FROM THE TOP
FROM THE TOP:
JAPAN’S NEW
ZAIBATSU?
Tim Poole examines US bids to land an integrated resort license in
Japan, as the race to build a casino in Osaka in particular begins
to capture the imagination
While the legalization of sports betting across the US has been
gaming’s main talking point since the overturning of PASPA,
there can be no doubting the biggest talking point of gaming’s
future: Japan.
As the bidding intensifies for the country’s three available
integrated resort licenses, all eyes are currently on Osaka, where
the race is said to be down to a trio of candidates at the time of
writing. MGM Resorts International, which may well hold pole
position, faces competition from Galaxy Entertainment Group
and Genting Singapore. Wynn Resorts was also rumoured
to harbour an interest, with Wynn executives previously
suggesting Osaka is the operator’s preferred location. But the
firm had generally remained non-committal when singling a
region out and, in October, confirmed it will concentrate on
the Kanto region, which includes Tokyo.
It is due to the interest of MGM, Wynn and more, of course,
that integrated resorts are no longer just a hot topic in Japan
itself, but rather a key focus for US casinos. Coming as no
2 GAMINGAMERICA
surprise, Caesars Entertainment announced in September it
will not be pursuing a Japanese license: that much was made
clear when Eldorado Resorts announced its plans to acquire
it for $17.3bn and emphasized a focus on domestic gaming.
Las Vegas Sands however, confirmed it will switch focus
away from Osaka and firm up its bids in Tokyo and Yokohama.
Sands CEO Sheldon Adelson explained: "Our company will
target new development opportunities that allow us to
maintain our industry-leading returns on invested capital – and
we think an investment in Tokyo or Yokohama gives us the best
opportunity to do exactly that.”
But it is MGM which looks like representing the US’ biggest
Japanese interest. MGM President and COO Bill Hornbuckle told
Gaming America in July: "Japan is the largest untapped market in the
world that we think can be regulated properly and a place we might
be able to get to. There will be three coveted licenses. Each one of
them will have an audience of about 30 million if they are spread
out correctly. So we’re all in. We’ve taken an Osaka-first position."

MGM Chairman and CEO Jim Murren was equally unequivocal
about the operator going “all in” for Japan. Murren has travelled
to the country 30 times in the last three years. An architecture
and urban studies graduate, Murren also told Gaming America he
is keen to create a “uniquely Japanese proposition.”
The prize on offer in Osaka is an architect’s dream. As things
stand, the artificial island of Yumeshima could play host to
Japan’s first world-class resort, whoever ends up winning the
contract. A 143.3 hectare area (1.4 million metres) previously
earmarked for industrial use, the Osaka City Planning Council has
now approved Yumeshima for commercial ventures. Transformed
into a casino resort and tourist destination, the island boasts the
capability to become one of the world’s finest gaming venues.
Looking at images of Yumeshima now, the cranes and containers
might just put you off. But there’s no doubting it’s a venue brimming
with potential. Picture a lavish five-star architectural plan – for no
less will surely win the tender in Osaka – and you have a location to
fall in love with, altering both the landscape of the city itself and the
gaming sector as a whole.
Standing just off the coast, you can already imagine a player’s
anticipation building before they even arrive at the casino doors.
Entering through the bridge? Imagine a massive MGM, Galaxy or
Genting gate greeting visitors. Entering via boat? Imagine the luxury
ferry rides VIP departments could put on for tourists and high rollers.
Historically, MGM, Sands and Wynn fit the perfect bill
for the Japanese market. Japan’s business culture was once
dominated by a handful of zaibatsu – large monopolies consisting
of holding companies which owned both banking and industrial
subsidiaries. In the 1920s, these organizations controlled a large
share of Japan’s economy – and the fact Mitsui and Mitsubishi
were two of the so-called “big four” shows you the size of these
businesses, their names echoing through history.
While the US’ biggest casino firms are not monopolies,
their reputations will hold great respect and resonance in
Japan, as will even non-US aspirants like Melco Resorts &
Entertainment. With the three licenses on offer, one could
argue Japan’s gaming market will essentially be run by a new
form of (albeit non-Japanese) zaibatsu.
Where there will be another nod to Japanese history is the
American influence on the country post-World War II. The US
worked hand-in-hand with Japan during its reconstruction,
as the Japanese economy duly became the world’s third-biggest
based on gross domestic product (as of 2018). Should MGM,
Wynn, Sands or any other US operator win the right to
develop an integrated resort, it will be a historical throwback
to that era of American-Japanese co-operation. The only
difference? Many suspect we will be discussing gaming’s biggest
market, not its third-biggest.
As for who should land the Osaka license, MGM has long since
made its Osaka-first stance clear and would be a sure bet were
the competition judged purely on revenue. Consolidated net
revenue at MGM rose 13% year-on-year for Q2, to $3.2bn,
FROM THE TOP
“HISTORICALLY, MGM,
SANDS AND WYNN FIT
THE PERFECT BILL FOR
THE JAPANESE MARKET.
JAPAN’S BUSINESS
CULTURE WAS ONCE
DOMINATED BY A HANDFUL
OF ZAIBATSU – LARGE
MONOPOLIES MADE
OF HOLDING COMPANIES
WHICH OWNED
BOTH BANKING AND
INDUSTRIAL SUBSIDIARIES”
taking its H1 total to $6.4bn. By comparison, Galaxy reported
a 7% year-on-year fall in H1 net revenue, to HK$26.2bn
(US$3.34bn) and Genting Singapore generated H1 revenue
of $1.2bn, a 3% rise. Had Caesars remained in the running,
its 6% year-on-year net revenue growth for H1, to $4.34bn,
may have given it a shot when combined with Eldorado’s H1
revenue of $1.27bn (down 5%).
It is however, only natural there are factors other than
pure revenue involved, while it is also in the best interests
of a fair and diligent process. In October, MGM Resorts Japan
confirmed it will sponsor the tenth Yosakoi Osaka Tournament,
part of the Dotonbori River Festival – Osaka’s largest. That month
too, saw the second Expo/Growth IR/Yumeshima Development
Symposium, where MGM and Galaxy delivered presentations on
their IR proposals.
Ed Bowers, MGM Resorts Japan CEO, said: “The first Japanese IR
must be the best in the world. For that purpose, partnerships with
the local area are important. For us, it’s only Osaka.” Satoshi Okabe,
General Manager at Galaxy Entertainment Group Japan, instead
chose to emphasize Galaxy’s appeal to Chinese patrons: “Our
strength lies in our ability to attract Chinese customers. Currently
half of the overseas visitors to Osaka are Chinese. This is where we
can showcase our skill.”
This, of course, is where capturing the imagination, with
eye-catching projections of exactly what Yumeshima may look like,
could make all the difference for prospective candidates. At a time
when so many mature markets across the world are being curbed
by regulatory pressure and an anti-gambling sentiment, US gaming
is showing so much promise by comparison. Much like in recent
history though, we must venture outside North America to truly
recognize the US’ contribution to global gaming. Look no further
than Japan, the most promising market of them all.
GAMINGAMERICA 3
 GGALV 2019
The winners at the sixth annual Global Gaming Awards
Las Vegas were confirmed in October, with the ceremony
proving to be arguably the most competitive yet.
All winners were announced at a luncheon ceremony at
the Sands Expo Convention Center, as part of the G2E show,
in front of more than 700 industry professionals.
Aristocrat was the only company to take home more than
one Award, winning two for the second consecutive year.
The supplier defended its title in the Slot of the Year
category, with Buffalo Diamond following up on Game of
Thrones' victory last year.
Among the other highlights at this year's show were
DraftKings winning its first Global Gaming Award in the
4 GAMINGAMERICA
Digital Operator of the Year category, Kambi winning Digital
Supplier of the Year just over one year after its launch in the
US, andAGS CEO David Lopez winning American Executive
of the Year ahead of 19 competitors.
BetConstruct was the Lead Partner for this year’s Awards,
powered by Gambling Insider.
Julian Perry, Gambling Insider COO, said: “We would like to
give our congratulations to all winners at this year’s ceremony,
and I would personally like to thank everyone who has
contributed to making this year’s Awards a success."
This year's winners were decided by a record panel of
100 expert Judges. The voting process was independently
adjudicated by KPMG Isle of Man.
 GGALV 2019 GGALV 2019

