’s still Class III gaming, but it’s based off a pull-tab system. Essentially, if you go up to a Wheel of Fortune game, and make a bet, the 50-cent bet and the dollar bet come from different buckets of pull tabs. And once it gets down to, I think, 10 percent of what the total pull-tab base is, it dumps more pull tabs in, so it’s not quite the same as traditional slots. Our slot director is great, a former IGT executive. And he was telling me, if you go play video poker at a bar, it’s a certain experience you get here in Las Vegas, and if you’re a skill-based player, you can do pretty well. But in Washington, if you get dealt the full house or a royal flush on the first hand, you can throw all those cards away, and you’re still going to get the same result, because there’s no skill involved. It’s all based on pull tabs.
Can you use Class II games?
Yes, those aren’t regulated by the state compact, so that’s more advantageous for us. They also have other restrictions, as far as types of games, and we really do need more Class II premium product, with those affluent markets that are so close to us, in Bellevue and Seattle, and Seattle proper, so we have an opportunity with a more upscale customer, just to have a higher-limit bet on each of the games. So, that’s really important to us, but we need premium content for it. Not all games are created equal, as we know.
When Ramesh Srinivasan was appointed CEO of Agilysys, the company’s already close relationship to the casino industry was cemented even more. And when he brought on as Don DeMarinis as senior VP of sales, he brought in an energetic and knowledgeable executive who could clearly communicate the Agilysys products and services to the gaming industry. DeMarinis explains how the hospitality solutions provided by Agilysys mesh with the casinos’ goal of creating customer loyalty and unforgettable experiences. DeMarinis spoke with GGB Publisher Roger Gros in Las Vegas at G2E in October.
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In business today, it’s all about the brand. But how can you build a brand if you don’t know what it means to your customers and employees. Questback is a Norwegian company that conducts online surveys and provides feedback that helps companies know what those two important groups are thinking. The company also evaluates corporate culture, an important tool when you consider some of the scandals that have rocked companies worldwide, including gaming companies. Justin Flanagan, the Questback VP of sales for the Americas, explains why it’s important to stay on top of the thoughts of your customers and employees and how to repair misconceptions once they are revealed. He spoke with GGB Publisher Roger Gros in October.
The legalization of sports betting in the United States has created opportunities for companies that have made a name in the European market. Sweden’s Kambi is one of those companies that supplies a full range of sports betting services, whether land-based or online. U.S. Director Max Bichsel outlines how Kambi works with casinos to deliver their services, the potential for the U.S. market and how Kambi has set itself apart from other suppliers. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
GGB: What is Kambi?
Bichsel: Kambi is a global B2B sports book supplier. For operators around the world in regulated markets, we’re able to supply sports books from the trading to the management, everything required to operate a sports book.
Kambi has a couple of contracts in New Jersey with the Hard Rock and Rush Street Interactive’s PlaySugarHouse sports books. What has the experience been like so far?
It’s been in the process for a long time, but we’re pleased with the results in New Jersey. And now we’re looking toward the rest of the country as legislation gets introduced and passed.
How has Kambi navigated the regulations in New Jersey?
We take the compliance and regulatory aspect very seriously. We have in-house counsel to guide us. We’ve created relationships not only with the regulators but the legislators as well, to make sure they’re knowledgeable about what they’re hoping to regulate. It’s gratifying for us to get into some of these markets. Our goal is to be regulated across the U.S. and in any other regulated market in the world. We’re a listed company on the exchange in Stockholm, so regulation is very important to us.
Kambi is known for its technology. What do you offer that others do not, or how is your technology better than others?
We come from a long line of traders that make markets, so we take it very seriously. We trade everything in house. We don’t scrape other sites or take information from other sources. We’re able to set odds on almost anything, not only pre-match, but also on outcomes in game. So if your team is driving down the field, Kambi can not only increase the entertainment value, but offer a wide variety of wagers. Take golf, for instance. There are some significant time stoppages in that sport, giving the opportunity for players to wager on whether or not one player will hit the green or make the putt. All these micro-markets make it very entertaining, and make it much more attractive for the player to stay with that offering.
If you’re going to accept sports bets in states across the U.S., how do you account for the “local” bettors? For example, in New Jersey, you’ll have lots of bettors on the Jets, Giants and Eagles.
Good question, but for us, the price is the price based on the information we have. We have a relationship with our operators to make sure we’re setting the lines effectively. There are outliers, of course, about what that handle looks like and how we need to accommodate that. If you are a local or regional sports book in a regulated market, that is going to happen. That’s the nature of being a bookmaker, and it’s something we have to take into account. Volatility happens, and that’s why there’s such a small margin in sports betting.
With the dawn of sports betting in the United States, the need for reliable data has increased exponentially for gaming companies. Not only must the data be safe, it also must be accessible quickly. Continent 8 has been serving the industry since the dawn of iGaming in the early 2000s. Michael Tobin, the CEO of the company, explains how the data is gathered and stored, how it is protected, and why a new data center in Atlantic City will become an important cog in the wheel of U.S. sports betting and esports. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
Inspired Entertainment was formed in London in 2002 as a mobile entertainment technology provider. Over the ensuing decade, it specialized in server-based gaming and became a pioneer in virtual sports betting. In 2016, it was acquired by Hydra. Lorne Weil, the former chairman of Scientific Games, was appointed chairman, and Brooks Pierce was named president and COO. With vast experience with gaming suppliers, Pierce has been able to raise the visibility of Inspired in the gaming industry and expand the reach of the company to include iGaming, lotteries and more. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
GGB: What drew you to Inspired Gaming?
Pierce: A couple of things. First, in my past, I had looked at the company and saw the technology and products and thought it was really interesting. And then when Lorne Weil, who I had worked with for 24 years building Scientific Games, became chairman of Inspired, it was an attractive opportunity.
I knew they had a very well developed business in Europe, but virtually no business in North America. I thought it was a great complement to my skill set and background since I had spent the majority of my career in North America. And quite frankly, starting from a zero baseline in the world’s largest gaming market is always attractive.
How does virtual sports betting work? Is it RNG-based?
Yes, that’s exactly what it is—like a ball drop in keno or a slot machine. But the outcome is displayed in high-tech, ultra-realistic fashion. So what would essentially be shown as a reel spin on a slot machine is displayed as a sporting event—horse racing, football, auto racing. It’s a slot machine pull but highly entertaining at the same time.
How do you work with all segments of the gaming industry—casinos, sports books, iGaming, lottery?
It’s great because our content is ubiquitous. So it’s not only the geographic disbursement of the business but also in all the different segments. Our customers can be as diverse as William Hill and the Pennsylvania Lottery. So every prospect out there is a potential customer for us.
How do you work with lotteries?
In Pennsylvania, we have a deal with Scientific Games, which is the central system for the state lottery. If you go into a bar or a restaurant, there will be three screens. We have two for our football and car race games, and Sci Games has the third for their keno game.
But the lottery is an important vertical for us. In Greece, we have the best-performing slot machines, as well as 100 percent of the market in virtual sports.
Doesn’t the legalization of sports betting make virtual sports betting less popular?
No, quite the contrary, actually. It’s a very complementary product. In every market around the world, our product is offered wherever sports betting occurs. Typically, what we see is that virtual sports are about 15 percent to 20 percent of what’s bet overall. And from the operators’ perspective, it’s (viable) product at all times because this is simulated and not on a schedule. If a player is betting a live football game or soccer match, it’s something they can play while awaiting the outcome of the live games. And while the hold on live sports betting is something around 5 percent, the hold on virtual sports betting is significantly higher than that. So it’s really complementary, not competitive.
From the Buffalo to the Lightning Link, dominance in Class II to the RELM steppers, Aristocrat Technologies has been doing just fine over the past few years, thank you. Credit for that starts with Matt Wilson, Aristocrat’s Americas managing director, and Jay Sevigny the president of the company’s VGT subsidiary. Both have directed talented teams of engineers, game designers, marketing and sales staff and others that have elevated Aristocrat to one of the industry giants. Wilson’s rise through the ranks of the company have hit every base, and Sevigny brought VGT’s Class II edge and stepper machines to fill a void at Aristocrat. Aristocrat’s recent appearance at G2E has only reinforced the sense that the company is continuing to hit home runs. The two met with GGB Publisher Roger Gros and Editor Frank Legato at G2E in early October to talk about the company’s strategy in North America.
Esports wagering is in its infancy, but Rahul Sood got on board early. His Unikrn company is the undisputed king of esports betting, with major investors like billionaire Mark Cuban, star of CNBC’s Shark Tank and owner of the NBA Dallas Mavericks. Esports is a burgeoning opportunity for the casino industry, but it’s still unclear about how to take advantage of it. Sood discusses how Unikrn operates, using many different titles and player skills. He talks about how the company handles its bets, why cryptocurrency is part of the Unikrn strategy, and how it could work in conjunction with the casinos. He spoke with GGB Publisher Roger Gros at the Unikrn offices in Las Vegas in October.
GGB: Tell us what Unikrn is all about.
Rahul Sood: Unikrn is a global esports bookmaker. We create our own odds. We permit live betting on our platform. We’re a “fan first” company. We embedded ourselves into the esports community. We create content like ESPN would for sports. We own teams, we run tournaments… We’re really a participant in the community rather than just a betting operator. And most importantly, I think, we’re the only wagering company on earth that’s built entirely on blockchain. We can accept 9,000 transactions per second, and we’re soon going to be able to offer our platform over multiple countries and accept bets in multiple currencies.
And you produce your own currency as well, correct?
Yes, back in 2015 we introduced Unikoin and created UnikoinGold last year. UnikoinGold can be used in a number of different ways. It’s not only tied to wagering. Customers can come to our platform and connect their gaming accounts—League of Legends, DotA, Fortnite, whatever—and start playing games and collecting tokens. They can win tokens, digital items and jackpots. And then we use UnikoinGold as a betting bonus. There’s lots of ways we can go with this using our ecosystem. In the wagering space, I think we’re light years ahead of anyone else with this.
Can you bet on teams or is it head-to-head betting?
It’s both. You can either bet on professional esports teams or you can bet on yourself when you go up against a friend. We do buy-in tournaments at MGM, for example, where you buy in for $15 and can win a prize, like a poker tournament.
What regulatory bodies have given you a license, and how do they oversee your activities?
We’ve worked with the strictest regulators in the world in Australia, the Isle of Man, Malta and the U.K. We’re about to get licensed to take wagers and for our cryptocurrency activities. And it’s frankly very hard to get, because you have to show them your AML and your KYC programs on the platform, and we’ll be the first in the world to accomplish that for cryptocurrency.
Esports is quite bifurcated because of the various publishers of the games. How do you work with so many different entities?
Right now, it’s kind of a spectrum. You have some that willingly share their data with us and think about the future of the space and others that say they can’t do anything because of the optics of gambling. When we built Unikrn, we built our platform to be completely publisher-agnostic. It doesn’t matter what the publisher does, we can put a wagering experience on top of all the popular games.
The casino industry is inundated with data, but the individual companies and casinos often don’t know how to use it. Former casino executive David Patent is using his experience and knowledge of gaming to help executives understand how to parse the data and use it effectively in elevating the customer experience. Patent was recently appointed as CEO of VizExplorer, one of the industry's leading analytics firms, and is a graduate of Harvard University and Harvard Law School. He worked at the upper level management with then-Harrah’s Entertainment and later Neil Bluhm’s Rush Street Gaming. He believes data analytics holds the key to creating loyalty and improved relations with the customers in the casino industry. He spoke with GGB Publisher Roger Gros at the GGB offices on Las Vegas in September, prior to being appointed CEO at VizExplorer.
John English has been in the sports betting business for decades. For that reason, he’s moderating the sports betting session at the UNLV Gaming & Hospitality Education Series on October 25. English and Vic Salerno, who is also on the panel, developed the first mobile sports betting platform when they were with a company called American Wagering, which was later acquired by William Hill. English understands the relationship between sports betting and casino operations and explains how it can be a boost not only to the gaming revenues, but also to the casinos’ non-gaming output. Because of his experience, Global Market Advisors is one of the most sought-after consultants for casinos looking to install sports betting. To register for the October 25 session of the UNLV Gaming & Hospitality Education Series, which includes a session in esports, visit www.UNLVGHES.com. English spoke with GGB Publisher Roger Gros at the GMA offices in Las Vegas in September.
When Everi joined together an up-and-coming slot company, Multimedia Games, and the industry’s most powerful payment processor, Global Cash Access, it was a marriage of diverse companies and cultures. Board member Mike Rumbolz was brought in as president and CEO to fix the problems, and fix them he did. He’s been able to create a powerful brand that spans the two technologies, and develop cutting edge products on both sides of the equation. The financial technologies division has upped its game and now processes billions of dollars in payments every month. On the slot side, new cabinets and content have created truly unique games that can be enjoyed on any platform. Rumbolz spoke with Editor Frank Legato in August for the cover story of the October issue of GGB.
In the last few years, the gaming industry has discovered that esports can deliver the younger demographic they desire to their casino facilities. As the first leader of the esports lab at UNLV, Robert Rippee has been testing theories and doing research into the esports player and enthusiast. He talks about the different ways that casinos have been using esports and what can be done in the future to refine the appeal of the activity to attract customers to casino resorts. Rippee will moderate a panel on esports at the UNLV Gaming & Hospitality Education Series on October 25 that will feature many experts in the field. To sign up for the episode on person or as a webinar, visit UNLVGHES.com. Rippee spoke with GGB Publisher Roger Gros at his office in the International Gaming Institute at UNLV last week.
GVC Holdings is a huge online gaming company consisting of such powerful brands as PartyPoker and PartyCasino, bwin, Ladbrokes, Coral, SportingBet and more. GVC also has a relationship with MGM Resorts in the U.S. to run its New Jersey iGaming operations and now has reached an agreement to operate its online sports betting business across the country. Nick Batram was recently appointed the head of investor relations and corporate strategy for GVC. He spoke with GGB Publisher Roger Gros at the GVC offices in London in August. To hear a full podcast of this interview, visit GGBMagazine.com.
GGB: Give us a thumbnail of GVC today.
Batram: We are one of the biggest online sports wagering companies in the world. We got there largely through acquisitions but also through growth. Every business we’ve acquired, we’ve accelerated their growth.
It’s a fascinating story. Over the past 10 years we’ve gone from an unregulated gray market to a largely regulated business. Today, 95 percent of our revenue is taxed by jurisdictions regulated now or in the process of being regulated.
GVC is built on technology, isn’t it?
Yes, technology is very important to us. We own everything from the casino to the poker room to the sports book to the back end, and even bingo now, and the platforms that run them. That gives us a number of advantages. First, it’s quite efficient. When we do acquire companies, we’re able to plug in synergies easily. You saw that with the bwin deal in 2016.
The Bwin.Party transaction made everyone sit up and take notice. What did that mean to the company?
That meant a lot to GVC. It propelled us into becoming a big company and allowed us to do an even bigger deal with Ladbrokes Coral.
The Bwin.Party acquisition was the result of a failed merger that happened in 2011. Bwin historically was a pioneer in European sports books. PartyPoker, prior to the Unlawful Internet Gambling Enforcement Act in 2006, was the largest online gaming brand in the world. Post-UIGEA, business shrunk significantly, but had been built up, and casino was added. But Party didn’t have any sports and bwin didn’t have any poker, so what could possibly go wrong? It had a ₤1 billion market cap, and prior to our acquisition it had slumped to ₤750 million... There were only two suitors—GVC and 888. And there’s always the danger when you’re buying a distressed company if you’re trying to catch a falling knife or actually got something where you can create real value. Fortunately, it was the latter.
The Ladbrokes Coral buy is the big one. That brought you some brick-and-mortar outlets for the first time. How has that worked out so far?
It’s very early days, but we’re very pleased with what we bought. There’s no question that, being a 100 percent online business, buying a retail business in the U.K. raised a few eyebrows. But we’re pleased with the U.K. legislation that limits the machines in the betting shops. There could have been a number of scenarios. But that uncertainty permitted us to acquire what we think is a fantastic brand with a very good business underneath. We managed to do a transaction that insulated our shareholders from a worst-case scenario.
Tell us about your new agreement with MGM Resorts to operate their mobile sports betting.
There were a number of ways to get into a regulated U.S. sports betting market. Our preference was to be more than just a technology supplier. From day one, we wanted to do a deal with a big partner so we could leverage our experience with their brand and multi-state footprint. MGM fits that description. Our existing relationship with them, originally worked out with bwin, has been a valuable learning curve. We know each other and there’s a common belief about where we see the market and how we can address it.
GGB: We know about your time leading the Greenspun Group, but give us a little of your casino background.
Deifik: I’ve lived 30 years in and around Las Vegas. When I joined the Greenspun Group, they were actually exiting their involvement with gaming because of the downturn in the economy. But I continued to be involved. Over eight or nine years, I picked up the Silver Nugget with some partners. We bought the Lucky Club, out on the 15 near the Speedway. So I have two unrestricted gaming licenses and I’ve also learned through other investments in smaller casinos.
What was it that first appealed to you about Ocean?
Walking the property for the first time, I had some idea of what I was going to see from reports I had heard. I of course knew of the problems here, but I saw through that. I also saw a very heavy lift to open the property. The property was in immaculate shape—the power never had gone off. So when you take the building at $2.45 billion, add the central power plant at $157 million and a couple hundred million in furniture, fixtures and equipment, you’re approaching a $3 billion write-off. So I felt that on a price-per-pound basis, here was not only one of the greatest assets in Atlantic City, but also one of the great assets in North America.
How did you address some of the problems that existed at Revel that you knew needed to change?
First, we went through the posts on social media and began a list based on the comments people had made. We put together focus groups to determine the issues we needed to address. Non-smoking. If you were a smoker, there was no place for you at Revel. We fixed that. Two-night minimum stay? That was silly when the average stay was 1.2 to 1.4 nights. We fixed that. The wayfinding? The signage they had was poor. We made an investment in better signage and ambassadors showing people around. The layout of the casino floor was a problem. We fixed that by opening things up and making it easy to get around and added at least 50 percent new machines. The main escalator was scary. We invested several hundred thousand and put wings on the escalators so now everyone feels safe. It’s made a huge difference. And we got rid of the prison wall on the Boardwalk. Now we have a grand staircase with a sign. That is symbolic of what we’ve done at Ocean.
How about the operational issues? They didn’t really go after the gambler.
My attitude is we ripped the rear-view mirror out. So when we opened the doors on June 28, it was like we had never been opened. With our great CEO Frank Leone, we created what we think is one of the greatest four-tier loyalty programs in the industry. If you’re a member of our rewards system, we built a beautiful players lounge. The comps are coming. What they didn’t do before we’re going to do now.
Why the name Ocean?
That was my wife. People were telling us we had to get big consulting firms to create a catchy name and brand. But my wife looked at me and said, “Let’s just call it Ocean,” and that was it! We wanted to just call it “Ocean” by itself, but Carnival Cruise Lines was protecting that, so it became Ocean Resort Casino.
Over the past 10 years, Konami Gaming has grown from an also-ran to one of the major powers in the slot business. Steve Sutherland made it one of his goals to put Konami on the “podium” and given the company’s market share, he’s reached that goal. But Konami is far from done. With a new state-of-the-art headquarters in Las Vegas, a constantly evolving product line, innovative cabinet designs and systems that are becoming some of the best in the industry, Konami promises to debut some cutting-edge products at the upcoming G2E in Las Vegas. Sutherland interviewed by GGB Publisher Roger Gros, and was joined by Steve Walthur, Konami’s senior director of marketing and product management, at Konami headquarters in July.
James Plousis has been involved in law enforcement in New Jersey for more than 40 years, from a patrolman to a U.S. marshal to head of the state’s parole board. His recent appointment as chairman of the Casino Control Commission is a natural progression, he believes. As one of the cleanest industries in the state because of the diligence of the state’s regulatory authorities, Plousis believes that integrity is of the utmost importance. He explains his priorities during his term and about his relationship with the Division of Gaming Enforcement that does most of the heavy lifting in New Jersey’s regulatory space. He spoke with GGB Publisher Roger Gros at his offices on the Boardwalk in Atlantic City in July.
Geoff Freeman departed the American Gaming Association as of August 1. But his five-year tenure at the AGA will continue to resonate. Taking over for a legend, the first and long-serving CEO Frank Fahrenkopf, Freeman fundamentally changed how the AGA was structured and conducted operations. Not as politically connected as Fahrenkopf—the former head of the Republican Party—Freeman focused on expanding membership, creating alliances, and finally on the drive for legalized sports betting. His interview was part of the cover story of the August issue of GGB, which focused on the future of the AGA. He spoke with GGB Publisher Roger Gros in the AGA offices in June.
Dave Rebuck has been the director of New Jersey’s Division of Gaming Enforcement since 2011. Appointed by then-Governor Chris Christie to streamline the state’s cumbersome regulatory structure, Rebuck responded by working closely with industry executives to remove unnecessary regulations. He oversaw the introduction of legal online gaming in 2013, the closing of five Atlantic City casinos in 2014 and most recently the opening of two replacement casinos and the legalization of sports betting. He spoke with GGB Publisher Roger Gros at his offices in Atlantic City in July.
GGB: It’s a credit to you that New Jersey Governor Phil Murphy has kept you on since he took office in January. What is your relationship with his administration?
Rebuck: Governor Murphy hit the ground running and is very much involved with casino gaming and sports betting in particular. Attorney General (Gurbir) Grewal, my immediate boss, has been a great asset for us in helping us to perform the duties required of us. It’s been quite a hectic six months since the governor took over, and so far we have a great relationship with him, his staff and the attorney general.
How hectic has it been in the last six months?
We knew Hard Rock was on target to open this summer, so if it had just been that, we would have had no problem completing that investigation. And with the resolution of the sports betting case before the Supreme Court, we knew something was going to happen. But the total victory meant we had to get up and running quickly. And finally in January, just hours before the deadline, Revel was bought by Bruce Deifik and his team, so we had to add that to your list.
June was especially busy with sports books openings at Monmouth racetrack and Borgata, and later at Ocean Resort. And with the two new casinos opening on June 28, the pressure was on.
How worried are you that the increasing supply of gaming in Atlantic City will force other casinos to close?
Before the Taj closed in 2015, we had an eight-casino market that was fairly stable. So with the opening of two new casinos we go to a nine-casino market, and the question is whether we can sustain that. And I don’t know. But I will say this: I really don’t care. I hope it does. But I will say this to anyone who comes into this market. If you cannot compete in this market, you have no business running a casino. We have a very low tax rate, second only to Nevada. We have the best regulations in the country when it comes to overseeing and working with the industry—these are not oppressive and onerous and costly like many other jurisdictions.
There are now more diverse gaming products available here than in any state in the country—sports betting, full-blown iGaming, any product you can think of in traditional gaming—it’s here. And in non-gaming amenities, we’re second only to Nevada. We’ll never catch Las Vegas, but we’re a strong second.
Sports betting in New Jersey got off to a good start with two racetracks and two casinos running sports books as we speak. Any idea why the other casinos haven’t jumped on board yet?
The casinos are being very deliberate and conservative in their rollout. They’re taking their time to build the perfect offering, and most of them have opportunities in other states, as well, and have to take a multi-state approach, as opposed to the racetracks, which will not.
We’ve had a number of heart-to-heart discussions with casino operators and told them I need them to be more aggressive. I think they’ve gotten my message and are picking up the pace now.
I think we’re on the right track. And I’m very optimistic now that New Jersey will be a leader in this area. By the time we hit the end of the fourth quarter of 2019, I want New Jersey to be in a position to be the leader in the country. That’s a tall order because Nevada is on top now, but I think we have a shot.
Do you think the market is that big?
Let’s consider where we are now. We’re only doing ticket business using business practices like it’s been done in Nevada since the 1970s. We have the potential for 14 licenses, with three skins each. So we’re not very robust. In fact, we’re rudimentary.
But we’re off to a stunning start. Once we get all the licenses up and running, mobile apps working at full speed, you’re going to see a huge increase in play once we get (further) into the 21st century.
What about the growth in iGaming? Are there too many sites now?
It continues. For months, we’ve been posting double-digit increases and it was the same in June. I don’t know how long this is going to continue—there has to be a ceiling somewhere—but for now we’re enjoying it. And remember, right now, it’s just New Jersey. So when other states come on, we’re going to continue to grow.
And no, there are not too many sites. And competition is good. If you can’t compete, you fall by the wayside. We encourage innovation and experimentation, so come to New Jersey and give it your best shot.
Christopher Justice is president of the Gaming Solutions division of Global Payments. A 25-year veteran of the payments industry, Justice recently joined Global Payments, which provides a wide range of services to the gaming industry, both land-based and online. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas in July.
GGB: There still is quite a bit of difficulty in making and receiving payments for online gaming. Why is that?
Justice: In the credit card world, it’s definitely a significant issue. While a financial institution may underwrite a cardholder for a particular credit line, that doesn’t necessarily mean that a bank is willing to stand behind that cardholder when placing a bet. It’s one thing to spend $500 on a purchase at Best Buy, but it’s another entirely to put $5,000 down on your favorite team to win. If you don’t win, the bank might not want to make good on that particular transaction. And banks still have a significant apprehension about being in the gaming market, just due to the reputational risk associated with those transactions.
Isn’t it somewhat odd, since good players have high credit limits and usually pay quickly?
Yes, that’s true. They have good standing within the community, but banks are continuing to restrict their funds.
And that’s where Global Payments comes in from an iGaming, iLottery and sports betting approach. We deal with close to 500 brick-and-mortar and digital casinos all over the U.S. and Canada. And we also deal with every one of the iGaming properties in New Jersey. Depending on the site, we are 40 percent to 60 percent of their actual wallet. We provide that high level of authorization that the players expect when trying to participate in gaming. And the sites need that high approval rate, as well. It all boils down to the company’s longstanding expertise, technology and process.
Why wasn’t the special code created for legal iGaming the answer?
Visa and Mastercard create these “merchant category codes” and adjust them twice a year for market conditions. They did create a code for legal iGaming, and now with the repeal of PASPA they’ve created codes for sports betting. So they’ve got the rules and the infrastructure, but that still doesn’t require a financial institution that is holding all of the risk for the cardholder to actually participate. Even though it exists, it still doesn’t mean the major banks want to participate in iGaming or sports betting.
Tell us how the legalization of sports betting is going to impact online gaming payments.
I don’t think it’s going to do anything to improve approval rates on credit or debit cards. While Visa-Mastercard have created codes and procedures, it doesn’t appear that this is going to change anything that financial institutions have already decided to do.
From the Global Payments perspective, with our VIP program, we’re still providing approval rates exceeding 94 percent across all of the locations we service. We’re still providing the stability of an $18 billion company standing behind and underwriting the players.
Even though Nevada allows mobile sports betting, you still have to go to a casino or bar to make a deposit or collect winnings. Will that change?
I would certainly hope so. A lot of the reason those problems exist is because of regulatory constraints. I wonder now that sports betting is going to go nationwide whether with the added competition, Nevada regulators get together to see how they create frictionless commerce. If I can buy a bag of dog food on Amazon and have an Uber driver deliver it within four hours, I should be able to fund my wallet to make a sports bet in a similar manner.
When Hard Rock International, Joe Jingoli and Jack Morris bought the former Trump Taj Mahal in 2017, they envisioned turning it into the glittering gem of the Hard Rock chain. But when construction started in October 2017, it seemed doubtful that the property would be open by the summer of this year. Yet a massive effort by everyone involved allowed the Hard Rock to open on June 28 and take advantage of the Independence Day week that followed. Gaming veteran Matt Harkness was given the reigns at Hard Rock AC and directed the staffing, training and opening of the property. He talks about his relationships with the city, the state and the employees as they moved toward opening day. He spoke with GGB Publisher Roger Gros at his offices in Hard Rock AC just a week after opening in July.
The Hartmann Group was founded by Jeff Hartmann, a former high-level executive at Foxwoods and Mohegan Sun, as well as several other properties. After leaving Mohegan Sun, Hartmann dedicated himself to helping smaller gaming operations, largely tribal, apply progressive business principles to improve and expand their product. Justin Tesler met Hartmann when he worked at Foxwoods and is now the director of gaming operations for THG. He explains how the company works with smaller casinos, what expertise they bring to the table, and how the phrase “that’s the way we’ve always one it” is one of the most damaging to any business. He spoke with GGB Publisher Roger Gros at Harrah’s Resort in Atlantic City during the East Coast Gaming Congress in June.
Felix Rappaport, a highly regarded and beloved casino executive, died on June 18 in the place he most loved, a suite at Foxwoods Casino Resort where he was president and CEO. A former Wynn and MGM executive, Rappaport was appointed president and CEO of Foxwoods in 2014. Since that time, Foxwoods has improved its financial performance and backed away from the fiscal cliff it was approaching. Rappaport explained how his team has approached their task, the simple solutions they employed to improve performance, and how the Mashantucket Pequots now have a five-year plan for Foxwoods. He spoke with GGB Publisher Roger Gros at his offices in Foxwoods in August 2016.
It’s an exciting time in Atlantic City. Two new casinos are opening, with the focus being on Hard Rock. But Frank Leone, the CEO of Ocean Resort, the former Revel property, warns experts not to miss his casino. With more than 30 years experience in the Atlantic City market, Leone aims to correct all the errors the former Revel managers made and take advantage of the vast amenities and features that were previously underplayed. Gamblers, he says, will be welcomed with open arms and rewarded with superior benefits. He spoke with GGB Publisher Roger Gros after a tour of the new Ocean last week in Atlantic City.
Scott Fisher and Suzanne Leckert have a long history in gaming consulting. Together, they have more than 35 years of experience in gaming, leisure, tribal, commercial and public sectors. They recently announced the formation of the Convergence Strategy Group, a new consulting group whose services include project feasibility, land use and master planning, economic impact analyses, and advisory services for existing operations looking to increase market share and operating margins. The firm is also bolstered by the application of groundbreaking GIS mapping and data analytics tools that only a few experts in CSG’s core industries have mastered. They spoke with GGB Publisher Roger Gros at the Indian Gaming tradeshow in Las Vegas in April.
Joe Asher has been in the wagering business for more than 20 years. He was appointed CEO at William Hill US in 2012 and has been growing the company in Nevada since then. William Hill now operates more than 170 sports books in the state and offers a state-of-the-art mobile platform as well. May’s Supreme Court decision opens up an incredible amount of opportunity for William Hill in states that decide to legalize sports betting. Asher outlines what will attract his company to those states and why casinos should consider hiring William Hill or any other sports betting company to operate their sports books. He spoke with GGB Publisher Roger Gros at the William Hill offices in Las Vegas one week after the decision. To hear a full podcast of this interview where Asher discusses the “integrity” fee, the economics of sports books to casinos and more, visit GGBMagazine.com.
GGB: Were you surprised about the clarity and decisiveness of the Supreme Court decision?
Joe Asher: No, I wasn’t. I wasn’t surprised. I was in the courtroom in December when the case was argued, and obviously, anyone in the courtroom, on our side, had a pretty good feeling that day. But you never know. So, while I thought this was the most likely outcome, and that’s what we’ve been saying internally, you’re really reading tea leaves, and trying to determine votes by questions and the like. So, surprised, no. But obviously happy to read it.
What will be the immediate impact first on the industry, and then on your company?
Clearly, just about everybody in the industry is now focused on sports betting. Before the decision, it was one of those things that was a priority among a lot of other priorities that folks had. But now, it obviously went to the top of the pile. Folks that we’ve been having discussions with over the last couple of years were on the phone that day asking us what they needed to do now. So, it certainly crystallized attention, and people now will go forward and make the investments that are required to be made.
On our side, we’ve been doing a lot of work and spending a lot of money in anticipation of the ruling. Not because we were certain what the ruling was going to be, but because we felt we had to invest in order to be ready in the event of a positive ruling. But, clearly, there were some things that we were deferring, pending the outcome—long-term leases for additional office space, contracts with other operators, those types of things. Now we’re comfortable pulling the trigger on those sorts of things.
Now we’re looking at states considering legislation. It seems as though a lot of the politicians don’t have a realistic view of the business model for sports betting. Is that your impression?
Obviously some are more informed than others, clearly, as is the case with every issue. But it is so important to have a tax structure in place, and a regulatory environment in place, that is going to allow us to be competitive with the black market. If you look in Nevada, we pay the gross gaming tax, which caps out at 6.75 percent. And there’s a well-developed regulatory system.
