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Nevadan At Work: Thirty Months on Sideline Was Long Enough for Gaming Executive27 February 2006
By Howard Stutz
LAS VEGAS, Nevada -- Mike Rumbolz thought he'd retired from gambling companies.
The former gaming executive was enjoying life away from the casino business when a Minneapolis-based technology company looked to increase its small foothold in the casino industry. The company, Cash Systems, asked Rumbolz to lead it.
Rumbolz ended his 30-month exile.
As the chairman and chief executive officer of Cash Systems, Rumbolz is setting the direction for the company to place its cash transaction devices inside casinos across the world.
"This is an entirely different kind of vendor than I've ever been associated with," said Rumbolz, whose 20 years in the gaming industry crossed most of the major segments, including regulatory, casinos, slot machine manufacturers and technology providers.
"This company provides products that customers use in retail locations everywhere in the United States on a daily basis," Rumbolz said.
When Cash Systems started looking at gaming, the company established its primary headquarters in Las Vegas.
"The casino environment is very different, but customers are very accustomed to dealing with cash transaction products of this type," Rumbolz said.
In one way or another, Rumbolz has held just about every gaming industry job.
"I've made a living from the industry since I was 14 years old. It's been very good to me," Rumbolz said.
As a high school student, he waited tables in casino restaurants. While attending college and law school, he spent his summer breaks dealing poker and blackjack.
After two years as a chief deputy attorney general, Rumbolz was appointed to the Nevada Gaming Control Board, becoming the agency's youngest-ever chairman at age 33 in 1987.
When his term expired two years later, Rumbolz shunned a statewide political career and entered the business world, serving as the eyes in Nevada for billionaire developer Donald Trump.
Rumbolz was exploring opportunities for the New York real estate magnate when a 1990 helicopter crash killed three Trump executives.
The deaths came six months before the opening of the Trump Taj Mahal in Atlantic City.
Trump brought Rumbolz back east to help open the casino. Rumbolz stayed in the New Jersey gaming market briefly as an executive at Trump Castle.
He returned to Las Vegas in 1991 to help Mandalay Resort Group predecessor Circus Circus Enterprises find development opportunities outside of Nevada. When the company joined with two other casino operators in opening Casino Windsor in Ontario, Rumbolz was named the property's first president.
A year later, he returned to Las Vegas and became the chief executive officer of slot machine manufacturer Anchor Gaming. The company grew, building casinos in Colorado, acquiring a state lottery operation and a gaming systems division, but Rumbolz left in 2000 when company founder and Chairman Stan Fulton was bought out.
Eventually, Rumbolz landed on the board of Casino Data Systems and he helped engineer the company's sale to Aristocrat Technologies.
When he joined Cash Systems in January 2005, Rumbolz wasn't looking for another job.
Question: What made you end your "retirement"?
Answer: When you're not looking for something is when everyone has something for you. I looked at half-dozen opportunities and there were a variety of approaches, such as running companies or sitting on boards of directors. At least one approach was political.
Question: What is Cash Systems' role in the gaming industry?
Answer: We're a cash access provider to casino customers. We basically take the risk from the casino for any of the multitude of transactions where the customer receives cash at the casino, such as automated teller machines, credit-card cash advances, debit card and check cashing.
The casino offloads the risk of the check being bad or the credit-card transaction being fraudulent to companies like ours. We shoulder that risk and provide the systems that are necessary to access all the networks for those transactions. We then share in the fees that are generated from the casino's customers.
Question: Is Cash Systems just a casino vendor?
Answer: We have a few legacy retail locations in Minnesota, but for the most part, we're only in casinos and focused on American Indian casinos. We've been able to build a portfolio of 170 casino customers, and about 60 percent at Indian casinos.
Question: The company is named Cash Systems, but isn't the name misleading?
Answer: It may be something of a misnomer because these really are cashless systems that are being distributed. Casinos are probably going to become more and more cashless. People are using cards much more than they are using cash or checks. As a society we're spending more time with plastic than paper, and we believe that is going to be the future of these systems in casino environments. We'll see card-based solutions being fully integrated in the (table game) pit as well as the slot machine floor.
Question: You've been with the company for a year; what changes have been made?
Answer: When I came on board, the company had been growing quickly. We did $45 million in revenue in 2004 and we were poised to do $60 million in revenue in 2005. There had been a perspective on how large Cash Systems could become and the board of directors decided to bring in seasoned management to complete building out the infrastructure. They wanted someone with a background in gaming, systems development and product development.
During the first year, we wanted to make sure our systems were robust enough that they could handle the kind of growth for which the company was poised. We have the people and technology in place to really move Cash Systems to the next level from a small company to a much larger company.
Question: What products do you see making their way to the casino floor?
Answer: The real future of the cash access industry is the application of new technology to allow casino patrons to access cash from the space where they are gambling. The company had already introduced a hand-held device for credit card transactions, but it was brought to Nevada gaming regulators somewhat prematurely. (The Gaming Control Board) didn't have enough information about the potential impacts of this kind of technology on the casino floor. They asked the company to put it on trial in other jurisdictions. Our plan is to roll it out in Native American jurisdictions. We're now perfecting the internal control system on how it's used.
Question: Why did the Cash Systems recently switch from being listed on the American Stock Exchange to the Nasdaq National Market?
Answer: There are more technology companies on Nasdaq. The company has been in a building mode for last year and we've spent a lot of money and a lot of time and energy getting both products and staff in a posture so that we can take 2006 and 2007 to really grow company.
Question: Before you joined the Trump organization, you were often mentioned in political circles. Any regrets you didn't enter politics?
Answer: I think it was a lot of others that were encouraging me to run. After spending six years in government and having the opportunity to head a state agency, I became convinced I would be better suited for a business environment than a political environment. The idea of going out and asking people for money, making five or six presentations a day about why I'd be better than someone else had no appeal for me.
Question: Are your personal work batteries sufficiently recharged?
Answer: After everything I was involved with, I realized I hadn't taken more than five days off in any year. I had a nice respite and that gave me a chance to sit back, take a breath and decide what I wanted to do.
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