Sponsored by

"We are delighted to receive

this highly prestigious Award
and for the recognition"
-Eldorado Resorts

Winning the Award for the first time BOYD GAMING

was Eldorado Resorts. In June, CHURCHILL DOWNS
the operator entered new realms GALAXY ENTERTAINMENT GROUP
HARD ROCK
within the gaming industry with the ELDORADO RESORTS
LAS VEGAS SANDS
announcement of its planned $17.3bn MGM RESORTS INTERNATIONAL
acquisition of Caesars Entertainment. PENN NATIONAL GAMING
STATION CASINOS
WILLIAM HILL US

Sponsored by

"It feels amazing to win this

Award, especially given all the
impressive operators out there"
-Paul Liberman, COO, DraftKings

DraftKings was another first-time 888 HOLDINGS

winner in its chosen category. The FANDUEL
GOLDEN NUGGET
operator opened its sportsbook at
PALA INTERACTIVE
Resorts Casino in Atlantic City in
PARTYPOKER
November 2018, which was its first RESORTS DIGITAL
DRAFTKINGS
physical location in New Jersey. RUSH STREET INTERACTIVE
THE STARS GROUP
WORLD SERIES OF POKER BY
CAESARS ENTERTAINMENT

6 GAMINGAMERICA
ELDORADORESORTS.COM
 GGALV 2019
"When your peers across the
industry are voting, it gives Awards
like this so much significance"
-John Connelly, CEO, Interblock Gaming
Interblock Gaming won its first
ever Global Gaming Award with
Stadium. The product connects the
live interaction of a dealer with an
unlimited number of players. Interblock
currently has more than 100 Stadiums
operating across four continents.
SCIENTIFIC GAMES
– OPENSPORTS
8 GAMINGAMERICA
Sponsored by
EVERI – JACKPOT XPRESS
EURO GAMES TECHNOLOGY – P-42V
ST CURVED
INTERBLOCK GAMING
GAMECO – VIDEO GAME GAMBLING
INSPIRED ENTERTAINMENT – VALOR – STADIUM
INTRALOT – LOTOS X
KONAMI – SYNKCONNECT
NEWGIOCO GROUP – ELYS SPORTS
AND VIRTUAL BETTING
SCIENTIFIC GAMES – PRAXIS ANALYTICS
SYNERGY BLUE – SAFARI MATCH
Sponsored by
"It’s great to have our
achievements recognized"
-Keith O'Loughlin, SVP, Sportsbook
and Platforms, SG Digital
Scientific Games defended its title BETCONSTRUCT – SPORTSBOOK
in this category, after winning with BETGENIUS – LIVE DATA
& TRADING SERVICES
OpenBet last year. OpenSports, the
EVERYMATRIX – CASINOENGINE
redesigned sports betting portfolio, IGT – SPORTS PLATFORM
combines proven elements of the KAMBI – SPORTSBOOK
platform with streamlined services PLAY'N GO – OMNY
that stage operators for short- and NETENT – VIKINGS
SBTECH – SPORTSBOOK
long-term success.
SPORTRADAR – MANAGED
TRADING SERVICES
 GGALV 2019

Sponsored by

"It’s taken us six or seven years

to get here through really hard
work and focus"
-Rich Schneider, CPO, Aristocrat

Aristocrat's first success of the day AGS ARISTOCRAT

came in this category. In the past year ARUZE GAMING
before being nominated, Aristocrat CASINO TECHNOLOGY
EVERI
released the EDGE X and Helix XT
IGT
cabinets. Aristocrat has grown to INTERBLOCK GAMING
nearly 5,000 employees, serving KONAMI
thousands of customers. NOVOMATIC
SCIENTIFIC GAMES

Sponsored by

"We have signed a lot of big

brands in the US in the past
year and we’re very pleased with
our success in the US market"
-Kristian Nylén, CEO, Kambi

Kambi is celebrating success just ASIA LIVE TECH

one year after its launch in the BETCONSTRUCT
EVOLUTION GAMING
US, following the overturning of
KAMBI GAMEACCOUNT NETWORK
PASPA. Kambi's customers include
GREENTUBE
DraftKings, Mohegan Sun, Rush IGT
Street Interactive and 888. SBTECH
SG DIGITAL
SPORTRADAR

10 GAMINGAMERICA
sales@kambi.com
kambi.com
 GGALV 2019
"Customer service and providing great
experiences are what we’re all about"
-Marc Jacobson, Manager of Corporate Media
Relations, MGM Resorts International
M life is back at the top, after losing
its title to Caesars Entertainment last
year. M life was the winner in each of
the previous four years. MGM guests
can earn Tier Credits for virtually all
their spending to elevate and enhance
their experience.
THE VENETIAN MACAO
12 GAMINGAMERICA
Sponsored by
BOYD GAMING – B CONNECTED
CAESARS ENTERTAINMENT -
MGM RESORTS
CAESARS REWARDS
INTERNATIONAL
COSMOPOLITAN CASINO – IDENTITY
FOXWOODS RESORT CASINO - – M LIFE
FOXWOODS REWARDS
MOHEGAN SUN – MOMENTUM
RYMAX MARKETING SERVICES
SAN MANUEL CASINO – CLUB SERRANO MEMBER PROGRAM
SCIENTIFIC GAMES – MY LOTTERY REWARDS
STATION CASINOS – MYBOARDINGPASS
Sponsored by
"This is extremely gratifying
for each and every one of our
team members"
-Dr. Wilfred Wong, President,
Sands China
The Venetian Macao is the second BORGATA HOTEL CASINO & SPA
winner of this Award, after Borgata's CASINO DEL SOL
success last year. Not only does the FOXWOODS RESORT CASINO
MOHEGAN SUN POCONO
Venetian Macao boast the largest
OCEAN CASINO RESORT
casino floor in the world, it stands as PEARL RIVER RESORT
the third-largest building in the world PECHANGA RESORT CASINO
and is the largest single structure STUDIO CITY
hotel building in Asia. WINSTAR WORLD CASINO
 GGALV 2019

Sponsored by

"I am so proud of everyone on our

team for making this happen"
-Elaine Hodgson, President and
CEO, Incredible Technologies

The Infinity V55 Edge debuted at last ASIA LIVE TECH – PROGRESSIVE
year's G2E and is driven by the need to BACCARAT JACKPOT
BETINVEST – SPORTSBOOK IFRAME
WINNER
create a unified gaming and product INCREDIBLE
DATASPADE – BOUNCEBACK
merchandising package. TECHNOLOGIES
EVERI – EMPIRE ARENA
EVOLUTION GAMING - MONOPOLY LIVE – INFINITY V55 EDGE
GAMBLIT GAMING – PAC-MAN
BATTLE CASINO
GANAPATI – NEO TOKYO
PRAGMATIC PLAY – PRAGMATIC
PLAY ENHANCE
ULTRAPLAY – HYBRID ESPORTS
LIVE BETTING MODEL

