Internet Gaming: Preparing for the Future

Transcription

1 Internet Gaming: Preparing for the Future What does Internet gaming mean for Indian Country and how can it be used to enhance brickand-mortar properties? Indian Gaming magazine spoke with executives from the top game technology companies ready to share their insights. Here is what they had to say... Aristocrat Technologies Kelly Shaw, VP of Systems Sales & Marketing North America Kelly Shaw is Vice President of Systems Sales & Marketing North America at Aristocrat Technologies. Previously she has served as General Manager Systems Sales North America at Aristocrat. She is a leading expert in casino management systems and has increased the bottom lines of casinos across North America with her passion and creative system solutions. What is Aristocrat s viewpoint on Aristocrat believes that legalized Internet gaming in the U.S. is not a question of if, but when. With the success of the online gaming market in Europe, the U.S. will certainly capitalize on that experience and allow the gaming industry to transcend beyond the typical brickand-mortar casinos. In our view, the Internet has allowed so many other business segments to evolve and realize the advantages of technology, so why should the gaming industry be any different. Do you currently have Internet games online? If so, how have they been received? Yes, we have a number of distribution channels. First, we work with a small number of online gaming platform partners in Europe, and provide top tier content to them through regulated online casino operators. In December of 2011, we actually announced two content licensing and distribution agreements with two separate companies OpenBet and Chartwell. Those distribution agreements compliment our initial online platform partnership with Game Account Network, the platform provider for our Internet solution in Europe and with whom we are porting that content through. Second, for unregulated markets, such as the U.S. currently, we have a new online offering for land-based customers called nlive. This is really a turnkey virtual casino that provides a fun free-for-play online casino product fully branded environment for a land-based operator. Players can visit the virtual casino site and access a whole suite of online games that include poker, table games, skill-based games and slots. It also offers our casino customers the opportunity to build their online brand presence and extend their relationships with their players into the online space. A distinct advantage that we have right now is that Aristocrat has the Oasis 360 casino management system, and any casino that is using our Oasis system can implement a link for an integration module that connects the players online account with their land-based account for free-play. Third, we have a wide range of our top performing games available in the Apple App Store and players can download them for $1.99 a piece. These games have been performing very well, and we ve been averaging about 10,000 downloads a month. What is Aristocrat doing to position itself as a leader in We really want to be the one-stop shop for land-based casinos entering into the online space. We want to enable our customers to take the brand recognition that they have built up in their brick-and-mortar casinos, and really extend that brand into the online world. As I said earlier, we have a partnership with the U.K.-based Game Account Network as our platform provider. They have over ten years of experience providing online solutions for regulated markets throughout Europe, and bring us a very clean, compliant background. This is a key area that our customers really need to be aware of when they re looking at who they want to partner with in the Internet space that they know the platform provider has been clean, has great compliance reviews and is absolutely able to be licensed in any kind of jurisdiction, which was one of the key reasons we chose Game Account Network as our partner. If you take that partnership and add our knowledge of the U.S. market, then you take our casino management system technology and add our slot content, this adds up to what we would like to be to our customers an end-all, be-all one-stop shop. Not only do we offer our own Aristocrat game content, but we also offer any other kind of third party integrated content into the Internet platform. This is another area of distinction there s been a lot of confusion in the marketplace about how 28 Indian Gaming March 2012

2 everyone needs to rush and get a poker offering, and that s a little short-sighted. Clients really need to be evaluating a longterm platform partner that not only can support poker content, but can support slot content, skill-based content roulette, blackjack and even games like backgammon. You want your player to have the experience of coming into your land-based casino and then go online and have the same amenities in that virtual casino world. Internet gaming will be a vital piece to the tribal marketplace. Without Internet gaming, tribes will not only be competing with neighboring casinos, but eventually with online casinos as well. It s incumbent upon Native American communities to create an alliance even think about like-minded tribes in their particular area and consider setting up a consortium of sorts. There s been a lot of press about the California Online Poker Association (COPA) in California and what that