Contrast that with Pennsylvania, where the bill that passed requires a sports book operator pay $10 million up front, for the privilege of then paying 36 percent at the state and local level. And of course, that’s in addition to quarter of a point of handle tax you pay to the federal government, which is about another 5 percent of revenue.
How in the world can the legal market possibly compete with all of the bookies, in Philly and Pittsburgh and other places? An illegal bookie can offer a 25 percent rebate on all your losses, and he’ll still have a 16 percentage point advantage over us. And he hasn’t paid the $10 million up front. He doesn’t have all these infrastructure costs that you see if you come to our office. He doesn’t have a compliance department. He’s not paying payroll tax. We really haven’t spent a whole lot of time in Pennsylvania, because of the tax issue. So, that is going be an absolute critical aspect of all of this.
What do you bring to the table when you go into a casino to run their sports book?
This is our little niche of the world. You know, I’ve been around the gaming industry my whole life, and if you want to talk to me about slot machines or table games or hotel rooms, I can have a very superficial conversation with you. But, if you want to talk about sports betting, that is the tiny little sliver of the world that we happen to know an awful lot about, and that’s where we focus our efforts.
For casino operators who have a whole bunch of other things on their plate, outsourcing it to William Hill is a great option. They’re going to have a better product; they’re going to make a lot more money because they’re not going to have all the costs associated with doing it. And it will be attractive to their customers. So, that’s really the proposition, and they can rest assured that they’re dealing with a company that is licensed and a known commodity, has good relationships with regulators, and is going to do things in the proper manner.
An era is coming to an end at the National Indian Gaming Commission, the federal regulator over tribal gaming. The term of Chairman Jonodev Chaudhuri expired at the end of April, and he’s now serving in a “holdover” status. But for five years, Chaudhuri has presided over a peaceful period in the relations between gaming tribes and the federal government. He sat down with GGB Publisher Roger Gros at the Southern Gaming Summit in early May to review the accomplishments of the NIGC during his tenure and his views of the future.
Global Gaming Business: Your term is officially over now but you’ll still be serving until a new chair is appointed by the Trump administration. What is your focus now?
Jonodev Chaudhuri: I’m focused on tying up as many loose ends as possible. I don’t anticipate being at NIGC forever. I do anticipate being at the agency through a significant part of the summer. We’ve been working as diligently as possible to serve Indian Country and the general public to the best of our abilities, knowing that my time is coming to a close. We’ve been working for many months to get important regulations out the door, to take care of things that are specific to the chair’s duties. But, I will say it has been an absolute honor to serve as chairman of NIGC during this period of time.
When I became acting chair, it was the 25th anniversary month of the passage of the Indian Gaming Regulatory Act, October 2013. So, my term will have spanned, as chairman—either acting or confirmed—the 25th anniversary through the 30th anniversary year of IGRA. And we’ve seen a lot of changes, but there are many more changes to come.
Your term has been relatively calm in comparison to some other chairmen. Why is that so, do you think?
We recognized early on that IGRA carved out an important role for NIGC, and that was to first and foremost serve as a regulator. In my professional career, I’ve always been immersed in Indian Country. I’m proud of the work that I’ve been able to do as an attorney, as a judge, as an organizer in Indian Country. I’m a supporter and believer in sovereignty, first and foremost, to the core. But I also understand that Indian Country has needed and will continue to need NIGC to be a credible regulator. So, our challenge when I first started was, given the history of the agency, how you hit that balance, to be supportive of tribal sovereignty, while at the same time not shirking your regulatory responsibilities. It’s a fine balance. I think after 30 years of IGRA, we’ve hit the correct balance point.
What do you consider some of your other accomplishments?
After 30 years of IGRA, I am convinced that we’re on the cusp of a new age of gaming. Gaming is an industry that’s inherently driven by technology. The technological developments that are on the horizon are going to drive important policy decisions, both nationally and on a regional basis, and I think we positioned the agency, and by extension, positioned our partners to be in a great place to meet the challenges of those changes, and take advantage of the opportunities that those changes will present.
Some of the accomplishments break down into two categories. One is on the technology side of the equation. One of our first orders of business was to create a technology division, in recognition of the changing technological landscape of Indian gaming. And that division has done what we intended it to do. It has informed every aspect of our agency, since it started. I’m very proud to have a great division director, Travis Waldo, who comes from Indian Country, who understands the technological changes. That division has helped inform our regulatory and decision-making. It’s helped inform our guidance. It’s helped inform our enforcement functions, and it’s also informed our training and technical assistance. We now have IT vulnerability assessments that we do free of charge, for Indian Country.
So, we’ve made all sorts of huge advancements, in terms of technology. That’s the first bucket. The second bucket is, back to the perfect balancing point in everything that we do as an agency, to balance our credibility as regulators with our support of tribal sovereignty and tribal decision-making. You see that in our enforcement philosophies.
That balance point has influenced our ramping up our numbers on the training and technical assistance side. Through our virtual trainings, we now train more people each and every year since I’ve been at the agency.
Now that you’re coming to the end of your term, what surprised you, what was something that you didn’t expect?
I’ve always been a policy person. I’m very honored to have served in the interior secretary’s office immediately before NIGC, and beyond that, I had advised and worked with tribes in a number of capacities over the years. So, I thought the biggest challenges would be advancing sound policies, which I think we’ve done. But what I didn’t anticipate was how much hard work there’d be, just in the day-to-day administrative functions of the agency.
That was the biggest challenge. I thought it would be instituting large-scale policy, or perhaps working through some tough enforcement actions, or working through some critical matters that involved Supreme Court decisions. But the hardest part was the administrative work, and keeping folks moving in the same direction, and keeping folks energized, and really being part of a team—in order to get the job done, we all have to believe in the same approach. And I think, collectively, we’ve done it.
Bingo and keno have always been significant players in the gaming industry. While simple, the two games are linked by numbers and the enthusiasm of their players. But they’ve changed over the years, and technology has now elevated them to new levels. Mike Dreitzer, who stepped down as president of Ainsworth North America late last year, was named president of Gaming Arts in February and hit the ground running with his new company. With licenses in more than 70 jurisdictions, Gaming Arts is a major player in the bingo and keno sector. Dreitzer met with GGB Publisher Roger Gros at the Gaming Arts offices in Las Vegas in April.
GGB: You’ve been involved with some very progressive companies in the industry. Why did you choose to come to work for Gaming Arts?
Dreitzer: I had been having discussions with David Colvin, the owner of the company, since late last year. David used to own the Sienna casino in Reno, so he’s got a good gaming background, and we realized we had some very complementary skill sets. He’s very creative and is the mastermind behind the product. He’s very involved in the design of the games both from the mathematical side and the graphics side. I’ve been more focused on operations, sales and marketing in my experience.
Tell us what it was about the products that attracted you.
For a very small company, we have a very diverse set of products. We are in the traditional keno space with a keno system called Optima. We are the leading provider of keno in the world, and there is a lot of growth internationally.
We have developed a keno kiosk where a player can enter up to 999 games. You can connect that to an app on your phone to track your winnings.
How about your bingo products?
In the bingo space, we have “Super Games,” which are side-bet or overlay games that can go over traditional bingo systems. We can coordinate and interface with any bingo system in the world.
Most notably, we have Bingo Millions. This is a product where if you cover a certain amount of numbers, you can win up to $1 million depending upon the pay table. It’s an interesting product for a few reasons. First, the odds of winning the top prize are one in 1.5 million. Compared to the lottery or even top-award slot machines, it’s quite a good set of odds.
In addition to the odds, Gaming Arts insures the jackpot. So if it hits on an operator’s floor, Gaming Arts pays it. You would think it wouldn’t hit that much with those odds, but it hit just before I started in January at a property in Phoenix, so we paid it. Operators can advertise a big jackpot and have zero risk.
How did you get up to speed on bingo and keno?
As you know, I had little experience in this space, just the traditional slot machines in the pure casino environment. So learning about bingo has been amazing. You’d be amazed at the number of bingo players and the amount of money they play. In fact, bingo globally is more popular than slot machines. And many of the tribal and commercial casinos have large bingo rooms, so I feel very comfortable there.
So, Gaming Arts can offer both paper games and EGMs? Are the games Class II games?
Yes, we can put our Super Games across any system. It’s just a matter of how the bingo operator wants to spice up its bingo offerings. We have very diverse pay tables and great opportunities for all operators.
It’s interesting, but when we’re talking about bingo in this context, it’s not Class II. In many casinos around the country and also in charity games in a true bingo hall, we’re talking about “session” bingo.
Our Super Bingo and Ultimate Bingo EGMs are also not Class II. They’re Class III bingo—stand-alone RNG gaming devices, which happen to be bingo games.
With the eSports phenomenon suddenly exploding in Las Vegas and in gaming jurisdictions around the world, Alex Igelman is ready to guide the way. As the CEO of Millennial eSports, a public company traded on the Toronto Stock Exchange, Igelman’s was the first eSports company in gaming when he opened an eSports arena in Downtown Las Vegas.
Global Gaming Business: What brought you to Las Vegas?
Igelman: We came to Las Vegas about two and a half years ago. At that time, the company was primarily a tournament organizer with a competitive gaming platform, which allowed people to play games against each other. That was the original model.
We identified Las Vegas early on as the perfect place for eSports. We built this arena in Downtown Las Vegas, the first of its kind, purpose-built for eSports.
In the back of our minds, we know eSports has a very active wagering side—maybe not in North America—but we knew that one day you’d be able to walk into a sports book and make a wager on an eSports event. But of course, our focus is on the millions of people who visit Las Vegas for all it has to offer.
How can casinos monetize eSports?
The easiest way for an operator to monetize eSports is as an event. If executed properly—and that means it has to have some authenticity about it by bringing in someone who understands eSports—it’s an opportunity to make money as you would on any event. In that regard, you’re trying to attract a demographic that you haven’t experienced at your casino before.
Then you could hold a tournament, as you might a poker tournament. There are some capital expenditures there if a casino wanted to have a permanent facility, but there are numerous tournament organizers who could arrange this. It’s a very specialized, niche market. You really have to know what you’re doing. It could be a loss leader until casinos figure out the right model.
What is that eSports demographic?
We’ve done a lot of research and determined that the average eSports aficionado is male and about 35. So we’re not talking about young kids. It’s a valuable demographic. And you have to remember, not only will you get the customer who likes to play eSports, but you also get people who like to watch professionals play eSports. That’s a huge segment.
We’ve seen several different models from Las Vegas operators from building eSports venues inside a casino to a production studio for eSports tournaments. Do we know what works yet?
I think it depends on the risk that the casino wants to take. In the eSports arena at Luxor, the relationship with MGM is more of a landlord. At Caesars, they’re using a production studio to host a full season of eSports with H1Z1. That’s a different kind of commitment and may attract a younger demographic.
But these are all the things you have to consider when examining eSports, and in time they will develop.
How would wagering on eSports work? And can you really prevent cheating on these eSports games?
In Nevada, being very progressive, they decided to accept wagers on specific events. It’s not a blanket acceptance, but each event has to be approved. It’s not the most ideal situation, but it’s a start.
As for cheating, the fact that all of the play takes place in a digital format makes it very auditable, and there are certain algorithms that will detect any abnormality in play. At that point, referees would look into any kind of match fixing. So in that respect, I think it’s easier to track, since you won’t have to read someone’s mind.
Jerry Epstein is a recognized leader in marketing communications, spending three decades leading companies with innovative strategies for brand development, new product launches and marketing communications for many casino hotels and integrated resorts. Along with co-founder Bill Paulos, Epstein operates Engaged Nation, a company specializing in gamification to create attention and loyalty for any casino brand.
GGB: When did gamification really become a thing?
Epstein: The concept is quite old. You might remember—I do—S&H Green Stamps or Plaid Stamps. You’d go to the market and they would gamify it by giving you Green Stamps that you’d put in a book and take to a retail redemption center.
Inside and outside the casino industry, gamification has been viewed as “pay for play.” So to a certain extent, a players club program is gamification. Other applications are points for your credit card use, airline miles and the like.
But the modern way that we see it is you’re paying people for their investment. You’re rewarding them and driving them to your property ultimately to generate incremental visits and revenue.
Why has this taken so long to get a foothold in the casino industry?
Everyone says they want to be a leader, but they don’t want to be first. Gamification a very misunderstood and often misused term. It’s not just slapping a logo on a game; it’s offering an experience to a player to keep them coming back to the property. There are a lot of different ways you can implement these programs, and the casino industry is just starting to realize how powerful they can be.
What’s the theory behind this game play?
We immerse them in the experience. It’s very much like what the casino industry is trying to create on the floor—have fun in an immersive experience that is rewarding and challenging. When you put it together in the right way, you’re bringing people in or online and we’re educating them about the property so they actually become brand ambassadors. And for their investment of time—they do have fun while they’re doing it—we reward them with virtual currency or instant rewards like a drawing entry that drives business.
Sounds like there is real science behind this.
For sure! Gamification is changing motivational behavior to the desired outcome of the casino. And to get this desired result, the casino needs to determine what the goal is. Is it reactivation of old customers, acquisition of new customers? It really is a science.
So gamification allows a casino operator to touch his customer on an ongoing basis, even when they’re not at the casino?
Funny, but just a couple of years ago lots of casinos were saying, “My baby boomer customer doesn’t engage in technology.” Well, that’s absolute nonsense. They engage just as much as or even more than millennials.
Even if they did admit that they were tech savvy, they said they didn’t want to engage them at home, they wanted them in the casino. Today, a mobile device is a portable entertainment center. Do you want them to engage with you or play games with someone else? The opportunity to keep them connected with your brand, with your messages on an ongoing basis is really the foundation of what we call continuous engagement.
The upcoming Supreme Court decision in a case brought by the state of New Jersey is bound to have an impact on the legality of sports betting in the U.S. Kate Lowenhar-Fisher, a member of the Gaming and Hospitality Practice Group of Dickinson Wright, is working with clients to understand how the nuances of any decision rendered by the court will affect the individual states. As a Nevada attorney, Lowenhar-Fisher believes other states should just emulate the successful Nevada regulations and processes, but understands that is not likely to happen. She discusses the options and how companies with sports betting expertise outside of the U.S. can capitalize on legalization. She spoke with GGB Publisher Roger Gros in the Dickinson Wright offices in Las Vegas in February.
In the 40 years Atlantic City has existed as a casino destination, nothing was as important as the opening of the Borgata in 2003. Atlantic City was a declining casino town with competition poised to enter states along the borders. Bob Boughner was charged by Boyd Gaming—the operating partner of Borgata, along with MGM Resorts, which now owns the facility wholly—to build something different. Borgata renewed interest in Atlantic City and forced competing properties to up their game. Today, Borgata is the market leader by several degrees of magnitude in Atlantic City. Boughner spoke with GGB Publisher Roger Gros in April in Las Vegas to talk about how the Borgata was envisioned, designed and operated. The discussion includes other non-gaming issues.
GGB: We were covering the development of the Borgata fairly closely in those days, and I remember you walking us through a layout of the casino in the Atlantic City Convention Center to see how far it was to walk between parts of the hotel or how close together the chairs were in the theater. Why go to such detail?
Bob Boughner: We saw that those efforts that the team put together—and everybody contributed in a great many ways—came to understand and appreciate the fact that we are a very visceral business. We are a business that focuses on many aspects of the experience. I tried to talk to the team in that environment, to say this was really about scene 1, scene 2, scene 3, scene 4, and scene 5.
When you walked in the front door, what was scene 1 all about? What were you trying to say? What did you want to communicate to the consumer when they walked in the door? Then scene 2, the same pathway—depending on which direction you went—you wanted to give something that was inviting and provide something that created a desire to see more, to participate more. And then we wove in the various amenities on a logical pathway. We, as humans, I think, are very much inherently lazy. Especially with the long walk, and a long walk gets dull and boring, and lacks interest completely. So, we tried to minimize the instances in the building of those long walks, but where there was going to be a long walk, make it interesting. And also, take advantage of the people that were in the building.
Atlantic City had a negative perception in those days. How did you convince people to come back? We used to call them the “rejecters.”
We put a heavy emphasis on non-gaming amenities. Non-gaming amenities helped us differentiate ourselves from the competition in that marketplace, and very early.
We talked to the rejecters often during the course of research, and in unique ways. We did focus groups, but were actually interacting with them in a room, and they were carefully selected to be sure that they hit the “who we created for,” and “who we invited” groups. They told us many things that they did not like about Atlantic City, and things that they felt would make Atlantic City a more interesting place. So, we used that good and sound advice, and we put it to work. We put it to work with designers, we put it to work with architects, we put it to work with the folks that helped create the wardrobing for us. We put it to work with people that helped us craft our voice to the consumer. And again, one area that we felt was very important was to provide a food product offering that was different: Our dining component. Our nightlife component. There was nothing like it in Atlantic City at that time.
Today, the Borgata is by far the best gaming performer in town, by sometimes triple your competitors. Is that because the non-gaming components are so compelling there that people want to gamble there, as well as go there for other reasons?
I think that non-gaming has played a role from the beginning, and it still plays a role at the property. But, frankly, it was a superior gaming product to what was in the marketplace at the time. Because it was designed at a certain level of capacity, and not added on to over the years, unlike many of the operations where they started small, or they didn’t know what the future held, and so they added on in bits and pieces, and sometimes those bits and pieces never got knit together, so that it was not a cohesive experience.
We started out with a pretty cohesive experience, and essentially kept that pretty cohesive experience over the course of time. I recall when I would tell folks that Borgata did gaming revenue that was greater than Bellagio, they would think that’s not possible.
But it was. Sometimes we did double what Bellagio did—obviously, a very, very successful and enjoyable property. I’m not comparing one to the other, but there was a level of non-gaming appetite that existed in Atlantic City. We helped create an appetite among customers, because they were really very fatigued by the restaurant product in the city at that time. They were very fatigued by the entertainment product, except in some rare instances.
And we put a little bit of energy behind dining, nightlife, entertainment, and that little bit of energy paid significant dividends, not only in terms of the performance of those areas, but also to help us bring a new customer to the marketplace, and then that also manifested itself in the significant contribution on the gaming side.
The rise of skill games in the casino industry has been accelerating. As the second and third generations of the games hit the floor, research has shown that they are doing exactly what was expected: increase play from younger customers. Blaine Graboyes is the CEO of GameCo, one of the leading skill game companies. He explains the challenges that he has overcome in placing the games on casino floors, the reluctance of slot executives to experiment and the reaction of players. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October of last year.
Twenty years ago, the formation of the Gaming Standards Association was a seemingly innocuous event that had a huge impact on the gaming industry. The GSA rapidly began setting technical standards for the industry that proved to be profitable for operators and manufacturers alike. Peter DeRaedt was there in the beginning and remains the GSA president today. He spoke with GGB Publisher Roger Gros in Las Vegas in February about the 20th anniversary of one of the industry’s most important organizations. To hear a full podcast of this interview, visit GGBMagazine.com.
GGB: Congratulations on 20 years of progress with the Gaming Standards Association. Tell us how it started.
Peter DeRaedt: In 1997, we informally met with about five companies on behalf of John Acres, who at the time had patents with respect to bonusing. The only way that he could promulgate these patents and this technology was with some kind of a standard that would be agreed to by the industry. Following that, the organization was officially created in California as a nonprofit organization in 1998.
What were some of the first actions taken by the organization?
It shifted quickly to the creation of the exchange of information data standards, which predominantly was SAS. We wanted to come up with something that’s more open, more flexible, that’s architected for the future, and we did that. That was in 1998, and we soon attracted the attention of some of the larger operators like Park Place, Mandalay and Caesars.
So, moving forward, it was a challenging time. Operators joined us, a company would leave and come back. Intellectual property became an issue, antitrust laws, all the things you have to do in an organization to make sure that people are comfortable participating. And I think we did that. It’s not been an easy road; I’m incredibly grateful for all those engineers and especially those companies at the beginning and today that support us. I think we created a significant number of standards to a variety of success. But do not ever forget that the mission of the organization is trying to help the industry.
The mission of the organization is not to become an innovator and go out there and find out what the industry needs. Generally, the industry identifies a problem, and they come to GSA for a solution. And we will do that.
So it was the operators that really were the genesis behind this. In the early days, slot machines had to be connected by the two- and three-wire systems because they were all talking different languages.
It was a challenge. Don’t forget this is a very small industry, with a few suppliers—and now there are even fewer than there were at that time. So when we moved from a manufacturers’ association to the Gaming Standard Association, meaning where the operators, which are part of the industry, participate, that was a big shift. Everybody needed to start feeling comfortable; we did that.
Initially it was BOB—Best of Breed, which was demonstrated at the gaming show at the time, and that evolved into the G2S, the Game to System, which was a combination of BOB and SuperSAS. Then the industry decided, “Let’s create a single standard.” Remember that creating these kinds of standards with these kinds of technologies, in a gaming industry that’s very heavily regulated, takes time. And it takes time from multiple levels, including resources: you might have had the right resources to deal with the XMLs, and the Ethernet standards. If you don’t have the right hardware, hardware needed to be redeveloped and redesigned and approved. These are cycles of multiple years.
Once that was done, we got finished, probably about 2007, when G2S was first released as an open communication standard. I think the value we created at the time, and the flexibility, if operators would only understand, I think it would circle back around. But some operators have left. And that’s very unfortunate, because we all understand that if customers want something, they demand that things happen. If you don’t do that, well then, you have to buy whatever is on the shelves.
And that is what happened in this industry, for now, even 20 years later, almost. Canada is a bit different, and Europe and the rest of the world are different, as well.
You recently started GSA Europe.
Yes, last year. It’s taken us a year to work through the mechanism of the legal issues, as to how to establish it, where to establish it... a lot of policies. We chose the country of Malta because of the large number of online gaming companies located there. They have very clear regulations for the online gaming, which is important for us. They spoke English, which was a benefit. And they were less expensive than some of the other English-speaking countries in Europe.
So iGaming is a big factor in Europe?
Yes, GSA got involved in identifying needs in the online gaming industry in 2012, believe it or not. And it was our land-based casino suppliers who identified certain areas that we should be focusing on. And we did. It’s taken four years. By that time that we got some of the larger online gaming manufacturers and suppliers on board—the Playtechs and the Microgamings—because they saw the need for standardization in this space. We’re just about to release our first product, TPI, which is a third-party game content interface. In other words, TPI connects the remote gaming servers with the platforms. It reduces the stack of the software needed to accomplish this. That is one of the first initiatives of GSA Europe.
The GGB Podcast sits down with Willy Allison, the owner of the World Game Protection Conference, on how the upcoming show will be different than any of the previous 12 conferences.
It’s been a wild year for security and surveillance in the casino industry. From several mass shootings at casinos around the world to the brazen cage robberies at casinos on the Strip and elsewhere to data breaches and hacking incidents, professionals in this field have been overwhelmed. But there’s help on the way.
Former casino surveillance executive Willy Allison has been producing the World Game Protection Conference for 13 years. This year’s show, held at Bally’s Las Vegas from March 12-15, will drill down into the recent troubling incidents as well as focus on its core roles of game protection and asset protection. He spoke with GGB Publisher Roger Gros about the conference in Las Vegas in February.
The fourth of the four casinos approved for the “northern tier” of New York state opened in February. Kevin Kline, the COO and GM of Resorts World Catskills, explains why the best was saved for last as it’s closer to New York City and has a powerful relationship with the Resorts World family of brands. Kline has had a long history with Harrah’s/Caesars Entertainment and came to Resorts World Catskills from a previous position with an Ohio casino.
GGB: This has been a really long time coming for the Catskills region. They’ve been talking about casinos in the Catskills for decades. What’s the general mood in the company approaching the opening?
Kevin Kline: There are a lot of folks who have been really focused on this opportunity for a very long time. Many of our executives at Empire Resorts have been part of this journey, dating back quite a while. I will tell you that, as someone who’s just joined Empire Resorts and is embedded now here at Resorts World Catskills, there is a tremendous anticipation, as you would expect—just an amazing energy throughout the property. And there is a genuine pride to see this magnificently designed and programmed property come to life.
What’s the reaction in the community so far to the debut here?
There are many stakeholders who have been very engaged at the government and community levels, making the case that this was the right location for one of the upstate licenses. So there’s a high degree of anticipation to see this finally come to reality, and similarly, there’s a lot of pride up here for what the Catskills was, and for what we have the opportunity to re-create in this new form.
How many employees have you hired, and are they mostly from the surrounding areas?
(As of) right now, we’ve hired close to 1,300. We’ll continue to ramp as the rest of the property scales to about 1,700 team members. As somebody who gets around to all of our team member orientations, one of the things that I like to do is to ask folks to raise their hands and ask how many people are from Sullivan, Orange and Ulster counties. We have done an amazing job of activating the local community, and finding some amazing team members as part of our Resorts World Catskills team. There’s so much enthusiasm and so much pride from the team that we’ve hired to be part of this opening, and to really be part of that revitalization of this region. It’s been a great story from a local employment perspective.
How far is Resorts World Catskills from Manhattan?
We’re 90 miles from New York City. It’s a pretty straight shot. And obviously, that’s to Manhattan; the surrounding New York metro is much larger, and so we have a great opportunity within that captive market to get our fair share and more of that business. We expect to have a major presence in this Northeast market.
This is the fourth casino approved several years ago by the state of New York in the Northern Tier region. The others ones haven’t performed that very well. Why will Resorts World Catskills be different?
We’re very different. We are not a regional casino. I mean, being 90 miles away from New York City, we’ve created an integrated destination resort, and that experience is meant to complement our location here in the Catskills.
The hotel product is 332 all-suite rooms, penthouses and villas, along with 100,000 square feet of gaming. In addition to competing for the premium mass market, we’re also focusing on VIP premium gaming, and we think we can be very competitive. Our property’s been designed to accommodate the premium Asian customer. We’ve built a very authentic Asian gaming and food offering, that provides both traditional and modern cultural influences.
We have a world-class upscale full-service spa and fitness, and a multi-purpose entertainment venue, with 27,000 square feet for entertainment, conventions and meetings.
We are redesigning and bringing back the iconic Monster Golf Course in 2019.
Part of our campus is going to include the Kartrite, a luxury lodge and indoor water park, that will open up early part of next year, with another 350 rooms.
We’re looking to build a service environment and a guest experience that will reach five-star, five-diamond standards. So, everything has been added within our footprint to be a true integrated destination resort that becomes a major draw.
Genting runs the most lucrative casino in the country, in Resorts World New York City. Do you have access to the list that they’ve built up down there?
One of the benefits of being a Resorts World brand are those cross-market opportunities. We’ve coordinated some efforts to come out of the gate and ramp up our property. We’ve been able to leverage the Resorts World database to get folks in here and get them excited about Resorts World Catskills as a premium experience to keep tourism and gaming revenues in the state of New York.
It’s a nice way to start, knowing that we can go out there and contact those who are familiar with the brand, and begin to introduce them to a new and unforgettable experience of Las Vegas-style gaming in the Catskills.
Affinity Gaming is one of the industry’s best-kept secrets. With properties in Nevada and several other states, Affinity is using unique marketing techniques to attract customers to its diverse casinos. Vincent Lentini, chief marketing officer and senior vice president, explains how the company uses the latest technology combined with unmatched customer service to create loyalty among its players. He spoke with GGB Publisher Roger Gros at the Affinity offices in Las Vegas in January.
GGB: Affinity Gaming has so many diverse properties: destination resorts in Primm, Nevada; a convention/locals casino in Las Vegas; locals casinos in Reno and several Midwest states. Is there an overarching marketing philosophy for all?
Vincent Lentini: To understand our properties over the last three years has been a journey, which involved fixing the properties on the marketing reinvestment side. When I first arrived, we had properties that were giving 110 percent in marketing reinvestment. We had to change that, and that was very painful for customers and for employees. They didn’t understand why we were doing it. But now in our third year of a new management team, we’ve completed that task. So we’re calling 2018 our pivot year, which means we’re going to focus on quality, value and experience for all of our guests, no matter what property you visit.
How do you segment the properties?
This is going to be a property-by-property approach. We’re going through a brand-positioning exercise at Silver Sevens (the Las Vegas property) and Rail City, our Reno property. For the first time, we’re going through consumer insights and brand development hypotheses, and they test that to set up a framework of what it means for these properties for value and quality for our customers. It’s pretty exciting, and we’ll be doing this for all our properties, but will approach each of them differently.
Marketing a property used to be relatively straightforward focusing around advertising and direct mail. What has changed in today’s world?
What has changed for us is our reliance on technology. This year, we’re building a data warehouse that will allow us to give specific offers to specific customers based on their preferences and what they play. We’ve created CRM technologies such as pinging cell phones to send a host out to greet a customer who hasn’t been there in 90 days, for example. We’re moving casino hosts to a more sales-oriented experience where we try to discover how we can extend the stay, convert more trips, or to simply thank them for being there at each stage of their trip.
What is some of the technology that has really performed for you?
We’re lucky because early on in our tenure, we brought in Duetto, and as soon as we plugged it onto the cash side of the business, we saw a 30 percent increase in our cash revenue. We have a motto here: “You can’t beat the machine.” So as a yield manager, the computer program and the machine are always going to be more perfect in the pricing strategy than we could do on our own. And now that Agilysys and Duetto are integrated with our booking engines, we make sure we take advantage of all the technology they have available.
How effective is social media?
It’s pretty important now and becoming more important within our demographic, which is mostly 55-year-old female slot players. Facebook is huge. It gives us the opportunity to interact with our customers at a level which is unprecedented in the marketing world. We use Facebook Custom Audience to go after specific entertainment acts that we have at Primm. For example, we target everyone who likes Styx. And oh, by the way, Styx is at Primm sometime in 2018. It’s an incredibly powerful tool that allows us to target a great but specific market.
The GGB Podcast features a discussion with Sally Gainsbury, the deputy director of the Gambling Treatment & Research Clinic at the University of Sydney, about her research into problem gambling issues.
The GGB Podcast features an interview with Sean McBurney, the general manager of Caesars Palace, on the unique place that property holds in the Caesars organization.
Tracey Chernay joined TransAct in May 2005 as senior vice president, marketing, bringing in-depth understanding and extensive experience in global marketing strategies to the company, which produces market-leading ticket printers, as they expanded international initiatives and implemented growth strategies across the entire business. In May 2007, Chernay moved to Las Vegas and assumed responsibility for product sales and marketing for the casino and gaming industry. She was promoted to her current position in June 2010.
What was TransAct’s product that really made your name when ticket-in/ticket-out (TITO) was introduced?
For TransAct, the product that put us on the map was the Epic 950 printer. We brought that out to be the next-generation TITO product that would meet all the needs of the casinos. We did a lot of research to find out what the needs of the casinos were, what they wanted from a technology standpoint. Our first installation was at Wynn Las Vegas when it opened.
The Epic 950 has been our flagship product for all these years, but we recently launched the Epic Edge. We’re excited about the performance of TITO in the marketplace for the player and the casino, and how the Epic Edge will improve performance. And every customer has the ability to upgrade to add couponing to the ticket. The Epic Edge offers a higher-resolution print. It’s a 300 dpi vs. 203 dpi with the Epic 950 and all its competitors. It gives us better-looking coupons and better read rates on the bill validator. But the Epic 950 isn’t going anywhere. It remains our flagship.
How have the printers improved over the years?
The 950 has been enhanced with firmware changes and minor alterations, but overall it had the right set of features, and has the upgradability that has been very popular. We have over 15,000 games with the 950 installed. The addition of real-time couponing has been the biggest change. It’s all about more time on device, creating loyalty and growing your revenue by offering a better experience.
With the convergence between gaming and lottery, TransAct’s role in lottery is interesting. How do you work there?
We are very active in the lottery space. Our Epic printers are in lottery terminals manufactured by IGT, Novomatic and other companies. They have to be extremely reliable. If you think about Powerball, in one weekend they may have to print tens of thousands of tickets. They are highly reliable, high-volume and very professional printers. In addition, our Epic 950 is installed in many video lottery terminals.
With no more coin-out slot machines, reliability is critical. How do you ensure that your printers don’t go down?
It is a critical function. It’s something neither casinos nor VLT operators want to think about. They don’t want to have to worry about down time. We’ve got an excellent quality control department that monitors all the components that go into the printer, the manufacturing process and the reporting process once they’re in the field. For the Epic 950, less than three printers out of 10,000 are returned for any failure in the warranty period. That’s extreme reliability. Even once they’re in the field for longer periods, they are very reliable. It’s all integrated with our quality group to ensure that reliability.