Sponsored by

"The slot resonates well with

players and they love it"
-Christmas Uberuaga,
Game Designer, Aristocrat

It's two wins out of two in this ARUZE GAMING – WHEEL

category for Aristocrat, after
winning with Game of Thrones last
year. Buffalo Diamond honours the
ARISTOCRAT
original game. It has a $500,000
– BUFFALO DIAMOND
wide area progressive and is the
first game in the Buffalo franchise
to appear on the flame 55 cabinet.
OF PROSPERITY
ECLIPSE GAMING – CASH
LANTERNS ANYLINE PROGRESSIVE
GAMING ARTS – PIÑATAS OLÉ
IGT – SCARAB VIDEO SLOTS
LIGHTNING BOX GAMES
– ASTRO CAT DELUXE
NETENT – DEAD OR ALIVE 2
RED TIGER GAMING
– PIRATES' PLENTY
RTG ASIA – EAGLE SHADOW FIST
SCIENTIFIC GAMES – DANCING
DRUMS EXPLOSION

GAMINGAMERICA 13
 GGALV 2019

Sponsored by

"This speaks volumes for all our

team members around the world"
-James Maida, President,
Gaming Laboratories International

Gaming Laboratories International BMM TESTLABS

was another first-time winner. CAESARS ENTERTAINMENT GAMING LABORATORIES
GLI will review an operator's CONTINENT 8 TECHNOLOGIES INTERNATIONAL
IGT
existing responsible gambling
LAS VEGAS SANDS
programs, personnel, resources MGM RESORTS INTERNATIONAL
and performance metrics. SAN MANUEL CASINO
SWIMA
WILLIAM HILL US

Sponsored by

"I see this as a team Award

more than anything else"
-David Lopez, CEO, AGS

JIM ALLEN SHEILA MORAGO – OKLAHOMA

DAVID LOPEZ
– AGS
The AGS CEO came out on top
against 19 other shortlisted
executives. Lopez has been CEO
of the supplier since 2014 and has
overseen sustained growth, in a
period including the acquisitions of
Colossal Gaming and Cadillac Jack.
– HARD ROCK INTERNATIONAL
RENATO ASCOLI – IGT
JOE ASHER – WILLIAM HILL US
GREG CARLIN – RUSH STREET GAMING
JOHN CONNELLY – INTERBLOCK GAMING
BARRY COTTLE – SCIENTIFIC GAMES
TREVOR CROKER – ARISTOCRAT
ELAINE HODGSON – INCREDIBLE
TECHNOLOGIES
MATT KING – FANDUEL
RICK MEITZLER – NOVOMATIC AMERICAS
INDIAN GAMING ASSOCIATION
JIM MURREN – MGM RESORTS
INTERNATIONAL
TOM REEG – ELDORADO RESORTS
JASON ROBINS – DRAFTKINGS
MICHAEL RUMBOLZ – EVERI
KEITH SMITH – BOYD GAMING
ERNIE STEVENS – NATIONAL INDIAN
GAMING ASSOCIATION
MARTIN STORM – BMM TESTLABS
LEE TORRES – PECHANGA RESORT
CASINO

14 GAMINGAMERICA
AWARD WINNING INNOVATION
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 G2E REVIEW
G2E 2019:
CALM AFTER
THE STORM
David Cook reflects on this year’s
G2E, including the Global Gaming
Awards Las Vegas, sports betting
talk and an unfortunate incident
in the dunes
As I begin writing this report of the 2019 instalment of the Global
Gaming Expo from the departure lounge of McCarran International
Airport, the overriding emotions are a mixture of relief, satisfaction
and excitement. Relief the preparation time for this year’s show is at
an end; satisfaction it went swimmingly and we’ve got bucketloads
of content to use from it; and excitement it’s now less than one year
until it all starts again.
Anyone who read my description of Las Vegas in our G2E Preview
magazine and on GamblingInsider.com will have learned of our
plans to pace ourselves much better this year – and flying out three
days before the show helped us do that. We landed on the Friday
afternoon before the show and the first night often brings with it
a unique combination of jet lag and alcohol; which are not really
designed to work together, but you have to find a way around these
issues. Still, it was a rather tame effort compared to my 32 hours
without sleep last year and consuming a dessert at the Cheesecake
Factory (which I would highly recommend) swiftly took the energy
out of me and put an end to the first night.
Our team took to the dunes on the Saturday, as dune buggying
brought great fear and relief when one member of the group ran
a corner too wide and flipped the buggy onto its side. Thankfully,
the buggy was not damaged and the threat of thousands of dollars
being added to our company’s bill for the trip did not come to
fruition. Aside from that, it was great fun.
The Sunday brought an unsuccessful day of poker, as I showed a
consistent ability to run into pocket aces with slightly less powerful
hands (it’s always down to luck when you don’t win, after all).
But to Monday, and the Global Gaming Awards Las Vegas,
which always sets the tone for the overall show. For our team here
at Gaming America, it’s always a pleasure to see so many senior
executives from the industry in one room at an event we have put
so much effort into. From a personal standpoint, it’s particularly
exciting, as it’s my task to interview all 12 winners as they come off
16 GAMINGAMERICA
stage, running back into the hall after each interview in an effort
to make sure none are missed. The ceremony went without a hitch
and now the focus quickly switches to the Global Gaming Awards
London 2020 in February.
Once conferences and meetings began on the Tuesday, it was
clear there was a much calmer atmosphere than at last year’s show;
but that is meant in a positive sense. It seemed nobody could get
enough of sports betting chat last year, with particular regard to
regulation, as the show was held less than six months after PASPA
was overturned. You can feel things have simmered since, with there
now being more of an educated understanding that widespread
regulation could still take some time and an appreciation it’s still
very much the opening quarter of the game, so to speak.
It’s always fascinating to see rival companies exhibiting with
stands in close proximity to one another. At one stage, my
colleague even pointed out an employee of one supplier secretly
filming from their competitor’s stand while walking through it.
That was quite an eye-opener as to the lengths suppliers will go to
when trying to gain an advantage; it’s interesting to see, although
one would hope this will not lead to extreme security measures
on the stands moving forward.
Anyone who has attended shows like G2E and ICE London
will relate to the issue of managing meetings and remaining on
schedule. I personally found pencilling in one meeting per hour
this year was actually more productive than holding wall-to-wall
meetings every 30 minutes, as I often have done in the past. This
allowed for more time within each meeting and meant there was
less of a panic when attempting to locate each stand for my next
meeting, in an attempt to be there on time.
This was not necessarily reflected in the hard data, as my step
counter app showed I walked an average of a little more than 26,000
steps per day during the show, almost bang on level with last year’s
average. Let’s see if ICE can top that in February.
 WINNER OF

DIGITAL PRODUCT OF THE YEAR

CONTENT / TECHNOLOGY / SOLUTIONS

scientificgames.com
 SKILL-INFLUENCED GAMING

FINDING OUR PLACE

Executives from the leading suppliers of skill-influenced
games met at G2E to discuss their place in the market,
competition with slots, understanding casino players
and their future position

