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COVER STORY a better communicator through social networks. We already have a number of Bally games available for free play that players can participate with. We do expect to be more of a player in social gaming as that evolves over the next 18 to 24 months. I can't say much more than that for competitive reasons. How do you monetize that? G a new product, we have to have it approved in many jurisdictions. If we add an officer or director, we have to have it approved in many jurisdictions. So it's very expensive, and it slows the pace of innovation. So there's attention being brought to bear on how can we help our patrons and casino customers by getting products to market faster and increasing the com- petitive environment? ood question. It comes down to can you extend your brand so that people play in the casino where it is wager-based? Can you attract fees for mobile devic- es for advertising dollars? Those are the ways that you can do it. It's not perfectly clear how it's going to be and how soon. We're investing modestly, but rea- sonably for the upside that we see. Is that what Chiligaming is for? C Are the Nevada Gaming Commission's efforts to amend its regulations to allow independent testing of new games and products going to help in that regard? I absolutely believe so, and I think that's one reason why they decided to do it — to help speed up the pro- cess and lower the cost. New Jersey also has adopted a fast-track product approval process that says if you're introducing a new product in our state, we'll try to get it through the regulatory approval process in a couple of weeks when it used to be months. hiligaming will allow us to do more in that arena. Three games are already available on our hand-held devices and on the Internet already, even before Chili. But Chili will enable that to be integrated for wagering when that happens. Where can I find a free game to play online? O ur most popular online game is "Cash Spin." You can go to the iTunes store and the play-for-free games are available for the iPad, the iPod Touch and the iPhone. It's an app and they're all interactive so you can interact with the game as if you were standing in a casino. You were elected chairman of the American Gaming Association. What are your respon- sibilities in that capacity? W ell … my responsibilities are to cat-herd some really big cats, which are the casino executives and my fellow competitors. Because we have a terrific full-time staff in Washington D.C., time demands are typically modest and it's more fun than it is a head- ache. It's a good opportunity to network with others in the industry on the key issues in the industry and stay very current on what's happening in gaming. What issues are on the horizon for the AGA and the industry in the United States? T he three big issues are Internet gaming, social responsibility and regulatory reform. Regulatory reform? T here's an increasing awareness by those in gam- ing — regulators, suppliers and casino customers — that the cost and time delays of product approvals are a real hindrance to gaming being competitive with other forms of entertainment. Bally, for exam- ple, is licensed in 300 jurisdictions. When we develop | 30 APRIL 2012 | What's the outlook for manufacturing in 2012? Is most of the business in new venues or replacement machines? T he scheduled number of new venues will be higher in 2012 than 2011, but at the same time we expect probably 75 to 80 percent of our revenue to come from the replacement market and existing customers. While most people view Bally as a slot- machine manufacturer, the company seems to be more in tune with the "Technologies" half of its name. Why? W e changed our name about six years ago to emphasize technology because our value proposition to casinos is really all about technology, based on hardware and software innovation. What are those kinds of innovations? I f you look at the things we've done with the basic slot machine now, you have an iDeck instead of a but- ton deck so that you can customize the player inter- face with the machine itself. We can create floorwide entertainment experiences using great system tech- nology connected to all the gaming machines on the floor. The pace of technological change is going fast- er and faster and it creates a greater, more individu- alized player experience and greater opportunity for profitability for casinos. Is that because there is more dwell time on the machine? T here's more entertainment value. The sounds are greater, the bonusing capabilities are more intrigu- ing and interesting and the casino can communicate directly with each individual patron based on what's important to that patron, making a more custom- ized experience. The value to the player is more. They would prefer to spend their entertainment dollar there than somewhere else with that level of enter- tainment. "Nevada is arguably the most advanced and sophisticated market, so it's a terrific market to deal in. One of the things you will find in other markets is that you don't have as much free casino competition as you do in Nevada. So in many other markets where the gaming is more restricted as to quantity, you'll find the business even more profitable. " Richard Haddrill, Bally Technologies' CEO 17