Over-the-top booths, endless handshakes and hoards of people wearing sensible shoes and pulling wheeled suitcases. Some things never change at the Global Gaming Expo, and this year’s event, held Nov. 17-19 at the Las Vegas Convention Center, was no different. Vendors still pulled out all the stops to display their latest and greatest innovations; executives still gathered to meet, greet and seal the deal; attendees still roamed the floor, filling their goodie bags with swag and composing wish lists for their casinos. However, one nationwide financial disaster and one global recession later, some aspects of G2E 2009 were noticeably different than last year. An empty stretch of exhibitor space at the back of the main hall called attention to the many companies that chose not to attend. Likewise, rows of empty seats in the classrooms and lecture halls reflected the 14-percent drop in conference attendees.
Frank Fahrenkopf Jr., president of the American Gaming Association (AGA), never thought he’d be excited about a smaller G2E show floor, but given the current economic climate, he said a 20 percent decline is still good news. This year, the expo covered 258,000 square feet, compared to 335,000 square feet in 2008.
Nonetheless, if G2E is all about making contacts and catching up, this year’s show was certainly successful. “I measure the success of the show based on what our customers are telling us, and after the first day, we got terrific feedback from everyone on the show floor, who said, in fact, this is the best first day they’ve had in many, many years,” declared Courtney Muller, group vice president of show organizer Reed Exhibitions, on the second day of the show.
G2E also had some new offerings this year, including 100 first-time exhibitors, a partnership with the International Association of Amusement Parks and Attractions (IAAPA) trade show, and debut conference tracks I-Gaming and the Advanced Gaming Institute. “We tried really hard this year to make sure that all of our sessions were solution based,” Muller noted. “If you went to the session, you could walk away with something you could use in your property right away.”
Reed also worked to attract attendees through social media for the first time leading up to the 2009 show. Muller said G2E had 1,500 followers on Twitter, Facebook and LinkedIn combined. The social media focus culminated with a “Tweeter” in a blue shirt at the expo, whose job was to tweet about what was happening, as it happened, all week. Muller hopes to see many more social media followers after this year’s conference. “When people are having conversations about your show or your product online, you want to be part of that conversation,” she explained. “You don’t want to let those conversations go on without you.”
Reed had hoped attendance numbers would be up this year, and overall they were, despite the drop in conference attendees. Show floor attendance was up 8 percent, and combined, attendance was up 4 percent from last year. “We worked really, really hard to make sure we were delivering the right attendees this year, because we knew if we didn’t do that we’d have a little problem on our hands,” Muller said.
On the floor, Fahrenkopf said server-based gaming was the hot item, noting that server-based games will be the shining stars of CityCenter when it opens in December. One such game that debuted at G2E was highlighted during the opening ceremony, when Mr. Big himself (a.k.a. Chris Noth) helped cut the ribbon to kick off the week and rally excitement about IGT’s new Sex and the City slot machine, which features recordings of Noth’s voice.
Internet gaming was also a hot topic, although Internet gaming products probably won’t start to infiltrate the show floor en masse for a few more years, or maybe longer. Although the AGA hasn’t yet taken an official stance on Internet gaming, Fahrenkopf does not believe lawmakers will have enough time to take on the issue and pass any bill by regular order this session. As far as bricks-and-mortar expansion, Fahrenkopf pointed out that governments often turn to the gaming industry to fill budget gaps, as they are doing now. But instead of more full casinos, he expects to see more slot machines and VLTs added to racetracks, as it helps lawmakers “avoid the NIMBY problem—not in my backyard.”
“You don’t have to worry about getting zoning for gaming—it’s already zoned as a gaming site, and what you’re doing is changing the mix,” he explained. “That’s why I think racinos have become so popular.”
“Historically when new markets open, they’ve tended to, in the past, benefit places like Las Vegas,” he added. “More and more people get exposed [to gaming] and want to come to Las Vegas.”