Tell us about your applications for table games.
Table-game technology is a big trend in the industry, and TransAct is part of that. At G2E this year, we brought out two new products that will assist operators in their pit games. The Epic 950 TT, for tabletop, and the Epic Edge TT. We had a number of table-game innovators showing the Epic products in conjunction with their table games. The idea is rather than have them take their chips away to the cage, they turn them in at the table and receive a TITO ticket to take to a kiosk in return for those chips. That will save time for fills and depleting the chips on the tables.
Vic Salerno is a member of the AGA’s Gaming Hall of Fame because of his legendary career as a legal bookmaker in Nevada. As head of American Wagering, Salerno launched the first mobile sports betting app, just before the company was acquired by wagering giant William Hill. Salerno’s new company, US Fantasy Sports, uses a parimutuel system to allow players to enjoy fantasy sports in all jurisdictions where fantasy sports are legal. His long background as a legal bookmaker allows him a unique viewpoint on the possibility of legal sports betting in the U.S. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas.
GGB: Everyone is waiting for the Supreme Court decision in the New Jersey case challenging the Professional and Amateur Sports Protection Act. But does it even matter these days? There is so much attention being drawn to how PASPA has failed so miserably that there seems to be some momentum in Congress to fix it, no matter what the Supreme Court says.
Salerno: Oh, I agree with that. I think that if (SCOTUS) allows it to stand, Congress will go and change the law. We all know illegal sports betting is happening. It’s not regulated and nobody’s benefiting—not a city or a state, or at the federal level. And it’s getting more popular, and it’s harder to detect now, with the advancing technology.
Let’s say PASPA is overturned or Congress passes something that puts it in the hands of the states to legalize it. What will the shape of the industry look like if that’s the case?
I think it’s going to be a Pandora’s box, if it opens, because every jurisdiction—and you’ve seen it in the past with gaming—creates different tax rates and different regulatory limits that will really affect it. And states don’t like to get along with each other, or do things the same way. They could take the Nevada model, and do it tomorrow; it’s worked for us for 60 years, or more, so why not take that? But states will want to do it their own way.
I think the biggest fear that I have is the states don’t understand the business is really gambling, and it’s really a low return on your investment. You can see that here in Nevada; it’s 1 percent to 2 percent of our gross revenue, paying a tax rate of around 6 percent. We have a hard time making it with 6 percent, so if you consider the rate Pennsylvania wants to impose—approximately 36 percent—I don’t know how people can make it.
When Delaware approved sports betting, before the courts said they had to limit it to parlay wagers, there was one property that built a Vegas-style sports book, spending millions, and ended up having to eat that investment. How do you recommend casinos approach sports betting?
Well, if you take Nevada, for example, the sports books are coming down in size, even in the big properties. They’re not as large. We used to build them for the Super Bowl, but it’s the same thing that’s been said many times. If you build a church for Easter, what do you do the rest of the year?
So I think that they should start off minimally. Use existing space. They all have conference or ballrooms where they can televise the events, and with today’s ways that you can wager, especially with the mobile application, why do you need to build these huge theaters? And I don’t think it’s going to attract that many new people. Especially in New Jersey, I don’t think people are going to drive to Atlantic City just for a Sunday football game, if they can wager on a mobile device or go to a racetrack that may be closer.
Let’s talk about mobile betting. That has really exploded here in Nevada. How important will it be for states to approve that kind of wagering? You were a pioneer in this field.
It is the convenience. Other states will come around, just like anything else in gaming. We saw what happened to Native American gambling, going across the country. We saw racinos come in across the country. I think the same thing’s going to happen here. It’s going to be a progressive thing, and the states that have the lower tax are going to do much better than the other states, because they’ll be able to give the customer the benefit.
So, if you have a budget, do you want to spend it on a huge facility, or would you rather spend it on marketing to a mobile app, where the person’s going have it 24/7? To me, it’s really a no-brainer.
You mentioned what a narrow margin sports betting has. How would you go into a state and convince them that you can’t tax this out of existence, because you won’t get the benefits that come from it?
In our good years—let’s say the average of the past 20 years—we averaged about 5 percent of the handle that we put through. Of that 5 percent, first of all, we have to pay the 6 percent to the state, and then the federal government has an excise tax, where whether we win or lose, we pay one quarter of 1 percent. So, you start off with those, and then you have your overhead.
So, I think the customer is going to go where he gets the best deals. We see that play out here. The places that have the better odds do much better than the other places.
The GGB Podcast features a discussion with Anika Howard, the senior director for product marketing for mobile, PlaySpot, and North American sportsbetting for IGT, on being named one of the 25 People to Watch in the January issue of GGB.
Anika Howard has always wanted a career tied to technology. She got the break she needed when she was recruited for the President’s Associate program at Harrah’s Entertainment (now Caesars), where she helped to open the permanent Harrah’s casino in New Orleans. She later took on responsibilities for interactive programs at Caesars, where she developed innovative interactive marketing campaigns that increased profitability and drove hotel occupancy. She also developed strategies for on-line advertising, social media, email marketing and acquisition and on-line customer service. Since joining IGT, Howard is responsible for overall strategy and marketing responsibilities for expanding IGT’s mobile and sports betting services and solutions in North America. She spoke with GGB Publisher Roger Gros at the IGT headquarters in Las Vegas on the occasion of being named one of GGB’s 25 People the Watch for 2018.
Geoff Freeman was appointed president and CEO of the American Gaming Association in 2013, succeeding the founding CEO Frank Fahrenkopf. Freeman immediately began transforming the AGA into an aggressive proponent of the gaming industry, changing the strategy of playing defense. Today, the AGA presents a positive image of the gaming industry to the world, and has taken the lead in the effort to legalize sports betting in the U.S. He spoke with GGB Publisher Roger Gros in Las Vegas in October.
GGB: When you joined the AGA it was somewhat disjointed. Do you believe the industry is more unified today?
Freeman: Here’s what stands out to me, and I think it’s typical of anyone coming into a new role. Whatever you thought you knew in year one or year two, you didn’t have a clue. You learn something new every year. I do finally feel like I’m beginning to get my arms around this industry, and some of the great opportunities we have in front of us. You mentioned unification; that has certainly been a major priority of the AGA. I think that for any industry organization to be effective, the prerequisite to that is a certain degree of unity among the membership. I think this industry has a lot of experience in fighting battles at the local level, the state level, and various countries around the world, where a market’s open. Obviously, unity is not necessary for fighting for a license. But unity usually is necessary for opening up a market. Unity usually is necessary for defending yourself against attacks. Unity usually is necessary if you want to advance some good ideas. And that’s why we’ve placed such a premium on unity, at this point in time. And I think it’s paying off. We now represent more than 90 percent of all commercial gaming revenue and more than 95 percent of all the supplier gaming revenue, and at this point, we represent more than a third of all tribal gaming revenue. We do that because with that unity comes power.
Sports betting has been your major initiative over the last year. Where do we stand now?
Sports betting has certainly been a high priority for us; it’s a big opportunity for us. We’re the American Gaming Association; we’re not the Sports Betting Association, but we can walk and chew gum at the same time. This is an opportunity to grow the market by billions of dollars. And we are very much focused on that with a two-track strategy: one through Congress, and one through the court.
We see three potential outcomes. Two of those are good, varying degrees of good. I think the least-likely outcome at this point is that the Supreme Court simply concurs with the lower courts and tells them they’ve done a great job. That’s not what the Supreme Court’s in the business of doing. It’s possible, but I think it’s the least likely.
The two more likely outcomes are, one, simply declaring the Professional and Amateur Sports Protection Act unconstitutional, which would instantaneously turn this thing over to the states, to regulate sports betting the same way they choose or choose not to regulate other forms of casino-style gaming.
Or, two, more of a nuanced position that sides with New Jersey’s workaround, and throws the ball back into Congress’ court, to address this issue once and for all. If we had to lean one way, I think we see that as probably a more likely outcome, which, again, this industry is well positioned to address, because of the great work we’ve been doing as an industry over the past several years.
A contentious issue when you first came on was online gaming. Just recently, we saw Pennsylvania approve online gaming, becoming the fourth state in the nation to do that. What is the AGA’s position today on iGaming?
Two things I’ll say about the issue of online gaming—and, as you said, it was a big issue when I joined in 2013 and the AGA did have a public position of supporting a federal poker-only solution. That was a flawed position. It was a flawed position then, it’s a flawed position now, and the AGA, given the lack of consensus in the industry, has taken more of a neutral position. So, two things I’d say about it. One, I wish I could put that genie back in the bottle. I wish we could do that process over again, because I think that the sports betting experience is informative as to what can happen when you’re patient, when you keep your discussions internal, and do the due diligence necessary to determine if you have common cause. I am of the belief that with the right information, with the right process, there is greater common cause in the industry on online gaming, but we didn’t go through that process, at the time.
Number two, the other big issue in online gaming is people certainly know the biggest proponents of online gaming. And they assume that the industry isn’t succeeding, or isn’t engaged, because of the opponents or the proponents. I would say the biggest factors to the lack of industry engagement on online gaming are the entities in the middle. And that’s where most of the industry is. Most of the industry doesn’t know what it wants to see in online gaming. Most of the industry isn’t yet convinced of the business opportunity there. And it’s because of that neutrality of most of the industry, rather than the people on the other end of the spectrum opposing, or pushing online gaming, that we have not been able to see any consensus to date, and why I don’t think you will see a rapid change in that position, at least specific to poker or other casino-style games.
Todd Cravens joined Galaxy Gaming a year ago as vice president of business development. He was promoted to CEO in July when the license application for previous CEO Robert Saucier was returned to staff at the Nevada Gaming Control Board. Prior to joining Galaxy, Cravens was CEO of Americas for TCSJohnHuxley. He spoke with GGB Publisher Roger Gros at the Galaxy Gaming offices in November.
GGB: You took over as CEO of Galaxy just a few months ago. What did you find when you got here, and have you made any changes at this point?
Cravens: When I got here, I found a team that was kind of hungry for some management, some leadership. I also found customers that were looking for more from us. So, one of the things that we’re focusing on is opening up new markets and bringing new products to those markets. But overall, I found a team here that was very interested in growing the company, very interested in growing themselves. And so, from a standpoint of coming in as a new manager, it was enthusiastic people who were saying, “What are we doing next?” That’s made my job a lot easier.
Galaxy just got licensed in Nevada. What does that mean to the company?
Nevada means more than just Nevada. It’s the gold standard of regulation, and other jurisdictions pay attention. It’s huge for us. And we’ve already had really good response from customers. We’re doing a number of field trials currently, and the first quarter of next year we’ll be rolling out more of our electronics, the progressive Bonus Jackpot System, so that’s really important for us. And obviously, a lot of our big, major corporate customers have a lot of properties here. So, that’s important.
You replaced Rob Saucier, who was the founder of the company. What role does he play in the company right now?
Rob oversees product, and business development. Rob is the guy who created Lucky Ladies (side bet), and he has a tremendous mind for games. And at the end of the day, I think that’s where his passion is. He remains the majority shareholder of the company. He’s on the board of directors. When we talk about a new game, or we talk about some business development work, he lights up. And I would be silly to discount 20 years of running this company, if I don’t go in and ask him some questions from time to time, to get some advice.
How important is technology? You have some great products, some great content, but technology is really the cutting edge of the business. How important is that to the company right now?
More than ever. Of the four areas that we’re focusing on, product is No. 1, and technology is a big part of that. I’ll give you an example. In the state of Washington, the No. 1 game for the last 20 years has been Spanish 21. And as you know, it’s hard to dislodge a game in a market like that. So, we came out with a game called Player’s Edge, and it was a similar product, but we put our BJS and our electronic progressive system on there, and it caught fire. And so, we have now roughly 45 percent or 50 percent of the market in six months. So what’s interesting to me is not just the progressives, but our methodology on it is that we are looking for a higher frequency, a lower payout.
Baccarat has been a growing table game in Las Vegas and beyond. Is this a trend in the gaming industry now that baccarat is becoming a much more important table game to the casino operators?
Absolutely. It’s not that we just see it here on the Strip, but a lot of our customers in the state of Washington need to do something a little bit different. And other places that maybe you wouldn’t think about. In Kansas City, they’re running baccarat tournaments.
I think baccarat is a really, really important part of it. EZ Bacc has been out there for a while, and we’re trying to think about this differently. But I think baccarat—not just for now, but in the long term—becomes a really, really important game for everyone.
If there is a royal family tree in gaming, the Fertitta/Sartini families would be it. And Blake Sartini II would be the crown prince. The son of Golden Entertainment Chairman and founder Blake Sartini and Delise Fertitta, the sister of Station Casinos leaders Frank and Lorenzo Fertitta, Sartini II has been raised in gaming. But things haven’t been easy for him because he’s related. He worked his way up through the company starting as a bartender and doing many jobs along the way. Today, Sartini handles the route operations for Golden, which means the PT’s, Sierra Gold and other brands in a Nevada company of 70+ bars and pubs, as well as a growing business in Montana. He spoke with GGB Publisher Roger Gros at the Golden offices in Las Vegas in October on the occasion of his being named one of the 40 Under 40 in the November issue of the magazine.
Andrew Tottenham has dedicated his life to making gaming better. Founder of the British-based consulting group, Tottenham & Co., he spent five years in the late ‘80s, early ‘90s heading up the EMEA (Europe, Middle East, Africa) division for Caesars Entertainment. More recently, he was the lead negotiator for Las Vegas Sands in its pursuit of an integrated resort in Spain. The client list for Tottenham & Co. reads like a who’s who of quality gaming companies: MGM Resorts, Rank plc, Sun International, Kerzner International Resorts, KPMG, Deloitte & Touche, just to name a few. He recently launched the Tottenham Report, European news and commentary, for CDC Gaming Reports. He spoke with GGB Publisher Roger Gros about his views on gaming in Europe and beyond at G2E in Las Vegas in October.
Ramesh Srinivasan was named president and CEO of Agilysys in January. Before joining Agilysys, he spent nine years with Bally Technologies, where he was instrumental in building a small systems unit into a $300 million annual powerhouse. He was later promoted to president, COO and finally CEO. At Agilysys, he is keenly focused on leveraging his comprehensive background in the gaming industry to drive the company forward as the industry’s leading hospitality technology provider. He spoke with GGB Publisher Roger Gros at the Agilysys offices in Las Vegas in October.
GGB: Agilysys has a lot of technology solutions for the gaming industry. But there’s other companies that do that, too. What is it that differentiates Agilysys from your competitors?
Ramesh Srinivasan: Especially with respect to gaming, our history includes a lot of gaming DNA. For example, our InfoGenesis POS solution started with casinos as the primary users, and shortly after that, we added LMS property management with a large gaming customer base. In fact, nearly all our products have some measure of the gaming industry’s needs built into their DNA.
This gaming-centric focus is not just evident in our products, but also in our people. You will find a lot of the Agilysys team has 10, 15, 20 years’ experience in gaming, and that includes me. Of course, this deep industry experience also applies to the non-gaming hospitality industries we serve. In addition, Agilysys is the perfect size for our markets. We’re in the $100 million to $300 million annual revenue bracket, which means we provide a higher level of customer service than very large vendors. We are very close to our customers, and they each get a personal level of attention that only a company of our size can provide.
Lastly, the breadth and depth of the products and services that we offer also sets us apart. Many of our solutions have been in the marketplace for well more than a decade, and we are constantly adding new features and capabilities. This, combined with the fact that Agilysys is the only comprehensive solution provider to focus exclusively on the hospitality industry, is how we provide a clear advantage for our customers.
Even before you left Bally, there was a strong trend toward non-gaming revenue. How important do you think that is today?
It is no longer only about gaming spend; it’s about non-gaming spend as well, and that has always been the key area in which we play. Between our solutions for the non-gaming parts of the casino resort and our robust integration with casino systems, we understand what our casino customers need in order to track and grow non-gaming revenue.
To accomplish this, our customers tell us they need a single view of the guest. They need to understand how much the patron plays in the casino, and how much the patron spends outside the casino. At Agilysys, we offer not only hotel property management and point-of-sale systems, but we also have software solutions for managing golf, spa, retail and food service. So, we are in a position to bring all that patron data together to facilitate the desired single view of the guest.
In addition, we have integrations with casino management systems, and other solutions that our customers use. With a product like rGuest Seat, for example, we can help customers to better understand the guest. When a patron comes to the restaurant, we provide the ability to address them by name, to understand their preferences, their allergies, their favorite table, and the food they prefer. So, as non-gaming is becoming more and more important, our role becomes more and more important as well.
In evaluating gaming and non-gaming spend, profit margins in a restaurant are smaller on food, but larger on alcohol. How do you balance that, and give the casinos a good picture of their non-gaming spend?
It’s about understanding the guest’s behavior, understanding their preferences, and thus their value. The casino industry—as is true of other industries—is only scratching the surface to address this challenge today. We have not yet taken it to where it needs to be.
With our products, we already provide a lot of information about guests, but we plan to do a lot more. Currently, the value of the guest is directly proportional to their spend. Agilysys’ technology is capable of providing insight into whether a guest normally stays in your hotel on a discount day, or even on a premium day.
Customers also want to know more about their guests. How often they play golf, for example. And what they prefer to do after golf. Access to this data is available, but the way each operator wants to look at it varies. We are progressing toward helping more of our customers access and analyze this information. That said, we acknowledge there’s still a long way to go.
Agilysys has been very good at buying companies, and also partnering with companies. How important is that to Agilysys that you acquire and partner with these other top-line companies?
We have very good partnerships with solution and service providers in every area. And we are good partners with competing companies as well. Not only companies that compete with each other, but also partner companies that compete with some of our ancillary products. Our philosophy and vision clearly is that we want to help our customers improve their guest experience and guest loyalty. That’s why we are in business. In fact, where we provide our own solution in some of those areas, but the customer happens to choose another product, we gladly integrate with them. We will do whatever we must to provide value to our customers so that they can increase their guest experience and loyalty. That is the only reason we are in business.
Jeff Hartmann got his start in the tribal gaming industry at Foxwoods after he began his career at Price Waterhouse. He later moved to the Mohegan Sun, where he was president and CEO. In 2011, he took over the Revel casino in Atlantic City and later started the Hartmann Group. His organization has a joint venture with Foxwoods to build and operate a Foxwoods casino in Biloxi, Mississippi. He spoke with GGB Publisher Roger Gros at G2E in October.
GGB: Tell us about the formation of the Hartmann Group.
Jeff Hartmann: We formed the Hartmann Group in 2012, and over the last couple of years we’ve had a lot of success. We do two things: We work with Native American and commercial casinos and do the Hartmann Group 360-Assessment, which is a deep dive on the complete operations—everything from operations to marketing to game protection to slot floor layout. And then we also focus on retail, dining and entertainment—what are the cutting-edge restaurants, entertainment and stores?
Non-gaming revenue is such an important element these days. How do you advise tribal casinos about how to enter that space?
It starts with the technology when the guest arrives. We need to recognize every guest. A lot of operators only focus on the gaming data, but we look at all the customer spend. What’s the holistic view of the customer and how do you acknowledge the guest? Are you using any retail beacons, and how do you recognize guests for some of their non-gaming behavior?
F&B is so important. The industry is moving away from food courts to food halls. In retail, the trend is now for personal shopping, so we try to bring some of that to the retail ventures.
It all starts with integration. You’ve got to have great service and all the touch points as well.
We look at the marketing data and reinvestment. We see a lot of tribal operators who get caught up unfortunately competing on price, like free slot play. We try to get them to focus on their products and their service and look at trends in their database.
How do you work with tribes? Each tribe is different and the approach has to be different.
I learned a long time ago you have to listen and ask questions, rather than tell the tribes what you have to offer. Tribes have been free of compensation for a long time, and now states are considering getting into the game or allowing other tribes to open casinos on non-tribal lands. There are additional pressures, so we try to get tribes to think less gaming-centric and more about the integrated resort. You have to take certain snippets of that if the tribes are in remote locations, but we try to help them think long term.
What has been a recent effort where you helped a client?
We recently worked for the Lucky Eagle Casino, which was facing the opening of the Cowlitz casino right in their market. We were able to come in and refine their operations and their marketing strategies. Some of the pundits said there would be a high-teens or low-20s impact on their revenue. We’re happy to say it was just a low-single-digit impact. We’re proud of the work we did at Lucky Eagle.
Tell us about the joint venture with Foxwoods in Biloxi.
It’s been a pleasure to reconnect with the tribe and Felix (Rappaport) and his team. That’s where I got my start, so it’s a great opportunity. Our project has 500 rooms, 70,000 square feet of convention space, 1,200 slots, 30 tables. It will truly have an authentic Gulf Coast experience. The site we have at Point Cadet is kind of like the Borgata site in Atlantic City. It’s on the back bay with great brands from the Gulf Coast. It will be an entertainment-centric experience. It’s been a fun project so far.
The GGB Podcast features an interview with Lou DeGregorio, the founder and president of Shark Trap Gaming & Security Systems, about his new shufflers that he promises will revolutionize table games.
Aristocrat has long been dominant in video gaming, but has been a late-comer to the reel games. After the purchase two years ago of VGT, whose strength was in reel games, things have changed. Jon Hanlin, Aristocrat’s VP of commercial strategy—gaming operations, talks with GGB about the new release of the RELM XL cabinet and the reel games that accompany it. It starts with the very successful Buffalo game and goes from there.
Hanlin, who he leads product and marketing strategy for the Gaming Operations Division, has wide operations experience with Caesars Entertainment, and explains why he believes Aristocrat will have a strong entry in the premium slot market with the new RELM cabinet. He spoke with GGB Publisher Roger Gros at the Aristocrat headquarters in Las Vegas in October.
It’s not surprising that someone under 40 years old has achieved a high position in charge of online gaming for a major casino company. What is surprising, however, is that Seth Young, who occupies that position for Foxwoods Casino Resort, has been at it for more than 20 years. As a 13 year old, he started his first online business and later went to law school before working for some iGaming startups. But his big chance arrived with Foxwoods and he says he’s having the time of his life. Young's interaction with land-based casino executives has given him a much wider appreciation of gaming overall. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas last month.
Eric Persson took over as general manager of Aruze Gaming in March and was promoted to president and COO in October. Persson has a long career on the operations side of the industry, most recently as the corporate vice president of slot operations for Las Vegas Sands. He takes over a company that has posted impressive gains over the past year. He spoke with GGB Publisher Roger Gros and Editor Frank Legato at last month’s Global Gaming Expo.
GGB: You came to Aruze from a career in casino operations. How did that experience help you approach the job at Aruze?
Eric Persson: When I knew I was going to leave Las Vegas Sands, the only company I wanted to consider was Aruze. And they’re exactly the company I wanted to go to. And that had a lot to do with the fact that my career has been spent mainly working with very successful businessmen—people like Michael Gaughan, Sheldon Adelson and Jeremy Jacobs at Delaware North. Coming to a company that’s very entrepreneurial by nature, with a true owner, like (parent Universal CEO Kazuo) Okada, was very appealing to me. And the reason is, I thought that I’d be able to effect the change more quickly by coming to an organization that had an individual owner that would allow some entrepreneurial freedom. And that’s exactly what it’s been at Aruze.
I wanted to take all the things that were hidden disrupters for me, as one of the largest buyers in the world at Las Vegas Sands, and the things that I didn’t like about buying slot product, and then solve those customers’ needs, because they weren’t just my issues; they were many customers’ issues. For example, I never liked it when I would buy hardware, and then the game didn’t work, and they’d want me to purchase a conversion. So, one of the first things we announced was a two-year performance guarantee. So if your product’s doing 80 percent or less of floor average, the first two years, we’re going to give you conversion. We’re going to make sure it performs.
From your first six months as GM of Aruze, what are the main lessons you’ve taken, that will help point the right direction forward?
One of the big things was getting back towards being focused on electronic table games, because it’s a space where we’ve been incredibly successful historically. We started competing more in the video space, and I understand why—because it’s appealing. It’s easy to create software titles. But the truth is, it’s a highly, highly competitive market. We’re never going to outspend our competitors.
But from an ETG standpoint, we’re a leader. You have to see our craps table, which solves a huge customer need, because at the end of the day, it’s a real craps table; you’re playing craps, you’re throwing dice. It takes one-fourth the labor a traditional craps table takes. Many more rolls per hour, never has dealer error. There is no theft. And also, when you normally would shut down the table for graveyard, it has an auto-play mode where you’re able to throw virtual dice and still continue to play.
We have a new roulette wheel that uses a technology called DLP Projection Mapping. It takes a traditional wheel, and it has a real ball. The ball spins around, so it’s an actual roulette wheel. But it has a lot of projection mapping technology involved. And so, it’s integrated into the game play. You can see the trends of what numbers have been coming up, just by eyeballing the board. When the number comes out, it will read the number to you. It has a meteor—when the ball’s spinning around, it looks like a meteor is falling. It’s just a lot of fun.
Do you still want to be a disrupter?
There’s no question about it. I came here, because I thought this would be the most amount of fun. I’m blessed in my life, because it’s not about economics, although I love getting paid. But what I really love is competing. And I felt like this was an industry we could compete in. We could compete really hard; I got with the right company. When you’re small, and you’re not tied to certain economic strategies, you can do so much more.
You’re dealing with some controversy with the clashes of the parent company and Mr. Okada. Is that a distraction for you?
No. At the end of the day, what you have is a company that is vibrant, that is very successful. And we have a shareholder, Mr. Okada, who is having issues—a lot of them are family issues; he’s lost control of his trust, although I think he’s taken a lot of steps that (will lead to his) regaining control of his trust formally over the next month.
You have to separate Aruze from the shareholder. I believe Mr. Okada will come out the other side. We’ve taken steps to mitigate risks. For example, I’m a trustee now. Mr. Okada has no management control, or economic benefit. (CEO and Chairman of the Board) Takahiro Usui and myself, we run the company. And so, we do have to take pragmatic steps, but we believe at the end of the day, Mr. Okada couldn’t say more forcefully how he believes that he’s been wronged here, and he’s going to prove it.
Kathy George was named president and CEO of the Firekeepers Hotel Casino in Battle Creek, Michigan in May. She joined Firekeepers in 2012 as vice president of hotel operations, and has now taken over one of the most successful casinos in the state. She discusses improvements to the property, community involvement and the assessment of the Michigan/Indiana market.
GGB: Bruce McKee and Brian Decorah left a healthy operation with lots of customer loyalty and employee enthusiasm. What was your first goal when you took over at Firekeepers?
Kathy George: Brian and Bruce did leave a great foundation on our property, so I just wanted to continue moving forward, continue our great service we already provide and expand our revenues. We want to keep growing and take our service even to the next level.
You came from the hotel side, so how did you get up to speed on gaming?
I was a general manager for Seneca Gaming Corporation, so I had experience in that area. But even when I worked on the hotel side, we did extra projects that exposed me to the different departments in the hotel. When the position opened up, the other people asked me to apply because they didn’t want someone from the outside to come in and change things, and it all worked out.
The Nottawaseppi Huron Band of the Potawatomi is a real example for other tribes. Casino gaming was introduced very carefully and thoughtfully from Laura Spurr to Jamie Stuck. How has it been working for the tribe?
The ownership is so good to us as employees and the community that I’m really proud to be part of the family. They work very hard to do the right thing and make the right decisions. Sometimes people might not understand our decision, but we’re not going to build or open something that’s not right for those involved.
It’s all heart-driven. Yes, we’re in business and we’re there to make money, but they also consider all the heartfelt things as well.
Brand recognition is important, and Firekeepers has done a remarkable job marketing to a wide region via the golf tournament and race sponsorship. How important is that to your success?
It’s huge. The partnership we have with Michigan International Speedway for the NASCAR race gives us millions of imprints around the world. To go in and see the tribal flag and the Firekeepers logo is incredible. And our relationship with the LPGA is just as good. It’s great to contribute to women’s golf and Battle Creek Country Club, and to see our logo and flag is just as exciting. It’s important to get our name out there.
You can have the greatest facility, but customer service is of course the most important element to success. How do you motivate your 1,700 employees to provide that great service?
My expectations about the service levels have been clear. Right after I started, we had team rallies that allowed me to get my message out. Between myself and the vice presidents, we’re out on the floor, we walk the property, they see us everyday. I think that helps a lot. They know what we expect and everyone wants to meet or exceed those expectations.
We also work for some great owners. The benefit package they provide us is very motivational. And just to have a great job in Battle Creek right now is a motivation in itself.
Everyone wants to be recognized. We have secret shoppers that identify exceptional service and we reward them with Keeper of the Month or Keeper of the Quarter. And we have programs where we can award cash, prizes or paid time off for those who give exceptional service.
New technology in the gaming industry has to be tested by accredited test labs to wind up on the casino floor. BMM Testlabs has been serving the industry for more than 35 years. Martin Storm took over the company in 2003 and has grown BMM beyond its native Australia to become a global provider available in more than 400 jurisdictions worldwide.
Storm explains how BMM is active in testing products for land-based gaming, online gaming, lotteries and more. He discusses the trends in the industry when it comes to skill games, eSports and more. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas earlier in October.
One of the largest mergers in gaming history occurred more than two years ago when GTECH/Lottomatica bought slot giant IGT. At that time, Renato Ascoli was appointed CEO of IGT North America Gaming & Interactive, based in Las Vegas. Ascoli talks about how the corporate cultures were merged, new products, innovative technology and the state of the gaming industry overall. But he reveals that his most important goal is to put the player first. He contends that unless his company understands the end user, it can’t service its casino customers as effectively as necessary. He spoke with GGB Publisher Roger Gros and Editor Frank Legato in his offices at the IGT headquarters in Las Vegas.
The Center for Gaming Research at the University of Nevada, Las Vegas is one of the most comprehensive research organizations covering the gaming industry. David Schwartz operates the center, but is also a renowned author. His Roll the Bones is the definitive history of gambling from the caveman to present day. Other books include Suburban Xanadu: The Casino Resort on the Las Vegas Strip and Beyond, Cutting the Wire: Gaming Prohibition and the Internet, and Grandissimo: The First Emperor of Las Vegas. He spoke with GGB Publisher Roger Gros in his offices at UNLV in September.
GGB: Let’s start with Las Vegas. The town took a hit during the recession but now it’s come back. Who’s coming to Vegas now?
Schwartz: It’s a different customer than was coming in 2006. They gamble a lot less and some don’t even gamble at all. The city has been smart, and adjusted to that new reality. Instead of trying to force people to gamble, they’re now valuing the customers by their non-gaming spend.
Jeff Hwang did a piece in GGB saying that the value on the Las Vegas Strip has gone down because they’ve replaced the small bargain joints with massive 5-star developments. Is that a danger?
It can be. I think what’s dangerous is a trend we’ve seen in the last year where room rates have gone up a lot and we didn’t see other ancillary spend rise, and some of it actually fell. So if you’re cannibalizing your F&B spend with higher room rates, you’re not giving players enough value. I wouldn’t say that if you lower your room rates other spend will go up, because we saw during the recession that didn’t happen, but you can’t go 180 degrees the other way, either. It’s not sustainable.
Has Downtown become the place where value has gone in Las Vegas? They’ve been producing some really good numbers the past 18 months or so.
I think it is. They’ve been employing a really successful strategy. They’ve known for 30 years they can’t have the white tigers, exploding volcanoes and all that. They’re going to compete on value and gaming conditions. If you want to come to Vegas and see a show and be wowed, you go to the Strip. If you want to come to Las Vegas and have a couple of beers and play blackjack or craps, you go Downtown. They’ve done a very good job at that. These sharp operators have shown you can be successful even in the shadow of these huge multibillion-dollar integrated resorts.
You’ve been doing a lot of research into eSports. Tell us what kind of opportunities that offers for the casino industry.
There are lots of opportunities. It’s not going to be a replacement for gaming, so it won’t be a question of someone making a decision to play slot machines or play in the Madden tournament. It’s more of an event type of thing where you’ll attract thousands of people to attend and watch eSports events.
As for betting, I don’t think it’s going to be big at all. Even if you could bet on it at a sports book, it will be a minor item. Given that sports books only produce 1 percent or 2 percent of total gaming revenue, eSports will be a small portion of that. And we don’t even know if most sports books will take those bets.
Do you think sports betting has a chance to be legalized across the U.S.?
