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Inside gaming: United Coin taking steps to not go up in smoke

17 March 2008

LAS VEGAS, Nevada -- United Coin Machine is trying to cut the financial bleeding caused by last year's statewide smoking ban.

The company, one of Nevada's largest slo- machine route operators, is deploying 100 high-tech, bartop slot machines developed by Bally Technologies in an effort to win back gamblers. The United Coin-managed bar and tavern locations lost business in the past 14 months because smoking is no longer allowed in locations that serve food.

The slot machines, which include several video poker games and traditional spinning-reel offerings, are bartop versions of machines found in casinos, where displaced smoking gamblers have relocated.

"From our perspective, infusing some new technology into the bar and tavern market might be the way to go," United Coin Chief Financial Officer Steve Des Champs said. "The machines look terrific, are eye-catching and have a wide sweep of games."

Des Champs said United Coin manages slot machines at 425 bars and taverns in Nevada. He said the company's losses, due to the smoking ban enacted by voters in 2006, are similar to those experienced by Herbst Gaming, which has had a 20 percent drop in revenues at its slot route operations in the past year.

Under the agreement, United Coin, which was a subsidiary of Bally Technologies until it was sold in 2004, has exclusive use of the Bally's games in bars and taverns and can buy up to 500 of the units. Financial terms were not released by either company.

Des Champs said the rollout should begin in a few weeks. He said two or three of the Bally machines will be installed in Las Vegas and Northern Nevada locations, which have a maximum of 15 slot machines.

"This is an important contract for Bally Technologies because it provides significant exposure in Nevada to our new bar-top product, which are significantly more advanced than anything currently available in the industry," Bally Technologies Chief Operating Officer Gavin Isaacs said.

Unlike those in California, Arizona's Indian casinos don't need voter approval to add slot machines.

Statewide population increases will allow Arizona casinos to add 2,908 slot machines this year. Arizona's Indian casinos recalculate their gaming positions every five years based on a population formula.

According to the most recent Indian Gaming Industry Report prepared by the Analysis Group, Arizona's 26 Indian casinos had 12,862 slot machines as of 2006.

In February, California voters approved an expansion of 17,000 new slot machines.

Deutsche Bank gaming analyst Bill Lerner said Arizona could give slot makers a financial lift in this year's second half.

The Inside Gaming column is compiled by Review-Journal gaming and tourism writers Howard Stutz, Benjamin Spillman and Arnold M. Knightly. Send your tips about the gaming and tourism industry to insidegaming@reviewjournal.com.

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