THE PANEL
GEORG WASHINGTON, CEO, Synergy Blue
ERIC MEYERHOFER, CEO, Gamblit Gaming
MICHAEL DARLEY, CEO, Next Gaming
BLAINE GRABOYES, Co-Founder & CEO, GameCo
KEITH WINTERS, Chief Creative Executive,
Competition Interactive
It's not often we're granted the opportunity to speak
with so many senior executives from a particular
segment of the market for a lengthy period of time,
but the opportunity presented itself to Gaming America
at this year's G2E.
The narrative on skill-influenced gaming may have
shifted in recent years, with some of the earlier projections
about a supposed takeover of the casino floor in the
coming years now being downplayed, but it becomes
clear from the panel here that there is plenty left to
learn and certainly still room for growth. But as
you'll see from the first question, just don't call it
skill gaming.
What do you make of the term 'skill gaming' and
does it accurately describe what you provide?
GW: I think it's a terrible term. We call it skill-influenced
gaming. Pretty much everything we do right now is
chance-based, with an influence of skill. Video poker
is the style of game we model our games on.
EM: I agree. When you say something is based on skill,
that doesn't really describe what we do and I really
don't think it's a very useful marketing term for us. We
like to think of it more as interactive video, video slots
or another segment.
MD: We're doing so many things, and our product is
evolving. The definition of us is expanding. To call it
skill gaming is very myopic. It doesn't have a great term
right now. People look at skill-based and it's fuzzy for
them. We're explaining how they're influenced by skill.
GW: Another thing with skill-based is people think of
grey-market areas, so it's a bit of a tarnish on the name.
SKILL-INFLUENCED GAMING
How would you assess the current position of
skill-influenced gaming compared with where
it was at the beginning of the decade?
BG: It's important to think about the comparisons to
other things and how quickly we're working. The first
slot machine was invented in 1886 and the first video
slot was invented in 1976. I think it's pretty fair to say
we've done 90 years' worth of work in four or five, in
a category that we invented. It's happening
incredibly quickly.
MD: The big suppliers are replicating what they've done
last year and the year before and so on. We really see an
uptake in creativity and it's evidenced in all our booths.
We have taken leaps since the last G2E, so when you talk
about when we got started, we have rapidly grown
year-over-year. We're really focused. We have pressure,
but we do well in chaos!
KW: I think transition is key. It's about the slot player
transitioning to these other games. With the skill gaming
we launched last year, which is a racing game, as hard as
it was to monetize, players were hesitant. 1) Because it's
different. 2) It was monetized differently to what they
were used to.
If players hesitate, operators are going to sense that in
a second, and they want something different. Skill gaming
came down from all the hype to "ah skill gaming is not
going to work." I don't believe that notion, but as a
company that needs it to perform now, I think we're
reaching out to the player with a huge skill component
that is working as a bonus within the slots.
MD: You're talking about conversion. Can I get slot players
to play our games? There are multiple segments to people.
KW: We in the skill industry can have the resources to
last four or five years, but action needs to happen now.
MD: But you can't force people to do anything. You have
to decipher a specific way to get them to the machine.
GW: Some cater to some. Some will be an eye-catcher
to bring them in. You've got a bit of a mix, and when you
look at the stat that three out of 10 slot machines are
successful, you can say not everything will be successful,
because look at slot machines.
EM: I actually think it's closer to one in 10 and I think
that's normal. That's why they produce 100+ titles every
year. I think they might get 10 out of that which stick.
GAMINGAMERICA 19
 SKILL-INFLUENCED GAMING
From left to right: KEITH WINTERS, BLAINE GRABOYES, ERIC MEYERHOFER, GEORG WASHINGTON and MICHAEL DARLEY
BG: I'd say three in 10 are premium, but a premium
game probably lasts on the floor for three months.
EM: I think they're all on an aging curve and the best I
can tell is that 80% are off the floor within six months.
They just roll on to the next one.
MD: We're challenged with those habits and we fight
against them. We fight against the slot floors that churn
their machines, because it's an easy fix for them. If they
take one out and put one in, there will be an uplift and a
honeymoon period. We make a handful of games compared
to them. If we were churning games like they did, it
wouldn't work. We fight against a number of embedded
behaviors in slots that may not be applicable to us.
There have been a lot of examples of skill-influenced
products in casinos appearing similar to arcade games.
Why do you think this has been common?
MD: I think all of us have recognized that getting somebody
involved in a longer experience where they push buttons and
make decisions is where we're all at. We decided to go towards
the arcade games, because we believe it appeals to a wide
demographic. People have said many times they played them
as kids and have played them with their kids. Plus, they're fun,
interactive and very presentable. People relate to them.
BG: Yeah, I think brands are good to track people, but every
game that we all make, you can learn to play in 15 seconds.
That's part of what makes it easy to get into and then where
20 GAMINGAMERICA
does the challenge come in? We're starting to get into
head-to-head and bracketed tournaments, but in terms
of entry, we want to make it really easy for people to walk
up and play these games. Brands definitely help, but I
think at the core, it's the same as in what we would call
casual games. It's about being easy to play and hard to
master. That's what we're creating as a segment.
EM: When I look at slot players, they're gambling, and I don't
even really think of them as playing the game. At least for
Gamblit, one of the challenges that we contemplate is the line
you want between entertainment and gambling. At the end of
the day, they're there to gamble. There's so much content you
can get on your phone for free, so what are we offering?
KW: It's about familiarity. It's a challenge for us as a group,
because we're on the floor of a sea of slot machines that all
look large and have bright lights. Players kind of have tunnel
vision. They either know where they're going and they're
going to sit there or they're just wandering aimlessly. It's about
attracting that eye to that area and it has a little bit to do with
our presentation, but also the operators and how they lay
out their floors. We've all talked about a potential designated
area for skill gaming and The Linq is doing that. That's another
aspect that we battle; the casino design mentality.
EM: I think that's one area where you might find a difference
in this group. I say just put us on the floor. It doesn't help to
over-think about something like that. We push for all this capex
investment in floor labs, but I think that's way down the road.
 SKILL-INFLUENCED GAMING
KW: You're relying on the designer to do it properly.
GW: It’s all about education though. It’s about educating
the consumer at a larger level. When you see skill gaming
online, they do a lot of advertising, and it’s not something
I’ve sought out. It just pops up on my Facebook. Facebook
notices you’re interested in skill and will then ask you if
you’re interested in backgammon.
"YOU HEAR ABOUT
NON-GAMING, BUT
THAT’S DOWN TOO.
IT’S NOT THE PANACEA
CASINOS WISH IT WAS"
– BLAINE GRABOYES
BG: It's important to remember though that for some,
acquisition budget is $150m. I used to make console games
and we would make a $50m console game; our customer
acquisition budget for that game would generally be
bigger than our production budget. A $50m game would
have a $60m marketing budget and I think that speaks to
why video games grow 10% year-over year and we’re
in an industry that is sliding backwards. The marketing
the casinos do is essentially to offer discounts to their
existing customers, which is a sliding slope that doesn’t
create sustainability.
In terms of who the customer is, there was a general
perception a few years ago that your companies would
provide the solution to get millennials into casinos.
Is that the case in your experience? How can
skill-influenced games appeal to other generations?
EM: It's all a matter of opinions, but I don’t think our
gaming is necessarily going to bring millennials to casinos.
I think a lot of casinos are facing a massive reboot. If they
design things like compelling music venues, they give
people a reason to go there. Competition is so high now,
and so much higher than it was 30 or 40 years ago. I think
we forget just how it used to be. I think back and wonder
how anybody did anything before the answering machine
was invented. I don’t think our games necessarily will
bring them there, but there will be a natural curiosity.
When people are there, if you don’t give them something
they can appreciate, you run the risk they won’t return. If
the gambling experience falls flat, then why go there to
22 GAMINGAMERICA
gamble? For us, we’re more interested in the Gen X market
than we are millennials. You need four or five millennials
to equal a single 45-year-old. Millennials put singles and
fives into machines – not 20s.
Also, with a lot of casinos, it often doesn’t fit with their
ownership window. It’s different with tribes, who will own
casinos generationally. They will invest in the future and
I think they are the ones that are more forward-looking.
With most commercial casinos, once your contract is up,
that’s it. That’s probably why some of them are in the
situations they’re in.
BG: You hear so much talk about non-gaming, but when
adjusted for inflation, that’s down too. It’s not the panacea
that the casinos wish it was, so the industry needs the
next generation to be engaged in a new way.
With PASPA being overturned last year, how much of
a crossover could there be between your games and
sports bettors coming into casinos as sports betting
opens up in the US?
EM: It’s going to benefit us, for sure. I’m actually quite
pleased to see it, because that is something that can
offer up an experience that is not just a clone of another
nightclub in a casino.
BG: Sports betting has very little margin, so for us, it’s not
going to really move the needle from a revenue standpoint,
but they are creating these great spaces. We have machines
right next to the sportsbook at The Linq, and it’s one of the
 SKILL-INFLUENCED GAMING