I think it’s so popular, it’s going to be hard to keep it contained. Once you have the major leagues dropping their opposition—even if they’re not technically in favor of it, but just stop opposing it so broadly—I think it will be much easier to pass it. They’re really the only people who care. You have the typical anti-gaming people, but they don’t carry the clout of the major sports leagues.
When Don Guardian was elected mayor of Atlantic City in 2013, he beat all the odds. A gay, white Republican in a predominantly non-white city, he defeated a sitting African American mayor by cobbling together a diverse coalition of all creeds, races and sexual orientations. But soon after he was elected, a feud with a fellow Republican, Governor Chris Christie, eventually led to a state takeover of the city, stripping him of what little power he had, given that he had no allies on City Council either. Guardian is up for re-election in November, facing similar odds he overcame four years ago. He spoke with GGB Publisher Roger Gros, an Atlantic City resident, at his offices in City Hall in August.
Tom Nieman became president of the Association of Gaming Equipment Manufacturers late last year, taking over from Konami’s Tom Jingoli, who served a long term at the helm of AGEM. Nieman is senior vice president of marketing for JCM, and has been a respected figure on the manufacturer side of the industry for more than 20 years. He explains how the transition went from Jingoli and how the organization has moved forward in the past year. He spoke with GGB Editor Frank Legato in his offices in Las Vegas in August.
Kevin Ortzman has been with Caesars Entertainment for 13 years. He joined Caesars Atlantic City and Bally’s Atlantic City in 2012 as president, and in July was named regional president of all the Caesars Atlantic City casinos, including Harrah’s Resort. One Caesars casino, Showboat, closed in 2014, but the other three properties remain strong players in the market. Ortzman spoke with GGB Publisher Roger Gros at his offices in Atlantic City in July.
GGB: There’s somewhat of a perception that Caesars has not reinvested in its properties in Atlantic City over the last few years, because of the financial shape of the parent companies. Is that true, or not?
Kevin Ortzman: It is not true, but I do recognize that perception out there. I constantly address that. Over the last two years, we put about $200 million in the three properties. The majority of that went to Harrah’s, with the meetings facility, which was really intended to create new demand for Atlantic City, and which has been wildly successful.
And on the Boardwalk—also in the spirit of trying to create new demand—we created a new Wild Wild West, with a focus on entertainment and value. We are trying to go after what we believe is an underserved demographic, which we often refer to as the millennials, and that also has been wildly successful.
We certainly have a desire to continue to reinvest in the rooms, and we expect, once we emerge from bankruptcy, that we will be able to continue doing that. Fortunately, we just completed a 500-room project over at Harrah’s Resort, really intended to prioritize to be able to provide the overall product to benefit the meetings facility.
The Wild Wild West project has been impressive. You’ve spread out the games, there’s a big dance floor, a concert facility, and of course there’s a great bar that extends out onto the Boardwalk. How has that been working?
The intent was to create this immersive, fully integrated experience, because one of the few attributes that we understand about millennials is that they’re very social. They have a short attention span, so to be able to have a variety of stimuli, we feel that this has been very successful. We have an open-air bar right on the Boardwalk, the first of its kind. We have bull-riding, basketball and football games. We have live entertainment, beer pong, air hockey; so, a variety of different stimuli. And of course, the only $5 live table games in Atlantic City.
At Caesars, you’ve got the Gordon Ramsay Pub & Grill in the lobby. How has that been performing?
Very well. We continue to look at opportunities to create that excitement in our point of entry. It’s a bit of a challenge, because it is also where our front desk is. So, we don’t want to distract from the experience of checking in, yet create this great vibe that makes people realize they need to go there.
We just finished renovating nearly 300 rooms. What was formerly known as the Temple Tower is now the Forum Tower, which is essentially a replica of our Forum Tower in Las Vegas. So, we’re trying to create that expectation of a particular standard, when you go to any of our brands, like this particular one that’s in Caesars.
The conference center at Harrah’s really has made a difference. Tell us how that’s worked.
It obviously brings a different type of guest to Atlantic City, and lets them see what the entire city has to offer. It looks just like a Las Vegas conference center. Between the meeting space, and then all of the amenities that we have to offer, with the Pool at Harrah’s, the Red Door Spa and the restaurants, we have it all. The Pool is such a unique space to have a reception. We have so many things that professional and meeting groups want to have in a property.
At the Pool, we brought a gaming space downstairs to give it more energy. And then upstairs in the loft, we’ve really actually been looking at what they’ve done over at Bally’s, and seeing what we can do to model after that—just to create those stimuli that millennials want, and create new experiences all the time for those guests.
Caesars CEO Mark Frissora and MGM’s Jim Murren recently met with Governor Chris Christie and discussed a possible new convention facility connecting Harrah’s and the Borgata. Do you think Atlantic City would support a large meeting facility like they do in Vegas?
I don’t see any reason why not. Given the critical mass in the Northeast region, and the proximity, particularly as airfare continues to increase, we’re a more viable option for the region. We have a much larger selection, more cost-beneficial for these corporations than the major cities around us.
But there’s no real concrete plans one way or the other, other than we want explore opportunities to continue to create demand in Atlantic City.
Are you growing the non-gaming revenue in Atlantic City?
If you recall, it used to be 70-to-30 percent gaming in Las Vegas, and now it’s 70-to-30 percent hospitality. So, we hope to see that continued improvement here in Atlantic City. And we know lots of people are less patient than we are. We recognize that takes time. But Caesars is leading the way in trying to transform Atlantic City.
Rush Street Gaming is one of the most progressive companies in the gaming industry. With unique strategies at the Rivers Casinos in Des Plaines, Illinois; Pittsburgh, Pennsylvania; and Schenectady, New York, and SugarHouse in Philadelphia, maybe the most unique was the launch of an interactive division long before the major casino companies realized that interactive could be helpful. Richard Schwartz, an experienced iGaming executive from WMS Gaming, joined Rush Street to lead the effort. The unusual launch of a real-money iGaming site in New Jersey has been a big success, and laid the groundwork for further growth for the company. Schwartz met with GGB Publisher Roger Gros at the AGS GameOn conference at MGM National Harbor in June.
Although still quite young, Andrew Burke has one of the longest tenures at the innovative slot manufacturer AGS. Joining AGS in 2008, he was instrumental in the success of the Colossal Gaming and Cadillac Jack acquisitions, helping ensure a smooth integration of both companies into AGS. With his contributions, the momentum of the newly launched Orion premium cabinet has been the strongest in AGS’ history. He was recently promoted to senior vice president of slot products and reports to Executive Vice President Matt Reback. In his new role, he will be focused on strengthening AGS’ slot product strategy and operations to ensure output supports the rapidly growing demand in Class II and Class III markets. He spoke with GGB Publisher Roger Gros and Editor Frank Legato at the AGS GameOn conference at MGM National Harbor in June.
Eric Meyerhofer had a plan when he was leader of ticket printer FutureLogic, a company he co-founded in the 1980s. He saw an opportunity to introduce skill-based gaming to the casino industry, and formed Gamblit Gaming to accomplish his goals. Gamblit has made a big splash at industry trade shows, and this year followed it up with hot new games that are starting to spread across the Las Vegas Strip, Southern California casinos and beyond.
GGB: Gamblit Gaming is producing skill games. Is that your primary business?
Meyerhofer: That’s the term everybody is using. There is activity required by the player—some type of aptitude. You can call them skill games, but I like to think of them as a more interactive game experience. But yes, all of our games have some sort of skill required; it’s not just chance only.
People have called Gamblit a disrupter in the gaming industry. Do you agree with that?
We don’t see ourselves as a disrupter; that’s an important point. We think the market is bifurcated. The older generations that play slots and like them are perfectly happy. But there’s an entire second market that lies alongside it. We don’t disrupt those people from jumping into slot machines. We don’t think they’re going to go there anyway. For casinos, it’s going to be very challenging.
You’ve recently placed your first games on the casino floor. How is that going?
We’ve run focus groups prior to putting it on the floor, but you can’t really simulate real-life gambling. We needed to get it on the floor to see how people would react. So now we’re getting live play experience. The good news is that the first two games we’ve released are multi-player games, and they seem to be resonating with players.
There are many operators who are willing to take a chance. It’s going to take a while to figure it out, but from the data we’ve seen in the preliminary results, we’re pulling newfound dollars. That’s very clear, and our players are 15 to 20 years younger on average than the traditional slot player.
Why did you choose multi-player games first, rather than one of the single-player games you’ve also developed?
I think it had as much to do with what was going to be ready first in our own internal development process than anything else. We always wanted them to come out in close proximity to each other, and we plan to roll out TriStation (single-player machines on a carousel) very shortly.
Who is the player for your games?
Our target demographic is usually with a group of friends. We do see individual players walk up to the table, watch and study it, before they decide to sit down with strangers. But the majority of people who have been playing it are there with friends.
The player who is walking around on their own or the player who values time on device is going to be able to find that with the TriStation games. They’re very different, much more like video games than anything else. The multi-player games are simpler because you’re competing with other players, which adds a dimension of depth. The solo-player games are deeper games and bring a more immersive experience.
Dave Rebuck is now the longest-serving director of the New Jersey Division of Gaming Enforcement in its 40-year history. But with a new governor being elected in November, it may be his last year. From his initial charge to reform the regulatory system in New Jersey, he has dealt with a myriad of issues from online gaming to casino closures and more focus on new technology. He spoke with GGB Publisher Roger Gros at his offices in Atlantic City in June.
The last time we talked, Atlantic City was in dire shape, having lost five casinos in a little more than a year. Are things more stable now?
Anyone who looks at the numbers in Atlantic City over the last 24 months would say we have stability, even though we had the Taj Mahal and two of the three Caesars properties in bankruptcy. We weren’t seeing that continued downturn in revenue that was in play for five or six years before that. For the eight months or so since the Taj closed last October, we’ve had a real upbeat. But we have to be cautious because Atlantic City is still a very sensitive market to outside influences. The government is under a state monitor, trying to get its feet under itself. The casino industry, however, now has a very strong foundation.
When the Taj reopens as the Hard Rock Atlantic City next year, will the market be able to absorb it?
Yes, because I think Hard Rock will expand the market. With their database and brand awareness, people are going to want to come here. They’re being very aggressive, putting significant capital into the property, but they have a lot of work to do over the next nine months.
Last November, New Jersey voters overwhelmingly defeated an effort to bring casinos to North Jersey. Is that the last we’ve heard of that issue?
A lot of things are going to happen in the next year. We have a gubernatorial election and all the seats in the legislature are up for grabs, so we have completely new leadership. Whether or not that becomes an issue will be up to them. If Atlantic City can turn itself around and this market improves, you’re going to have less need from a public policy standpoint to expand gaming in other parts of the state. The operators here have that completely under their control.
While casino executives in Atlantic City are almost unanimously impressed with your actions since you’ve been head of the DGE, they are still concerned that regulatory costs are too high. How do you respond to that?
I can give them two numbers. When I started in 2011, $70 million was expended on the oversight of gambling in Atlantic City. Last year, it was $46 million. We had 343 employees overseeing the work of 11 casinos. Today, for seven operating casinos, we have 255 employees, and 25 people on the books for internet gaming.
I’m conscious of their concerns about the cost of regulation. We’re constantly looking at ways to reduce costs. But it’s all about integrity. I tell them if I can’t guarantee your integrity then you’re in big trouble. So I won’t sacrifice integrity simply to cut costs.
In the online gaming world, why hasn’t New Jersey completed interstate compacts with Nevada and even with the United Kingdom, which you were examining last year?
I have re-opened dialogue with AG Burnett (chairman of the Nevada Gaming Control Board) to determine if we can get an agreement to share liquidity for online poker. But since 90 percent of our revenue comes from online casino games other than poker, it really doesn’t matter too much until Nevada allows all casino games online.
With the U.K., we tried. We have three common operators between the U.K. and New Jersey, but the stipulation that we are required to house our servers in Atlantic City was a hurdle we just couldn’t overcome. Maybe the legislature will address that in the future, but it’s something we can’t change at our level.
MGM National Harbor has been an unqualified success in the Maryland casino market. The closest casino to Washington, D.C.—you can actually see the monuments from the deck of the hotel’s podium—National Harbor quickly took the top spot in the revenue race. Bill Boasberg, the general manager of MGM National Harbor, explains how it involved more than “build it and they will come.” The company had to understand the market and respond to its demands quickly after opening, or all would be lost. He spoke with GGB Publisher Roger Gros at the National Harbor property on the shores of the Potomac River early in the summer.
GGB: You’ve been open less than a year and are already dominating the Maryland market. That isn’t a coincidence, is it?
Bill Boasberg: We’re getting better every single day. The business is stabilizing every day. Our service is getting better every day, we’re learning about our customers every single day. When you open something this big, you can do a lot of planning but there will always be things you could have done better. So we’re making tweaks to things that we think we can do better. And we’re listening to our customers, and our company gets great feedback and surveys from our customers, so we’re better able to make adjustments based on the customer feedback. So, we’re real pleased with where we are right now.
How long did the curiosity factor last? And now have you determined who your core customers are?
Probably the first 90 days we had a lot of people really just walking through, coming to see the place. And while it’s not quite as crowded as it was in the first 90 days, the people are still coming to enjoy the restaurants, go to the shows, spend time in the casino, and so forth. And it’s good that it’s not as packed as it was in the first 90 days, because now people who are here can breathe and enjoy the space. Obviously, it’s easier to service the customers, and you can get a better handle on the crowd. We recently had our first concert out on the plaza, and we thought it created a great vibe and energy on the property. I think we’ll continue to be busy. A lot depends on what shows we have, special events and entertainment. And our convention business on property now is really taking off, and so, we’re in a good place.
You have a beautiful 3,000-seat showroom. How has that worked so far?
It’s been fantastic. We do a couple shows a week—sometimes three or four. I don’t think there’s been one show that hasn’t sold out. And we’ve had great acts in here so far—Bruno Mars, Stevie Wonder, Sting, Billy Crystal and others. So we have had comedians and concerts, and we had our first Vietnamese Asian act and it was a huge success. It sold out, and we had people waiting in the lobby, in the conservatory, to get in the show.
You have a very good Asian business—a full pit of baccarat tables. Is that a core business of yours?
It sure is. In our Asian pit, we have 16 midi-games, and we also have midi- and mini-bacc in our high-limit area. Within a 10-mile radius, there are about a quarter of a million Asians, so obviously it’s a core focus of ours. It’s been very successful, and we think it will grow even more.
As the name implies, MGM is in National Harbor, adjacent to an area that was really built around conventions and meetings, with the Gaylord Hotel as the flagship, really a meetings and convention hotel. How do you work with that facility?
Our facility is more intimate, more high-end than the Gaylord. We have about 40,000 square feet of convention space. The Gaylord has 500,000—one of the largest on the East Coast. We have a very good, positive relationship with Gaylord. If there’s a big group—and their groups are generally large-scale—which we could not put on, they’ll come over here, they’ll do dinners or break-out meetings in our rooms or theater. We’ve established a great relationship with Gaylord since we came to town, and we consider them a partner of ours.
Let’s talk about gaming. Your slot VP (Alex Alvarado) created a slot “draft” where the slot manufacturers could place the machines on the casino floor you were going to buy from them. Pretty innovative. How has that worked?
Alex came up with the concept of letting the different manufacturers help with the placement of the machines. They helped us lay the floor out. That’s been successful, but like any casino, we’re figuring out what machines are working, and which aren’t, and what’s popular and what’s not, what location is better than the other, and we’re making adjustments based on that feedback.
I understand the table games have exceeded your expectations.
Yes, the table market’s been fantastic, and it’s really been all games. I’ve never seen such a craps volume as we have here. Roulette is extremely popular, and obviously blackjack does very well. And it’s the same thing with poker. Our poker room has been No. 1 in the market right from the start, win per unit, and we think there’s more to grow as well in the poker room.
The Sands China empire in Macau is vast and varied. The leadership of the company requires knowledge of all the elements of an integrated resort. And Sands China has multiple IRs. Dr. Wilfred Wong was appointed president almost two years ago, marking the first time an ethnic Chinese was put in charge. Wong has presided over the construction and opening of the Parisian, the latest must-see attraction in Macau. Wong met with GGB Publisher Roger Gros at his offices in the Venetian in May.
GGB: Explain what impact the opening of the Parisian has had on the other Sands China hotels, and on the company as a whole.
Wilfred Wong: This latest addition to the Cotai properties really complements what we already have. The Parisian is a themed resort and particularly targets the mass market. We think that’s where the growth is, and the performance of Parisian after its opening testifies that this is the right approach. We have a retail mall that is targeted at fashion. We have another 14 to 15 F&B outlets. And of course, we have all kinds of non-gaming amenities. We built a half-size replica of the Eiffel Tower. We have a themed swimming pool, and a children’s play area.
What people normally worried about is whether there’ll be any cannibalization of the business, and in fact, what we saw was, there was no cannibalization. There was a net increase in our business volume, the revenue, as well as the overall growth of the Cotai property.
What has been the reaction of the customers to the property?
The reaction has been good, because we really targeted this property as an affordable luxury. It is luxurious but also affordable. And a lot of the visitors come for the MICE business. They like the theme, they like the public space, they also like the gaming and non-gaming facilities. And a lot of them like the restaurant in the Eiffel Tower, which is unique.
How did you handle staffing the resort?
We have a mix of about two-thirds experienced staff, and one-third newly recruited. So, of the 6,000 employees, 4,000 had worked in our properties before. And this really gave us the opportunity of assembling a very effective team, from day one. We started training six months before opening, so, from day one, there were very few hitches.
Let’s talk about the rebound of revenue in Macau. Luckily, Sands China wasn’t hurt as badly as some of the other properties, because you didn’t depend on the VIP market as heavily as some of the other properties did. Now that it’s coming back, where do you see most of your revenue coming from?
The mass market is still very much the growth area. The market has been growing very fast, and we grow faster than the general market. So, we are focusing still a lot on the mass market, where the contribution to profit is better. But, we never forget about the VIP segment, which is equally important. We remain very competitive. We still try to improve our services to our VIP customers. So I would say that we’re trying to cover both the VIP and the mass segments, but obviously, with all the non-gaming facilities available, we have a better chance of growing the mass market than the other competitors.
The Hong Kong-Macau-Zhuhai bridge is getting close to completion. When the bridge opens, how do you expect that to operate, in terms of how the ferries have operated in the past?
We are in constant touch with the Macau government. I think at this stage, they are still talking to the Hong Kong government on how the bridge would operate. I envisage that there will be a limit on the number of private vehicles being allowed into Macau, because Macau is a small place, but there should be licensed shuttle bus routes, which will be able to take passengers straight from the Hong Kong airport to Macau. And hopefully, that is going to overcome one of the major hurdles that the MICE event organizers normally face, and that is you have to clear customs twice.
I think Zhuhai is going to be another important link, because the high-speed rail in China goes to Zhuhai, and if we have the bridge, we can have shuttle buses picking up passengers from the rest of China, through that bridge, to Macau. That’s also very good for our business.
Is it difficult to really get the message out to Chinese markets, because you can’t even mention gambling in China?
Well, if you look at the building area of our properties, only 5 percent is gaming and 95 percent is non-gaming. So, it’s not difficult for us to show that range of services and facilities that we are offering. Plus, the entertainment that we’re promoting really gives us an edge in any overseas promotion.
There have been some reports in the media that the government may require all Macau operators to reapply when the concessions start expiring in 2020. What do you know about the process?
We haven’t heard anything from the government. Obviously, it’s getting closer to the period where the government needs to tell us what to do. But certainly, the government is having to evaluate the huge amount of money that all six of us have invested into making it work, and especially in contributing to the community of Macau.
Any suggestion that there might be additional concessions issued?
We don’t know. And obviously, this has to take into account President Xi Jinping’s comment about Macau not over-relying on gaming. I think the government has to consider that.
The GGB Podcast features a discussion with David Lopez, the president and CEO and Julia Boguslawski, the vice president of marketing, for the gaming equipment manufacturer, AGS, on how the company is doing things differently for its customers.
Lawrence Ho has been a major player in Macau and other Asian gaming markets since before the handover of Macau to China in 2002. He formed Melco International to forge his own casino company in partnership with Crown Resorts. The recent departure of Crown from the joint venture means a new era for Ho and Melco. Ho spoke with GGB Publisher Roger Gros from his offices in Hong Kong in May.
GGB: Tell us about the recent departure of Crown as co-owners of your company.
Lawrence Ho: We think it is the conclusion of the most successful gaming partnership ever, because in the gaming space, there aren’t many partnerships that last very long. And most of the time, when they end, they end in very bitter disputes and major lawsuits. James (Packer, Crown executive chairman) and I are still great friends. We’re both young. We’re both optimistic about the future, and we still might do something down the road together. So, who knows?
But at the same time, for Melco and myself, it’s extremely exciting. Because I really see the market turning around, not just in Macau, but literally, in all markets driven by Chinese economies and China’s export of tourism.
We just got a chance to see Studio City for the first time and it’s a pretty spectacular property. How is that performing now?
Studio City is doing much better. Studio City opened in October 2015 at a time where Macau was going through a much tougher time. And so if you look at Studio City, and the company that opened before, the Galaxy Phase 2, both of those properties really opened during some kind of tough times in Macau. Studio City is doing better.
But Studio City’s main investment thesis was always based on the coming of Lotus Bridge, which is the second border gate between China and Macau. But today you see the footbridge that the Macau government is currently building is not completed. And between us and the immigration building, the government is also building a massive light rail station. And so, the Lotus Bridge, which was supposed to be the most popular route to Studio City, is still blocked, and it has been blocked since its opening. Hopefully, sometime in the second half of this year it will be completed.
The new tower at City of Dreams also looks pretty spectacular. What’s the opening date on that tower?
Morpheus Tower, which is the last phase of City of Dreams, is due to open before next April. We’re less than a year away, and we really look at the opening as CoD 2.0. When City of Dreams opened in 2009, it was a very different market, and a different property, but over the last few years, we’ve solidified our position as the top premium mass and premium direct property. And with the unveiling of Morpheus, it really completes the retail loop, and we’ve done a lot of work on upgrading and improving the retail proposition. And so, it’s a significant moment for City of Dreams.
We’re very proud that this was one of the last properties designed by the late Zaha Hadid. She was amazing. But at the same time, what she designed was very difficult to build, and that’s why it’s taken as long as we have, and really taken a lot of resources, capital and expertise.
You mentioned the rebound of the gaming revenues in Macau. What do you think is driving this?
First of all, mass-market, for the last 12 months, has already taken over. Mass has taken over. It’s over 50 percent of the revenue. Since mass is four times as profitable as VIP, for operators, that’s very significant. And I don’t see that trend going away.
Deep down, when you look at Melco Resorts, it really is a company that is focusing on the growing middle class. We think of ourselves as pioneers, focusing on the growing middle class of the world. That’s really what this company is about. And we’ve had this feeling over the last 10, 12 years, which is, China is going to be the biggest contributor to that growing middle class, and we should take advantage of that.
A few years ago, Macau CEOs kept telling us that Macau has only penetrated 1 percent or 2 percent of the Chinese market. Is that still the case, or has that percentage gone up a bit now?
It’s gone up a bit, but again, if you look at Macau, it’s really been mainly about Guangdong. Guangdong is really just about the business of Macau. So it’s not just like 1 percent or 2 percent of China anymore, because Macau has broadened and reached through more parts of China, but it’s still a very low penetration base, compared to most mature gaming jurisdictions.
Tell us about your interest in Japan and how you would feel about being a minority partner in a Japanese casino, as the government seems to be favoring.
I look at Japan as the future of growth of the north Asia market, or north China market.
We’ve always wanted to be a very open and transparent company. So being a minority partner would be a tough one. But Melco has already been very open-minded and innovative, and our single goal is to be part of that market. So, I wouldn’t say it would be a flat “no,” but we would really want to understand how many licenses and work out the possibilities first, before we would even consider signing up for a deal like that.
The GGB Podcast sits down the Steve Walther, the senior director of product management and marketing for Konami Gaming on the changing world in slot manufacturing.
The GGB Podcast features an interview with Eric Persson, the general manager of Aruze Americas, on how his former life as a slot operator will help him in his new position with a leading slot manufacturer.
The GGB Podcast features an interview with Matt Wilson, the managing director of Aristocrat Americas, about his new position with the company and his strategy going forward.
As a longtime employee and later a member of the Nevada Gaming Control Board, A.G. Burnett was appointed chairman by Governor Brian Sandoval in 2012. An attorney, with expertise in corporate securities, Burnett has been instrumental in some of the recent developments in the Nevada regulatory landscape including skill games, eSports and the expansion of sports betting. He spoke with GGB Publisher Roger Gros at the GCB offices in Las Vegas in May.
GGB: You were appointed chairman just in time for the introduction of iGaming, the initial wagering on eSports, the definition and introduction of skill games, the expansion of sports betting, and dozens of other issues. Does it seem like it’s always just been one thing after another?
A.G. Burnett: I’ve been here for 19 years, and as luck would have it, or chance would have it, or skill—one of those—I would not have been here this long, had it not been for the great people here. We’ve got 400 people on staff. It’s just been an incredible working environment, to work with some of the greatest people I’ve ever been able to work with. But yeah, you’re absolutely right; it’s been one thing after another, continuously, but that’s gaming.
When you took over, there had already been extensive hearings on iGaming. What were some of your first concerns in Nevada, when iPoker was launched?
When iPoker was first being launched, I was on the Gaming Control Board, and I knew that it was going to be a big event. I knew that it was going to be something that we had to look at strongly as regulators, and I think we all collectively had a feeling at the time that it might be a game-changer for the state of Nevada.
My greatest fear was twofold. One, that it would flop immediately, and not get off the ground. You would have a green light, launch, and things would shut down. And two, that some patron would be ripped off, both of which would be embarrassing events for the state of Nevada. We don’t want anyone to be harmed when they play a game or a slot machine; that’s why we regulate in the way we do. It went off well. There weren’t any of those types of scandals or events or hitches. Things went up, and they were off and running.
More than a year ago, Governor Sandoval signed a bill, reaching an agreement with Delaware to share poker liquidity. What’s happened with that agreement, and is it working?
It’s the Multi-State Internet Gaming Agreement. It’s working well. Our colleagues in Delaware have been great to work with. It is something that is not on my list of problems, day to day. Staff at the Gaming Control Board has meetings, periodically, with Delaware, and the numbers aren’t big enough, or the number of licensees aren’t large enough to require much more than that at this point. But I think that it has been a success from our perspective.
Sports betting revenue in Nevada has grown pretty substantially over the past five or six years, mainly because of in-running betting, as well as mobile betting. What kind of role will Nevada play if and when sports betting is legalized on a national basis?
That’s a really good question. And I don’t have an answer, because I think it depends on what a federal law does. If (the Professional and Amateur Sports Protection Act) is just repealed, without any further guidance from Congress, that’s one thing. If there is a law passed in its place regarding sports betting, and the states’ ability to do that, I would imagine it would look a lot like the other gaming laws that are promulgated by Congress, which would be to ban it, but say that if a state wishes to do it, it can enter into that activity, as long as it’s legal within the state. So, if that were to occur, I would imagine other states would ask us questions as to how we regulate sports betting. Our licensees will be in those states. It’s going to be the Nevada licensees exporting their knowledge and expertise into that, which I think is incredibly important with sports betting, because it is so nuanced, and so highly specialized.
Let’s talk about skill games. Why was Nevada so quick to figure out how this was going to work?
There was a body created to study the impact of technology on gaming. I was part of that, along with Chairman Pete Bernhard of the state Gaming Commission, and that committee’s duty was to study what’s next, and try to determine what Nevada should do. The result of that, obviously, Nevada needs to continue to be at the forefront. What does that mean? For me as a regulator, it meant that we regulate to the statutes.
Eventually we called it a hybrid game, and I consulted with my technology division staff, and they agreed. And so, that’s what ended up being SB9—this concept of the gaming device, the traditional slot-machine gaming device, and then there’s a hybrid game.
The mandate that I gave my staff was this: Right now in Nevada, there’s an end zone. The very first statute says, gaming has to be regulated strictly, it has to be competitive, and these are the things that we have to do to protect the state, and the industry, the state’s population, and all 40 million visitors that come here every year. I said let’s move the goal post. Once we do, it’s going to be up to the industry to fill that space.
It’s not a stretch to call Andrew Cardno a “visionary” for the gaming industry. Cardno was one of the first to realize the possibility for data that casinos have collected for a couple of decades now. He says the depth of this information makes the gaming industry a leader in the data analytics field. As chief technology officer and founder of VizExplorer, Cardno has created many different programs and platforms the casinos can use to improve their fiscal performance on the gaming floor. He spoke to GGB Publisher Roger Gros from his offices in San Diego in March.
GGB: For many years, casinos were very in touch with their players. They knew who their players were, they had VIP and casino hosts, and direct mail that was very successful. But a lot has changed over the past decade. How do analytics help in knowing the player?
Andrew Cardno: The way the industry has adapted to analytics is something that we all should be proud of. We’re a leading industry in analytics. It always brings me back to one of my good friends, a GM at a casino in Tunica, who told me that we’re like this collection of small businesses. We’ve got food and beverage, we’ve got hotel, of course we’ve got gaming, and we’ve got different kinds of gaming. And that drives a need to be able to be fully informed about our customers.
The industry has a greater need to bring data together in real time than any other industry I know of. If you don’t have a complete picture of your player, you’re not giving that customer the right kind of service.
Tell us about how VizExplorer came to be. What was the inspiration?
When I founded the company, I set out with a goal of never having to build another data warehouse again, and it’s a bit of a joke, because it’s what I was doing for many years.
But to leverage the technology platforms that are out there, to bring together all the data in real time, we developed our integration hub that allows that data to come together and to be used to its greatest gaming optimization. So, we used the data infrastructure we put in place, for this one application. We proved the value of having that real-time data, of having all the data about gaming machines, so I could understand what games people like. Or, how are my preferences for games changing?
We just solved one of the hardest questions that I’ve worked on in gaming, which is: If I bring a new game onto the floor, taking out participation and all the other costs associated with it, what is the incremental revenue from that game—how much of it is truly incremental to the casino? We’ve solved the math behind that, and we’re really proud of it.
Do you provide any information to help casinos make those decisions about what slots to add or remove and where to place the machines on the floor?
Absolutely. At one point, I won a Smithsonian Laureate for Heroism in Information Technology for slot floor optimization. And that was even before I understood how important the customer was. We kind of have this joke at VizExplorer, in the data science team, that we keep learning new math models, and then inventing even better ones through replacement, but at the core of understanding how to do that is the customer. So, we used to analyze gaming machines based on theoretical win per day, or actual win per day, or handle pulls, or some other metric that was a measure of the performance of the game. And it worked really well. But we were mostly under-supplied and there was plenty of opportunity for growth in the industry. It wasn’t that difficult.
So, what changed?
Well, in today’s world, we’re mostly over-supplied. So, no longer can you optimize your games in that way; it just doesn’t work. Just think about the simple example of the high-limit room; it just doesn’t work to add more games in the high-limit room.
So, you need to look at the floor through a different lens. And the lens that we bring forth is the lens of the customer. We do a market-basket analysis. We have an issued patent on preference filters, for analyzing the market basket in the casino. It’s one of the hardest math problems we’ve solved. So now, irrespective of the performance of the game, I’m looking at what I need to do to make my customers get the experience they need to get. So, I’m optimizing the customer experience. Very different math models. We’ve been really successful with that.
It’s completely flipping analytics on its head. This is something slightly provocative, but I don’t really care about the slot win-per-day metrics. We need to focus on optimizing the customer experience, that every customer gets the games they need, so it can fill out all those market baskets and optimize all those market baskets on the floor. And just to defend that a little bit, because I know some people might be a little bit agitated by me saying that, just think about video poker. It’s not the greatest-performing game on the floor, but it would be unthinkable to remove it, especially in Las Vegas. You just couldn’t remove it, because you would lose those customers.
So, you have to work really hard on optimizing your video poker games, and then you go to your video reel, and your video slot, and your different types of games. It completely changes the way you look at a gaming floor, and we’ve got a deep track record of doing that.
Brett Abarbanel is director of research for the University of Nevada, Las Vegas International Gaming Institute, joining the college almost a year ago. Since then, she’s concentrated on eSports and what it may mean to the casino industry. She’s a graduate of UNLV who spent some time doing gaming research at UCLA before returning to her alma mater. She’s also a serious poker player. She met with GGB Publisher Roger Gros at her offices at the IGI in March.
