Casino Enterprise Management

A rather wise GameTech executive recently told me that if you stay in this industry for five years, you’ll be in it for life. Now I’m not sure if I can resist the call of retirement in Boca Raton when the time comes, but I do know that the allure and excitement of gaming certainly never get old — just ask Executive Chair of Ainsworth Game Technology Len Ainsworth. At 84, he is the most-seasoned executive in the business, and shows no signs of quitting quite yet.

The gaming industry boasts many brilliant veterans, each with heaps of patience and knowledge, and I have had the privilege of meeting many of them already during the course of my career. But Mr. Ainsworth is undoubtedly one of the most memorable I have encountered to-date. Responsible for founding both one of the most successful gaming manufacturing companies of all time — Aristocrat Technologies — and one of the newest, most progressive gaming manufacturing companies today — Ainsworth Game Technology — Mr. Ainsworth is inarguably a role model for success. But it is his spunk, sharp wit, spirit and humor, not to mention his astounding six-decade industry tenure, that truly make him a living legend.

Amid the river of attendees and exhibitors’ latest gongs and trappings at G2E last November, I had the opportunity to meet the man himself. Although his white hair and soft voice suggested a humble grandfather who would be more comfortably seated in a rocking chair on a sunny porch overlooking the Outback, complete with a pipe in hand, he was obviously relaxed and ready for business, sitting up straight on a modern steel chair inside a conference room tucked behind the scenes at Ainsworth Game Technology’s slot-filled booth.

Although he was clearly well-versed in the routine of speaking with the media, Mr. Ainsworth nonetheless seemed game for our interview. Speaking honestly and candidly in a distinct Australian accent, over the course of the afternoon, we touched on everything from his childhood in New South Wales to the future of his latest business venture.

I hope you enjoy these excepts of my conversation with Mr. Ainsworth just as much as I enjoyed holding audience as he animatedly recounted his start in this “super, fun business,” his exit from Aristocrat, the creation of Ainsworth, his feeling about gambling, his challenges and inspirations, and ultimately, what he believes has been the secret to his success.

Krista Reiner: Legal commercial gaming has been around for well over 50 years, and you’ve been there almost every step of the way. How did you get your start in this tightly regulated industry?
Len Ainsworth: Very simply. Back in 1953, I was manufacturing dental supplies for my father’s company — my old man had passed away in 1952 — we made dental consumables and appliances. We had an engineer by the name of Joseph Heywood, who joined me to make heavy dental equipment (i.e., chairs and units). Joe and I were chatting on this subject one day, and he said to me, “Have you ever thought of making slot machines.”

I said to Joe, “What’s that?”

Joe said, “You know — you put the money in the slot, pull the handle and the reels go round, and if you’re lucky, you win some money.”

“Never heard of ‘em,” I said.

“They’re in all the clubs!” he said.  “Where have you been?”

I replied, “I’ve been making bloody dental supplies for a living.” And I thought, well maybe I have seen one of those up in the Blue Mountains. “But you don’t make any money on those.”

“I know,” he said.

“Well, what about it then?” I said.

“Well, there is this fellow Smith working 24 hours a day, 7 days a week. He is six months behind with his orders, and the clubs are paying cash in advance.”

I said, “Cash in advance?” I was thinking that with the money we could earn making machines, we could buy the heavy equipment we need to make the chairs and units. “Let’s do it!” 

That’s how I started in the slot machine business. I went to see the bank, and said I wanted to borrow 10,000 pounds as I intended to make slot machines. The bank manager said that was OK, and I asked him what security he wanted, and he said, “With you I don’t need any.” So I got my 10,000 pounds.

We were making up a batch of some 16 pre-production prototypes a few months later when in came a fellow called Grant William Davidson, and he said, “I hear you’re making a slot machine.”

“Maybe,” I said.

He replied, “Do you want an agent?”

“Perhaps,” I said.

Davidson said, “I’ll take at least a hundred of these in the first year.”

“Oh, yeah?” I said.

Davidson asked, “What do you think you want for one?”

I replied, “200 pounds plus sales tax.” 10 percent at that time.

Davidson said: “Yes, that’s alright. I can sell them for about 350 pounds. I’ll take that and get a contract drawn up.”

Davidson then offered me a roll of money the size of a toilet paper roll. And he says: “Here, take this. You can count it.”

I replied, “No. I can’t take your money. My father taught me neither to borrow, nor a lender be.”

“What are you mad?!” he said.

“No. It’s a question of principle.”

So we started off to complete these at a rate of two per week. In those days only New South Wales, Australia, and Nevada were able to operate machines within the law. Back then I never thought we would eventually be making a couple hundred machines each day every day and shipping them all around the world. At one point I had 2,500 people on staff, doing all the work from design to production within our own walls.