best-performing properties. It’s also really worth thinking look at other products where nobody knew what to do
about the fact sportsbooks are empty 90% of the time and with them, where to put them or how to market them,
it’s about how you make use of that large space. It might so there are a lot of similarities.
be very busy on Super Bowl
Sunday, but for 300 days of EM: If you extended that
the year, it’s dead empty. time period to 10 years, I’m
What are you going to do? "IF YOU EXTENDED confident enough to say we
I think another challenge will represent 10% of the
with that is 80% of that THAT TIME PERIOD floor. There’s going to be an
activity is digital. The casinos
are seeing a much smaller
TO 10 YEARS, I’M inflection point, because
that’s the way this industry
portion of that revenue,
so I think it makes sense
CONFIDENT ENOUGH always goes.

to leverage what we’re TO SAY WE WILL Is it perhaps more important

doing to monetize that
in a bigger way.
Where do you see skill
gaming’s position in the
market in five years?
BG: We’ll occupy 5% of
the floor. Right now, we’re
0.5% or less of the floor.
EM: I think that could
easily be a percentage
point higher if we get our
for you all to come together
REPRESENT 10% OF for things like this and
talk about the market,
THE FLOOR. THERE’S because you’re still quite
GOING TO BE AN new to the market?
EM: Yes. I think we’re better
INFLECTION POINT, off having a handful of
suppliers in this market,
BECAUSE THAT’S THE because otherwise it just
looks like a one off.
WAY THIS INDUSTRY
ALWAYS GOES" BG: They’re all nice as well!

performance up to a more
comfortable range for the
– ERIC MEYERHOFER
operators – whatever that
is. Some operators are more
experimental than others, but until they hit that point,
it’s a little awkward for them to put a lot of them in.
I think you will see a significant uptake when they
realize the player habits are changing.
MD: In five years, there will be higher expectations. It will
not be the entire floor, but it will be a significant portion
of that floor. It’s a matter of refinement and analysis and
getting the right product out, but they’re asking.
KW: The closer this group gets to that threshold, then
the big suppliers start coming in. All the big cats and
dogs will try and figure this out. They’ll do what they
always do and they’ll pounce.
GW: You can make comparisons with the ETG market.
When ETGs started, they underperformed, but then they
had success in Macau, and people recognized the crowd
they attracted. It will be the same here. Once it starts to
move, the rest will want to move it along. You can just
GW: Having worked with
the big suppliers, if you
work for them, you can’t
talk to the competition.
I’ve been kicked out of booths because I work for a
third-party supplier.
BG: There’s nothing we don’t share at our booths.
Everyone comes by and plays each other’s games.
We’re growing the market and there’s plenty of
room for all five of us.
KW: There’s even been a conversation with the
Nevada Gaming Control Board’s technical division;
it’s an open dialogue.
MD: We all have individual personalities, but we
complement each other, like our products. We’re a late
entry and we share information. We don’t need to worry
too much about stealing market share from each other.
We’re better together than on our own. We’re still
competitive, but I don’t need to battle with anyone. We
need to talk openly and share information; that’s how
we move faster.

