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Gaming Guru

Rod Smith
 

Cashless Slots Becoming More Popular

29 March 2004

The race to cashless slots is picking up speed and should accelerate in the next two years as small- and medium-size casinos join the stampede, a Goldman Sachs survey released this week said.

Reno-based International Game Technology, the world's biggest slot maker, continues to set the pace and benefit the most, with Australia-based Aristocrat Technologies picking up steam.

The expected boom isn't making everyone happy, though.

Interest in Alliance Gaming and WMS Industries slots is lagging, and some casino managers are beginning to revolt against the trend to replace traditional slots with cashless.

The 2004 study, Goldman Sachs' fourth annual survey, showed 77 percent of the casinos surveyed incorporate some level of cashless machines on their slot floors, compared to 39 percent last year.

Goldman Sachs gaming analyst Steve Kent said the numbers are a strong indication of the widespread acceptance of cashless slots, which should lead to increased sales over the next few years.

Even though the number of casinos that have installed some cashless machines has increased, only 34 percent have more than half of their floor devoted to cashless, meaning the trend should accelerate slot sales, at least for a few more years.

IGT, whose "Wheel of Fortune" game was cited as the most profitable machine for the fourth straight year, should remain the winner in the stakes competition among slot makers, even though the Goldman Sachs survey found the "Wheel of Fortune" slot machine's popularity is slipping.

However, IGT spokesman Ed Rogich said demand for the "Wheel of Fortune" game remains solid and that his company this week started deploying an advanced version, "Wheel of Fortune Special Edition," in Las Vegas.

Of the other major slot makers, the survey found only Aristocrat is "making waves" for IGT.

"The increase in popularity of Aristocrat games was remarkable. Aristocrat games were mentioned 19 percent of the time as having the highest win per machine. This ranked second only to IGT," Kent found.

Aristocrat President Gavin Isaacs said his company has been pleased with the reception of its newest slots among casino managers and that the company plans to continue to respond to customer demands to make added inroads on market share.

By contrast, Alliance slot machines got little mention from slot floor managers in the survey.

"However, we note that AGI's games have never performed well in our slot survey, and the company has still managed to deliver strong game sales over the past few years," the survey said.

Alliance spokesman Marcus Prater said it is "always tough to (draw conclusions) from blanket assessments when our industry is so widespread."

Still, he said Alliance sales and placements have been improving recently as the company has accelerated the introduction of new games.

WMS, which had largely withdrawn from new placements for two years while it developed new technology, "dropped off the chart" in the survey.

"(However) , on the bright side for WMS, we found that 47 percent of the respondents said they planned to purchase more WMS games this year," Kent said.

The accelerated replacement cycle started mainly with the large casinos, but competitive pressure and the drive to cut costs seems to be driving small- and midsize casinos to start shifting to cashless more rapidly than they have in recent years, the survey said

However, not all smaller-casino managers share the enthusiasm for cashless slots.

Mike Devaney, operations director at Emerald Island Casino in Henderson, for example, said his customer's enthusiasm the cashless machines is vastly exaggerated and "employees hate them with a passion."

The 7,500-square-foot Emerald Island Casino features just 370 slots, compared with almost 4,000 slots at the MGM Grand and more than 2,500 slots in other major Strip casinos.

Customers, Devaney said, care most about service.

"Why invest in a system that it takes eight years to pay off with the labor savings when what the customers want is workers who can provide service," Devaney said. "Tickets are no solution for little locals casinos and our employees would hate it."

Cashless Slots Becoming More Popular is republished from Online.CasinoCity.com.