alliance potentially could become. There s a lot of opportunity, but tribes need to be very cautious about who they choose to partner with and truly understand that this platform partnership is a long-term strategic eight- to ten-year relationship. So, you want to make sure that platform provider can give you whatever you are expanding upon in your enterprise. Another reason it s so important for the tribal marketplace to have a great partnership with their platform provider is because that provider can help guide how to market specifically to an online audience. An online demographic is a brand new demographic understanding how to attract that online profile and take that player in an online world and push them back into your brick-and-mortar facility so that you have a mutual relationship going from your physical property back into the online space is critical. At G2E last year, we announced our first partnership with Island Resort and Casino in the upper peninsula of Michigan. That is our first tribal location integrating our Oasis solution with online, and they re going to be launching their online free-play virtual environment with our nlive product in the coming months. If you spend time building a free-play online player today, and you re building a nice loyal following in that free-play online space, when legalized gaming comes down the road, you are now attracting and building a huge revenue stream from that loyalty that you cultivated in free-play. And if you wait, then you ll have competitors that are way ahead of you and those customers will already be playing in those other online rooms. Then it will become more difficult to acquire that player into your online environment. March 2012 Indian Gaming 29

3 Aruze Gaming Steve Walther, Vice President, Marketing As Vice President, Marketing at Aruze Gaming America, Steve Walther is responsible for executing and achieving strategic marketing objectives. His leadership and expertise contributes to Aruze Gaming s ability to assist in developing, branding and introducing new and innovative gaming products to the gaming industry. With over 15 years experience in the industry, Walther also brings a broad knowledge of product management, global gaming systems and extensive skills and experience in casino marketing, software development, project management, quality assurance and organizational behavior. What is Aruze s viewpoint on We don t have an official policy at this time. We re taking a sit back and wait approach to see how our customers are going to respond. Specifically, in tribal enterprises, our tact may just be to license content to enterprises that want to participate in gaming, like we license machines to tribal operators. We would want to take some of the popular titles and license those to tribal operators if they so desire to run with the games. Do you currently have free Internet games online? Not currently, but it is something we re considering. Universal Entertainment Corporation out of Japan and Aruze Gaming America are both owned by Kazuo Okada. Aruze is a separate entity of no relation except for the fact that we have the same owner in Mr. Okada. Universal has online gaming for the Japanese market kind of an entertainment-style gaming. So, it s definitely in our DNA to have gaming, but we re really focused on bringing amazing, exciting games to casino brickand-mortar spaces. We re not looking to lead in the I-gaming space at this time. We re a very lean organization, and we want to focus on being an emerging provider of gaming entertainment and we want to make sure we put our dollars in the right place. At this point, we re not a hundred percent convinced that I-gaming will be driven from the supplier side; it may be driven from a venue side. We don t want to get into a situation where we make a large commitment and end up competing with our own customers, for example. It is really a brand extension for the tribes to begin with. There s an opportunity and I think the tribes need to say, How do we extend our brand and our market outside of our four walls and into the Internet space. It s going to be on a tribeto-tribe basis as to how they want to extend their brand, what services they want to offer in the I-gaming space, how they receive payments, etc. That s why we don t want to pick one strategy and put so many eggs into one basket and then our customers go off into a different direction. So, we re listening to what our customers want and then we ll make a decision before we move forward. Can we draw any examples from other industries that relate to the current movement in I-gaming? People said that when DVDs came out, or let s go even further back VHS and Betamax, that the movie industry would go away; that people wouldn t go to the movie theater anymore. But the fact is, you can t get the same experience on the Internet, or even with the most expensive home theater system, that you can get by going to a movie theater. The same can be said with gaming and Internet gaming. We know that people will still go to casinos because nothing can replace that at home. But the Internet gaming space will be the same type of extension to our industry as VHS, DVD, and Blu-ray has been to the motion picture industry. Nothing beats the digital projectors that they have in the four boxes with the big sound and the seats rumbling when the explosions go off. We re focusing our resources on games like Paradise Fishing, and