VEGAS INC Magazine - Latest Las Vegas business news, features and commentaries about gaming, tourism, real estate and more
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COVER STORY vary based on the economy, and the systems business is about one-third. Why are operations the highest? Is it because certain games are really popular? S Why is that? I it's going to be more challenging for any one state to dominate. ome of our most popular games are in that seg- ment. With a slower economy, the game sales seg- ment hasn't grown as fast as the gaming operations segment. But we're seeing game sales revenue pick up as the economy turns and with the launch of our Alpha 3 platform, which is creating a lot of excite- ment around our games. Tell me a little about Alpha 3. A nternet poker is a great game that's highly com- petitive. Based on what's happening in other juris- dictions where it is legal, casino-style games and sports betting are even bigger than poker. For us, our strategy is to provide great technology for our cus- tomers so they can participate with the best-of-breed platforms for poker, casino games and sports wager- ing and social gaming. We do have our own platform for mobile, hand-held gaming and we have our own Internet gaming platform that they plug into with their best-of-breed solution. lpha 3 gives our game designers greater capacity for graphics, sound and bonus features and we put it on a new cabinet that has an iDeck (touch-sensitive control panel) and much brighter graphics and enhanced sound. So now, we really have the leading technological platform in the market for us to put great new content on. It's viewed by casinos as being a great investment for the long term because it has the iDeck and has great horsepower, and we're prov- ing we can do really terrific games on that platform. Obviously gaming industry people know about the company, but do you think the public knows much about it? F So you have a system developed that's ready to go. T It sounds like you feel the federal govern- ment should regulate it. R egulation by the federal government would be better for our customers and probably better for players to have national standards for integrity, which is very important here and for uniformity. We would hope that it would evolve to some national legislation. hrough acquisition and internal development, we do. We're very excited about that, and we expect to announce some poker partnerships soon. The integration will be done. Our casino customers will be able to have a best-in-class poker solution, but integrated into their marketing database so they get a single look at the player on their Bally technology. We're excited about that, and so are our customers. Will there be other opportunities beyond Internet poker? You mentioned sports wagering and casino games. F rom time to time, we have a challenge recruit- ing people to Las Vegas. If they'll come and take a look, they always like it. But compared with certain markets, like California, where it's viewed as being a hotbed of technology, they don't realize until they come in how much exciting new innovation we're doing right here. We actually do have good success in recruiting when people come and take a look, but sometimes getting people to take a look is difficult. We have great innovation going on in Reno as well, but, again, we have to get people to take a look at what we're doing. What does the public misunderstand the most about slot machines and how they work? I t's probably that As far as the effects on Nevada, would you expect to need to hire more people in Las Vegas if Internet gambling were legalized? W e're actually hiring people as we speak for our Chiligaming platform. We're hiring and relocat- ing people from Europe here. We're hiring people for our mobile platform. To the extent that Nevada can be a leading state in regulating gaming, either through regulating casinos or hosting here, we would hire at an even faster pace. So we're hiring now, but we see that accelerating as Nevada takes a leadership role. How much additional hiring? O or us, near term, we think the hand-held mobile gaming is going to be a big business. We acquired this last year the leader in mobile gaming for casinos, Macroview. We now have more than 3 million play- ers on Macroview's technology. We think that will be approved faster than other forms of Internet gaming. Whether it's restricted to a casino or not, we can still provide a good experience for our customers with that. We're also putting our Bally content out on the Internet in those jurisdictions where it's legal to have casino-style games, so that will generate profitability for us. Our technology platform that we acquired, called Chiligaming, will allow our casino customers to participate in sports betting or casino-style games when it comes. Our strategy is to be a technology pro- vider and a content provider, not a direct business-to- consumer competitor to casinos, which is an impor- tant distinction. the outcome is really random. Most people I talk to seem to think there's a trick or a gimmick or some secret, but the outcomes are really random. So there's no such thing as a "hot" machine. W ell … let's just say that I think all Bally games are pretty hot (laughs). How do you think the industry will change if Internet poker is legalized? I nternet poker is one relatively modest part of the Internet and social gaming experience. We see for our U.S. customers the broad spectrum of Internet gaming is evolutionary and not revolutionary. We think it's going to be important, but it's not going to be an overnight explosion for most of our customers. 16 So you'll be selling this to your customers to reach the consumer, not using it yourself to reach consumers? E verall, we're attempting right now to hire more than 300 employees across the globe. The number that get hired in Nevada will depend on our ability to recruit the right people in Nevada, which, as I allud- ed to earlier, is sometimes a challenge. You said that you'd prefer to see federal legislation for Internet gambling regulation, but how do you expect it to play out? I think it will be federal. The longer it goes state by state, the more clearly it will become that there's a need for federal. The federal politicians are working on it right now. Whether they can get an agreement soon is hard to tell. But eventually, I'm confident it will be federal and I would give it a 50 percent chance that it happens in the next six months. Do you think they'd move that quickly in an election year? Do you expect it to be improved in the post-election lame-duck session? B xactly. That's Part One. Part Two is that we develop great games, and those great games will go out on the Internet. Any casino that wants to license those from us or any Internet site that does direct-to-consumer in a legal jurisdiction that wants to license us, that'll be the second area where we'll make money. What are your expectations about the eco- nomic impact of iGaming in Nevada? I oth good points. And that's why it keeps the odds at only 50 percent. The fact is, there is a real need for integrity at the federal level. I think the politicians see that, but they have to find a way to get it done that does not upset certain constituents enough to disrupt an election year. And that means attaching it to other legislation or being able to vet it in a way that the obvious integrity and tax advantages are clear. I think 50-50 are the best odds we could say for now. t can be important. Nevada has a very thoughtful and sophisticated regulatory environment and is the home of a lot of casino companies. Nevada can take a leadership position if Internet gaming is approved nationally. If it's approved on a state-by-state basis, What strategies are Bally undertaking for Internet gaming on social media sites? Will we see gaming on Facebook some day? W e have full-time talent looking at how we become | 30 APRIL 2012 |