But regardless of the what-if’s of the future, more than 520 exhibitors focused on showing off their new offerings for 2010 on the G2E floor. Fahrenkopf noted that the manufacturers’ creativity and ingenuity reflected the need for new and exciting products to excite buyers. “Let’s face it,” he explained, “many of the operators have not had the capital over the last few years to refresh their floors, to put in new slot machines, to replace old slot machines—that’s very capital intensive. So, with the optimism that I think everybody is feeling here, the manufacturers are going to lay out why … now is the time to start spending that capital on new machines that will be attractive to the public.”
Fahrenkopf also noted that while everyone is saying that the economic downturn has bottomed out, it appears to be a rocky bottom, not a flat one. Similarly, Las Vegas visitation numbers come with a caveat: “They’re coming here—it’s just there’s not the same amount of discretionary spending that they had in the past,” he said. He also spoke highly of a proposal in Washington, D.C. that would create a federally funded tourism office, which AGA board members believe would boost Las Vegas tourism numbers.
The State of the Industry
The State of the Industry panel also focused on the economy, with topics of discussion including value, player recognition, technology and expansion under the heading “Gaming’s New Guard.” The panelists included Guillermo E. Gabella, director of Bolt S.A. (Argentina); Nick Khin, president of Aristocrat Technologies; Virginia McDowell, president and COO of Isle of Capri Casinos; and Keith Smith, president and CEO of Boyd Gaming Corporation. The panel was moderated by Fahrenkopf.
All of the panelists tended to speak of the recession in past-tense terms—a drastic change from just one year ago, with the only major point of disagreement concerning the state of gaming companies as they entered the recession. In his first comments to the crowd, Khin said he believes suppliers entered the recession with good balance sheets. McDowell spoke next, saying she sees just the opposite as far as the operators are concerned. However, not much time was spent dwelling on the past. Much of the discussion centered on how the recession is changing the gaming industry now. Panelists also took out their figurative crystal balls and gazed into the future to give their predictions to G2E attendees.
Khin said Aristocrat is adapting to the new economy by offering more leases, in an effort to be more flexible for operators that want new machines now. Khin also noted that when operators make a decision to buy or lease machines, they want them faster than they did before.
Smith said the recession has changed the gaming industry in another major way: “We’re much more value-oriented than in the last five or six years.” For example, he noted that words like “indulgence” and “luxury” are not being used in marketing materials any more because people are seeking out value.
Smith believes Las Vegas is going back to its original roots as a “value-oriented destination”—“I think that’s a good thing because we were starting to price ourselves out of the market,” he said. He also believes the industry will continue to evolve and eventually find a new norm.
Khin’s vision of the future also hinges on value, particularly finding value in technology so that operators will be willing to invest in new systems. Khin also believes the gaming floor will change in the next 10 years, with networked gaming playing a larger role. Manufacturers are already taking the first steps, but, he said, “We have a long way to go in the evolution of networked gaming.”
Khin also told the crowd that technological advances need to drive earnings and that games will need to remember players and reward them for their loyalty. Otherwise, Khin said, “I don’t think operators are going to get behind technology for technology’s sake.” In the future, he also sees lower-denomination products becoming more popular and casino management systems playing a much greater role than they currently do.
Another movement spurred by the recession is the number of states looking to expand gaming in the U.S. McDowell is excited about the opportunities in Maryland and Kansas but has a warning for states looking to expand gaming to fill budget gaps: “You have to provide us with an economic platform where we can succeed,” she said. “You can’t have high license fees, you can’t have high tax rates.”
Smith hopes gaming expansion in Pennsylvania will energize Atlantic City leaders to freshen its image. “I think [Atlantic City] can have a bright future if it wants to, but it needs some public support … to clean up the city,” he said.
Smith noted that there is a tremendous amount of people who still do not visit Atlantic City because it does not have the products they want and because they are not comfortable with the city. “I had the opportunity to work in Atlantic City back in the early ’80s and I go back there today, and a lot has not changed,” he said. However, Smith believes that, with a close population base, the city can survive and even thrive if regulators, cities and counties partner with private industry.