24 GAMINGAMERICA
 CASINO INNOVATION
THE FUTURE IS ALREADY
ON THE CASINO FLOOR
Oliver Lovat discusses innovation within land-based casinos, emphasizing
the progress already made in the space
Having written a UNLV paper researching the next generation of
visitors to Las Vegas, I hear the statement we are wasting our time
with “millennials” and young people because they just don’t gamble
in casinos. This is true; however, having invested heavily in amenities
for that segment in the areas of non-gaming, the industry has been
successful; the number of under-40s coming to Las Vegas has grown
almost continually across the past 15 years to over 19 million people.
I am also witness to much discussion of forming a “millennials
strategy,” incorporating “skill-based” games, which include
esports, arcade-style games, branded slots, PSX and Xbox consoles
– basically anything outside the traditional casino floor. In the
past five years, many hours have been spent by executives, both
correctly and spuriously, debating what the future holds for
casinos, while true innovators have taken non-traditional gaming
from ideas to regulated products found on the casino floor.
We are now at a stage where this sector can be critically
evaluated – and what we are finding is our answers are already
on the casino floor.
What are we talking about?
ESPORTS
For the uninitiated, especially the older members of the industry,
esports is the most bewildering. The best way to explain professional
esports is competitive gaming in a digital format. There may be cash
prizes, such as with Epic Games’ Fortnite (which has multi-million-
dollar pools), or just on a local level, where kudos and smaller awards
can be gained. There are more than 250 million registered Fortnite
players, making it the largest game in the world.
Anyone with an internet connection and hardware participates;
but what has evolved is an established viewing audience on
platforms such as Twitch.tv. Twitch is owned by Amazon and the
numbers are staggering:
26 GAMINGAMERICA
 Average 1.3 million viewers at any given time
 Three million unique content creators every month
 Fifteen million average daily visitors
 More than 500 billion minutes watched in 2018
A frequent expression heard in the discussions surrounding esports
is the incomprehension of the third-party viewing element, which is
significantly different from video game behavior. However, viewing
of television sport has high figures and more people play esports
than football, baseball, hockey or golf; so why wouldn’t esports
feature the same high viewing figures?
VIDEO GAME CASINO PRODUCT
The principle innovators in this area are Synergy Blue, Next Gaming,
Gamblit Gaming and GameCo. Most conform to the design of
traditional slots, although these games involve the player playing
a game where skill can influence the outcome, with cash rewards
rewarded via a random number generator determining the size
of the prize – or likelihood of award.
Not dissimilar from the quiz games that appeared in pubs across
the UK from the 1990s, these games are targeted at the younger
customer and are either proprietary design, or co-opt known titles,
such as Gamblit’s Pac-Man or Next’s Arkanoid and other early arcade
titles. Like arcade games, there is a pay-to-play component, yet the
nature of the games is very different.
SKILL-BASED GAMES IN CASINOS
Skill-based games are not new. Blackjack is a skill-based casino
game, as is poker, which grew in popularity during WWII through
GIs serving the US. This was played in the post-war period as a
social tool played by the ex-servicemen around the kitchen or living
room table. Of course, high stakes and tournament poker always
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 CASINO INNOVATION
attracted a dedicated crowd and legendary characters, including
Nick “The Greek” and Doyle Brunson (the first person to be made a
millionaire from tournament winnings). Professional poker really
came alive in 1970 when Binion’s hosted the World Series of Poker
(WSOP), attracting even more characters and awarding bracelets
for winners.
California allowed poker rooms in the late 1980s and, with
more people playing, the market grew. Poker became a televised
phenomenon; before federal restrictions, online poker was one of
the earliest commercial successes of the nascent internet. Today,
the Caesars-owned WSOP is a global event. In 2019, the Main
Event featured over 6,000 entrants paying $10,000 to enter, with
Hossein Ensan winning the $10m first prize. Poker is not just a casino
tournament product, with video poker a key component in many
casinos. In some, it is the best-performing aspect, in terms of coin-in.
William “Si” Redd, the entrepreneur, casino owner and a 1991
inductee to the Gaming Hall of Fame, understood the attraction
of screen-based poker to the gaming customer. Originally working
as a distributor for Bally (in the days when the company was focused
on jukeboxes), he set up Sircoma to distribute his video poker
games, based on five-card draw. His first patent was in 1979. While
others, notably Bally, had doubts about his product, the once
niche product grew.
Sircoma was renamed International Game Technology and today
IGT is one of the largest gaming technology suppliers in the world.
Lenny Frome published many mathematical strategies for video
poker, simply explaining the skill component to the format. This
allowed, in some games, for the house edge to be reduced to a
minimal amount. With the active distribution of the games, and
widely published insights in how to play near-profitably, the game
grew exponentially and is still highly popular to this day.
FRAMING THE PARADIGM FOR TODAY’S CASINO
Firstly, and crucially, we need to separate esports and video game
gambling. Esports is a thing. It is real. It is established. Undeniably,
the man that has led the drive to converge esports and casinos is
Seth Schorr. We consider many gaming visionaries to be near the
end of their careers, yet Schorr is in his prime, on an ongoing mission
to bring together old and new gaming experiences.
At the Downtown Grand Casino in Las Vegas, Schorr implemented
the first esports program, with in-house teams, contests and events.
The journey has been complex and fraught in places, but other
casinos have sought to adapt accordingly. As interesting is the
launch of Schorr’s KonekTV, a commercial product that can stream
esports (and other relevant information, such as sporting odds and
vendor promotions) to existing TV infrastructure. Whereas traditional
sporting events are ubiquitous in every bar and pub, his platform
allows for the next generation that prefers to watch esports, bringing
a new demographic into a social environment.
The problem, as far as casino operators see it, is how do you
monetize esports? The answer lies on the casino floor; esports is
today’s poker. The UNLV says, across Nevada, the average monthly
28 GAMINGAMERICA
revenue obtained from poker in casinos is c.$10m. This is not a
significant amount when the costs of operating tables across the
state are considered. But what poker does is bring in revenue in
food and beverage, potentially hotel rooms and additional gaming
spend; perhaps poker players play table games or slots when they
are in the building. Poker is an amenity for the casino.
Esports should be considered the same. Games can also be
televised, tournaments held, rakes charged and ticket revenue
obtained. Granted, many of the core demographic of esports players
may be below legal gambling age. That though, will obviously
change; until it does, all customers will still need to eat and drink
– as do their families and friends.
Gambling video games are indeed something new and
revolutionary, as video poker once was, and could be as lucrative.
But, learning from video poker, it isn’t just about the product, it is
how it evolves and how it is consumed. The secret sauce of video
poker wasn’t just the game in itself. Having consulted for casinos,
a look at some of the highest-performing devices shows video
poker is among the most played games on the casino floor – in
particular, video poker at bars. Customers sit, drink, watch sports
and play video poker. This is very different from traditional slots
which, as studies show, have a semi-hypnotic element and are
played by those seeking a form of active escapism and low-level
risk. Also, the most popular versions are not just the original variant,
but evolutions, such as Ernie Moody’s Triple Play video poker, where
the simple game was adapted for higher excitement and risk. Video
Poker as a distinct measure is not recorded in Nevada, although
multi-denomination slot win (of which a large amount is video
poker) generates north of $200m monthly.
The target customer of video gaming for money is not the current
slot customer. Inside Caesars’ Linq resort, there are TV screens
adjacent to game console screens, so sports can be viewed and
esports can be played in the same line of vision; this generation
is used to multi-screen simultaneous engagement.
The industry needs to find the correct place and environment
for these games to be played. It may be in the same format as video
poker, at a bar and in front of a TV, showing esports on KonekTV.
GameCo launched a bar-top games device at G2E and mini-
multiplayer arena; could this be the tipping point?
Otherwise, it may be that one of the games launched at this
year’s conference could be the break-out as Triple Play Poker
was. As the case study indicates, social participation was at the
root of poker’s original success in the US gaming experience.
Whether an amateur or professional, every poker guide will
tell you there is one secret to a successful poker strategy: all
you need is patience.
Oliver Lovat leads the Denstone Group, which offers strategic advice
and consultancy on customer-facing, asset-backed investment and
development, with a focus on casino resorts. He is a Fellow of the Royal
Institution of Chartered Surveyors and visiting faculty at Cass Business
School in London. He lives in Las Vegas.
 MPN
IN FOCUS: MICROGAMING
FOLDS POKER NETWORK
Sean Chaffin examines Microgaming’s decision to fold its poker
network and how this affects the future of online poker
It was an interesting September and October in the poker world. A
monumental story surfaced when Flutter Entertainment announced
the planned purchase of PokerStars to form a firm with $11bn
in market capital. Flutter, formerly known as Paddy Power Betfair,
runs its own poker platforms in differing markets around the world
and also owns FanDuel. That deal may have more to do with sports
betting than poker; but it has plenty of potential to grow online
poker in a slowly-expanding US market.
However, players also received some bad news when it comes
to the number of online platforms. Microgaming, based in the Isle
of Man and one of the largest gaming software developers in the
world, announced its poker network would be shutting down in
2020. The Microgaming Poker Network (MPN), which began as
Prima Poker in 2003, was one of the early forerunners of online
poker’s “skin” model.
As a skin network, various poker rooms make use of the
company’s software while signing up their own players. Players
are part of a larger network when it comes to player pools and
30 GAMINGAMERICA
tournaments. As of October, the network consisted of nearly
30 different poker rooms, most of which shared the same
tables and tournaments, according to MPN’s website.
WHAT HAPPENED TO THE SKIN MODEL?
The skin model prospered for much of the online poker
boom. As opposed to single-entity poker models like
PokerStars and PartyPoker, which operate their own
platforms with their own players around the world, the skin
model took a business-to-business approach. MPN lagged
behind some competitors, including another skin model
network, Playtech’s iPoker, but had a regular pool of players
among its various skins. But Unibet left the network in
2013 to go it alone and traffic dropped after that move.
There were several advantages of using the skin network. For
new sites using MPN, that included software that is already proven
and developed, as well as an already-established pool of players to
play against those it attracts itself. That saves on technology and
programming costs, while the skins pay MPN to keep the hands
being dealt. Networks also spend their own dollars for software to
meet regulatory standards in various jurisdictions. The skin simply
becomes a marketing vehicle to enable further player acquisition.
The drawbacks though, mean a small number of players can hurt
all involved. Skins switching networks or folding can seriously hurt
network player pools, such as when Unibet bailed out. Independent
poker sites can create a unique buzz and adapt to player interests
and market trends where the networks and skins might not.
Sites like 888Poker, PartyPoker and PokerStars all may have
more brand awareness by being a single entity. Moving that brand
into new markets only adds to that. Those companies also run
major live tournament series to market their brand and connect
with players. That includes partnering with major live tours like the
World Series of Poker (888) and World Poker Tour (PartyPoker, 888).
PokerStars has found success in its own live tours, such as the
European Poker Tour, and campaigns like Platinum Pass.
It would seem unlikely that many skins could create similar
momentum in the industry. Some networks however, remain
in operation and are carving out market share depending on
their location. High-growth markets seem more likely to fit
this model, with more players available to begin playing.