KR: Were you involved personally with game design?
LA: Originally there was only one game with a choice of cabinets in blue, veaux rose and green, with three wheels, later four. I grew out of that role, but for many years developed all the game names and the features and picked up a lot of information when I first went to Nevada in 1960. I was very mechanically minded, with science and mechanics as a background and think I was just lucky to have the talent and aspiration needed at that time. Joe was a brilliant mechanical engineer, especially relative to design, and in the early days provided the design of all of our art. As a result of these things, we managed to knock out all our competitors, one after the other. When we first started, we had six backyarders, and one by one they either died out or I bought them out.

KR: When did you start distributing Aristocrat’s games globally?
LA: New South Wales had been our prime market, but in 1960, I traveled the world seeking further markets. Not long after, we designed a special piece of equipment for Nevada and naturally called it “The Aristocrat Nevada.” This machine had many more security devices than necessary for Australia; it was a world success and really set us up.

Following a Royal Commission around 1959, England came into the picture and became a major market, followed by the Scandinavian countries one after the other. England was good for a couple of hundred machines a week each week, and they nicely filled the cargo space of a Boeing 707. All of this was well before other parts of the United States began to legalize machines.

KR: As the founder of Aristocrat you surely had a difficult time leaving the company. Can you share how it happened?
LA: In about ‘94 or ‘95, I was diagnosed with prostate cancer. I asked the urologist the prognosis, and he said that if it got aggressive, I’d be dead within the year. He wanted to hack it out there and then, and I wasn’t all that keen. That was in about October or November. I asked him if there was any hurry. He said no, and that I’d be OK until the end of the year. In the mean time, I decided that with one ex-wife, one wife and seven sons, I might as well give the lot away to save any disputes after I passed on. So I gave it all away to them, divided it nine ways, which was about the same time we were going public.

I had a second biopsy in the New Year, the result of which said I was all clear. Some people suggested that I sue the doctor, and I said listen, I’m just happy to be alive. The ironic thing is that the doctor who gave that prognosis was dead himself in six to eight months from prostate cancer he didn’t know he had. That’s just how dangerous prostate cancer can be.

KR: So when and how did you decide to create Ainsworth Game Technology?
LA: I decided after giving it all away to the family.  They did very well — I guess I made nine multi-millionaires over night, which was good for them but not for me. And when they (the newly public Aristocrat Technologies) didn’t want any help from me, I thought well, too bad. I shall start up again in competition just to keep myself occupied. And that’s what I’m doing. Whether that was the smart thing to do, I’m not sure. I’ll tell you in a few years time.

KR: As the executive chairman for Ainsworth, what do you on a doy-to- day basis?
LA: I ride shotgun on everybody. I have to keep an eye on all of those other people who work for the company — sometimes you’ll find one of them out there in Siberia chasing business. Honestly, I have to keep a watchful eye on what’s going on and hopefully come up with useful ideas. I also have to try and catch misjudgments before they are made.

And of course, they unlock the cupboard once in a while to bring me out to places like this (G2E) to say hello to people. I was asked earlier this year if I am the person who’s been in the industry the longest. I said yes, and I don’t think there is much chance of that being wrong. I started at the end of 1952 and thus have been around the industry rather longer than old Si Redd.

KR: So it’s keeping you busy?
LA: Yeah, it’s keeping me kinda busy.

KR: Which Ainsworth product do you think is best?
LA: Oh, I don’t think there is any one best product. They are all good products and getting better all the time.

KR: What do you think give Ainsworth products an edge?
LA: I think because of the earning capacity of the product, the feel of the machine, the fact that we’ve been making machines for many, many years. And I think because of the fact that we are good people to do business with. We find that once we have a customer, they become friends and stay with us, and that’s very important to us.

KR: How is Ainsworth’s expansion coming along?
LA: We are in almost every major U.S. state now, and I think that next year at some point we will submit to Nevada for approval. Nevada is probably, or probably used to be, the hardest jurisdiction to get approval in, but the regulations there are well justified. Plus, you can’t tackle all markets at once. It’s too expensive. Of course, New Jersey and Mississippi are not far behind Nevada and the Indian casinos have been very good to us. The gaming industry these days is spread worldwide in a way I never would have believed possible.

KR: Where do you see Ainsworth in the future?
LA: I expect we will continue to access a growing share of the industry on a global basis.

KR: Do you like to gamble?
LA: Not really.

KR: If you were to gamble would you prefer a table game or slots?
LA: Well, of course slots because you have 92 to 94 percent coming back to you. And they are very interesting to play. It is my job to provide entertainment and the results speak for themselves. Today’s technology has opened up technical possibilities of every description.