Gabella said the fight against illegal casinos is pressing for the future of gaming in South America. Gabella is encouraged by growth in countries like Brazil, Peru, Uruguay, Argentina and Chile and believes that these countries are making positive steps toward stronger regulation. He also believes that if the right laws are passed, Brazil would have many opportunities for gaming expansion—possibly even more than Mexico.
Fahrenkopf then posed the biggest question to the panel: “What do you think is going to drive operators to start buying again?”
According to Khin, it will come down to patrons feeling secure in their jobs and their disposable income. In other words, when players start playing more, operators will buy more. Khin said Aristocrat is not predicting significant improvements in the economy until 2011 and reminded the crowd that third-quarter 2009 shipping numbers from the major suppliers were the lowest of the decade.
From an operator’s perspective, Smith said the number one motivator is price. He told the crowd that if prices for machines were lower, operators would buy. He also noted that while technology and player response are important, price is the most important motivating factor. McDowell agreed, stating the $20,000 average price of a slot machine is too high for many casino budgets. She also noted that some casinos are choosing to spend that money in other ways. “If it comes down to either buying chicken drumsticks for a year and putting them in the bar and elevating the experience for my customers, or buying a new slot machine, you know, which are you going to pick?” she asked.
During a later interview with Casino Enterprise Management, Fahrenkopf noted that he also believes economic recovery for the gaming sector will come down to how soon people will get back to work. However, he said he is not sure how many companies will be hiring back employees whose jobs were cut during the last year of belt tightening. Fahrenkopf believes gaming companies feel lean and mean now—which isn’t a bad thing at all considering the increased competition and decreased operator spending.
It doesn’t seem to be a bad thing for G2E either. Despite the streamlined size, it was still the same old G2E, with old friends reconnecting, new deals inked and everyone heading home with at least one bag full of candy, travel hand sanitizer, pens and promotional materials.
Gaughan Inducted into Gaming Hall of Fame
Keeping his acceptance speech short and sweet, this year’s Gaming Hall of Fame inductee Michael Gaughan left the crowd with a sincere, “Nice to see you all here and thanks for coming.” Gaughan was honored this year for his contributions to the gaming industry and Las Vegas.
Gaughan, who is known for his management style and is one of the most beloved employers in Vegas, is the son of Jackie Gaughan, another Gaming Hall of Fame member. The younger Gaughan said being inducted to the Hall of Fame is a special honor, especially considering he now shares it with his father.
Gaughan became owner and ultimately the casino manager of the El Cortez Hotel in 1965. He opened the Royal Inn Casino in 1972 and later sold it to develop other casinos, including the Barbary Coast Hotel, the Gold Coast Hotel, the Orleans Hotel, the Suncoast Hotel, and the South Point Hotel Casino and Spa. Today, Gaughan owns and operates the McCarran Airport slot concession, the Casino Queen Riverboat in St. Louis, and the South Point Hotel, Casino and Spa on the South Strip.
G2E by the numbers*
Exibition Attendance
12,794, up 8% from 11,820 in 2008
Conference Attendance
1,989, down 14% from 2,314 in 2008
Total Attendance
14,733, up 4% from 14,134 in 2008
*unofficial
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G2E Hit List
Industry executives and experts weigh in on the most innovative and exciting products they saw on the G2E show floor this year.
3M Touch Systems—Multi-Touch Displays
Using its Projected Capacitive touch product as its base, 3M Touch System’s new 10-finger multi-touch display monitors wowed vendors, operators and developers alike at this year’s show. Using all 10 fingers, G2E attendees were able to use both hands to simultaneously tap, pinch, expand and rotate content displayed on a 22-inch durable glass-front display. It’s a new and very unique technology. The potential of game development—and the potential to open new markets—using this platform is amazing. Imagine what just one creative mind could develop using its super sensory features!