you ll be seeing other games that are similar to Paradise Fishing coming forward, where the experience and the feel of the game is what matters and you really can t duplicate that in a home environment. Games like poker work very well in an I-gaming setting because you ve got a community where there s a bit of chatting and you can go back and forth with that. But if you go into a four-wall box place and you see somebody getting a jackpot, they don t keep it to themselves. They walk over and tell the person next to them, they shake the person next to them and they jump up and down. They want to be noticed. What s the cat going to say when you hit a jackpot on the Internet? We re looking at I-gaming as a natural extension to the market. We just want to make sure that extension fits right into our strategy of how we deliver the best content in the best environment. 30 Indian Gaming March 2012

4 Bally Technologies Michael Daly, Senior Director, Interactive Michael Daly joined Bally Technologies, Inc. in 2006 and currently holds the position of Senior Director, Interactive. He has eight years of experience in the gaming industry and is responsible for overseeing the daily operations related to Bally s new Interactive Division, which encompasses the company s Internet, mobile, and social initiatives. In this role, Daly manages the rollout of three products lines, as well as the integration of Bally s mobile and I-gaming acquisitions. In previous roles at Bally, he has overseen a number of the company s gaming product lines and managed the U.S., Canadian, and European field organizations. What is Bally s viewpoint on Bally s interactive strategy has three segments: mobile, online and social. Those all may converge closer together heading into the future. Online is first and foremost an area that we can help provide technologies to improve marketing beyond the walls of a casino. Traditional marketing has been sending out mailers, fliers and blasts, but more and more we re looking for ways to help customers do two-way interfaces with their players outside the casino. Late last summer, we acquired a company called McAfee Labs, which was a leader in mobile marketing platforms for casinos. We continue to add customers under the Bally Mobile brand now. It allows the casino s marketing content to move across multiple platforms iphones, Androids, Windows mobile phones, Blackberry, tablets from one content management tool. So, they can tell their customers outside the property what s going on, and inside the property, they can give them navigation and way-finding and tell them what the special is at the restaurant this hour. For example, if the casino has an excess amount of lobster in their restaurant on Wednesday night, they can put out a targeted marketing offer to everyone, within two miles of the casino, on their mobile phone app saying, Hey, come into the restaurant in the next three hours and receive 50-percent off our lobster dinner. These are ways to help casinos maximize their interfaces with their customers in a much more interactive way. We have also added free games to mobile, because what better way to encourage customers to open up a mobile app for Pechanga or Pala than with a free game? I can open up my Pechanga app to get to a free game, and meanwhile, since I m in their app, they can be marketing to me directly about why I should come to the casino to play the games for real. There might be a hotel special I can book through the app on my phone, or a concert that might drive me to the property. So, first and foremost, online to us is an opportunity to help our customers reach their customers beyond the walls of the casino. How widely are your Internet games available online? We currently have them on mobile devices. We made an acquisition recently of a remote gaming server technology from ComTrade, and so that becomes the place we will host free games online. It s the same technology that should a jurisdiction regulate to legalize online gaming, will allow us to flip a switch for a lack of the real depth of the engineering and change it from free-play to wagering. We re not going to, unless our customers ask us to, but our first intention is to offer examples of the games they see on the floor online with the same sort of pay tables. It is important to us with those free games, online and mobile, that they are representations of what s on the casino floor because we think that is the cross-marketing opportunity for the casinos. If I play a cash-spin game from Bally online and then the casino can tell me, We have this on our property and here s where the current progressions are at, that may drive me onto the property where I can find that same piece of content. We re hoping to help our casinos build an ecosystem with their players that will further enhance loyalty to the casino and the brands. What is Bally doing to position itself as a leader in We want to support casinos with an open architecture that says, we know you re going to have multiple brands of games on your floor let us provide a platform that allows you to put multiple types of brands online as well. That s what we acquired most recently with Chile Gaming. The Remote Gaming Server (RGS) allows us to put games out there on anyone s platform. The Chile gaming platform gave us the underlying architecture to tie it to our land-based systems module so a casino can choose which brands of poker, casino games or live table games they might want to do for free play. But it also give them the interfaces to do banking transactions, have fraud protection and account management that they will need should the jurisdiction regulate. The reason we went with Chile Gaming is it s an open platform aggregator. We will allow our customers to drive where they want to take their business and we will help them with the technologies to take them there. We ve also been strategic by looking at what is going on today, and making sure it is not becoming a distraction for our core competencies in systems and games that we provide to the 32 Indian Gaming March 2012

