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Gaming Guru

John G. Edwards
 

Gambling technology: Now see this, and this

3 January 2007

LAS VEGAS, Nevada -- Las Vegas Gaming Inc. has devised a solution for the gambler who doesn't like abandoning a slot machine to watch and bet on sports events and horse races.

Las Vegas Gaming's product is called PortalVision, and it can serve as a platform for several programs.

Gamblers using PortalVision also will see a pop-up option when they start to cash out. The pop-up gives them an opportunity to leave a few dollars more with the casino to play a progressive keno game called Nevada Numbers.

PortalVision can use part of a slot machine screen to show races, sporting events or other television programs chosen by the casino operator.

Promotional material describes PortalVision as "the first multimedia delivery system that offers exciting new ways for customers to instantly increase their play -- and casino operators to increase their profits -- at any existing slot or video poker machine."

Las Vegas Gaming has applied to the Nevada Gaming Control Board, seeking approval for two PortalVision programs -- AdVision, which allows casinos to use promotional material for a screensaver; and the split-screen television viewing system.

Meanwhile, the company has arranged with Treasure Island to field test PortalVision.

"We all feel we're hanging onto this tiger, and he's ready to rumble," Chief Executive Officer and Chairman Russell Roth said.

Andre Filosi, vice president and assistant general manager of Sam's Town, said he and other Boyd Gaming Corp. executives were impressed when they saw a demonstration of PortalVision.

"For the most part, the folks in that meeting liked the program," Filosi said.

He tempered his enthusiasm with concern about how long it would take to get regulatory approval and the risk that gaming control may have issues about security needed to protect PortalVision from hackers.

Filosi is waiting to learn how much Las Vegas Gaming will charge for PortalVision and how Las Vegas Gaming will get paid, such as through a percentage of revenue or a flat fee.

James Lavelle, chief executive of Watchit Media, which produces video programs for casinos, said Las Vegas Gaming's product looks good from his perspective.

"They developed a number of very interesting casino games that would seem to have applicability in the global gaming environment," Lavelle said. "(The gaming company has an) interesting business model that has real potential."

Over the last several months. Las Vegas Gaming has "enhanced its staff with very professional and seasoned gaming executives, like (company President) Stephen Crystal," Lavelle said.

Las Vegas Gaming dates back to 1998. The company acquired Back to Back Gaming, which sold a side proposition for roulette games, the same year it was formed. Back to Back Gaming is no longer available, but Las Vegas Gaming has several other products, including progressive keno game Million Dollar Ticket and Super Bonanza, a side bet for bingo players.

The company introduced Nevada Numbers, linked progressive keno game, in July 2001 through properties operated by Park Place Entertainment. Park Place, which later renamed itself Caesars Entertainment, owned Caesars Palace, the Hilton casinos and Bally's before merging with Harrah's Entertainment.

The keno game didn't produce large revenues, however, because casinos typically locate their keno lounges in low-traffic areas. Roth estimated less than 1 percent of a casino's gaming revenue comes from keno while 85 percent comes from slot machines. Las Vegas Gaming believes its found a way to tap into the massive stream of money that goes through slot machines.

The company also intends to offer investors a way to bet on its stock; it hopes to make an initial public offering in late spring using the symbol LVGI.

Some aggressive investors may want to bet their money on Las Vegas Gaming shares before the possible initial public offering. Las Vegas Gaming already has 500 shareholders, and Roth said he often is able to match sellers and buyers of shares in the private company.

Roth set up Las Vegas Gaming as a public company so that its shareholders wouldn't need a license from the Gaming Control Board. Although the shares do not trade, the company does file reports with the Securities and Exchange Commission.

Las Vegas Gaming reported a loss of $1.1 million in the third quarter ended Sept. 30, down from $1.7 million in the same period a year earlier.

Revenue fell 14.3 percent to $1.2 million from $1.4 million.

Those numbers could change when and if PortalVision is a hit with casinos and gamblers.

CEO Roth was formerly chief financial officer of Sotheby's Holdings, the New York auction company, and chief financial officer of Cessna Aircraft Co. He published the Las Vegas Investment Report for five years.

Crystal was named president in October. He was co-founder and president of Barrick Gaming Corp., which owned casinos in Las Vegas.

Sam Johnson, chief technical officer, was chief executive of AdLine Network, the parent of a company that Las Vegas Gaming bought in January 2005. Zak Khal is chief operations officer; Bruce Shepard, a former partner with PricewaterhouseCoopers, is chief financial officer.

John G. Edwards
John G. Edwards