“The network/skin model worked well in the boom years but
MPN and iPoker have been imploding faster than anyone else
since Black Friday,” poker industry insider and journalist with
OnlinePokerReport.com Alex Weldon notes. “Yet you see the
network/skin model currently working well in Asia with GGNetwork
and IDNPoker, since that's a growth market. Basically, I think when
you're B2B, you're even more sensitive to changes in the overall
market than B2C competitors.”
WHERE DOES MICROGAMING GO FROM HERE?
The fading of the skin model certainly will not be a massive loss for
Microgaming, which has interests in numerous online gambling
enterprises. That includes casino, bingo, sports betting and even
land-based and live-dealer gaming offerings around the world. The
company, which was founded in 1994, also has a significant slot
machine portfolio of technology and branded games like Jurassic
World, Game of Thrones and Playboy Gold.
Its games remain popular as online gaming grows. In the US,
where online gaming in states like Pennsylvania and New Jersey
continue to see rapid growth, these types of games may offer
Microgaming some significant potential. Microgaming CEO John
Coleman acknowledged that in a news release announcing the
move to shut down MPN: "The network model no longer fits with
our strategic vision for poker," he said. "This is the right time to
announce the closure as we focus on redistributing key resources
and personnel across the business.”
It seems ironic Microgaming will be focusing on other
aspects of the gaming industry. Its poker product offered a
turnkey solution to other gaming entities which may have
focused more on other options. These operators could easily
add MPN as an option to their customers. Its shuttering may
MPN
mean many operators don’t find poker as important an option
anymore, especially with much bigger operators in the market.
“This decision is a strong sign online gambling operators just
don't feel online poker is an essential part of running an online
casino anymore,” online poker industry expert and analyst Michael
Josem says. “As a casino operator, why risk customers losing money
to other customers at the poker table, when you can have them
lose money to you at the roulette table?"
But he does warn: “People should be wary of drawing too many
conclusions from one network closing down, as it is likely new
competitors will emerge. After all, IDNPoker – the world's largest
online poker network – today has more players than PokerStars
and essentially no one predicted this publicly even five years ago.”
LOOKING AHEAD
Despite MPN’s closure, operators continue to innovate and add to
their existing products. That should continue in the 2020s, as poker
still remains a popular form of gaming. “It is likely online poker will
continue to evolve,” Josem says. “In 2009, when the iPhone was
barely two years old, few people would have predicted the vast
majority of online poker would be played on mobile devices.
“With increasing focus on faster, more casual games, it is likely
liquidity requirements will continue to fall and make the liquidity
offered by big online poker sites or big online poker networks
less of a draw. This may lead to a rebalancing of the online poker
industry, with a greater dispersion of players away from a big
couple of monoliths – especially as a result of local regulatory
changes and requirements.”
Sites like Zynga, for example, offer players more of a social
option when playing. Could Zynga harness its own pool of
free-to-play social gaming players and create its own social
gaming real-money poker offerings? A move like that could bring
something completely new to the market. The site has even
partnered on events and games with the World Poker Tour in
the last few years.
For poker players, it still may not be great news to see a network
go away. This move leaves fewer choices and shows some
retraction of the online sector, despite a booming live tournament
poker scene. But poker still offers a large player pool looking for
action. Platforms will continue to welcome those players and
build a player base.
While MPN may be going away, that apparently may still include
Microgaming as well. "While the network will be closing, this is not
the end for poker at Microgaming,” Coleman said. “Ultimately, this
move will help the business as we follow a new strategic direction
for the vertical, details of which will be revealed in due course.”
Sean Chaffin is a freelance writer in Crandall, Texas, and senior
writer for Casino Player and Strictly Slots magazines. His work
appears in numerous websites and publications. Follow him on
Twitter @PokerTraditions or email him at seanchaffin@sbcglobal.net
for story assignments.
GAMINGAMERICA 31
 INCREDIBLE TECHNOLOGIES
STRENGTH THROUGH
SMALLER SCALE
Dan Schrementi, Incredible
Technologies Vice President
of Sales and Marketing,
speaks to Gaming America
about the benefits of working
as a small manufacturer
DAN SCHREMENTI
32 GAMINGAMERICA
Can you talk Gaming America through why you believe
small manufacturers are important for slot floors?
What are the advantages for smaller manufacturers?
The simple answer is variety. A slot floor of too much
of the same isn’t one players will look to for entertainment.
This industry is all about new and exciting innovations
to attract players. Small manufacturers are often leaders
in cabinet innovation and unique gaming content.
Year after year, many smaller manufacturers’ efforts
have been recognized as innovative industry leaders.
Just this most recent Awards season, smaller companies
like AGS, Everi Holdings and ourselves received honors
for innovative products.
As one of the “little guys,” it’s crucial we listen to our
customers’ needs, to produce exactly what they and their
players are looking for. We have the chance to actively
work with our customers and create something that
exceeds expectations in visual appeal and performance.
The benefit of being small allows us to have those
conversations and shape our product to fit operator
and player needs along the way.
How do smaller manufacturers compete?
Is it quality over quantity, for example?
Smaller slot manufacturers can rarely compete with
larger manufacturers’ aggressive pricing and bundle
strategies. Smaller manufacturers‘ offerings to
customers have to come with more quality in terms
of product and service, for a value proposition
greater than price.
Often, manufacturers hear suggestions or
recommendations from customers regarding a game
feature or bet configuration. It’s evident smaller
competitors can take that feedback straight to R & D
and enact change faster than larger companies can;
it’s a common-sense business approach and it works.
Smaller manufacturers have the benefit of being
nimble and flexible. The chains of command are shorter
and smaller players in the industry see many of their
co-workers face-to-face every day. With easy access
to one another, we can all simply get things done
 INCREDIBLE TECHNOLOGIES

faster and more efficiently, ultimately producing We’ve taken a hard look at our processes and
better ideas on a streamlined timeline. refined them to anticipate demand and better
serve our operators. We consistently focus a portion
What will Incredible Technologies be launching in 2020? of our efforts on expansionary R & D to challenge
We just wrapped up our G2E 2019 show and we the status quo, while not sacrificing the day-to-day.
were thrilled with the response we received from We’re grateful to be where we are today and we realize
our customers and players. We debuted two new we must continually work to maintain our levels.
cabinets: the Infinity Pilot and Infinity Summit.
Both build upon the success What industry trends
of our Infinity V55 cabinet, or directions do you
with new games and “WHILE PLEXIGLAS see smaller players
hardware. In 2020, we’ll in the casino sector
see the rollout of our WEDGES OR SIGNAGE catering to?
launch titles on each.
With our expanded game
WERE THE INDUSTRY There’s an exciting trend
in the industry with a focus
canvas, we’re creating STANDARD FOR YEARS, on product merchandising.
innovative ways to utilize No longer are
the added space. IT TOOK A LITTLE SHAKE- manufacturers producing
Our game catalog
for Infinity V55 and
UP FROM SMALLER and placing a single game
or two on casino floors with
Infinity Skybox is rapidly COMPETITORS TO great expectations. It takes
expanding, as we continue
our commitment to the
QUESTION WHY THAT compelling signage and
banking packages to pull
established footprint of WAS THE NORM. THERE’S players in. While Plexiglas
these cabinets and find wedges or signage were the
more ways to market them BEEN A NOTICEABLE industry standard for years,
to players. Our strategy
in recent years has been
SHIFT IN THE INDUSTRY it took a little shake-up
from smaller competitors
to build upon our prior IN RECENT YEARS. to question why that was
successes and not reinvent the norm. There’s been
the wheel; but we definitely
JUST AT G2E THIS a noticeable shift in the
want to make it more YEAR, WE NOTICED industry in recent years.
interesting. We plan to Just at G2E this year,
keep on that path as we MANUFACTURERS we noticed manufacturers
move into 2020.
FOCUSING ON BANK focusing on bank
presentation and
What difficulties has PRESENTATION AND merchandising solutions in
Incredible Technologies core and premium games.
faced in the past 12 months? MERCHANDISING Operators are challenging
How have they been
overcome?
SOLUTIONS IN CORE manufacturers to produce
the best games with
We’ve experienced some AND PREMIUM GAMES” cost-effective, simple
growing pains and learned marketing and banking
a lot of lessons. Of course, strategies. Working
we’re thrilled to see an increased demand for our products; closely with customers on these solutions is a direct
but it was a test of our production pipeline to meet the benefit of being a small manufacturer with big ideas.
overwhelming response we’ve received. Scaling, while We can work side-by-side with our customers to offer
maintaining those qualities of being smaller and nimble, innovative solutions others may not be able to provide.
has not been a simple task. It’s challenged our people We can’t win on price, we can’t win on scale – we must
in new ways. To the credit of the big players in the win on product and creating value to our customer.
industry, it’s no question scalecould be a weakness It’s a tireless fight and one that keeps us inspired
for smaller companies. every day.