GGB: You’ve been concentrating on the eSports discipline since you joined the UNLV International Gaming Institute last year. How did you get into that?
Brett Abarbanel: I’ve been doing that for a very long time. Decades actually, but casually. I’ve never played that frequently, mostly because of time constraints. As fun as it is, I simply am not 8 years old anymore, so I just don’t have the time. And as I was playing, my husband actually plays quite a lot of video games, and I was noticing that gambling kept sort of cropping up in all of these, even if it was in just a simple RNG function in World of Warcraft, where you can bet on random games with coins of value.
So, this kept cropping up, and we started seeing, as these tournaments were getting more and more popular, the sport was starting to become legitimized. And it’s fairly established, sociologically speaking, and as something becomes more and more mainstream and acknowledged, we generally see gambling on it. And once I started seeing that coming up around January or February 2014, I really started paying attention to how the two were merging together. And previously, I’d been doing a fair amount of research in online gambling, and that’s a lot of the gambling that you see in this space. And so, the transition to include videos games and competitive video games, eSports into that, was fairly natural. It also allows me to play video games at work and have it actually be work, so that’s always a nice bonus.
What does eSports mean for the gaming industry?
We still seem to be in the somewhat preliminary stages. We’re certainly farther along than we were when I first started looking at this a couple of years ago. We’ve had initial interest, I think, in many of the tournament events. Last spring, Mandalay Bay brought in the League of Legends Championship Series. Since then, we’d had major eSports events in Las Vegas, but this really seemed to be the major catalyst for change, in terms of bringing in major events.
But we’ve also seen other applications of eSports. So, usually when we talk about eSports, we are specifically referring to competitive video gaming. This is the professional stage of video gaming. And then, in some cases, we also have used it to refer to amateur competitions as well. The eSports Lounge at the Downtown Grand is one of the manifestations of eSports that we’ve seen. Then we also have Level Up over at MGM Grand, and that also is a slightly different iteration of the gaming space, but I’m not sure I would call it “eSports space.”
You recently formed an organization dedicated to the growth of eSports in Nevada. Tell us about that.
Seth Schorr (chairman of the Downtown Grand) and I have been talking about this now for about a year: How does eSports look in the gambling world? Narus Advisors’ Chris Grove came in. We both like him very much. And then, Jennifer Roberts, my colleague here at the IGI, is the associate director of the International Center for Gaming Regulation.
And so, the four of us have been having meetings for about eight months or so. The eSports world, as quickly growing as it is, and as huge it is, as much interest as there is, it’s still fairly fragmented. There are a number of different developers.
It’s unlike traditional sports, in the sense that nobody owns football. The National Football League runs a league for football, but so does the Canadian Football League. And football exists in many different forms. You and I could go down to the park right now and throw a football around, and nobody’s stopping us from doing that.
But if we wanted to sit down and play a game of League of Legends together, we would have to pay for that. That game belongs to Riot Games. So, that’s one of the ways in which it’s fragmented. It’s not necessarily a bad thing; it’s just that the proprietary nature of these games means that there are different segments who have different interests—and that’s just in the game development component.
We also have different tournament organizers who are trying to put together their own tournaments, we have different teams, and there’s no formal league like there is with the NFL. There are a number of different leagues. So, it’s almost as though we have NFL 1, 2, 3, 4, 5—some of course with more prestige than others.
And why the focus on Nevada?
This is a state that has a very large established tourism infrastructure. Las Vegas is not just gambling; it’s a major tourist destination, and at the Las Vegas Convention and Visitors Authority, we can back that up with about a thousand different data points. Las Vegas has the capability to bring in these types of events.
And then as far as the gambling component goes, Nevada has one of the highest standards of gambling regulation in the world. We see Nevada as having the opportunity to be a major hub for eSports. It’s a global phenomenon, this eSports thing, and we’re trying to establish Nevada’s place in that global network.
Downtown Las Vegas has established a remarkable rebound over the past few years, mostly due to an infusion of $500 million in new capital in the area. One of the hotels investing millions has been the Plaza, at the foot of Fremont Street. British-born Jonathan Jossel has been running the property for almost three years now, and explains what has made the needle move, and why the future couldn’t look any brighter for the Plaza. Jossel spoke with GGB Publisher Roger Gros at his offices at the Plaza in February. To hear a full podcast of this interview, visit GGBMagazine.com.
The Plaza is one of the most historic hotels in Downtown Las Vegas. At one point, the legendary Jackie Gaughan owned it. What is the ownership structure of the hotel today?
In 2004, Tamares, which is a privately owned real-estate development company, purchased it from Jackie Gaughan and his partners at the time, and have owned it since then. Tamares owns the real estate. Today, I am the CEO and licensee of the operating company, which is called PlayLV. So, Tamares owns the physical property, and I own the business of the Plaza.
Give us a timeline of what happened during the renovation process, and where we are today.
As you mentioned, Jackie Gaughan was a very well-known individual Downtown, a pioneer of Downtown, and did amazing things here, not just in terms of physical development, but in terms of how he made people feel, how he made the employees and team members feel. We have a lot of team members that have been here 25, 30, 40 years—longer than I’ve been alive. And they have very fond memories of those days, and obviously the evolution of the Plaza.
From about 2004, 2005 onwards, the Downtown properties obviously were older, and they had had a lot of wear and tear. They needed a little bit of new life added into them, and that took place at the Plaza in 2010 and 2011, when we closed down for a full remodel.
During that time, I was invited by our architect to go see all the furniture at the Fontainebleau, which was sitting in the basement. And I called the owner and told him about the opportunity to buy this furniture, and fortunately for us, he gave us the go-ahead to buy it on the spot. And so, that was the beginning of the remodel of the Plaza.
No one knew at the time that it was going to become such a big project, because it was, at the time, just a room refresh, which morphed into more restaurants, more casino remodels, and everything else that we ended up doing.
Since I got licensed two years ago, the main physical improvements have been to the pool deck. We did a $4 million remodel of our 60,000-square-foot pool. It has way exceeded our expectations of what a pool remodel could possibly do for this property, in terms of driving occupancy to the building, revenues at the pool, and just general awareness of the property. It sits in between the two towers, with a magnificent view of Downtown. We have 16 pickleball courts, which is the fastest-growing sport in America. We do music events up there. We have a great bar now. So, it’s really turned into an amenity.
We have live music, seven nights a week in the casino. We added a party pit in the front of the building. We’ve added about 150 new slot machines to the floor. We’ve really focused on the guest experience, and creating a bit more energy in the casino, because that’s what people want when they come Downtown. We added a new show, with the Scintas, which has been a big hit. We’ve added more bingo games, because we’re the only property Downtown to offer bingo.
But, I would say that the biggest change hasn’t been physical. It’s been more about the experience of our guests, really focusing on what people feel when they come to the Plaza. And that comes from changing the morale of the team to one dedicated to the customer.
What do you consider your target market? Tourists? A mix of tourists and locals?
There are two separate answers to that. I don’t think that anyone has a true target market in the hotel. You can’t control who’s going on Expedia, searching by location, price, whatever it is. So in the hotel, I think our target market is somewhat of a moving target. We’re seeing great growth in occupancy, and I think that’s driven by all the changes we’ve made in terms of the property and the advertising. In terms of the casino, it’s a little bit more strategic. We know who our target market is. We’ve seen a lot of great growth in terms of our Hawaiian market, our Midwest market, and the people that come here to play bingo. But I’d say for the casino, it’s a lot of Midwest, and probably skews a little older, 45-plus, for the casino.
How about your gaming philosophy in terms of the rules of the tables, the paybacks of the slot machines?
I think there are facts to prove that we have the best video poker pay tables in all of Downtown. We have very favorable rules in the table games. All of our blackjacks pay 3-2, not 6-5 like the Strip properties. We have crapless craps and 10 times odds. We have a good variation of games. We’ve looked at single-zero roulette, but we haven’t quite migrated over to that yet. But coming from England, single-zero roulette’s all we know. So, I think we have very favorable gaming conditions, and our players club is extremely rewarding as well.
When the Lucky Dragon Hotel and Casino opened in December 2016, it became the first brand new gaming property to open in Las Vegas in the last six years. It is also the first fully Asian-themed property in the city, with signs in Chinese above the English. All the food outlets are a variation on Chinese/Asian cuisine, and the vast majority of the table games are baccarat. David Jacoby has been involved with the development for more than six years, and explains the concept and reasoning behind the property. He spoke with GGB Publisher Roger Gros in his offices at the Lucky Dragon in January.
GGB: This is an interesting property, and it’s been in the works for quite some time. Tell us how it was brought from concept to reality.
David Jacoby: About 2012, I really started in earnest working on Lucky Dragon. The early days were a lot of site prep; the site here was initially five separate parcels, with a city road running through it, and each parcel had different easements. That was a whole process, getting the land prepped for vertical development. And we spent some time putting together an entity that helped raise funds overseas for the projects, so getting that all set up, licensed and ready to go took quite a bit of time early on.
Who are the owners of the property?
The owners are the Weidner and the Fonfa families—Bill Weidner is the patriarch of the Weidner family; he was the chief operating officer of Las Vegas Sands for several years, and now is also the CEO of Global Gaming Asset Management. His eldest son, James Weidner, is the lead on Lucky Dragon for the Weidner family. Andrew Fonfa has been a successful real estate developer of many different asset types throughout the Vegas area for more than 30 years. Notably and recently, he built the Allure condominium tower, which is immediately adjacent to Lucky Dragon.
This is the first completely Asian-themed property in Vegas. Give us an idea of what your target market is.
When we looked at the Vegas market, we saw a select few properties that do a very good job at catering to ultra-high-level Asian players. Alternatively, we saw a few properties that do an OK job at providing opportunities for the kind of grind local play. There was not much in the middle. So, that was the space we sought to fill, and are filling now.
We look at our core customers as the local Asian population and the regional Asian population. So, a lot of California, Vancouver, Seattle, Toronto, New York, Houston and other major metro areas within the U.S. We’re seeing a good amount of overseas Chinese play, and broader Asian play as well. The inaugural direct flight on Hainan Airlines from Beijing to Las Vegas just fortuitously happened to line up as one day prior to our grand opening.
Most people know that Asians are not homogeneous. There are all kinds of different cultures—Philippines, Japan, Vietnam, etc. And they’re all different. How do you approach different cultures while still trying to present the authentic experience?
That’s been something we’ve paid a lot of attention to from the early phases of this property. We fully recognize that there are many different types of Asian ethnicities, and then even within each ethnicity there are different types of tastes and preferences and personalities. So, there’s no right way to address everything. If we address everything, we sort of address nothing.
We’re careful to make sure, particularly through the cuisine, and through our staff, and through some of our service standards, that we are sensitive to many other Asian ethnicities. So, if you walk around our gaming floor, you’ll certainly find dealers and employees that will speak Mandarin. But you’ll also find Korean, Tagalog, Japanese, Vietnamese, many other languages. We try to be respectful to as many Asian ethnicities as possible.
Let’s talk about gaming. You’ve taken a risk by being strictly Asian, but you also opened without a sports book, no poker, no bingo, no craps, live keno. What was behind that decision?
We wanted to focus on our core customer, and what they really wanted. In our estimation, we think it’s a good hospitality experience, a clean environment, a friendly staff, very good authentic food, and games they tend to prefer—baccarat, heavily. We also thought we needed a spa. We have a beautiful spa on level two, a Sothys Spa. So, we’re not opposed to keno, we’re not opposed to a sports book. Those things may be things we add in the future. We just didn’t necessarily think they were essential to the success of our opening.
We all know customer service is a crucial part of any new casino. How did you prepare and motivate your employees to deliver the experience and the elements that you want the Lucky Dragon to be known for?
I think it started with each of our department heads, and we’ve got people that we’ve assembled here as a team, that all have tremendous experience throughout the gaming industry, internationally, domestically, here in Vegas, not in Vegas. So, we’ve got a great kind of broad representation of people from throughout the industry, and then it’s just really hiring the right types of personalities.
We had a tremendous response to the jobs we were posting for the property, and I was worried we might have to start recruiting heavily overseas, or in the other markets, but so many people were interested in coming here to work, that we were able to really be selective. We filled every position quickly, fairly easily, and with some very high-quality candidates.
Railroad Pass Casino Hotel is the oldest operating legal casino in Nevada. It was opened and licensed in 1931. Originally, it served the workers on Hoover Dam in nearby Boulder City, where all gaming was prohibited. It’s had many owners through the years, but its current owner is Joe DeSimone, a commercial real estate developer, who bought the property from MGM Resorts in late 2014. A newcomer to gaming, DeSimone officially took over the property when he was licensed in October 2015. He made some immediate improvements and has grown the small market Railroad Pass attracts. He spoke with GGB Publisher Roger Gros at his offices in Railroad Pass in November.
GGB: Railroad Pass is in Henderson, just outside of Boulder City, Nevada, and it’s a very charming little casino. Please give us some of your background, and how it led you into the casino industry.
Joe DeSimone: My background is mostly in real estate and development. I was born and raised in New York. I moved to Nevada, and began doing mostly real estate sales for four or five years, and then made my way into the commercial development business. I did that from 1996, when I opened up First Federal Realty, and I continue to do that today.
We’re always looking to diversify—especially after the recession. First Federal did very well during that time. And this was offered to me as an exceptional business opportunity.
Were you actually looking for an opportunity in the casino industry?
Let’s say I’m aware of what’s going on in the community, and we’ve looked at a lot of different types of business over the years, and never really pulled the trigger. But I must admit that the character of the property, and the nature of the industry being in Nevada, led me to gaming and hospitality, and I thought this would be a good property to start with. I didn’t know how exciting it would be, but the people at MGM made it easy for me.
What shape was the property in when you got here? This was not a core property of MGM, by any means.
When I looked at their numbers, they had a $40,000-a-year capital improvement budget. The place was built in 1931. We replaced the roof, for a few hundred thousand dollars. We painted the place for a few hundred thousand dollars. We extended the bar; we changed the steak room layout and the menus. We renovated every room, for $1 million. Most recently, we bought an LED sign for the reader board on the highway, and spent $500,000 on that. So, we’re millions of dollars into the improvements. We made that commitment to the community, to our customers and to our employees.
Exceptional customer service is the key to success in the casino industry. What are you doing to really try to keep your employees motivated?
Well, MGM had some happy employees, despite the leaky roof (laughs).
We kept everybody on for six months, unless there was attrition. We found that they have happy employees, and the employees have a very unique relationship with the customers, since the majority of our customers are locals from Boulder City and Henderson. So, I understood that unique relationship.
We didn’t buy it to flip it. We didn’t buy it to sell it. We bought it to contribute to community, and make money as we do that.
You’ve got a relatively small market, as you mentioned mostly from Boulder City or Henderson. What’s the breakdown of your customers?
I think the standard rule of thumb for us is 80 percent of our business comes from locals, and 75 percent of that is from Boulder City. The customers that come back every day, or once a week, or twice a week, are really all like family. We love them.
You’ve got great payback on the video poker machines, and your table games are second to none, in terms of the low limits and the rules. You can have a good time and not go broke.
The first advice I got was to take out the table games, because it had been a loss leader. And I rejected that outright. And then I sought out advice on how to make it better, and the play has doubled; the people are having a better time. Anytime you come here, the tables are full. It brings excitement because it’s such a small place. And it also makes money now!
Across the street, you’ve got this massive construction project going on: the building of I-11 that will connect Las Vegas with Phoenix. What kind of access will the drivers have to your property here, when that’s completed?
Well, the drivers will have access from three directions. There will be a 24-acre truck stop and travel center on our site. We have 55 acres, just adjacent to the casino. So, the access will be, from Henderson, without a stoplight. From the bypass and Searchlight, without a stoplight. And from Boulder City, there will be the same experience. So, there will be three avenues onto
Railroad Pass Casino Road, which goes to the truck stop. We’re really excited about that.
So, you’re enjoying this new industry?
I’m having a lot of fun. I’ve met a lot of really neat people. I’m a people person, and I’ve built my career on that and relationships, and it’s helped me to expand my relationships into a different field, which has been exciting for me. But I like coming by. I enjoy the employees. Not just at the management level, but on a personal level, with the dealers or the cocktail waitresses, or the chefs. I also enjoy the discourse with the customers. It’s been a real fun experience for us.
Kahlil Ashanti has blazed a unique path to the gaming industry. An entertainer, Ashanti spent some of his time with the U.S. Air Force at Nellis Airbase in North Las Vegas. There, he got to know the Strip and gambling, eventually getting a role in a Cirque du Soleil show in Vegas. He got to know casino entertainment bookers who were constantly trying to learn more about their customers. So, Ashanti put himself through a coding class and learned how to develop a program that would break down the habits of both gaming and non-gaming customers, with the help of other experts in his company. He spoke with GGB Publisher Roger Gros at G2E in October.
Tell us a little about SpendSight and how you got where you are today.
SpendSight is software that gives casino operators a 360-degree view of their player. We do that by providing them with seamless access to the non-gaming spending behavior of each one of their players. We give them a profile so you can tell which one of your players is vegetarian based on their purchase patterns. Do they shop on weekends and pay with ApplePay? Do they have a social footprint and post reviews on Yelp? SpendSight helps casinos grow along with their customer base.
Do you rate the players and turn that information over to the casinos?
We don’t actually rate them. We just provide the casino with the methods to be able to segment that behavior. So, if a casino wants to know who their most valuable players are for a certain time of year for their coffee shops, or their spa, or their steakhouse, or even their showroom, we allow the casino to rate them based on their own criteria. We create a custom interface for each casino to view this information.
How did you build the SpendSight system?
I had the idea, and was looking for someone to build it for me but couldn’t find an exact fit, so I went to coding school and learned how to do it myself. So, being guided by people who were smarter than me, I built it myself. There’s no hardware at all. It’s all done in the cloud, so all casinos need to get the system is access to the internet.
Doing non-gaming ratings is much more difficult than simply rating the gambling of the player. Each different non-gaming offering has different profit margins. How do you balance that out?
We use measurements like lifetime value. How much has this person spent with you since they signed up for the player’s club? When you run a gaming promotion, for example, you can see side-by-side analysis of who spends the most at your restaurants or in your showroom. It’s never as clear and defined as the gambling rating, but when you compare them side-by-side you get a better idea of a player’s non-gaming value.
What we’ve found is that players want experiences, and the more we can tailor those experiences to their expectations, the more loyal the player becomes.
How do you make the data understandable to a casino executive who may not be very computer literate?
The SpendSight system is designed for people who don’t have a Ph.D in computers. Even before we introduced it, I spoke with casino operators who told me there was a lack of user-friendly, engaging options for them. The amount of training required to use some of this software is prohibitive. Our system is very intuitive and easy to use, and was built by listening to the operators tell us how they wanted the system to respond.
Russell Sanna was appointed executive director of the National Center for Responsible Gaming, an industry-funded organization that does research into problem and compulsive gambling, in March 2016. He’s spent this year getting to know the gaming industry and introducing himself to the important executives in the industry. His goal is to increase the visibility of the NCRG and to grow the funding of the organization to be able to conduct more research and make a larger impact on the solution to problem gambling. He met with GGB Publisher Roger Gros at G2E in Las Vegas in September to talk about his first year at the NCRG.
GGB: You’ve been executive director of the NCRG for less than one year. Explain what you understand about the early years of the organization.
Russell Sanna: The oral history tells us that people like Bill Boyd, Phil Satre, Frank Fahrenkopf and others witnessed the demise of the tobacco industry, with executives standing up before Congress and saying, “Cigarettes do not cause cancer.” Taking that message to heart, they all concluded we have to understand what is in fact going on scientifically with gambling activity. So there was a real commitment from the industry at that point to establish in the National Center For Responsible Gaming, establishing also a firewall between the industry and the science aspect. That was pretty important to do that, so that you don’t taint the outcome of the science, to be able to investigate the important questions: Is there gambling addiction?
So, over the last 20 years, one of the most successful research projects that we’ve established is that the prevalence of gambling disorder is 1 percent of the adult population—over and over again, that’s been established. So we were able to dispel the myths and the anecdotal evidence—my uncle, my cousin, that sort of thing. And so, we’ve been able to present what the peer-reviewed science says. In the last 20 years, the center has supported research, which has resulted in over 320 published articles in peer review journals, the gold standard of research.
What are some of the findings that stand out?
There continue to be a lot of new, interesting aspects that are coming out of the research. One of the major issues just now surfacing is that gambling addiction fits within a syndrome of other addictions, whether it’s other behavioral aspects, or substance addictions. That leads to a whole body of knowledge around psychopharmacology, for example. So, this summer, we gathered a group of scientists together for what we’re conceptualizing as a public health initiative, looking at the things that are associated with gambling disorder.
For example, a laboratory scientist has now trained laboratory rats to be addicted to gambling. And that’s important, because now we have a laboratory animal that psychopharmacology experiments can be conducted on. That puts them within the realm of other contemporary and leading scientific areas.
How about the comorbidity issue, where you can’t just treat one addiction and not the other, because they all go hand-in-hand?
That’s one of the big challenges that are out there. If you do the numbers, 1 percent of the adult population of the United States gives you 2.5 million people, approximately. The science that’s taking place through the centers, also, figured out that only 15 percent of that number is showing up in treatment modalities. So that leaves 85 percent, or roughly 2.2 million people, that we don’t know exactly where they are. And we think that upwards of 64 percent of that 85 percent have three or more comorbidities, with anxiety, trauma, depression.
And so, that’s what we’re trying to figure out. In conjunction with scientists, we need to get the policy apparatus in contact. The scientists that we deal with are not necessarily versed in the language of the state legislatures and policymakers. So, we’re making a considered effort to reach out, to get involved with organizations like the National Council of Legislators from Gaming States and various other associations where elected officials are members. We want to get on their agenda, so we can bring everyone together.
Give us a thumbnail of how the NCRG is funded.
We are funded by the commercial casino industry. The federal government does not spend a dime on gambling disorders. It would be a long conversation to figure out why that is; we don’t know that. We also know that the federal government’s probably not in a position to take up the cause. But it’s not unique to the gaming industry. In a previous job, I was involved in industry-funded housing research. We got architectural research from the industry. It goes on in the automobile industry and the construction industry, as well.
Is there an formula by which the industry funds NCRG?
Well, it’s fairly arbitrary, so it is voluntary. We have people funding us at the $300,000 level, and we have people funding us at the $5,000 level. So it’s a very typical 501(c)(3) nonprofit organization. We have a very active board of directors that’s made up of industry people and academic people who help us contact potential donors.
Do you also have contributions from tribal gaming?
We do not. Historically, Mohegan Sun and Foxwoods gave minor amounts of money close to 20 years ago. I would think historically there was a time when there was a bit of competition between Indian gaming and the operators within Nevada. Those days are over. So, in August, I was up at Seneca Casino in Niagara Falls, and I am back in touch with the chief operating officer there, who is very supportive and wants a proposal to go the board of directors. We’re hopeful this will be the first of many tribal contributions.
Governor Deval Patrick appointed Stephen Crosby chairman of the Massachusetts Gaming Commission in 2012. Four years later, there is only one casino—a racino in Plainville—open, with two others at least two years away. Crosby previously was the founding dean of the John W. McCormack Graduate School of Policy and Global Studies at University of Massachusetts Boston. He has more than 45 years of public policy experience. At the commission, Crosby has created one of the most respected regulatory bodies in the United States. He spoke with GGB Publisher Roger Gros at his offices in Boston in August.
GGB: There’s been a lot of criticism that there is only one casino up and running after four years. How much control did you really have over that?
Stephen Crosby: Well, a lot of it was in the act—principally the issues having to do with local control and litigation. And then there were also a lot of lawsuits, and a lot of politics. So, I would say, maybe a third of it was sort of within our control.
We chose to be very methodical, and we were very new to the game. We didn’t know much of anything. And we did feel very strongly that we wanted to make sure we created a competitive environment. So we spent a fair amount of time making sure that the industry knew that we were really open for business. There were no inside deals; this was going to be an open, competitive, transparent process. So, we could have sped it up, but I think we always felt strongly that getting it right was better than getting it fast.
What were some of the hurdles you met early on?
One of them was the whole background check process. We got these documents, this multi-jurisdictional individual background checks, and a lot of us thought this is unbelievably invasive.
I’ve been a businessman more than I’ve been in the public sector, and I thought as a businessman that this was crazy.
But our consultants thought that this is the way it’s done, and that it was better to start out as a heavy regulator and retreat, rather than start light and go heavy.
The issue of competition was a major issue. There was kind of a subterranean belief here that Suffolk Downs and Caesars, who were partnered, had the inside track on the Eastern Massachusetts casino. And we didn’t want that to be the perception, because that was keeping other bidders from coming in. So we took our time and we created that perception that it was an open bidding process.
One of the things that you oversee that very few states with commercial casinos also oversee is the tribal gaming element. How do you handle that?
We don’t directly regulate the tribe, but we do have a compact, which has an agreement that says that we will give them certain kinds of financial benefits, and potentially exclusivity in exchange for which we get some money, but also we get this oversight role. But it’s a partnership; I want to be clear about that. We’re not regulating the tribe.
The commission decided that there would be only one tribal casino in the southeastern region, but a lawsuit is challenging the BIA’s decision to put land into trust. How are you handling that?
Massachusetts is broken up into three regions, and we have the authority to license one commercial casino in each of those three regions. We’ve done it in Western Mass, we’ve done it in Eastern Mass. Southeastern Mass is where the tribal casino is purported to be. We don’t really want two casinos down there, we thought, but we never have known for sure whether there ever would be a tribal casino. After three years, they got their land in trust, and for a variety of reasons, some of which have to do with the tribe, some of which have to do with the proposal itself, we decided not to award that commercial license. Then, the Federal District Court reversed the BIA’s decision, as you said, to award land in trust. So we are right back now to where we were four and a half years ago, which is wondering whether or not the tribe will ever get land in trust. So, at this point, we’re just sitting tight.
Tell us about your responsible gaming program, GameSense.
There was a lot of focus in our statute about promoting responsible gaming and trying to control problem gambling. We’ve taken that very seriously. We’ve put together a whole program that we call GameSense, which is a program that has its roots in Canada, although we’ve developed it quite a bit. And it has really three basic elements. First, we have a GameSense agent, a responsible gaming agent, on the casino floor, 16 hours a day. That person’s job is to inform people about how the games work.
Secondly, the GameSense agents are largely responsible for our voluntary self-exclusion program. Most voluntary self-exclusions are sort of a law-enforcement function, and you’re kind of treated like you’re a bad guy. We would like to make it sort of an entry point to treatment, and encourage people.
The third element is the PlayMyWay, which is a play management system, what the industry sometimes refers to as “pre-commitment.” And, it is a system in Massachusetts, where when you put your player card in, up comes a screen that says, “Would you like to set budget?” How much are you willing to lose? Today, this week, this month? You can say no and move on. If you say yes, the system will warn you when you’re getting close to your budget. But it will never shut you down. It’s just a tool to help you manage your budget.
Felix Rappaport, a former Wynn and MGM executive, was appointed president and CEO of Foxwoods more than two years ago. Since that time, Foxwoods has improved its financial performance and backed away from the fiscal cliff it was approaching. He spoke with GGB Publisher Roger Gros at his offices in Foxwoods in August.
What did you do at Foxwoods to right the ship?
First of all, I don’t want to take credit for “righting the ship.” It’s been a team effort. But I know that my predecessor, his team, the tribal council and tribal Chairman Rodney Butler spent thousands of hours working with our lenders to create a more stable financial environment.
What I’ve focused on since I’ve been here is to rebuild the executive committee, bring in a creative marketing team and work with our lenders to have not only a good story to tell in terms of better operations and better financial results, but also to have a viable five-year strategic plan for the future.
What areas needed more attention than others?
It’s kind of counterintuitive, but one of the reasons I was so optimistic was that there was room for improvement in virtually every area of our business. And I don’t say that to disparage anyone who came before me; it’s not my style. My style is to build on the foundation of what came before. And we’ve built a team that is one of the stronger if not the strongest of any that I’ve worked with in all my years in the business.
Tell us about the impact of the Tanger outlet mall that opened last year.
It’s the only fully enclosed, fully climatized Tanger outlet mall in the world. This is the only one that is part of a casino, and for those who think an outlet mall has to be tacky, it’s the complete opposite. It’s a beautifully designed, 80-store facility, and continues to gain traction. The visitations continue to grow, and it really gives Foxwoods a tremendous competitive advantage over any other casino in the region.
The Plainridge Casino just opened in Massachusetts. What kind of impact has that had on your property?
Penn National is a very good regional operator, and a large part of our market comes from Massachusetts, so you have to have a very compelling message to get your customers to travel further. If you just want to gamble and you have a place that’s five minutes away, that’s where you’ll go. But if you want the things we have to offer—38 restaurants, 300 shows a year, golf, spa, shopping and more—you’ll come to Foxwoods. So we haven’t felt that much of an impact.
With the upcoming integrated resorts in Massachusetts and New York, is gaming over-saturated in the region?
That’s not a word I like to use. The world is competitive and organizations that evolve stay competitive, survive and thrive. And organizations that do not evolve don’t have much success. So it’s my job, my team’s job, the tribal council’s job, to figure out what we want to be when we grow up. We’re about to celebrate our 25th anniversary next year in February, so we have an abundance of resources and facilities—we’re the largest casino resort complex in North America. If we stay static, we’ll be less successful. If we build on our natural foundational elements and add to that, in my opinion, we’ll continue to thrive. It will be much more of a balance between gaming and non-gaming that we have traditionally enjoyed.
NetEnt was one of the first corporate entities to get involved in iGaming back in 1996. As in its infancy, the company concentrates on “better gaming” by emphasizing a cutting-edge platform and entertaining games. Per Eriksson was appointed president and CEO in 2012, and has led the company in a U.S. expansion. Eriksson spoke with GGB Publisher Roger Gros from his offices in Stockholm.
Global Gaming Business: NetEnt started during the infancy of iGaming. How did the company grow and evolve with the industry?
Eriksson: The company was founded in 1996. The founder, Pontus Lindwall, was brought up in a casino family. His father owned a company called Cherry, and they had a big portion of the land-based markets in the Nordics. So, when the internet became available, he realized it was a fantastic tool. Just imagine, instead of having a physical casino, you can reach out to everyone, everywhere in the world. So, that vision has been part of our success from the very, very start.
In the beginning, the regulations surrounding iGaming were either very spare or even nonexistent. But NetEnt has always navigated those waters very skillfully. What did you have to do to make sure that you always stayed on the right side of the regulations in those days?
From the very beginning, we saw that this is such a great opportunity, it’s important to really try to do it right, instead of taking any chances. Even though there was a lot of money out there, the best thing is to do it right—as right as you can do it when there’s no clear regulation.
NetEnt games have the potential to cross over from online to land-based. How do you see that happening?
In the U.K., we have William Hill shops all around the country. You can get NetEnt games on slot machines or video terminals there. So, that’s the start for us. They’re getting more into land-based. But our main focus is still online.
NetEnt also has games in the New Jersey online casinos. Have they been successful?
Yes, very successful. And we’re really happy to see that, because we heard a lot of people tell us these games will not work in the U.S., because the U.S. players are different. But apparently, they’re not. They are more or less the same, and like the same types of games, as the Europeans. So, we’re really happy to see that. And also, we’ve put a lot of energy and innovation and quality into our games, especially in the U.S. We are off to a better start than we could have dreamt, so we’re really happy.
Why did you decide to come into the U.S. at this time, with just three states active in iGaming?
We see ourselves as pioneers. We were in the U.S. before it was banned in 2006. We pulled out immediately at that point, but at that time, it was the biggest iGaming market in the world. The potential is still there. So now, when it starts to open up again, we want to be part of it, and make sure that we do it the right way. And that’s also why we pulled out immediately when it was banned, so therefore, it was not hard for us to get into New Jersey. We think that we are very well-positioned for success in the U.S.
Why isn’t NetEnt involved in social gaming or online sports betting?
We have decided to be in casino only, just to make sure that we stay focused and that we are best in class in what we do. Even if it’s tempting, we resist, so far. There’s so much potential in the casino market, so, it’s better to be there only. There might come a day in the future, but not in the near future.
NetEnt has been very aggressive recently in signing some impressive branded games, like Jimi Hendrix, Guns N’ Roses and others. What’s behind that strategy?
We think a good way of getting recognition for our casino games is with popular brands. This year we have Guns N’ Roses and Jimi Hendrix, and we also will debut Motorhead shortly. Prior to these, we’ve had South Park, and film titles like Scarface, Alien, and so on.