5 land-based casinos. They are the core customers of Bally, so we don t want to distract and take teams away from those products to focus on Internet gaming. So, our interactive division was formed as a third division of the company outside our system and games, with dedicated people from these acquisitions and others internally to build up our interactive products so that we can help our casino customers be ready when they re ready to take these steps. That s where we picked up people from MacroView like Aaron Ezra who was the CEO, and with Chile Gaming we picked up the CEO Alexandre Dreyfus. So, these people have been thinking about mobile and online gaming a lot longer than any of the rest of us. That s one of the ways we expect to make ourselves leaders, by bringing on the right people, having the right technologies and doing it with that open view. We re not going to try to change the landscape of what s been going on in the casinos. Let the casinos market to their players. I m a believer that, over time, online gaming will become legal in the United States and in tribal jurisdictions. That s probably a number of years down for some some may be closer. Certain products may be first; there s a lot of talk of poker legalizing first. There will be marketing opportunities and cross-play opportunities to players who perhaps even have to register before they can go online in the casinos. Properties can have marketing opportunities present inside the casino to drive players online and once online, players can interact with the casino s social network via these technologies and keep players in that ecosystem to then drive them back to the land base. We see it as an additional segment, not as a direct competition to anything being done in the land base. There s also a pickup of additional new customers from online that will drive them into an ecosystem and bring them to the land based casinos because a land based casino will still be able to offer things that an online casino can t. There is the interaction with your player, there is that experience of the entertainment destination that many of our casino customers have created and done an amazing job at. So sometimes you want to play along sitting at your table at home and sometimes you want to be in the casino. There are lots of ways these things cross-populate. One will not replace the other. I know some people are a little concerned about that, but I don t personally see that, at least in our lifetime, because we all have a need for social engagement. NAFOA s 30th Anniversary Conference Indian Country s Leading Economic & Financial Gathering March 20-21, 2012 New Orleans, LA The Roosevelt Hotel P lease join the Native American Finance Officers Association in historic New Orleans this spring for two full days of up-to-the-minute information on all financial issues important to Tribal Nations and their business enterprises, and a celebration of NAFOA s 30th Anniversary. Those who should attend include Tribal Council Members, finance directors, gaming executives, controllers, accountants, portfolio managers, and all those involved in Tribal financing, accounting and investment efforts March 2012 Indian Gaming 33

6 IGT Knute Knudson, VP of Global Business Development Knute Knudson is Vice President of Global Business Development for IGT. In this capacity, he coordinates business development activities for the company throughout the world and domestically. In his business development role and in cooperation with the IGT Government Relations group, Knudson pursues IGT business and policy opportunities in new markets, with new products, and with innovative business proposals. He represents IGT with the U.S. Congress, International governments, the National Indian Gaming Commission, federal agencies, state legislatures and regulators, and tribal governments. What is IGT s viewpoint on We view Internet and mobile gaming (collectively "interactive") as vital to the future of our industry for customers, suppliers and operators. Player usage trends dictate that we need to serve our players in the most convenient way, and the current younger generation consume goods and services interactively. In terms of the U.S. specifically, IGT believes that legalization will happen in the U.S., but we do not know when, where, or how. For that reason we remain flexible in our products, so that we can best serve our customers when legalization comes. Unlike large European suppliers our interests are aligned with land-based casinos. We believe that interactive gaming is an additional revenue opportunity for operators and suppliers. We do not believe that cannibalization of the existing market is a real threat to current land based casinos. Outside of the U.S. we continue with our strategy of being a leading