—Keith Petri, President, Kristel Displays
Shuffle Master—The i-Shoe™ Auto
The i-Shoe™ Auto is Shuffle Master’s latest intelligent shoe for blackjack and baccarat. It offers the casino executive a more secure option to the low tech plastic dealing shoe. The i-Shoe eliminates the possibility of card switching in baccarat, and can be utilized as a full accounting table game system. The i-Shoe is presently being used in conjunction with Shuffle Master’s i-Table system.
—Bill Zender, Industry Consultant
Lightning Gaming—Video Scrabble
Easily one of the most recognized and beloved board games of all time, SCRABBLE has finally made its way on to the slot floor, thanks to Lightning Gaming. This video bonus slot machine engages players (and editors alike) with a simple two-draw system of game play. The object is to score the highest possible word using the official SCRABBLE tournament word list. Players get an initial draw of seven letter tiles and the best available word is highlighted. Then the player has the option of holding any of the tiles, then a second draw is initiated, replacing any tiles not held. The highest value word is calculated and compared to a paytable to calculate the win. A bonus is initiated when the player uses all seven letters and scores on the paytable. The best part about the game? It doesn’t require spelling or vocabulary! Instead the game instantly reassembles drawn letters to form the highest possible word score and automatically provides word definitions. It’s education and gambling combined—what editor could ask for more?
—Krista Reiner, Managing Editor, Casino Enterprise Management
Casino Data Imaging—iGuide™ Mobile Media Application
Casino Data Imaging’s iGuide™ isn’t a new product, but its Mobile Media application is. It’s marketed as a “direct channel to market, advertise, inform, and communicate directly to casino customers” on their smart phones, but what I really care about is not getting lost on the casino floor. This app shows headings like HOT SLOTS, DINING, ENTERTAINMENT and WHAT’S NEW, and a map of the casino will take you right to wherever you want to go. After a week at Harrah’s, I still had trouble finding my way around, so this product is for me. Plus there’s a cute kitty on the logo—how can anyone not like that? The iGuide seems to have tapped the right balance of usefulness and coolness for customers and ROI for the casino. I would definitely use this.
—Amanda Huggett, Associate Editor, Casino Enterprise Management
Cole Industries, Suzo-Happ, Quixant, Elite Casino Products, Innocore, etc.
These vendors offer component products such as monitors, motherboards, driver software, cabinets and bonus toppers that make it easier than ever to construct high-quality gaming machines on a much smaller budget than ever before. The canvas of expression these companies combine to offer make it possible for creative individuals to build reliable gaming devices that support entirely new types of gaming machines. For too long, our games industry has suffered from a lack of true innovation caused by the bureaucracy and fear of obsolescence of current products that plague every established manufacturer. Our industry has focused too long on providing more-of-the-same products that aim at the same core of known players. Only when we truly open our product lines to appeal to that 95 percent of adults that do not gamble on a regular basis and work to develop new players will this industry enjoy expansion. Innovation such as this requires risk, and that’s something casino floors—oddly, of all places—are far too afraid of.
—John Acres, CEO, Talo Nevada Inc.
Hydako—4 Weapons
It might be hard to understand the company’s sales reps, but Korean-based gaming supplier Hydako proved that incredible design and eye-catching graphics speak for themselves. Particularly impressive was the title 4 Weapons (they also spell it “4 Wepons,” but who’s checking?). The game featured a huge 2.2 meter tall cabinet and a 42-inch vertical touchscreen monitor with outstanding graphics supported by outstanding sound quality. To show off the graphic capabilities the game featured five major bonuses: Cyprinoid Racing, Crescent Blade Man, Swordswoman, Broadaxman & Archer. Minor bonuses included variations of Broadaxman, Bow, Sword and Crescent Blade.
—Chuck Hickey, VP Slot Operations, Barona Valley Ranch Resort & Casino
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