So, we’re trying different types of branded games, to see what fits best and also for the players to enjoy. It’s great fun; we were so happy when we were able to sign these titles, because it’s very emotional. Most people like the bands, and new players are coming into the casinos that offer them to play.
Your second-quarter report was very impressive—more than 30 percent increases in the revenue, net profit and operating margin. How does that happen?
It starts with our corporate culture. We have people from 47 different countries working in NetEnt. We want people from all over the world to be part of NetEnt, so that we get influences from everywhere—because we believe very much in diversity, and because that diversity creates so much creativity.
We see ourselves as the leaders in the iGaming casino industry, and you need to push yourself all the time; otherwise, someone will come and be better than you in the future. We need to see ourselves in a different view, so that we can become better in what we do. And of course, we are launching new types of games, we are entering new markets. We are opening new offices, and we are expanding around the world.
Mike Dreitzer has been the leader of the North America division of Ainsworth Game Technology since 2013. He spoke with GGB Publisher Roger Gros recently about the company’s approach to the opportunities available today.
Ainsworth North America has just opened a new state-of-the-art headquarters in Las Vegas. What does that mean for operations in North America?
Well, it obviously is an enormous step forward for us. We are very happy with how our building turned out. It’s a 290,000-square-foot facility. That means a couple of important things. No. 1, I think it shows a commitment to the market in both North and Latin America, in a way that is very profound, and very visible, of course.
Operationally, it enables us to service our customers better. We can reduce turnaround time, and reduce lead time, and get things to customers in a scale that we’ve not been able to do. And there’s plenty of room for us to grow.
Former Aruze Americas CEO Kelcey Allison just joined the company, and other people on your staff have long experience. Is it important to get all those knowledgeable, experienced players inside the company?
We firmly believe in our slogan: Experience Counts. And starting with the Australian team and CEO Danny Gladstone and the group around him, we all have many, many decades of gaming. They are focused on experience and the long game. It’s a marathon, not a sprint. So when the opportunity arose to bring Kelcey on board, I told him he really fit in quite well with our narrative. He has a great sense of experience, a great knowledge base. He’s very, very good with customers, with a lot of solid relationships, and our business is built on relationships. And generally speaking, we do look for people with experience at all levels.
Ainsworth hasn’t really emphasized branded and leased participation games in the past; is that an ongoing strategy, or is that something you’re reconsidering now?
We have dabbled, I’d say, in the branded stuff. We can do better at it, and we will do better at it. I think that you’re going to see a more conscious and directed effort towards improving our performance and library in that space. But that’s a super-competitive segment, and we’d better come with our A game. We will.
We’ve got some really interesting new premium titles coming out—things that I think will be seen as very compelling. We recognize that it’s not about all the glitz and glamour and the Hollywood sort of stuff. We have experiences where we get games out and they’re the workhorses. And in many cases, we see games staying on the floor for years and years.
Where does Ainsworth stand on the skill games issue?
We are moving forward. There are some pretty interesting titles that are going to come out that have skill features for us. I think there are still some regulatory items that need to be settled, in terms of the parameters of what you can and can’t do.
One of the challenges there is to make a skill game that is compelling but also can perform well on the floor. Any time you add a skill element, it takes time, and if you take time away, you’re reducing your spins per hour, so to speak. So, I think you have to kind of marry the skill experience with the gaming experience.
Novomatic recently purchased the majority of shares in Ainsworth. What does that bring to the table in terms of North America?
When the transaction closes within the next 12 months, we anticipate a lot of benefits of the two companies working together. There are many ways that we can help one another. If you look at the geographic map, obviously Novomatic is very, very strong in Europe, as well as Latin America. We of course have strength in Australia, and we’ve been getting stronger in North and Latin America. So it fits together pretty well, as two companies working together globally, and we anticipate a lot of benefits across games. But we are very excited that they’ve committed to keep Ainsworth as Ainsworth, moving forward.
David Rebuck has been the director of New Jersey’s Division of Gaming Enforcement for the past seven volatile years. He came into office with a charge to fundamentally change the regulatory structure in New Jersey, creating an investigative/licensing arrangement between the DGE and the Casino Control Commission. Then he had to deal with the economic crater that hit Atlantic City following the 2007 recession that culminated with the closing of four casinos in 2014. In the meantime, he oversaw the introduction of legal iGaming into New Jersey.
GGB: Let’s start with the last year, in which Atlantic City has absorbed the loss of four casinos. Revenues have stabilized and most experts believe the market has “right-sized.” How is the DGE responding to this new reality?
Rebuck: We spent the past year responding to the closing of four casinos in 2014. It was something we saw coming, but it was worse than I had anticipated. So we reduced the number of staff that was necessary to oversee 12 casinos to one that was effective for eight.
And stabilization is the word I would use. We’re no longer seeing the revenue decline month after month; I think we’re at the point now where we see the casinos actually having a chance to compete against the surrounding states, so we have stabilization with the opportunity for growth.
Since Atlantic City is a free market in gaming, there is no limit on licenses. Do you believe that adding more licenses makes sense for businesses?
We’ve had several groups come to us over the past year to look at operating in Atlantic City. We’ve met with all of them, and up until now, none have decided to move forward. I think this demonstrates the reality of the market, and unless someone is reading it a different way, these groups have declined to become involved.
Let’s move to the North Jersey casino referendum. While we all agree that this would be a disaster for Atlantic City, the DGE has a statewide responsibility to ensure gaming is operated with integrity. Where does the DGE stand on this referendum?
We serve the governor’s office, and his view is that the people of New Jersey should be able to have a voice on whether there is gaming expansion outside of Atlantic City. So we’re pleased to be able to support that bill, and we’re ready, willing and able to do what is necessary under the law to implement the expansion of gaming if that is the choice of the people.
Does it bother you that there are few specifics contained in the bill?
Those who oppose the expansion of gaming, particularly here in the Atlantic City area, point to the lack of specifics in the bill. Their complaint is that people don’t know what they are voting for. They say, “How can you make that decision unless you know the details like the location, the tax rate and other things?” From the legislature’s point of view, they want to keep their options open. All these details would be filled in after the referendum is passed. So we’ll be ready to provide input and options if it ever comes to that point.
Let’s turn to the good news over the past year, the growth of iGaming in New Jersey. Why do you think it has finally taken off and found a foothold with the public?
I think a lot of it was growing pains. The assumption that U.S. online players would be the same as European players didn’t really hold up. So, it took a while for the online casinos to get to know their customers. Their marketing strategies have become more sophisticated.
I also think that the introduction of new games and products has made a big difference. And the improvement in technology has helped too. No longer is geolocation an issue. Payment processing has improved, although it’s still not perfect. And players now understand how to play, how the procedures work, and how they can have fun. It’s a combination of all these things.
Tell us about the liquidity agreement that you’ve reached with the UK Gambling Commission.
We sent letters to our licensees that also operate in the United Kingdom and asked them to suggest ways we could include players from both jurisdictions in the same pool. We first talked to the UK Gambling Commission about how this would work and we both agreed it could be done with cooperation from the licensees.
With 9 million people in New Jersey, and more than 63 million in the United Kingdom, this would mean a massive increase in liquidity for New Jersey operators. Even when you discount children and non-gamblers, it gives us access to a market that is very familiar with online gaming. That number is one-fifth of the total U.S. population.
Will this include all casino gaming?
Not initially. Our intent is to increase the liquidity of online poker, by exposing the games to many more players. Later, it could be expanded to include all casino games. We’ve given our licensees until August 1 to respond, and we’ll figure out where we go from there.
We’d still have to figure out lots of issues: specific regulations, how the tax rate from each jurisdiction would be applied, player ID and geolocation issues, and other things we probably haven’t even considered yet. But you have to start somewhere.
But we’re very serious about this, and we want to move it along as quickly as possible, so iGaming in New Jersey will continue the impressive growth we’ve shown over the last 15 months.
Mark Brown is a native of Brigantine, New Jersey, and began his casino career in nearby Atlantic City, eventually operating Trump Taj Mahal as the president and general manager. From 2006 to 2009, he was president and CEO of the Venetian Macao and Sands Macao. In 2013, he joined NagaCorp, the Cambodian gaming company, but less than a year later left for the top position with Imperial Pacific, which is developing gaming on the American territory of Saipan in the Northern Marianas.
Tell us about Saipan. Most Americans don’t understand what it is and where it is, so give us the Cliffs Notes on the island.
Saipan is a beautiful island, and like most, I didn’t know much about it. There’s a lot of history, with lots of tourists: one-third Chinese, one-third Japanese and one-third Korean. It’s a great vacation resort, with 2,800 rooms on the island, 100 percent occupied. It’s the most beautiful place in the United States you never heard of, because it is an American territory.
You’ve been operating a temporary casino in Saipan for the past year or so. Tell us about that and how it has performed.
We didn’t have room at our permanent casino site, so we eventually wound up at DFS (duty-free shopping) Galleria mall. They were renovating it, so we took half of it to use as our temporary casino. We probably spent too much on a temporary facility, but because of the clientele we’re bringing in, it had to be beautiful. We opened in July with 32 mass-market tables, six premium-mass tables, 106 slot machines and seven tables that were in three junket rooms. In November, we introduced our rolling-chip program and shocked people by doing $1.6 billion, and about the same amount in December. Every month it has continued to grow, and now we’re doing roughly $2 billion a month, except for $3.2 billion in April. The VIPs love the island and what we do for them.
What is the plan for the permanent casino?
There has been some mis-reporting that we were going to build a $7 billion resort. That’s not the case, at least initially. Yes, we could invest $7 billion over time with some partners, but initially we’re building our casino pod, the main lobby and some of the restaurants. This is a Paul Steelman design, six-star, and will open by the end of this year, which includes junket rooms. We’ll open a beachfront exclusive area, which is modeled after the One-And-Only in Dubai—15 villas and suites, private lobby, French restaurant. The hotel with 374 suites will open in the first quarter of 2017. We’re spending $550 million on this phase. For the rest of the development we’ll take on partners, which is very much how Macau’s Cotai was developed.
What is your target market? How will you approach that market?
More than 95 percent of our VIP market right now comes from mainland China. But look at a map. Saipan is convenient to everywhere in Asia. It’s a four-hour flight from China, and there is no visa—you can walk right through customs. They’re spending an average of 3.5 days here. Before we even arrived, the mix of Chinese, Japanese and Korean visitors were coming and continue to come. Then we have the local market—businessmen most of whom are not native to Saipan.
Tell us about the role of the regulators in Saipan.
We are highly regulated. We come under all U.S. laws for anti-money laundering and know your customer, and we abide by them. Contrary to what people might think, our VIP partners like the fact that we’re highly regulated and watched. They feel like it’s a safe place for families and their customers. It’s being run by U.S. and Macau experts, so we are all very comfortable with the regulators.
Rino Armeni’s journey in Las Vegas began following a successful career with Marriott and the Walt Disney Corp., when he was named vice president of food and beverage for Caesars Palace. In 1994, he became executive director of marketing for Southern Wine & Spirits, the leading liquor distributor in Nevada. Today, as president of Armeni Enterprises, he remains active in several food-and-beverage-related developments. But Armeni is most proud of his role as founder and chairman of the board of the Las Vegas Business Academy (LVBA), a charitable organization that provides funding for worthy individuals to earn their advanced degrees in Las Vegas.
Tell us about LVBA and how it got started.
Someone once asked me if this was a dream of mine. I told him it wasn’t a dream, it was an obligation on my part to improve the education in a city that has been very welcoming to my family and me. There are a lot of brilliant young people who are interested in earning their MHA, MBA or JD, who could not afford it or had to leave town to do it. My take was, I’d rather keep these brilliant people here than see them leave to go elsewhere.
How does it work?
We offer up to $75,000 for the candidates to advance their education in hospitality, law, business, and we’re adding engineering now, too. The great part about this program is the mentorship. The money is important, but we’re blessed with more than 30 board members who are leaders in big companies like Golden Gaming, MGM Resorts, Coca Cola, Ecolab, Las Vegas Sands, Southern Wine & Spirits and many other companies who spend their time educating students on how to become business professionals.
The students have to sign a five-year contract and work with a different company every month throughout their time in our program. Our recipients work to understand how these companies operate, so that by the end of the two years of the program, the depth of their knowledge will be attractive to any company looking for talent. And we also offer, to the employer, the opportunity to hire someone who is very well-rounded, very well-educated.
How do you identify the candidates?
Most of them are referrals from previous students. They also come from leaders in the industry who have identified people in their organizations they believe are worthy.
The students follow parallel curriculums, one with the University of Nevada, Las Vegas and one with LVBA, which includes working in the individual companies.
Do they work in all different departments?
Yes. For example, if you go to work for Southern Wine & Spirits, your first days may be driving with a delivery person at 3 o’clock in the morning. Then you’ll be in accounting, sales, marketing, legal… Each student will end up with a basic knowledge of what happens in each of those departments.
What kind of reaction have you gotten from both the students and the companies?
We’re a young organization—we’ve only had three classes of scholarship recipients so far—but so far the feedback we have received has been fantastic. One of our students has already been promoted twice, another works for a federal judge. They are already brilliant individuals, so this education gives them a quick boost to get ahead in their chosen careers. And the companies couldn’t be happier to be able to hire such talented executives.
Aron Ezra joined the gaming industry when the former Bally Technologies purchased his company, MacroView Labs, which developed apps for a wide variety of companies, just some of them gaming. He became vice president for Bally and concentrated on many cutting-edge technologies developed by the company. But three years ago, he left Bally to launch another startup, OfferCraft, which “gamifies” communications with customers. The company has many relationships with casino companies, and has crossed over into retail, restaurants and other mainstream businesses. He spoke with GGB Publisher Roger Gros at the GGB offices in April.
GGB: What made you leave Bally to start your new company, OfferCraft?
Aron Ezra: We had a wonderful experience at Bally. It’s a great company; there’s a lot to like over there. Very, very innovative. But ultimately, there are certain ideas that just need to be built, and certain ideas that are a lot harder to build in any big company. OfferCraft happened to be one of those ideas that we were just so excited about, and needed to do. And we felt like the only way we could really do it right was to incubate it on our own.
Tell us about OfferCraft. What makes it so special that only you could do it?
There are a million companies out there trying to tell you what you need to give a player to get them to come back. What we wanted to do was really think about not what the offer should be, but how the offer should be presented. We spend so much time wondering whether we should give $12 or $15. But the way that something is given to somebody, the way that thing is presented, makes just as big a difference—often a bigger difference—in whether or not that individual is going to actually use the offer. So we wanted to really create something that would allow us to bring the concept of gamification to all different parts of the property.
You have so many casinos where they think about games all the time, but they only think about games on the casino floor. We thought that was crazy because casino patrons, more than maybe any other demographic in the world, love playing games.
What areas of the casinos do you really focus on?
We’re primarily focused in three areas. We gamify marketing, operations and certain HR elements, as well.
On the marketing side, one of the most frequently used parts of our platform would be sending out emails to a whole bunch of inactive customers who maybe haven’t shown up in a year or two, and they’re about to get rid of them in the system. By actually letting those folks go ahead and play a game to win things, we’ve been able to reactivate a pretty significant number of those folks.
But then on the operation side and on the HR side, we’ll do quite a bit to actually use games to incentivize certain behaviors. Maybe the server who serves the most drinks in the night gets to play a game and win something. Or the housekeeper who cleans her 5,000th hotel room gets a chance to play a game to win something.
And when we do all these things, we’re collecting data about these people’s preferences.
There must have been a lot of psychological research that went into this—how people respond, why they respond, and then quantifying that response.
We spent a long time looking at fields like behavioral economics, the study of how people behave and think, and what incentives get them to think about things. We looked into cognitive psychology, spent a lot of time on decision-making sciences. The goal of all of this was to discover how to present information in a more psychologically compelling fashion. Our clients spend X-million dollars a year on marketing, and typically have maybe 30 percent of the people respond. If we can increase that by even a few percentage points, then that is a massive return on investment.
Tell us about Smart Rewards.
This is the part of our platform that I’m most excited about. The games are a really amazing way to get people engaged, and get people to sit up and take notice. We actually do get participation rates up pretty significantly, but the redemption rates go up just a little bit. So, before, you had a 10 percent redemption rate, now maybe we have a 14 percent redemption rate. But I wanted to figure out a way to make that redemption rate really skyrocket by giving out rewards.
When we give out a reward, it looks like a normal coupon or voucher. But it’s not. It’s actually a tiny software program that can evolve and change itself, even after somebody has received it. Let’s say we give someone $20 of free play, but they decide not to use it. So if you don’t use that, in our system, we know that you’re ignoring it. We know you didn’t use it. So that reward is going to expire after a few days if you’re not using it. So then we send a message that we noticed you didn’t use this; do you want something else instead? So you can swap it out for something—maybe you don’t want more free play, maybe you’d rather get 2-for-1 on a hotel booking. So you can actually select something different, which not only dramatically increases the chances of you coming in and using the reward, but also gives us really, really powerful insights into your personal preferences, as well as the macro-level preferences of everybody.
That’s the kind of thing that gives us a lot of insights, and there’s a million different behaviors that we can actually pre-program in. The possibilities are endless.
IGT has been the market leader in slot manufacturing for many years. Even though its U.S. market share has diminished in recent years, the purchase of IGT by GTECH has strengthened the company’s international presence. Walter Bugno, a senior executive with GTECH, was made the CEO of the international division of the company. He explains how the merger of corporate cultures has been accomplished and how the two companies have truly become one. He talks about the products being developed by IGT since the merger and explains how the games are introduced and released. He spoke with GGB Publisher Roger Gros at the ICE trade show in London in February.
GGB: Tell us about the merger between GTECH and IGT, and how it has worked.
Walter Bugno: It’s been very positive for us. Twelve months ago, we sat here as two companies. There was a big wall dividing what was legacy GTECH from legacy IGT. Fast-forward to today. It’s seamless, and the customers are feeling it. There’s a lot of excitement about new content, new cabinets, the expansion of our product range from VLTs, all the way to mobile and interactive and everything in between.
We’ve certainly been impressed with the new leadership of the company, with Marco Sala, Renato Ascoli and your new role. You’re building a great team here. Tell us about how the integration is working.
When we announced the merger, Marco Sala was very clear with all of us on what his expectations of the new organization were. And the first point he made to us was design an organization that is based on the principle of customer first, and customer intimacy. His view of how to win the market was you need great product and great content, but to arrive at great product and great content, if you don’t have customer intimacy and really understand what the customer needs, you won’t be able to develop that great product and great content.
So, he’s built an organization that’s focused on being as close to the customer in every part of the world, and putting as many senior executives in this organization as close to the front line as possible. I think that’s been a real positive for us. It allows us to sit around the table and very clearly and openly describe what our priorities need to be, and have us all aligned on it, because we all share the view of the customer.
Let’s talk about your specific responsibility, the international market. According to the Eilers-Fantini Slot Report, IGT has some great market share in the U.S. but not so much in the international market. How are you focusing on that growth?
It’s a world of opportunity.
You’re right. IGT, traditionally, has been very, very strong in, at the time, what was the home market. But now we are not a U.S. company. We are an international company, and hence the onus of responsibility for us is to be a significant player wherever we compete.
We have great market shares in—when you combine the Spielo and GTECH and IGT positions—EMEA and in Latin America, but with still lots of geography for expansion.
We are weaker when it comes to Asia. There’s no doubt that Aristocrat has maybe not a stranglehold, but a very dominant position, in its home market of Australia, and also in the adjoining markets of Asia. As a result, it is not realistic for us to say that we can take them. But to be a strong No. 2 in that marketplace is realistic, and our strategy is very simple: focus on developing locally curated content. It’s as simple as that. If we can change our product from being sourced in one market and just applied to another, to actually develop for that market, then I think we’ll have a chance at succeeding. But a world full of opportunity.
Internationally, are the social casinos as popular in Europe as they are in the U.S. at this point?
Growing. Growing. We’re seeing quite a large number of our land-based casino operators approaching us to discuss the opportunity of some form of a social casino or play-for-fun solution for their brand. So, it’s growing, because it’s seen not necessarily as a stand-alone business, as DoubleDown Casino is, but as a means of building loyalty with their own customer base.
We’re always amazed at the differences between European casinos and U.S. casinos in size and scale. IGT has a lot of systems; are these scalable that they can be placed in the smaller European casinos?
Yes, they are. One of the real complementarities of the GTECH/IGT merger was that GTECH was very good in the smaller scale, and hence had a very good market share in systems in the European market, for example. IGT was very good at the larger casinos.
We’ve actually worked at putting that together into one common offering. We are now able to offer a product, an affordable or economical product, with exactly the same quality of solutions, depending on the scale of the business. For IGT, systems are a hugely important part of our business. It creates an even further level of relationship integration with our customers, because when you’re hooked in at the systems level, you’re with them every day, from the level of support, the upgrades that you’re giving them, and the problem resolutions.
For a company that was on the verge of bankruptcy just a few short years ago, MGM Resorts International is on something of a roll. After buttoning up billions of dollars in debt, MGM Resorts began to plan.
First, it won the final (extra) license in Maryland, for a casino in suburban Washington, D.C. Then it won the license available for the western region of Massachusetts for a casino in Springfield. A casino on the Cotai Strip in Macau looked iffy for a while, but it will now debut in 2017 in what will hopefully be a more balanced gaming economy. And this month, the first major project opens, the T-Mobile Arena on the Las Vegas Strip behind New York-New York and the soon-to-be-rebranded Monte Carlo (see page 21).
Bill Hornbuckle is back in Las Vegas for a few days before heading out again. As MGM Resorts’ president and lead development executive, Hornbuckle spends at least half his time on the road. From Massachusetts to Maryland to Georgia (where MGM was interested in an Atlanta-area casino), Hornbuckle’s plate is full. But his immediate attention is going toward the T-Mobile Arena, coordinating the grand opening with a variety of entertainment events.
“The Grand Garden Arena (at MGM Grand) has been a great vehicle for us,” he says. “But clearly, there was a lot of dialogue in the community about yet another arena, and we just didn’t want to cede our position—period, end of story. What was interesting about this was the dialogue we were having with AEG, which wanted to manage the content. But AEG isn’t just a content company. Even though they have AEG Live, they are an asset-based company. That’s their core business; it’s about owning these huge, great assets.”
With the talk of a National Hockey League team calling T-Mobile home, Hornbuckle says that would be nice, but not necessary for the success of the arena.
“To make T-Mobile succeed, we need about 100 events,” he says. “To completely succeed as a company, we need about 200 to 240 events, give or take. The NHL would get us there more quickly, but we’re confident it will come one way or the other.”
The company’s other two arenas—the Grand Garden Arena and one at Mandalay Bay—will continue to succeed, says Hornbuckle.
“There are a lot of right-sized events, a lot of made-for-television events, that want to stay at MGM, and we’re happy about that,” he says. “I think the one that will see fewer A-level events, candidly, is Mandalay. But the whole economic design of that place, and the reason it still stays in existence, isn’t to be an arena. It’s to be a housing activity and a place for special events. Bill Gates was in there last year, speaking to his Microsoft folks. The CEO of IBM is coming in in a couple weeks to speak to 11,000 of his people.”
Park Place
For a company where the recent 500,000-square-foot expansion of the Mandalay Bay convention center was taken in stride, the creation of the Park, an entertainment area connecting T-Mobile with the Strip, is hardly an afterthought. The Park was envisioned by MGM Chairman Jim Murren to be the spine that connected T-Mobile with New York-New York and the Monte Carlo, which is undergoing its own metamorphosis with an as-yet-undisclosed name change and a 5,000-seat theater that will spill onto the Park.
“We think it becomes the center of entertainment in the entertainment capital of the world,” says Hornbuckle.
Adding the theater at Monte Carlo fills in a void that MGM lacked, he says.
“As we looked at our entertainment portfolio, we know where we wanted to be—we want to control the arena business,” he says. “But we also recognize, we had 19 theaters, plus two arenas at the time. But what we didn’t have was a facility to compete with either the AXIS theater or Caesars’ Colosseum. We didn’t have something of scale that could accommodate premium entertainment that would run over two- to three-year contracts.”
And the redesign of Monte Carlo is all part of the plan.
“Luckily, it’s pretty vanilla,” he laughs. “It’s not like we’re tackling Excalibur or Luxor. You’ll see a lifestyle product emerge from there, something that hopefully competes a little bit more with Cosmopolitan or potentially even with Wynn. We’re going to step it up.”
Maryland My Maryland
The long-drawn-out process of adding a final license in Maryland for the Washington, D.C. area ended with MGM acquiring a license to build a casino resort at National Harbor, an existing mixed-use development on the Potomac River just across the bridge from Virginia and just downstream from the nation’s capital.
MGM was only mildly interested in the state when one of its development officials discovered National Harbor, and the interest went from mild to wild quickly.
“It was instant, as soon as you saw the property, given the infrastructure, the location, that it was the right thing to do,” says Hornbuckle. “So we went hot and heavy, and later, really hot. We spent a lot of money investing in winning that deal, but we did.”
And MGM’s interest has been justified. Last year, the Maryland market did $1.5 billion in gross gaming revenue, most of that coming from one property, Maryland Live! in suburban Baltimore, operated by the Cordish Companies.
“That’s not bad, for a parking lot location,” grins Hornbuckle, referring to Maryland Live’s site, adjacent to Arundel Mills Mall.
But Maryland Live! was built for around $400 million. MGM plans to at least double that in National Harbor.
Hornbuckle doesn’t see that as overspending.
“In Detroit, where we double-spent everyone else, we dominate that market,” he explains. “And I think in Maryland, well, we’ll have 35 percent to 40 percent market share, because of the amenity itself. It is not just a casino; it’s a regional environment that has a theater of 3,500 seats. So the acts that we put here in the Park theater will go there, and vice versa. There’s a lot of synergy there. And there’s nothing quite like that in that area. The return may take an extra year or two, but for the next 30 years, there’s going to be nothing like it.”
As part of the National Harbor complex, Hornbuckle says the attraction is the entire project.
“We’re part of a trolley system that will link us with the Gaylord entertainment center, a large retail mall and the main part of National Harbor. We’ve got only 300 rooms, but there are 3,000 rooms within a half mile, so it’s going to be a major destination.”
Making It In Massachusetts
A second license won by MGM was the western Massachusetts gaming license in Springfield, defeating companies like Mohegan Sun and Hard Rock along the way. But like all things in Massachusetts, it hasn’t been an easy path. Just recently, a design change that eliminated a large hotel tower in favor of low-rise buildings had some questioning the dedication of MGM to the Springfield project. But Hornbuckle points out that the financial commitment never changed, just the approach.
“All politics are local, and particularly in Springfield,” he laughs. “The original design had residential on-site. The more we got into it, the more we thought about it—frankly, the more we priced it—we didn’t think it made a lot of sense. We had a commitment to the community to bring professionals back to this corridor, so, we’ve taken that residential off-site. We’ve got three locations. One for sure; two others are pending. We’re going to spread it out a little bit. We moved our hotel into the then-front structure on Main Street, which we think helps that Main Street corridor, it helps build the engagement, and the city still gets residential. And our budget’s still at $950 million more or less.
“Springfield hasn’t seen anything like that ever, actually, in real dollar terms. And so, we’re pretty excited by it. It will take us until September 2018.”
In Connecticut, the two tribes that operate the state’s casinos, the Mohegans and the Mashantucket Pequots, are planning to build a casino in the Hartford area, which would cut off MGM from those residents of northern Connecticut. The idea is to protect revenues and jobs from leaving the state for Massachusetts. Hornbuckle dismisses that concern, saying a casino located in southwestern Connecticut would make more sense if those are the issues.
“Are we concerned?” he asks. “Yes. Have we remained active in understanding it? Yes. And here are two realities. They talk about losing 4,000 jobs. Hogwash. A third of our jobs are probably going to be Connecticut residents anyway, because remember, we are literally on the border.
“Will we take some of their business? Maybe. But if you want to put a third casino in Connecticut, it shouldn’t go to Hartford or the airport or some small-town location to block us. It’s got to go to the southwest quarter of the state, where you’ve got the whole New York metropolitan area, and a massive amount of people to pull from, and put it there. Of course, that’s not the intent, but we’d be willing to participate in a bidding process there.
“The other concern is that this is reservation-shopping at its finest, under the guise of the protection of the state. We believe it’s unconstitutional, because of the way state constitution works, and we think we’ll prove ourselves correct in that opinion.”
In March, MGM teamed up with the Schaghticoke Tribal Nation of western Connecticut to fight the Mohegan-Pequot third casino. The tribe has struggled for years to achieve federal recognition and accuses the state of discriminating against it by not giving it an opportunity to build and operate the third casino.
Building a Database
In both Massachusetts and Maryland, MGM will have to build a database of customers, something that doesn’t trouble Hornbuckle. He says this will also have to be done without benefit of the database of Atlantic City’s Borgata, owned jointly by MGM Resorts and Boyd Gaming.
“Borgata owns the database. Boyd doesn’t own it, and MGM doesn’t own it; it’s Borgata, which is somewhat frustrating,” he admits.
Nonetheless, the vast size of the MGM Resorts database across the country gives Hornbuckle faith that it will not be a problem.
“We’ve got 60 million-plus people in mLife (MGM’s loyalty program),” he says. “There’s probably 8 million that really play. We put concentric circles around Springfield, around National Harbor, around any place up and down the East Coast corridor. We come up with 250,000 to 300,000 customers of substance. And so that’s a good place to start.”
In addition to a third casino in southwest Connecticut, Hornbuckle says the company has been examining expansion opportunities in Georgia, where a bill to legalize casinos came close to passing this year, and in North Jersey, where a referendum is likely to go on the ballot in November. Hornbuckle admits the North Jersey interest is a bit reluctant, worrying about the impact of New Jersey gaming expansion on the Borgata, Atlantic City’s most successful property.
“We’re looking at North Jersey because we have to,” he says. “If something’s going to happen there, we have to be involved.” A preliminary bill gives Atlantic City casino companies favored status when bidding for what will likely be two casinos in North Jersey.
Asian Equation
What was once the savior of MGM Resorts during the lean times, when debt was mounting, has slowly become its headache. An expansion in Macau to the Cotai area has been ongoing for the past five years, and construction on MGM Cotai has been progressing, but the company recently announced it won’t open until the first quarter of 2017.
“It’s not about a budget issue; it’s about timing, it’s about trying to understand where the market’s going to be then,” he says. “So we’ve pushed it until the end of March, of the first quarter. No one was surprised by it—most notably the marketplace. And you know, the good news, over the last couple of months, is mass market has begun to stabilize. Matter of fact, we’ve seen some modest growth, particularly through Chinese New Year.”
Hornbuckle says the VIP-mass market split has reversed over the past several years.
“(Mass market) is now 80 percent of our bottom line, where VIP is only 20 percent, and I think that trend will continue for the whole community.”
Even with the precipitous GGR decline over the period, Hornbuckle says it’s still a good place to invest.
“At one point, people were getting 50 percent return on their investment each year,” he says. “But if we were even to look at what we’re proposing today, which is a $3 billion-plus spend, what we think it will return in today’s market, or next year’s market, which is a better example, will still be a return on investment of 22 percent or 23 percent. We’ll do that all day, every day, all day long. And the penetration into Macau is still less than 1 percent.
“It’s a $45 billion market that has turned into a $25 billion market. And there are no other $25 billion markets anywhere in the world.”
Marketing Mission
Prior to being named president, Hornbuckle was the chief marketing officer for the company. He says he’s more comfortable as president, and has appointed marketing executives who truly understand social media and internet marketing. In 2014, he brought in Lilian Tomovich, a former MasterCard executive, to become the first chief experience officer to improve the guest experience company-wide. And last year, Beverly Jackson was added from the Grammy Awards to handle the social media aspect of marketing.
“We’re looking at addressing a whole younger demo,” says Hornbuckle. “We’re all over it; we’re fully dedicated to it. What it will yield, we don’t know yet. And it will be a long-term yield. But we do know this. If you’re not in that space, you have no voice, and over time, that matters. And so we’re all in.”
Hornbuckle says it’s not too soon to think about millennials, because the trends are moving in their direction.
