CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Recent Articles
Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Global Gaming Expo: Slot Market Looks Dim Within U.S.

13 September 2005




While gaming expansion into new North American markets may be slow to develop over the next 18 months, opportunities internationally could arise more quickly, panelists told an audience at the opening session of the annual Global Gaming Expo on Monday.

Pennsylvania, where gaming regulators are wrestling with writing rules to bring an estimated 65,000 slot machines into the state, is the most promising new domestic gaming jurisdiction. But the best guess, according to the panelists, is that the first "handle pull" is at least a year away.

"There is always a lot of hype initially surrounding a new gaming market, but some factor, such as politics or anti-gaming forces, always seems to come up to slow down the process," said Bill Bartholomay, director of new market development for WMS Gaming.

He added that with 2006 being an election year, most politicians won't want to be seen as the leading proponent for a controversial issue, such as gaming.

Gaming equipment providers may find better inroads in such markets as Turkey, Italy, Russia, and Brazil, which may allow casinos to substantially increase their slot machine offerings over the next few years.

"There is potential for new markets to open up," said Sebastian Salat, managing director of WMS International. "The question is how the governments in those countries will regulate the machines."

Salat said Macau will experience the largest slot machine growth anywhere in the next few years as MGM Mirage, Wynn Resorts Ltd. and Las Vegas Sands Corp. open large casino-hotels. There are 4,000 machines in Macau, and Salat expects there could be 14,000 slot machines by the end of 2007.

The session was part of the gaming industry's largest trade show and conference that began Monday and will run through Thursday at the Las Vegas Convention Center. A showcase with more than 700 vendors displaying products expected to be on casino floors next year opens today. The G2E is closed to the general public.

Eleven states allow for Las Vegas-style casinos and seven states have laws that permit slot machine play at racetracks. There are 28 states that have agreements with American Indian tribes allowing for casino-style gaming.

Melissa Adams, senior director of business development for Aristocrat Technologies, said she was conservative in her views on how many new slot machines will be available in American and Canadian casinos by the end of next year. Gaming observers and analysts have estimated there are 800,000 slot machines in play and Adams expects just a 2 percent or 3 percent growth rate above that figure.

"I think the days of 5 to 6 percent annual growth in the North American slot machine market are over," Adams said. "A lot of these markets where we thought 25,000 to 30,000 machines might materialize are just not happening."

States where casino-type gaming exists, the panelists said, have either agreed to increase their slot machine totals or are contemplating a switch from lower-paying, bingo-style Class II games to the higher-paying Class III, typically referred to as "Las Vegas-style slot machines."

But the transformation is a slow process.

Although New York racetracks were given approval by state lawmakers more than four years ago to build slot-machine areas, lawsuits and other legal challenges tied up the matter. A recent court ruling resolved the cases in the tracks' favor and the state's two largest racing facilities are in the initial stages of opening casino space for almost 10,000 video lottery terminals.

Meanwhile the push to add slot machines in Broward County, Fla., has slowed due to political opposition, even though voters approved the matter in March.

Adams said California, which has more than 55,000 slot machines, had been viewed as a potential growth market. But disputes between several of the large American Indian casinos and the governor's office slowed progress.

"Everybody was talking about another 25,000 to 50,000 slot machines in California, but that has slowed tremendously," Adams said. "The casinos with 2,000 machines can handle more, but it may have to wait until after next year's election."

Bartholomay said the replacement cycle for ticket in-ticket out slot machines ended, which has left most of the major manufacturers seeking new markets for sales.

"A lot of the companies would like to see new markets open more quickly so they can recoup their research and development dollars," Bartholomay said.

Global Gaming Expo: Slot Market Looks Dim Within U.S. is republished from GamingMeets.com.