KR: What are you feeling about problem gambling worldwide?
LA: I do admire what’s been done in America. The American attitude toward responsible gaming is one to be admired. The attitude seems to be that if people are unfortunate enough to get themselves into trouble, then the individual should seek help.

In other countries, such as Australia, we are very much inclined to expect the industry to carry the burden, but there is no uniform approach. The unfortunate thing about gaming is that it gets blamed for everything, and not enough is said of the benefits gaming brings to the community. If people have problems and they gamble as a way out, gaming is blamed when it is not the real issue. The real issue generally comes down to some personal problem. People will continue to gamble no matter what — it is part of human nature.

KR: You have seen many innovations over the last 56 years. What stands out as the most remarkable advancement?
LA: To increase the bottom line, there was one-in-8,000 chances of winning every time you spun the reels in the old days. These days, thanks to virtual reels, video reels and the like, you can have an almost unlimited number of combinations. And on a single-cent machine you can hit a jackpot of $5,000 or $10,000. The innovation of the penny slot has created a new and ever-increasing player base, and this combined with a vast variety of games affords the slot player an entertaining way to pass the time.

We’ve got two kinds of people in this world: those people who have so much work to do that they can never accomplish it all — academics and slot machine manufacturers — and then you’ve got the other people who work 35-40 hours a week. In many, many cases the latter don’t enjoy the work they do, and they’re bored to hell. So when they finish work, they want to go off and have a beer with their friends and play a slot machine just for fun because it doesn’t take too much skill, or they just like the entertainment.

My way of being entertained, apart from skiing, is reading a book or doing something of an educational nature, but not everybody is that way. There are very many people who just want to be entertained, and slot machines are their release, or as the English put it, “amusement with prizes.” There are all kinds of people in this world, and it’s not for us to tell them what they should be doing with their leisure hours.

KR: What has been your biggest professional challenge?
LA: Well, I think that in this day and age being a slot manufacturer is like running a gauntlet through a ring of fire while walking over hot coals — it’s not an easy thing to do. But the biggest single challenge is the amount of regulation, in so far as every jurisdiction everywhere has a different set of regulations. For example, in the United States every application you put in runs 50 pages on average and reveals just about everything you would want you to know about somebody; this means everybody knows everything about everybody. And you have to be fingerprinted. Now, my fingerprints don’t take very well — maybe I’ve got indistinct fingerprints, or maybe I’ve just worn them out. Sometimes I’ve had to take multiple fingerprints, and if you’ve ever had fingerprints taken, you know that it takes awhile to get the ink off. Then you have all the forms to sign.

It’s an awful lot of work. It’s an awful lot of money. And it takes an awful lot of patience. It also means you have to employ, in our case, at least a half dozen people just to do those things. And it also means that if you submit an application today to license the company, you must also license your senior executives. Then your machine has to be approved as a machine to ensure its integrity, and then each single game you create has to be approved as well, whether you sell one or a thousand. It’s a very capital-intensive business, and it’s inclined to put a hole in your piggy bank and everybody else’s in the industry.

KR: What has been your biggest personal challenge?
LA: To stay alive, I guess. When you get to 84, you know you have to start thinking about that man with a box that he wants to put you in. It’s hard to hear him sometimes, but I can make him out on occasion saying, “He’s about 5 feet 6 inches, 200 lbs. Yes, I think that number seven will suit him.”

KR: What has inspired you over the course of your career?
LA: Oh, the fact that it’s a wonderful, fun business. Yes, it’s a wonderful, fun business. There was this chap that I met years ago from one of the Sydney papers. We were at a London show, and he said to me, “Do you play slot machines yourself?” And I said, “Do you think I’m mad?!” And he just walked off. He came back about an hour later and said, “Do you like watching other people play?” I said, “You’ve got me.” Of course I love watching other people play our games and saying, “Gee, this is a great little machine!” or “Wow, what a great game!” or “Wow! What fun!” I think there is a lot of satisfaction in designing something that other people find entertaining and rewarding. That’s part of what I really enjoy.

I also really enjoy coming up with a new machine device that I know will result in players wanting to get on that machine. We recently introduced a machine that recreates a cockfight and was made for our Phillipino customers. To our surprise, it wasn’t so popular in the Philippines, but it was going gangbusters all the way through the Caribbean and South America. Yet cockfighting itself was popular in the Philippines. Maybe players prefer the real fight and raising roosters. Who knows? But that’s where I have some fun.

KR: What’s the secret to your success?
LA: It’s quite simple, really. The harder you work, the luckier you will get.

Krista Reiner is the Managing Editor for Casino Enterprise Management. She can be reached at (701)293-7775 or by e-mail at editor1@aceme.org.