“From a marketing perspective, we’ve all seen what’s happened in Las Vegas, where the average age has come down six years, driven by the nightlife business. That’s all been a good thing. It’s an $800 million-$900 million business in this community, and we’re doing fine. It will shift, too, someday, by the way. The big DJ thing will become something else, and we’ll need figure that out. And millennials are very interesting. They’ll go into a club and spend $5,000 on a booth, but then they’ll go back to their room, with six girls in one room.”
To further experiment with this demographic, Hornbuckle says MGM Grand is planning to build a “millennial casino” under the dome at the entrance to the Strip. He says they want “their own space.”
“We’re preparing to make a significant commitment to a millennial casino,” he says. “We’ll define that as a space that’s interactive that you go into because of the draw of the space and the enticement through music, food, the communal environment. By the way, it has gaming in it—a kind of gaming we think they’ll interface with, like new tables and other things that we all have in the pipeline.
“It’s time to mature to the next level.”
Casinos have always had table games and slot machines. Interblock is adding a third leg to the gaming stool—electronic table games—and is proceeding to redefine the meaning of that growing game genre.
And the genre is growing fast. Over the past two decades, multi-player electronic table games (ETGs), or e-tables, have been a fixture in European casinos. Since the late 1990s, ETGs have been ubiquitous in casinos from Austria to the Netherlands to Italy to Slovenia, Bulgaria and points east.
Starting with multi-player roulette, e-tables diversified in the early 2000s to include automated versions of craps, blackjack and other mainstays of the pit. Their primary benefits to casinos were obvious—more players in less space, without the labor costs associated with tables.
But from the beginning, other factors were at play. ETGs afforded a way to create new table players by letting customers learn the games in a non-intimidating fashion. Electronics could add not only precise accounting of wagers and play history, but bonuses, progressive jackpots and other features formerly exclusive to slot machines.
These days, casino operators in North America are starting to look at these same factors, and the automated tables are gaining fans everywhere they are placed. Electronic game pits are cropping up, as are lounges that bring the games to the millennial generation in formats designed to turn twenty-somethings into faithful casino customers.
There are several suppliers producing ETGs for worldwide markets, but one leading the charge in North America is the company that created the genre, Slovenia’s Interblock Luxury Gaming Products. Through subsidiary
Interblock USA, the company has launched ETG setups in U.S. casinos that are at once both radical and elegant in appearance—and superior in their technology, as Interblock continues to redefine the e-table genre.
Founded in 1997 by computer engineer Joc Pe?e?nik, Interblock Luxury Gaming Products pioneered a new segment of products for the casino industry with the first automated roulette wheels surrounded by electronic wagering stations.
“I began laying the foundation for Interblock in 1989 in Mengeš, Slovenia,” Pe?e?nik recalls, “building PCs for customers, then supplying POS systems for restaurants and bars. I saw a high-potential niche in the gaming industry—specifically, in classic casino games like roulette.”
Interblock made its international debut in 1997 at the ICE trade show in London with its first automated multi-player roulette product, Princess—“developed by me and a team of five in my own garage,” Pe?e?nik says. “After the enthusiastic reception for Princess, we launched Megastar roulette, dice and video, which set new industry standards.”
The product Pe?e?nik developed in his garage would spawn a host of competitors, particularly in his home country, where nearly a dozen e-table suppliers would crop up within a decade after Interblock’s founding. However, Interblock has remained the class of the industry.
“From the beginning, Interblock set the industry standards for electronic table games,” Pe?e?nik says. “We haven’t deviated from our original goals of bringing the traditional gaming experience to an electronic format, making operations easier for casinos, and creating an unparalleled experience for players.”
“Joc’s philosophy, historically, has always been a luxury product,” adds John Connelly, Interblock’s global CEO since January 2015. “The analogy I’ve always used is that Mercedes has an S-Class, an E-Class and a C-Class. But they all represent luxury. All quality. What we’ve been successful in doing the past 12 months is really taking what Joc created, which is this amazing S-Class Mercedes, and with his help, we are in the process of launching our E-Class, and by G2E in Las Vegas, we’ll be launching our C-Class.”
Connelly came to Interblock after 10 years with slot manufacturer Bally Technologies (now part of Scientific Games), where he was senior vice president of business development and interactive, and VP of international business—the latter a position in which he saw the European popularity of multi-player ETGs firsthand.
In North America, Connelly now sees a new frontier for e-tables. “Under 1 percent of the floor space in North American casinos has ETGs,” he says. “Internationally, you can find 15-20 percent of a floor with ETGs. So, the opportunity in North America is tremendous. Even if you just consider penetrating just a single percent, you’re looking at $100 million in EBITDA potential.”
“What’s exciting,” adds Pe?e?nik, “is that in North America, only 22 percent of the casinos have ever had an Interblock product on their floor. In Europe, we quickly established Interblock’s position as the luxury gaming electronic table provider. Now, we can offer our high-performing products at different price points to appeal to different demographics and types of casinos around the world.
“Unlike our competitors, Interblock is purely focused on electronic tables. We’re looking for the next revolutionary enhancement that will improve the user experience and revenue for our customers.”
Redefining the Genre
Interblock has made its name by consistently finding that “next revolutionary enhancement” in the ETG genre. Four active, stylish product lines (Organic, Diamond, Ministar and StarBar) supported by three generator types (Automated, Dealer Assist and Video) add up to compelling player experiences for roulette, bnaccarat, craps, blackjack, sic-bo, big six, Big 3 Six, keno and video poker.
Interblock is constantly experimenting with new ways to enhance the players’ experience with its products. These experiments have included use of holographic images—a concept Connelly says could come back soon—and new stadium-style setups that give a gaming area the feel of a sporting event—like, say, the eSports events currently drawing millennials in droves.
Interblock has packed all its technology into its latest millennial-friendly presentation of its ETGs, called the Pulse Arena.
Launched at last fall’s G2E show, the game presentation is billed as “a hybrid experience that combines gaming and social atmospheres.” Interblock designed it as a show that will attract all comers, but with a particular eye to the millennials. All of Interblock’s electronic gaming tables and player stations are arranged into a giant audio-visual experience, with live DJs, dealers and hosts manning dealer-assisted games intermingled with fully automated games.
“The Pulse Arena creates a nightclub atmosphere on a casino floor by blending the energy of Interblock’s electronic table games, interactivity and entertainment to create an exciting new gambling experience for established players, while attracting new players to the casino floor,” says Pe?e?nik. “People are talking, sharing winning experiences, participating together—it’s an entertaining wagering experience that players haven’t been able to find in most casinos.”
“You can get comfortable in your seat within the Pulse Arena,” Connelly adds, “and while you’re gaming, you have the ability to not only watch TV or interact socially; you have the ability, without getting up, to play virtually every game offered from a live table perspective. It’s all integrated, dynamic within the Pulse Arena.”
Connelly says the Pulse Arena takes the best of Interblock’s core ETG products and “wraps them in an environment,” one that attracts millennials and uses a variety of experiences to capitalize on just how hot the e-table genre is at present.
“We statistically know that the ETG segment of the casino industry is growing double digits globally,” he says. “It’s one of the few areas that we can say that about.
“So, we have intentionally integrated all of the leading products of Interblock inside. We have automated games, so at the slowest times during the day, rather than having to staff the Pulse Arena with 15 employees, we can go into an automated mode. The generators in the front are self-mechanical, meaning they will spin the ball, they will deal the cards. Or, we will have video blackjack up on the screen. So you can have very low infrastructure costs, and still maintain that environment.”
During peak hours, of course, the name of the game is as much action, and interaction, as possible, with both virtual and dealer-assisted games in which a live dealer spins the ball or deals the cards. “We have blackjack, roulette, craps, baccarat, keno, sic bo—all the main games that you’d find in the traditional table portfolio,” Connelly says. “But what we’re adding to that are additional features and functionality, as well as new types of tournaments.
“The concept is to take an area of the casino floor and really reinvigorate it,” he says, “not only with a leading product, in a segment that’s growing, but with an environment that will perhaps pull players onto the casino floor, whereas before they would have walked by.
“During the day, we can have Frank Sinatra, we can have keno going on inside. We can have a mood that is very much conducive to perhaps an older clientele. But then, with the push of a button, we can go into an evening mode, where the music gets louder, the lights are brighter, we have dancers, a DJ, a host—and incorporate a lot of different and new features of functionality on the ETG. That really makes it more of a social environment. So, you’re gaming while socializing.”
“When the players come back over and over again, they’re getting a new experience as they go inside,” says Pe?e?nik. “We’re adding progressives. We’re adding chat. We’re adding social media. This is not just a product that you can say is turn-key and stands as it is today. It’s something that’s going to continuously evolve into the future.”
Those future players, of course, have been the focus of many manufacturers. Pe?e?nik comments that Interblock’s Pulse Arena is typical of the social aspect to table games that appeals to the millennials.
“Interblock’s multi-player electronic table products keep the social aspect of play in mind,” Pe?e?nik says. “Our automated gaming devices use, for example, a real roulette wheel and ball, real dice and real cards. Our Dealer Assist gaming devices are real tables with electronic betting, offering players the ability to place wagers through play stations while a dealer conducts the game on the table.”
Future Vision
Interblock’s vision for the Pulse Arena and all of its ETGs is part of the company’s strategy to conquer new markets in North America and elsewhere, and to create new players along the way. Connelly’s appointment as CEO last year was one of many moves to add talent from the U.S.-based casino industry to a European staff that has been serving the sector for decades.
The company, for instance, brought in longtime WMS Gaming executive Rob Bone as president of North America, and longtime WMS and Scientific Games marketing VP Colleen Stanton Kakavetsis as global vice president of marketing.
“Obviously, you can’t replace 25 years of history in a private company, and Joc and the existing Interblock team that’s been here for decades, no matter who you bring in,” comments Connelly. “But we’ve brought in some great talent from around the world—from IGT, Aruze, WMS, Bally, Sci Games, you name it. What I’ve tried to do is really maintain that historical knowledge base within the company, and that innovation that existed within the company, and really complement it with people that know global gaming.”
He says the Pulse Arena is an example of how that combination of talent is being used to “evolve the ETG segment to the next level, using the best of both worlds.”
Another discipline being perfected by this combination of talent is finding innovative ways to add popular features to traditional table games that also increase the operator’s hold. “When it comes to ETGs, unlike in the slot business and other areas, the math behind the games is the math,” Connelly explains. “Roulette math has always been roulette math. Single, double zero. You really can’t touch that if you want be successful. You must mirror the play experience versus a traditional game, for all intents and purposes.
“If you want to add something, you can, provided it’s at the player’s discretion. You can’t force them. So, there is a huge emphasis being placed on side bets—trying to increase that hold percentage, and to make it a little bit more exciting and compelling to players who are used to playing side bets on live tables, and on slot game bonus features.”
Innovative ways to spice up table games has been one of Interblock’s hallmarks, and Connelly credits Pe?e?nik for orchestrating the plan. “He’s always looking to innovate, and take the electronic table game gaming segment to the next level,”
Connelly says of the Interblock founder. “So, I don’t see us ever really stopping from an innovation perspective and trying new things.
“Obviously, not everything can be a home run. But I think you’ll see, heading into G2E this year, that we have increased our roadmap and the resources supporting our roadmap dramatically in the past 12 months, specifically to try to bring the brand, and the look and the feel of Interblock, to the next level. Pulse is one example, but you’re going to see lots of other new things over the next six months as well.”
ETGs Soaring
Fueling this drive for innovation is the fact the electronic table game segment itself is soaring.
“Times have never been better for Interblock,” says Pe?e?nik. “We are seeing continual double-digit growth within the electronic table gaming segment around the world, and we attribute this largely to an ETG’s ability to extend across all
demographic boundaries and complement performing trends on the casino floor.”
Last year, Interblock commissioned the first-ever ETG player segmentation study, The ETG Player Portrait. “This report is the first and only study that defines who these players are and why they are critical to gaming businesses,” Pe?e?nik explains. “We found that ETGs attract not only slot players, but players from live tables and video poker as well—which makes ETGs the central conduit on the casino floor, the place where all the different segments of the market come together.”
Adds Connelly, “The more player research we do, the more we are finding that we seem to be a melting pot between slot players who have always wanted to try a table game but are afraid and table players who perhaps haven’t liked the environment of a traditional live table.
“What we’re finding is that the ETG product we’ve been offering seems to be really attracting a new dollar onto the casino floor. It’s not cannibalizing. And it’s attracting both existing and new players. Now, to the degree that’s going to sustain itself as the footprint expands, we haven’t gotten there yet. But so far, the indications are that the players really seem to be liking the fact that they have their own environment.
“In over 80 percent of the surveys we did, we asked, ‘What was your most compelling argument to go up to the ETG, other than the way it looked?’ Resoundingly, the answer was, ‘I had my own environment I could gamble from.’ If I felt like socializing, I was able to socialize.’”
Connelly adds that the new era of ETGs that Interblock is launching coincides neatly with the drive to please the next generation of casino players. “When you look at players’ online wagering, or even playing on social sites where they’re not winning any money, players over 50 are playing predominantly slots. In fact, over 90 percent are playing slots. But when you go to players under 40, it flips. Over 90 percent are playing table games. So there’s definitely been a cultural shift between the two generations, from slots to tables.
“When those players come out to the casino floor, they’re predominantly leaning towards tables, and because they’ve played online or are used to a touchscreen and a computer screen, having an ETG sitting there seems to be attracting a younger demographic.”
Connelly adds that this surge in ETG popularity is a worldwide phenomenon. “I’m very happy that it’s diversified across Asia Pacific, to Latin America, to North America, and even now, parts of Europe. We’re seeing growth and revenue increase across all our regions, in the double digits. And part of that is because, quite frankly, Interblock historically had not focused on several key areas of the globe—Australia; the Pacific Region; Latin America. We’re excited and pleased that right now the growth’s coming from across the board.”
In the Asia Pacific region, Interblock recently went live in Studio City Macau. “We’re proud to say that we’re the first ETG player, or supplier, back into the Macau market,”
Connelly says. “And that was several months ago. Since then, the demand for the Interblock product has been overwhelming. Asians very much have accepted the ETG product. I think it’s a great benchmark for what North America could be.”
For Asia, that’s 15 percent of the floor in Macau, 15 percent of the floor in Singapore and elsewhere. “It shows that there is definitely this third leg to the gaming stool,” says Connelly, “meaning it is no longer just slots and tables—it’s ETGs. Because of that, it’s an amazing opportunity for our company to expand. Although Macau may be, from a junket perspective, going through a transition, I can say from an ETG perspective, it’s full-steam ahead.”
It’s full-steam ahead in North America as well. Connelly says there is a “resounding appetite,” particularly from large casino groups, to create an area for the Pulse Arena. “Casino groups, especially the larger ones with a very large footprint, are trying to attract that energy and player traffic to the Pulse Arena,” he says, noting that the company is currently finalizing five Pulse Arena placements. “We’ve signed a very large deal in Quebec,” says Connelly, “and we’ll be going live with the first Pulse Arena somewhere around the May timeframe.”
Meanwhile, the Interblock brand and product line stand to grow right along with player appetite for ETGs.
“The Interblock brand stands for luxury, player-favorite electronic table games,” says Pe?e?nik. “We’ve created a unique brand. It’s important that players recognize our products among all others on the casino floor for their style and beauty. Once we’ve drawn the player in, we follow up with one-of-a-kind, patented technologies that deliver unparalleled gaming experiences.”
Back in 2009, Jamie Odell, CEO of Australian slot manufacturer Aristocrat Leisure, Ltd., made a commitment to improve the legendary slot-maker’s North American business. Odell’s five-year plan to accomplish that goal was to focus on growing the company’s inventory of premium games.
In the ensuing five years, Aristocrat brought in the best design talent in the industry, secured licenses to create blockbuster games from The Walking Dead to Britney Spears, and created show-stopping presentations like the Arc Double and the Behemoth that draw crowds to the slot floor.
But one move at the end of that critical five-year period arguably has done more to boost Aristocrat’s gaming operations portfolio than any other—the 2014 acquisition of Tennessee-based Video Gaming Technologies for $1.28 billion.
The VGT acquisition stood out among the mega-mergers and buyouts of that year, because unlike the others, it did not represent a consolidation, but rather an expansion, giving the acquiring company something it never had—a foothold in the Class II Native American gaming machine market.
More than a foothold, in fact. VGT was and is the largest supplier of Class II games in the U.S. Its 20,000-plus units in the field (mostly in the Class II heartland of Oklahoma) account for nearly 40 percent of the total Class II market.
From just about any angle, everything about the VGT acquisition made sense. “First, we weren’t in the Class II space, so it was an accretive move for us to get into that market,” says Brooks Pierce, Aristocrat’s managing director for the Americas. “Secondly, VGT was a very well-run company in a strong business that we thought we could integrate nicely, which we have. And lastly, the attractive part about it was the gaming operations nature of the business.”
Class II Pedigree
Aristocrat always had great relationships with tribal gaming operators in Class III compacted markets, and if the goal was to augment those relationships in the Class II space, it couldn’t have chosen a better partner than VGT.
Founded in 1991, VGT was one of the first suppliers to realize the potential of the Class II tribal business which was created only three years earlier with passage of the Indian Gaming Regulatory Act. The company quickly established itself in the Oklahoma market.
“VGT was one of the first companies to come into Oklahoma, and built a market share pretty quickly,” says Jay Sevigny, president of VGT. “Most importantly, VGT grew right along with a lot of the tribal gaming, and developed a lot of trust. We think of it as a shared partnership, and today, our relationships are very, very robust.”
In many ways, VGT provided the final piece of the puzzle in Aristocrat’s resurgence, which saw adjusted ship share rise to 23 percent in the fourth quarter of 2015. The Class II business completes a package that already had seen gaming operations business soar, from the company’s traditional casino business to its newer social casino offerings, made possible by the 2012 acquisition of social content supplier Product Madness. Pierce says the majority of Aristocrat’s North American business is now gaming operations content.
But the addition of a burgeoning Class II business to Aristocrat is only one benefit of the union. After all, this wasn’t a strong company taking over a weak company. Each company had developed technology that propelled it to the top tier of its market.
“Unlike some of our competitors’ acquisitions where they were reliant upon synergies to make it pencil, ours wasn’t that way at all,” says Pierce. “It all tucked in very nicely, and now we’ve just grown the business together, and leveraged the best of Aristocrat and the best of VGT.”
The integration of technologies already has begun. Last summer, VGT unveiled Easy Money Jackpot, its first-ever wide-area progressive link, at 11 casinos across Oklahoma. It was made possible thanks to technology from Aristocrat—specifically, the legendary Hyperlink multiple-progressive platform that brought the Australian company one of its first huge successes in the Americas in the early 2000s.
It was a combination of the best technology of the two companies. “VGT had struggled for quite some time and wasn’t able to deliver the wide-area progressive technology,” Pierce explains. “The problem was pretty much ready-made for us. We integrated with VGT, and within nine months, they had a WAP out in the marketplace. And it’s doing phenomenally well. It’s probably the best illustration of where we’ve leveraged our technology for the benefit of VGT.”
“It’s up to about $775,000,” Sevigny says. “People are real excited about it; it’s working very well, and it’s a great benefit to us.”
That was the jackpot at press time—resets are at $250,000. “It’s been a phenomenal additional platform for our customers’ business,” says Pierce. “It gives them a wider breadth of coverage in the Class II space. Obviously, with the volumes of play in Oklahoma, you can get some pretty big jackpots. So from a customer perspective, it has been greeted really warmly.”
Aristocrat, meanwhile, is benefiting from a technology perfected by VGT over the years—the three-reel mechanical platform that houses all those Hyperlink-fueled wide-area progressive slots in Oklahoma.
Despite the moniker Video Gaming Technologies, VGT has been at the forefront of innovation in the reel-spinning genre in the Class II space. The company’s patent-pending mechanical game terminal—traditional reels and stepper motors controlled by VGT’s proprietary Live-Call Bingo platform—has dominated a large portion of the Oklahoma Class II gaming market. Since the merger, Aristocrat and VGT have worked to develop a Class III stepper using VGT’s technology.
At last fall’s Global Gaming Expo, Aristocrat showed the Global Stepper, its first developed with VGT. “It’s a beautiful product,” Sevigny says, “and we’ve been very involved in its development. We have a number of hardware and software engineers that have experience in that area, so we’re very pleased to be part of that project.”
“The stepper has been an interesting part of our integration,” says Pierce. “We worked with VGT engineers on developing platform design and product management, along with our industrial design group. What we’re trying to do is take the best of what we know in Class III—and as you know, our cabinet strategy has been robust, with Helix, Double Arc and Behemoth—and combine the best of that industrial design with the core mechanics and functionality VGT knows so well in the stepper.”
The Global Stepper was displayed in prototype at G2E.
Pierce notes that while Aristocrat has offered stepper lines in the past, low-denomination video has always been its wheelhouse, and VGT has been churning out high-earning steppers for years. “We also think it’s a space that’s ripe for innovation,” he adds.
“And frankly, our customers have been clamoring for us to get into this space, because it’s a big part of their market as well—20-25 percent of the U.S. market. We don’t play in it, but we will by the end of this year.”
Sevigny adds that where VGT helps Aristocrat in stepper technology, Aristocrat helps VGT in video. “First and foremost, the two companies had very compatible cultures,” he says. “This was an acquisition by Aristocrat that was justified based on the complementary aspects of our businesses. They are very dominant in Class III, and VGT is very dominant in the mechanical stepper product. We have stepper technology and capabilities to assist them, and they’re doing a lot to assist us in the development of video products.”
Growing Together
While Pierce and Sevigny are obviously hesitant to reveal specifics, both say the sharing of technologies is likely to result in more products that bring the strengths of one to the market of another—or to new markets altogether.
“VGT was beginning to launch a new platform at the time of the acquisition, and we have that in storage right now,” Sevigny says. “It’s actually a fabulous platform, but with all the development going on with the Aristocrat platform, we’re joining them for this next wave of games.”
But will those games include Aristocrat hits for VGT? VGT titles in Class III casinos? For now, that’s being kept close to the vest, although Sevigny does concede that he would eventually like to do more Class II video products.
But not right away. “We are very excited about putting some Class II games out on their platform, and we do anticipate that we’re going to be bringing some Class III titles in,” says Sevigny.
Pierce says the beauty of the combined company is that both legacy platforms stand alone. “Nobody has better math in Class III than Aristocrat, but you could argue that nobody has better math than VGT in Class II. We feel we’ve got the best of both worlds.”
And both worlds will now grow, adds Sevigny. “We are growing outside of Oklahoma now, and one of the opportunities of being with Aristocrat is that the technology capabilities are significant. With Aristocrat we brought a wide-area progressive to tribal properties, which is fantastic for all of us. And every time we do these types of things, it strengthens the abilities of the tribes and the casinos to succeed and compete, and to continue to grow and achieve their objectives as well.”
Sevigny says VGT is even looking to expand to Aristocrat markets beyond the U.S., and there appears to be great customer interest in that possibility.
“But the real opportunities for us, in the near term, are closer to home.”
As in an expansion of VGT’s already-strong Class II presence in the U.S. beyond Oklahoma, which is home to 90 percent of the current VGT installed base. “We’d love to be in every Class II market,” says Sevigny. “We have a wonderful product and we create great value for the players, and in doing so, we create great value for our tribal partners. Every tribe has its own specific objectives, and some tribes have compacts where they’re allowed Class II and Class III, but we look forward to working with any tribe.”
Adds Pierce, “It’s made sense for us to leverage the VGT infrastructure in Oklahoma, and we have, in terms of service, sales and support. In other markets where Aristocrat has more feet on the ground, VGT will come to us when they look to expand to those markets. They have a direct sales force, but we certainly have contacts and relationships with most of the customers they would call on.
“We look at it holistically. From a customer standpoint, we’re trying to offer them the best of what we have, both in Class II and Class III.”
He adds that customers love dealing with one company for both classes of game, particularly as tribes look to increase Class II inventories. “They love the fact that they can get from one company under the Aristocrat umbrella all the solutions they’re looking for,” Pierce say. “California’s a perfect example—most of the properties out there have a mix of Class II and Class III, so they love the idea of being able to deal with one organization.
“When you get the combination of one interface with two channels that are doing extremely well, and a company that’s dedicated to innovation like we are, and add in for us the stepper product in Class III, it makes it easy for the customer to go do a lot of their one-stop shopping.”
Pierce says the integration of the two companies is complete. “It’s a normal occurrence to have meetings with VGT people on a regular basis, but the nice part is they have their own autonomous organization.
Jay Sevigny works directly for Jamie (Odell). Where we work collaboratively across the business, it’s really been exciting—great for both parts of the company.”
In the meantime, he says Aristocrat has been careful not to upset the very successful apple cart that
Sevigny has governed in Tennessee for just over a year. “The interesting thing about VGT is that in many ways, it’s still operated as a stand-alone, autonomous organization,” he says. “And again, it was very well-run, and from a cultural standpoint, the integration was seamless.”
“Nothing’s changed,” Sevigny says. “In Tennessee we have the administrative functions, primarily because that’s where the founder and owner lived. And we have engineering activities there. In Oklahoma, we have significant assembly and service operations, and our sales force is really based out of there as well. But we do everything the same way.
“Our customers tell us, to their delight, they haven’t perceived any change in their relationship with VGT, or the way that we service them. In fact, the only thing they see is that there’s now more opportunities for them, because of what our combined resources can do for better product on their floors. We have access now to a total of six studios across the world, where we now have game developers that are going to be involved in helping us with our games. That’s been the real exciting part for us.”
For Aristocrat, the VGT addition strengthens a relationship with Indian Country that already was strong. “The tribal community knows us very well,” says Pierce, “not only our cabinets and content, but our systems—the majority of our systems business are tribal customers. Overall, more than 50 percent of our revenue comes from Native American gaming.”
“The headline for all of this is that the experience has really been good,” says Sevigny, “and we’ve worked well. Our cultures are so compatible. We’ve had a couple of huge successes bundling Aristocrat products with VGT products, including the Oasis system. And our tribal customers benefit from this, because where you bring things together, they get more out of a deal, and we end up getting better contracts.”
Even better ones to come, no doubt.
Olympic Entertainment Group is the largest casino operator in eastern and central Europe. With casinos in eight different countries—Estonia, Latvia, Lithuania, Poland, Slovakia, Belarus, Italy and most recently Malta—Madis Jääger has his hands full. As chairman and CEO of the group, Jääger concentrates on customer service to elevate his companies from his competitors. He admits non-gaming revenues aren’t the focus, but understands things like bars, restaurants, entertainment, and in some cases, hotels can make the difference. He spoke with GGB Publisher Roger Gros during the ICE trade show in London last month.
GGB: Tell us about your casino which opened recently in Malta.
Madis Jääger: About five weeks ago, we opened the largest casino in Malta, which, in terms of our size, really is the largest for us too. It’s really the crown jewel of the casino industry in Malta as well, located in a city center of entertainment in the Intercontinental Hotel. So the natural flow of people and the crowd congregates there. Prior to deciding to locate in Malta, we did a survey of our potential competitors and saw a real opportunity from the service point of view. Maybe I’m too arrogant to say this, but you cannot really compare our service to the competitors. It’s still about the service and provision of the games, loyalty programs and the attitude. It’s not only about pure gambling.
Do you have one casino that you consider your flagship property?
While the Malta property is bigger, I’d have to say our property in Riga (Latvia), the Voodoo Casino. It is really the attraction point of all of the Latvian entertainment. We have expanded and enlarged the casino from time to time, and it is becoming a hub, where people have to come just to see what is happening.
They even do not come to gamble; it’s more like a type of Las Vegas thing. People can gamble, but you can have a great restaurant with a very nice bar. So I would say it best illustrates what an Olympic casino should be.
Tell us about the casino you are planning to open in Tallinn in Estonia.
We are building right now a Hilton hotel, which will be the first Hilton in the Baltics, opening this summer. This will become our flagship casino, which means that we will be moving the majority of the business from the existing casino we operate now. The new casino will be triple the size of the existing one, with some very new things as well that we have not introduced before into the casino market there. So, it’s not only about the gambling. It’s not about the bars or some entertainment, but some new features, some new elements that we hope will be positively accepted by the customers.
What’s different about this project than your other casinos?
This one we are building from the ground up. Our model up until now has been we are tenants in a building that belongs to somebody else. This forces you into some sort of framework, or there are always some restrictions, about the floor layout, what is the entrance to the street, what is the entrance to the hotel, etc. With this Hilton project in Tallinn, we are integrating the casino with the hotel. This will give us the best layout, the best connections to the conference room where we can host poker tournaments, to the lobby, or to wherever. So, the whole product will be more or less like a small destination resort, which will attract tourists from Russia, where the casinos are not allowed. We’ll also attract players from Finland, Sweden and Norway. I believe that it will have a great future.
Olympic operates in multiple countries with very different regulations, tax rates and markets. How do you keep track of all these differences?
Yes, it varies much. In some countries, we have limits on the number of slot machines. In some, we can only have 20 or 30 slot machines. In some of the countries we have mandatory table numbers, and this is what we need to really operate, not just only to have the tables and open them only when business requires it.
And the number of slot machines is, in many cases, driven by the tax rate as well. For example, in Slovakia we pay fixed tax per year, which doesn’t really matter if I operated only two months or 12 months; it’s a fixed tax per fiscal year. And the more machines you put on the floor, the higher your fixed cost. So it’s optimization, whether you want to take this fixed cost, and then hope for the revenues, or you decrease the number of devices, saving the tax but maybe missing out on revenue. So it’s really about finding the good balance of the profitability.
How important is non-gaming revenue to Olympic?
It’s not really important. When we’re looking at the millennials, they are influencing our businesses more and more every day. Right now we are not even competing that much against the other casinos. It’s becoming more about competing against how the millennials are spending their time and money. Where we operate, the nightclub thing is a little bit over, so it’s more about smaller lounges, some fine dining, small things which are not maybe too expensive, but still social. So, it’s really about competing with other alternatives of entertainment. But at the end of the day, our focus is on the thing that we are really good at, and that is the casinos.
The principals of Global Market Advisors, Andrew Klebanow, Steve Gallaway and Bill Bryson have vast experience in the casino industry, so when they bring the focus to an issue, they can drill down and get to the bottom of the problem. In 2015, several articles in GGB magazine raised the awareness in the industry of the steadily rising hold percentage on the slot floor and what impact that has on players and operators. And their long experience in Asia has made GMA the “go to” company to hire when you’re considering investing in any Asian country, especially Korea, Taiwan, Russia, Vietnam and Cambodia.
How did you come to the conclusion that slot payback percentage was a problem?
Klebanow: We conducted player focus groups in Las Vegas and around the country, and the one message that was consistent was that slots were getting tighter. Now, that could have been anecdotal, but once we started looking at the data, it became clear that not only was the slot hold increasing, it was far more dramatic than we had thought, up to 40 percent over the past 10 years.
Now, the casinos say the hold is only a point or two higher, but it’s really much higher than that, isn’t it?
Gallaway: If you have a 10 percent hold game and you increase it by two percentage points, you’re really increasing that hold by 20 percent. And this is on top of how much the average bet has increased. Historically, the higher denomination the machine, the lower the hold percentage. So when pennies were introduced, the reasoning was those machines should have the highest hold. But a penny game is not a penny game anymore. When you have an average bet of $1.50 or $1.75, and compare it to the average bet of a quarter game, 75 cents, the average bet of a penny game is twice that. So that gives you half the time on device, coupled with a much tighter machine. It’s impacting the customer experience negatively.
GMA is very active in Asia, with many clients. What’s the current consensus on the government crackdown in Macau?
Bryson: We’ve seen this many times over the years, but this crackdown has had some serious legs. The first was aimed at government officials who were illegally taking money to Macau. The second was a crackdown on conspicuous consumption, which went beyond gaming, the large purchases or very public events. And the last crackdown was on the people who market to Chinese to gamble, the junketeers. That’s the most troubling aspect of this crackdown, and it shows me that this might be going on for a while.
How is Macau going to survive?
Bryson: I think the operators are going to have to take a second look at markets they’ve by and large neglected for years because the Chinese market was so huge.
Gallaway: That being said, the Asian gaming market is so large, you still have 300 million-plus middle-class Chinese, and while it is now going through a recession, they will get through it. Trying to predict China’s policy is very difficult, but as China goes through a recession, some neighboring countries are going to benefit.
How about Vietnam, where you have several clients? There’s one big resort there and proposals for more.
Klebanow: There are very few markets in the entire world where a $4 billion resort makes sense, much less in an emerging economy like Vietnam.