supplier of I-gaming systems and gaming verticals to legalized markets. We will not compromise our gold standard compliance. Do you currently have free Internet games online? Throughout our twelve plus years in real money gaming in Europe we have always offered free play as an extension of our real money agreements. In the U.S. we do not have a freeplay presence. We have been approached on many occasions to provide freeplay in the U.S. and our view is that this should be as part of a plan for post-legalization real money Internet gaming. As real money Internet gaming is legalized we will offer a freeplay product to our customers as a part of our I-gaming platform. What is IGT doing to position itself as a leader in At IGT we already have over twelve years experience in real money Internet gaming. We already are a leader in the field, and operate multiple gaming verticals (casino, poker, sports) and a turnkey style platform, which holds all player account management functions. We already have a dedicated workforce of over 300 people working in our interactive gaming division. This includes both products and services (marketing, player support and payments among others). We have over 100 interactive business partners in Europe. REWARD YOUR PLAYERS & EMPLOYEES! rewards Easter, Mother s Day, Father s Day, Any Occasion! We have the winning hand. Also Available are REWARD CERTIFICATES from our Brand Name Ham, Flower and Chocolate partners just in time for Easter and Mother s Day! Contact us today to take advantage of this season s special offers. Visit or call x112 March 2012 Indian Gaming 35

7 IGT Knute Knudson - Continued For the U.S., the concept of games convergence and the ability to take famous land-based titles and move these seamlessly into the interactive space is crucial. This is a proven concept in North America already, where last July IGT launched "Cleopatra" and "Wheel of Fortune" games on the British Columbia Lottery Corporation (BCLC) e-gaming casino site in Canada. These two games are top performers on BCLC's gaming casino site, proving that online slots work in an I-gaming slot culture. The real question here is how important will local brands be to play in a legalized market? At IGT we firmly believe players will stay loyal to local brands, that they will see their online gaming consumption as an extension to their current gaming mix. For this reason, we believe it is good for IGT and good for tribes to extend our partnership with tribes from the brick-and-mortar environment to the interactive environment. By combining local loyal brands operated by tribes with IGT s experience in interactive gaming, we believe we will provide a compelling player-facing product that will support tribal governments. WMS Richard T. Schwartz, Vice President Online Gaming Richard T. Schwartz, Vice President Online Gaming, joined WMS in In this role, he created and leads the Company s Online Gaming business. Prior to his current role, Schwartz was Vice President of Business Development at WMS. Schwartz formerly served as the Vice President of Technology Development and Legal Affairs at Telecom Italia Lab USA, and was an intellectual property attorney in the Silicon Valley. What is WMS viewpoint on It s a dynamic and fast-growing new market that will provide material growth opportunities for gaming suppliers and casino operators. WMS has developed online gaming solutions intended to supplement the existing revenues from land-based casinos. Our strategic solutions will enable operators to effectively drive their players back and forth between online and offline properties. Do you currently have free Internet games online? If so, how have they been received? Yes, we offer free Internet games. They ve been received well by players and we ve discovered that there is a large appetite among both existing and new gamblers to play for fun slot games online. We develop online gaming products & solutions with the goal that our casino customers will use them to attract new land-based players and retain existing ones. What is WMS doing to position itself as a leader in We developed, launched, and currently operate an awardwinning online casino site, JackpotParty.com in the UK. The reason we decided to operate the Jackpot Party Casino in the UK was to prove out both our product offering and operational capabilities to land-based casinos in new territories who are interested in entering the online gaming space in a safe and secure manner, but without assuming the operational risks themselves. We re also experimenting with social games that use Facebook credits (such as the recently launched Lucky Cruise) as part of our initiatives to prove how WMS slot content can be socialized to attract new audiences to WMS slot content at our land-based customers casinos and to partner with casino operators seeking to enter the social casino space. By keeping their current players engaged with their brand and casino while attracting new land-based players. As momentum grows for the regulation of online gaming on a state-by-state basis, this will create unique opportunities for tribal casinos to expand into the online gaming business. We hope that WMS trusted corporate credentials, proven online gaming platform, worldclass game library, and highly-compliant operational services will position us with our tribal customers to supply them with leading online gaming products and services. 36 Indian Gaming March 2012