GAMINGAMERICA 33
 SCIENTIFIC GAMES

A MATURING MARKET
Keith O'Loughlin, SVP Sportsbook and Platforms, SG Digital, and
Pat McHugh, Chief Executive, EVP, Lottery Division at Scientific Games,
spoke to David Cook at G2E, reflecting on how their departments
have developed in the US after a whirlwind 2018
There was of course a huge amount of discussion about
sports betting at last year's G2E. How would you compare
the atmosphere in your first couple of days at G2E with
what it was like last year?
KO'L: I think the conversation has moved on a lot. The common
theme in most conversations last year was what platform to buy,
and what tech it was going to be; trying to get the infrastructure
right. Now, it is much more about how operators are going to
win; looking at the tools they’ve got and making sure they have
the right marketing. It has moved towards a much more strategic
avenue, rather than just looking at price. What we have seen is
operators going back into the market, having just got their toe
in the water. They now see some of the challenges of running
a sports betting business, of which there are many. Now they
are thinking: “Okay, this isn’t just as simple as buying a piece of
software. This is a much more complicated business.”
last year, we announced our acquisition of Don Best Sports and
that began the cornerstone of a managed trading service. We also
built our front-end portal. You can simplify sports betting into its
components: OpenBet being the bet engine; OpenTrade being all
managed trading services; and OpenEngage being that front-end
piece where you’re interacting with the customer. It certainly made
it easier for our sales team to be able to communicate. We’re trying
to get some mind share with operators who are walking around
G2E and seeing all the stands. We’re trying to make sure the
message we’ve got is straightforward and they can see how all
of those jigsaw pieces fit together.
Keith, one of the challenges you mentioned last year
was making sports betting easy to digest for customers.
How do you think that’s developed in the last year?

PM: I think pretty much the same. I’d say there is a more
thoughtful discussion because they’re now understanding
the complexity and that sports betting opens up a new market.

KO'L: On a weekend, we are seeing 150,000 price changes per

minute. There are not many industries on the planet that are as
complex as this one. It might be on sale, but we’re dealing with a
market in which everything is so fluid. That’s where the complexity
is and that’s what some people are only just seeing. Companies are
thinking about how they can get an operator or partner to take
away that complexity?

OpenSports was named Digital Product of the year at the

Global Gaming Awards Las Vegas this year. What was the
thinking behind the redesign of that portfolio, changing
the name from OpenBet to OpenSports?
KO'L: OpenBet has been the engine that’s driven most of the
successful brands in most jurisdictions. The UK's six or seven
biggest brands found OpenBet to be hugely successful, but it was
an engine. It didn’t have a managed trading service and it didn’t
KEITH O'LOUGHLIN
really have a front-end. People were buying it, but it still had a lot of
work to do around building the other core components. This time

34 GAMINGAMERICA
 SCIENTIFIC GAMES

KO'L: In sports betting, I think we’re at the start of a journey to

make it really easy. What we saw two years ago in Vegas was that
95% of the wagering was on North American sports. Now what
we’re seeing is other sports, so there’s more interest in soccer and
there’s more interest in tennis, because the richness of the mobile
interface means it is able to display a number of sports. The
Fifa Women’s World Cup for example, created a greater interest
in soccer. That’s a different demographic to people who have never
even been involved in sports betting. I think it’s not as easy as it
could or should be yet. It can take a long time for operators to get
up and running in the states, although Delaware, Pennsylvania and
New Jersey were all quick with us. But the regulations can make it
difficult. The regulations are really challenging. In other jurisdictions,
if software is ready at midnight tonight, you could be live at 8am
tomorrow. In the US, if it’s ready at midnight tonight, it could be
another two weeks or six weeks, so it’s a much longer process and
that probably stifles innovation.

PM: There’s two perspectives from the player and the value.
The value of lottery is that you get broad distribution and you
get a much larger player base with casual players, so making the
product offering simple is a very significant opportunity for growth
and a higher percentage of GGR. We’ve seen phenomenal success
with that in Delaware, which last year went from pre-PASPA decision
to post-PASPA decision. The parlay business distributed more
broadly at traditional lottery retailers has continued to grow. Then
looking at simplicity from the lottery side, we keep repeating
the fact that SG has fully-managed trading services which make
it easier for our lottery customers to engage with the business.
KO'L: The margin in New Jersey is significantly higher than it is in
Nevada. This is because you are starting from a clean slate, so you
can deliver a much richer interface than maybe there has been
in Nevada. That interface makes it easier to do parlays.
Pat, how do you see online lottery regulation moving
forward in the US?
PM: It's still in its infancy in the US. In sports and digital, it’s just
starting. Outside the US, every product you see on the floor here,
we’re selling through our lottery channels. Gaming machines,
digital lottery, digital sports betting; the US hasn’t really seen that
yet. Now, with internet sports wagering being allowed with the fall
of PASPA, we’re going to continue to see lotteries that are looking
at continuing to raise proceeds for the beneficiaries. Those lotteries
who continue to participate in digital continue to have a strong
program. We launched a little over a year ago, putting together the
digital and lottery teams at SG. We launched in Pennsylvania, which
had legislation which allowed expansion into online lottery. It was
the most commercially successful online lottery launch in American
history. We hit $500m in handle in just over a year, and at the same
time shattered all their retail ticket sales. It's one of the top five
PAT MCHUGH
performing lotteries per capita in the world. It’s a great example
of shattering records on a digital launch, offering the product
online and record years in retail sales.
What would you say are still the main aims for both of your
departments across the next few years and how will you
go about growing both sides?
KO'L: In sports, we want to make sure our operating partners win.
While that might sound really simplistic, every single thing we do
is about making sure operators win, because that’s the only way
you can be successful. This isn’t about shipping product. This
is about long-term partnerships and the essence of what our
partners need, and what the market wants changes, so we’ve
got to challenge them and say: "You’re missing this, you should
be doing this." That’s what good partners do; they have difficult
conversations with partners to say this is what you’re missing.
PM: It’s very similar on the lottery side. Our lottery’s mission is
to maximize the proceeds to the beneficiaries. We demonstrated
our products and services for the lotteries that we partner with.
It’s not about moving into a certain individual channel, it’s about
working with our customers on what strategically is the best
way to grow their portfolio, and their business given their political
and legislative constraints. We’re very bullish in our core business.
There’s huge opportunity in the core business and as they move
into new areas such as digital sports betting and other forms
of gaming; for us it’s about making sure the strategy is right for
those individual lotteries.

GAMINGAMERICA 35