Gallaway: And the only way a $4 billion project could even begin to be feasible—and it definitely is not—would be if you had a guarantee that you could attract the high-level junkets that were going to Macau over the years. We don’t see that happening.
Washington state hosts one of the most unique gaming industries in the U.S. With tribal and commercial casinos, the state is a often a beachhead in the gaming industry. Chris Stearns, a member of the Navajo tribe, and an expert in Indian gaming law, was appointed to the Washington Gambling Commission in 2013 and recently reappointed to a term that will last until 2021. He has paid close attention to iGaming and possible implications in Washington state, as well as the spread of illegal gambling in the state. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October.
GGB: Give us a thumbnail sketch of what the gaming industry is like in Washington and what your area of responsibility is there.
Chris Stearns: We oversee not just the regulation of the commercial games, which are operated by card rooms—pull-tab, punch board, bingo operators, raffles—we are also a law enforcement agency, so we prevent illegal gaming. And in fact, that is a large part of what we do. And then when it comes to tribal gaming, because of the way the federal law is structured, we co-regulate with the tribes. I think Washington has a really good structure, when it comes to the tribes. We’re one of the few states where there is no revenue sharing. That’s worked out well, both for Washington citizens and for the tribal nations.
Do the tribes pay any kind of regulatory cost?
They do. Under the compacts, they pay the cost of regulation. There are also small payments, but significant in terms of the actual number and the size, to localities to help mitigate things that come with gaming—crime, traffic and such. And then there are also contributions to a responsible gaming program.
Tell us about the “mini casinos.” Are they really that small?
Some are, but, some we call “enhanced card rooms,” and they can be pretty large in size. They’re located in urban and rural areas, and they’re pretty popular. There are some limitations that they have, that maybe tribal operators don’t have. But in general, they’re very popular.
You’ve been very interested iGaming as it might pertain to Washington state. Give me some of your thoughts on where iGaming is going right now.
We’ve been following it for about three years or so. Back then, it seemed like the next big thing, but I’m glad we’ve paid attention to it. One of the things we do is to give the governor and the legislature all the information they need, so we’re not just in a reactive stance, but we can proactively see what’s happening. So, we thought iGaming was something we should be studying.
Tribal casinos in Washington are all on reservation land. Is there any movement toward off-reservation casinos?
Yes, there are two active requests for the Bureau of Indian Affairs to put land into trust. They have approved the first part of a two-part step for the Spokane tribe. And the Spokane tribe has proposed to have land and gaming operation near the city of Spokane. There’s some controversy, and that decision now rests with the governor, to decide whether or not he’s going to concur.
The second instance is that the Bureau of Indian Affairs took land into trust for the Cowlitz tribe, which is on the I-5 corridor, but much closer to the Portland metro region. And that decision by the Bureau of Indian Affairs is under litigation.
When someone becomes an executive at a tribal casino, is the tribal gaming commission responsible for doing the licensing of that official or is that the responsibility of your agency?
We also license individuals who work at Class III facilities, so we do that with the tribe. The tribe will often do the first pass-through, and they’ll make their decision. And if there is some decision that we don’t agree on, we can work that out.
There have been so many vendors that really got their start in Washington state, especially the table game vendors. Do you get involved in approving those games?
Yes, we do get involved. And I think one of the reasons that there are a number of people who get their start in Washington is that rules are actually very strict. So, if you can pass Washington’s requirements, you can probably get your game licensed in other jurisdictions.
Testing slot machines is always a big issue. Do you use private labs?
We have our own lab. But we don’t really have slot machines. The tribes have a tribal lottery system, which is an electronic system that is based on scratch lottery tickets. Those are Class III machines, and we approve and test those. But the tribes also work with their own testing labs. And that is something we’re looking at, at the request of the tribes, to see if there is some duplication, and if so, if that is something that needs to be changed. We’re having those kinds of discussions with the tribes right now.
There sometimes is a perception that Indian gaming is unregulated, even though we know it’s regulated at many levels. What do you say to people when they say tribal gaming isn’t regulated?
What we say is that our experience is that tribal gaming is not only regulated, but it is well regulated. It is very effective. We have a very good relationship with the tribes, and we can certainly say that they do an exceedingly great job of regulating gaming in Washington.
Dermot Smurfit, the CEO of GAN (formerly GameAccount Network), talks about why U.S. casino operators have been slow to embrace social casinos that would allow them to stay in touch with their players when off property.
- What is the status of the casino industry completing an online transition like other industries?
Traditionally, when bricks-and-mortar industries migrate online, usually you get a leader who jumps way ahead of the pack and everyone else races to catch up. We’re in the early period of that era, and I predict sometime within the next year, you’ll see one casino company jump far ahead of the pack, and the others will wonder how they did it.
- Why can’t casinos just use Facebook for a social casino platform?
It’s pretty simple: Because you never own your customer data; you only rent it. And today in the social casino market built principally on the Facebook platform, you can see that the big boys continue to get bigger and bigger, so it’s very hard for a startup casino to achieve any degree of scale, which we would express as maybe 200,000 active players a day. And even if you are successful, very quickly the competing casinos copy what made them successful using Facebook’s amazing advertising systems. It’s a great platform to advertise on, but a horrible platform to operate.
- Why are land-based casinos the best organizations to operate social gaming?
Because of the prohibition of iGaming in the U.S. (except for a few states), it is a market that is not being served by the people who are best positioned to serve it, the land-based casinos. American casinos are very much at the heart of every regional community, and they function like a social hub. They can bring that same service to social gaming.
- Why haven’t casino executives capitalized on social gaming?
There is a growing cohort of casino executives in America who are beginning to understand the scale of the business and the sheer quantum of money that is being spent by casino patrons when they are off property. If you appreciate the level of engagement, you have to reassert your relationship with that group and also protect the remainder who haven’t yet decided to download IGT’s DoubleDown or Aristocrat’s Heart of Vegas or one of the other social casinos available today.
- So, how many of today’s casino customers are playing in social casinos?
We’ve seen two things. First, when a player engages in simulated gaming at home, it’s their way to prepare to come back to the casino. They play online with their local casino because they want to go visit that casino. That doesn’t mean that they’re not continuing to frequent other social casinos; they do. But we modify their behavior by reallocating their existing spend, which is typically fragmented across two or three existing social casinos, to their local land-based casino.
Kevin Brown was elected as chairman of the Mohegan Tribal Council in his first attempt in 2013. “Red Eagle” spent 25 years in the U.S. Army, with deployment experience and management expertise at stateside bases. He has several degrees, and served as an analyst at the Pentagon. With extensive leadership and organizational management experience, Brown was the perfect choice to lead the Mohegan tribe at this time, as it is facing competition from Massachusetts, diversifying its economy and building yet another expansion to its flagship property, Mohegan Sun. He spoke with GGB Publisher Roger Gros at Mohegan Sun in October.
GGB: You spent a lot of years in the Army.
But I’m guessing being chairman of the tribe, you get reactions that are very unmilitary.
Kevin Brown: That’s funny. A lot of folks have sort of a misconception about the very hierarchical structure of the military, and following orders. But the last 10 to 14 years of combat, and the deployments that come with it, put soldiers in a very uncertain and violent environment, where they have to be very agile and adaptive. I’ve got those experiences under my belt, as well as dealing with tribal sheiks in different countries, let alone my own tribal politics here in the U.S.
Your tribe is unique in Indian Country, in that you’ve really got your members involved in the management of the company, from Bobby Soper on down.
We’re very proud of that. It was a long-term goal and part of the vision of this entire development. And we have reached probably the ultimate here, by having Bobby now seated as of October 1, as the heir to Mitchell Etess as the CEO and president of Mohegan Tribal Gaming Authority. And as you said, it trickles right down to Ray Pineault, who’s the president and general manager of this property and Kara
Fox-LaRose in Pocono Downs in Pennsylvania. She’s assistant general manager of that property. There are many others, as well. However, we also recognized early on that if we weren’t careful, we’d make the mistake of accelerating down that path too quickly, and it would be to our own detriment. We were very fortunate and very well advised in the early years to recognize that we needed to have industry experts to cultivate, mentor and bring these folks along to the point that we’re at now.
Your preparation for the challenge of the casinos in Massachusetts is impressive. How is that strategy working out right now?
It’s twofold. It’s moving down two parallel paths at the same time, and it seems that everyone I talk to has allowed themselves to get pigeonholed into thinking we’re only doing one or the other. We are both improving and developing this property to make it that much more of a destination tourist location, an integrated resort location, and looking for other ways to directly compete with Massachusetts by developing other gaming locations.
And in the news quite a bit lately is our joint venture with the Mashantucket Pequot Tribe, who own and operate Foxwoods. We could consume this entire interview just talking about the history of that relationship. We competed against each other fiercely in this corner of New England and now we come together to fight against Massachusetts.
And I think that you can see that this joint venture has been taken seriously. The press is reporting that MGM is reassessing the scope of their project in Springfield. We are not—as we were once alleged to be doing—going to build a “slots in the box” kind of environment. In fact, we’re going to build a first-class casino like the one we operate here in Uncasville, and we’re going to directly compete with whatever MGM puts up north. And their box is getting smaller, isn’t it?
You just got back from Korea. It sounds like a tremendous opportunity there. We all know that gaming in Asia is booming, even with the slump in Macau. What do you see in Korea?
We’re talking about a potential property, positioned strategically, right on the Incheon International Airport grounds. You will fly into that airport, and you will see the Mohegan Sun-inspired project on the north side of the runway. And within five to seven minutes, you can be in the front door.
In the broadest sense, we’re talking about the ninth-largest airport in the world that has 42 million visitors through it every year. They’re building a second terminal that will bump that to 60 million visitors a year. They have plans for a third terminal and two more runways to make that 90 million visitors a year. All of that driven by the Korean government’s desire to increase tourism to the country. We want to be a player in that. And it’s looking very good.
What was the thought initially, to become involved in Asia?
Well, two things, I would say. But first and foremost, I don’t know if there’s such a thing as a pyrrhic loss, but the Massachusetts pursuit, the Massachusetts competition, was sort of a pyrrhic loss for us. Because the silver lining was that the world, those that are seeking to have operators come in, began to recognize that Mohegan is in that upper crust of operators. And this initial connection to Korea came as a result of not landing the Boston casino, but someone seeing that we could compete toe to toe with a guy like Steve Wynn, and do very well.
And the second thing is that there is an affinity for Native American culture in Korea. So that became sort of a hook for us as well.
The sale of International Game Technology to GTECH was completed more than six months ago, and the new executives are getting comfortable with the acquisition. Renato Ascoli, formerly a senior executive with GTECH, has been given responsibility over the company’s all-important North American and interactive markets. DoubleDown Casino, one of IGT’s most profitable assets, is also under his oversight. He spoke with GGB Publisher Roger Gros and Editor Frank Legato at G2E in October. In the full podcast of this interview, Ascoli gets into skill games, tournaments and the discussions about slot payback percentages, visit ggbmagazine.com.
GGB: It took a while to put together, but now it looks like the strengths of the combined companies are really coming out. What has been your strategy since the merger?
Renato Ascoli: Yes, it took some time, but the good news is that we were well-organized and prepared since day one. First, we decided to have a single brand and decided that IGT would be the home for all the new products. We organized a single sales force, and it was actually ready to go since June. We wanted a single portfolio of games, so the legacy IGT would know more about the GTECH part, and vice versa. Legacy IGT was strong in VLTs, in distributed markets and of course, in casinos. They’re strong in casino systems, and GTECH was less into that. GTECH had a strong presence in interactive, particularly in the central systems and in the CRM applications. IGT was always strong on content. So, it’s a natural blend.
So what are your plans going forward?
Today, we’re trying to build the new success story for IGT, on some specific pillars. And I always remind my team, the first pillar would be “customers first,” which is not just a motto. It’s a day-by-day attitude. And we think we began doing that with a very important process that legacy IGT had to form a CAB—a customer advisory board. So, we listen closely to our customers. In June, more than 40 customers actually were very clear and open with us indicating what we should or should not do anymore. And I’m so thankful for them.
The second item, I think, is the player’s voice. So, this is probably the area where my team, the legacy GTECH, is probably bringing more knowledge, in terms of operating into a B2C ecosystem. I personally have been managing B2C operations throughout my life, so I did research and testing, and we’re introducing this discipline in the IGT world as well. We would never send out a product to the market without a thorough testing, in field, before doing that. And we’ll definitely make the decision to recall a product from a testing phase in the field, if the product will not perform to a certain level.
What has been the reaction from your customers to these changes at the company?
I like to be conservative. But it would be fair to say that, particularly after the CAB, our customers realize that we are open to listening and suggestions. They were actually suggesting we use the same platform, the same technology. They ask us very vocally to use a station charge for smartphones on the boxes, and we did.
We are not afraid to admit we may make mistakes, because I think we learn from mistakes. So, I’m asking all the team not to be dismissing of this fact, but to go deep into the root cause of that, and try to make some changes.
Tell us about the new technology. Your True 3D has now been applied to Wheel of Fortune, merging popular IGT titles and new technologies.
Wheel of Fortune has been the leader in the market for years, and now it’s on a technology that proved to be successful in the marketplace, True 3D with Sphinx. But even more than that, I think that probably the quintessence of the company coming together is probably the OnPremise solution that we offer. We’re about to introduce it to the market by the end of this year on the MGM platform. So players sitting in a bar or in a restaurant, or anyplace else in any time of the year, can place a bet, or play a casino game on their iPhone.
That solution is bringing together the interactive technology that we are bringing with GTECH, with the mobile technology that we brought with the recently acquired U.K. company Probability Plc., with our sports-betting capabilities, that we developed starting from Italy, combined with the distribution of casino games, and connected to a central system, which is the legacy IGT true capacity. So, doing this is not easy, but it is what we decided to do, just to demonstrate to the market there could be value in bringing this different multi-faceted element of company together.
And this leads right into serving the millennial generation, doesn’t it?
Definitely. Because it’s a way to let them try the opportunity to place a bet on sports, or enjoy a slot machine, in an environment that is more friendly to them. They usually like some features that probably a standard casino player would not like that much. They like leaderboards, for instance. They always want to know where they stand, compared to someone. They want to be, and to appear in the top of a list. They want to be in control of the game. They want to tweak and change the color, the functionality, so we need to provide these kinds of things. And of course, they like the skill component.
So, we need to start from there. Let’s introduce fresh blood into our business.
David Rebuck has ridden the roller coaster in Atlantic City. Appointed by Governor Chris Christie in 2011 to completely revamp gaming regulation in the state, he got involved in promulgating the rules for online gaming, approved by the state legislature in 2013. And within the past year, he has overseen the closure of four Boardwalk casinos at a loss of more than 8,000 jobs. To hear a full podcast of this interview with GGB Publisher Roger Gros, where he talks about iGaming, the status of Revel, the future of Atlantic City and the possibilities for expanded gaming in New Jersey, visit GGBmagazine.com.
GGB: What has been the impact of the closures of the casinos and the real difficulties in Atlantic City over the last year on the DGE?
David Rebuck:The major impact in closure to the casinos has been an economic impact on the region—a significant loss in jobs, and the filtering down to other businesses that provide goods and services to the region that are now impacted. So, that was a very tough year, 2014, for us. The impact on us, as regulators, was to make sure that the closures were done in a professional and effective way, with as little impact on the people who were truly impacted—the employees—as possible.
We’re still well positioned to deal with the oversight and the integrity of the industry for eight casinos and internet gaming, but it was a very difficult year for all of us.
What do you think about the idea to expand casino gaming into other regions of the state?
New Jersey is in a very interesting period of time right now, where casino gaming has been restricted to one city, obviously Atlantic City. The state has begun the dialogue and the debate as to whether or not that should change. If it does, the focus is clearly on the highly populated northern region of the state, the New York metropolitan, the North Jersey market—probably the No. 1 market for possible expansion in the United States by the industry, because of the population, as well as the affluence. And I’m sure the legislature, as it considers whether or not expansion is viable, will consider if it is viable, how it is to be structured with ownership interest in an expanded area.
The effort right now in Atlantic City is to create more non-gaming amenities. Does the DGE play any role in encouraging that?
I sit on the Casino Reinvestment Development Authority. So, I wear that hat in working as a board member to assist in the redevelopment and funneling of revenue into these non-gaming projects… But as DGE director, when I put that hat on, there is an area where we have a responsibility to assist, and that is in the area of the alcoholic beverage venues, whether they’re owned by the casino and operated by the casino, or whether a third-party vendor. And we were very active in working with Bart Blatstein, who (is developing) the Caesars Pier… I believe that he would be one to tell you that we did that in a very effective and efficient, professional way, that allowed him to become operational in the time frame that he wanted to allow for a non-gaming entity to be in operation this summer, for visitors to Atlantic City.
One of the areas you can have a lot of influence in is innovation in gaming products. How has that effort been going?
Our lab, led by Eric Weiss, has done a great job, and we’ve made it known to the industry, with the casinos as well as AGEM and their representatives, that we’re ready, willing and able to look at any device that they want to bring in, whether it be skill-based gaming, whether it be social gaming, whether it be an expansion on a slot machine product that’s unique and novel. We’ll take it on and we’ll look at it in a very prompt way and get a response back to them faster than any other jurisdiction in the United States. It’s my commitment to them, and I think we’ve delivered on that.
You mentioned skill games. How important is it that the industry get this right?
It’s an area where I do believe that the gaming community needs to be more aggressive in the future, because I think it’s well known in this industry that if it does not adapt and innovate to what may be interesting to others, particularly the millennials or younger generation, then it will go the same route as other gaming interests that have fallen off that slippery slope of being irrelevant in what is interesting, exciting and entertaining.
One of the things New Jersey was proactive on was fantasy sports. The legislature passed a bill in 2012 allowing the casinos to offer some sort of fantasy sports activity here. Why didn’t that develop?
I believe that the timing wasn’t right for us in one way, and at the same time, that the fantasy sports regulations that we approved went out a few years ago, and we also became very aggressive in trying to roll out internet gaming. And I think it was very difficult for the casinos in New Jersey to multitask to two new products. And they made a choice—rightly so, I believe—to focus their efforts on internet gaming, which was on a very aggressive timeline, and there was a desire to do it and do it right on their part. What suffered was the fantasy sports, because they couldn’t put research and development resources into that… In hindsight, I wish they could have multitasked. I would have loved to have been the base for fantasy sports play in the country out of Atlantic City. It just didn’t work out.
The Sycuan Casino in San Diego started as a small bingo hall in 1983. Since then, it has become an integral part of the community, but with competition coming in the Jamul tribe’s Hollywood Casino, slated to open next year, it was time for a change. Interim General Manager John Dinius has been working at Sycuan for 22 years, and explains how leadership changes at both the casino and the tribe, including his own promotion, inspired a new look at Sycuan’s experience and the future of the casino. He spoke with GGB Publisher Roger Gros from his offices at the Sycuan in August. A full podcast of this interview can be heard at GGBmagazine.com.
GGB: Why did Sycuan choose to rebrand at this time?
Dinius: Late in 2014, Sycuan experienced some significant changes in senior leadership. We took that as an opportunity to redefine what the Sycuan experience means for both our guests and our team members. Ultimately, we set out to regain a strong position in the market, as well as prepare for new competition that is coming into our area in mid-2016. We wanted to look at everything we were doing on a daily basis to make sure we were executing and achieving the goals that we had set.
What are some of the elements of the rebrand?
We broke our strategic plan into three separate elements: environment, loyalty and branding. The branding focused on the experience the guests have when they come into the Sycuan casino. We faced some challenges over the years, primarily with our air quality. That was our No. 1 complaint. We expanded our non-smoking area, so now we offer the largest non-smoking area in San Diego. We also revamped our entire loyalty program, which makes us the best loyalty program in San Diego. We’ve added live entertainment throughout the casino, a new promotional stage, and a revamped Primrose Room so we can really cater to the high end and Asian customers.
How did you revamp your loyalty program?
We commissioned a couple of feasibility studies and market-assessment studies to gain a true understanding of where we stand in the market. We were able to identify a tremendous number of values that drive players to choose one casino over another. And then our management team created goals and tactics to support those value statements from our players. We feel like this is a very thoughtful and deliberate new brand, and we’re already realizing some of the benefits.
You’ve been working at Sycuan for almost your entire career. What special perspective does that give you on the rebrand?
I have been working at Sycuan for 22 years. During that time, I’ve seen a number of changes both inside and outside the organization. I’m a San Diego native and feel more connected to the community than I feel most do. This is one of the reasons I’m so proud of the community efforts Sycuan has been well-known for over the past 32 years.
Being here for so long, I’ve had the opportunity to develop some longstanding relationships with many of our Sycuan team members. With that, I’ve garnered a lot support and enthusiasm from team members. And adding to that, we operate in a “bottom-up” philosophy, changing the traditional paradigm of top-down management.
We implement focus groups from every department to better understand the challenges they face and consider tools they may need to take their service excellence to a new level. By doing that, we gained a tremendous amount of insight from our team members. We implemented those changes not only to make their experience better but also their delivery of excellent customer service for our players.
The team has been phenomenal. They are very supportive, and there’s a lot of excitement out here.
With competition coming into your primary market, how to you plan to maintain player loyalty?
We acknowledge that everyone is going to want to go and check it out. But we have an experience that exceeds anything that anyone could bring in without knowing the players. Everything we’re doing today is more than just preparing for Jamul. It’s about taking our rightful spot in the marketplace back again.
Where does Sycuan stand on iPoker in California?
This is a very dynamic and complex issue, to say the least. We continue to keep our eye on the ball with the iPoker regulation. While we’re doing due diligence behind the scenes, we’re sitting on the sidelines right now. We haven’t taken an active or formal stance. It’s probably dead for this year from a political perspective, but we’re always looking for new businesses, so we’ll continue to keep our eye on it.
Tell us about the commitment of the new tribal chairman, Cody Martinez, and the tribal council to the campaign.
This has really been an incredible experience. Chairman Martinez and the entire tribal council have been more engaged and more involved than any tribal council I’ve seen or even heard of. If you’re going to try to do something as cutting edge as we have attempted, you have to have that tribal commitment and buy-in. This is a very young group, they’re very creative and the ideas are free-flowing. They’ve been tremendously supportive.
We had four meetings with our 1,700 team members, and all members of the tribal council were present for every meeting. They said some words that truly conveyed the commitment they have not only to the organization but also the team members and the community. It was a demonstration of their total commitment to what we’re doing, and I’m very excited about the future.
In January 2014, Ram Chary took over as president and CEO of Global Cash Access. With a long history in the areas of retail payments and financial services, Chary’s expertise was well suited for the leader in the gaming sector of those disciplines. And when, less than a year later, GCA completed the acquisition of Multimedia Games, an innovative gaming machine manufacturer, Chary’s organizational expertise was tested. But he’s been up for the challenge, as both GCA and MM Games have continued to lead their sectors. Chary spoke with GGB Publisher Roger Gros at his offices in Las Vegas in May.
GGB: It’s been about six months since the acquisition of MM Games has been completed. How has the transition gone so far?
Chary: It’s been going very well. This clearly was a transformational acquisition for us. It more than doubled the size of our company. We’ve identified areas where we can consolidate services, like human resources and finance, and understand why services need to be separate because of the unique characteristics of the two divisions. I’ve been very pleased with the efforts put in by members of the teams, and we’re very enthusiastic about the future because our company is so different than any other in our industry.
It’s not like one slot company buying another. There were two different businesses, so what has it taken to be able to blend the two into one corporation?
Yes, this is truly a unique combination of companies. We’ve been concentrating on adding the full product portfolio from Multimedia Games to our existing customer relationships, and that effort has begun to succeed. So, we’re creating a full-service solution for casino operators to optimize cash-to-the-floor solutions with player-proven slot gaming products that focus on retaining and acquiring new casino players. GCA is licensed in so many more jurisdictions that we’ve been able to introduce Multimedia Games to an entirely new audience in many cases.
Tell us about the GCA side of the business. Obviously, the casino business runs on cash, and that’s what you provide. Why has GCA been so dominant in this space?
We understand the needs of the casino operator like no other company. People forget that we acquired the NEWave company before we bought Multimedia. NEWave was focused on compliance issues and how casinos approach them, so our customers know that we provide solutions to them for the issues that are most difficult. This area has become more crucial recently because of additional federal regulations and proposals. And because we’re so large, we’re able to offer them the best deals, which we expect will continue with Multimedia Games. We are offering them value and product that nobody else has.
Remember, we both provide hardware that ends up on the casino floor that’s critical in the casino operation. That’s a commonality that’s very significant but that many people overlook. We sell to the same decision-maker in the casino’s organization more often than not.
What are the various services GCA offers to land-based casinos?
ATM transactions are more commoditized, and some of the cash advance aspects of the business were found in a lot of different places. We have proprietary technology—proprietary software that’s patent-protected, and kiosks that are also very unique and stand on their own in the space, and they are things that are not provided by the other suppliers.
Payment processing is such a hot topic these days. How will GCA play in the iGaming space?
We’re really not participating in iGaming at this time. Until our customers tell us that this is a service they require, I think we’ll wait and see what happens in this complicated area.
Let’s move to the Multimedia side, a new business for you. What have you done personally to get up to speed on the slot business?
I’ve been working very closely with the folks in Austin (the headquarters for Multimedia Games). We plan to leave them in place there to operate as they have been doing. As you know, they’ve been very successful. We have a great team there, led by industry veteran Dave
Lucchese. I’ve really been energized by seeing the enthusiasm and creativity that this team brings to the table.
MM Games’ TournEvent program has been very successful. What does it do for your casino clients, and how does it pay off for your company?
This event has gotten bigger every year. It’s a great way for our customers to invite their players in for this special event. Our team has done a great job creating excitement on the casino floor, and this year we’ll make more than 100 stops on two routes. It’s a way to partner with our clients and make them knowledgeable about our games and our people.
What is your company going to be known as going forward?
We’ll have an announcement around G2E to reveal the new name of the company. It won’t be either Multimedia Games or GCA, and it will be a brand that will quickly become one of the most powerful in the industry.
Is the MM Games acquisition the final move by your company, or are you eyeing some other moves that would make it stronger and more diverse?
It’s going to take us a few years to absorb this acquisition and make it work, so I don’t see us making any major moves during that time. But if we see some kind of tuck-in acquisition opportunity that will help us transform the gaming floor, we won’t hesitate to pull the trigger.
Former Mirage and Station Casinos exec Scott Kreeger was tapped in 2012 to take over the struggling Revel property in Atlantic City. Kreeger’s emphasis on the gaming product increased productivity and revenue at the property, but it was too little, too late, as debt and monthly energy bills defeated his every effort. In 2014, he was chosen to replace the departed Rob Oseland as the leader of SLS Las Vegas, a property that opened to high expectations but faltered early. However, with an emphasis on gaming, the local market and the superior F&B products, Kreeger is slowly turning the ship. He spoke with GGB Publisher Roger Gros in May to explain his philosophy and explain why SLS will soon become profitable.
GGB: Why were you brought in to lead SLS, and what did you find when you got here?
Kreeger: Well, the property had just opened up. It was about three months into post-opening, and trying to get through the trials and tribulations of typical opening. Rob Oseland, who was the previous president, had decided to take another job and work on another project, and I was just coming off my project at Revel, where I spent a year and a half doing the strategic sale process and trying to correct the business model. So, the two properties had a lot of similarities: lifestyle-oriented properties, trying to figure out the right business model to operate on, and maximize profitability.
I’d met Sam Nazarian (president of sbe entertainment, the SLS parent company) in the past, so it was just coincidence that we had just kind of concluded the auction process at Revel. Sam gave me a call, and asked me to take SLS through post-opening, and get it on the right track.
A lot of the elements of this property are reproduced from previous sbe properties in L.A. or Miami Beach. Are you evaluating whether they work here in Vegas?
Yes, we definitely are. First of all, we’re unique. Unlike a lot of Las Vegas Strip casino hotels, we own all of our own brands on the property. So, whether it’s Bazaar Meat, or Katsuya, Cleo, the restaurants, the nightclubs, we run and operate those properties. That’s unheard of these days, where you have celebrity chefs and nightclub operators who work on lease/rent deals.
Then, we evaluated what our strengths are, and where we needed to bolster those elements, especially when we’re in a situation as a new property that’s gaining recognition. People are trying to figure us out, and become familiar with our brand. First of all, the remodel of the place is phenomenal. It’s like a ground-up build; it’s not really a remodel. And the property itself has great bones. The amenities are great, the feel in the casino is great. It’s very manageable. And it’s kind of unique; it’s truly boutique compared to the size of most Las Vegas casinos.
Let’s talk about the casino. You had a database problem in the beginning. Revel had that same problem early on—no names in the database; you start building it from scratch. Where are you in that process?
When I got here, we weren’t where we needed to be. I have a gaming background, so we went through the fundamentals. First of all, we took a look at the loyalty program. Funny enough, the loyalty program was similar to Revel, in that it didn’t have any tiers. So there was no aspirational tier levels or benefits, in that regard. We took a look at some of the process of being able to use your points for food—that function wasn’t available. In June, we’re launching a completely new card program, very competitive point-to-redemption ratio, more competitive than the local casinos.
Then there’s the other aspect of casino marketing, which is player development. I had the benefit of working with some incredible player development executives on the East Coast. I called them up, and asked them if they’d like to come join me here. And so, I have two of the top PD executives, and one of the top casino ops executives on the East Coast, who came and joined me here. And then we paired with one of the people who I think is one of the best local marketing people in Las Vegas. We put together a heck of a team.
In May, you experienced the first Rock in Rio, MGM’s music festival across the Strip from SLS. Two weekends of solid music. What kind of impact did that have on the property?
It was the best free entertainment I’ve ever seen (laughs). Our property is front and center.
It was just phenomenal. But it was a collaborative effort. That’s what’s nice about being on the north end of the Strip, and all of this emerging business. We’re all collaborating, whether it’s the Stratosphere guys, or the new MGM guys, Scott Menke and the Paragon Gaming group that now just announced that they’re running Westgate. We’re all working together.
Rock in Rio was one of those examples. We shot the fireworks for Rock in Rio from the tower of SLS. So, I couldn’t ask for a better way to expose this property, being less than a year old, to the masses. Because we literally had tens of thousands of people every day coming through the property, on all four days. It was phenomenal, and the experience was amazing over there. Well-orchestrated, and the city did a great job with the traffic, and the pedestrians. The whole experience was great, and we’re excited for MGM to make a commitment to invest $20 million in that venue, and we’re excited to continue to see that programming.
The new MGM Cotai resort in Macau promises to be one of the gems of that region. With amenities specifically designed for the Chinese customer, Grant Bowie, the president and CEO of MGM China, is taking the knowledge accumulated at the MGM Macau location and transferring it to Cotai. While Bowie believes change has been endemic in Macau since the launch of expanded gaming, he’s confident the SAR will be able to surmount the recent issues and evolve into something new and better.
What do you believe is the principal reason for the decline in gross gaming revenues in Macau?
I think there’s a combination of reasons. The last two years we’ve seen astronomical growth and we all knew at some time the growth would slow. There’s no question that the transformation of China, both in economic terms and government oversight, is all having an impact on consumer confidence.
Will MGM be able to replace VIP revenues with mass/premium mass business?
We’re starting to see that. The future growth in Macau gaming is quite clearly going to come from the mass market. And for us, that’s been our objective since we opened here. But we also understand that you have to respond and adjust to market conditions at all times. We all need to push harder to build our mass business.
Do you believe the regulatory regime in Macau will become more stringent?
It’s been happening all along for us. The U.S. operators that came into Macau have seen that level of oversight. It’s a slightly different approach than Western regulations, but from our perspective, we run a global compliance strategy, so we do exactly the same in Macau as we would do anywhere.
How much has the general decline in the Chinese economy impacted Macau?
With the changes in China, the first thing you always look at is consumer confidence. Because of the significant change that is taking place, the consumers, to a degree, are sitting on the sidelines, trying to work out where they fit into the future. A lot of our customers are private businessmen in China, so they are having to invest lots of time and money into their own business, not leaving much for recreation.
Are you confident that you’ll get the allotment of table games you expect?
We’re confident that we’ll be able to gain the right number of tables and we’ll be able to operate successfully and effectively. Clearly, we’ve made an application to the government and asked for a specific number of tables. We need to pay attention to how the market is tracking, and I think we will get the tables we require, but it’s very unclear how that’s going to happen. We’ll look at our total gaming capacity and decide how to effectively deploy all of our assets.