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Howard Stutz

Bally Technologies wins pacts in disparate locales

19 January 2010

LAS VEGAS, Nevada -- No one will ever mistake Dodge City, Kan., for Macau.

Bally Technologies, however, has found new revenue sources in both places.

The Las Vegas-based slot machine manufacturer was awarded a comprehensive systems and server-based technology contract for the Boot Hill Casino in Dodge City, which opened in December as Kansas' first state-run casino.

A day later, Bally announced it was given a contract for a table game, slot machine and casino management system for Galaxy Entertainment's casinos in Macau.

Both contracts allow Bally to deploy its iView display system, a touch screen display that includes player tracking information and marketing messages directly onto game screens.

While the deal with Boot Hill marks the company's initial entry into Kansas, the Macau contract gives Bally potentially half of the available market share in the Chinese gaming enclave.

It already procured casino systems contracts with Stanley Ho's Sociedade de Jogos de Macau and with Las Vegas Sands Corp.

"With Galaxy, Bally locks up three of the six Macau concession holders," Roth Capital Partners gaming analyst Todd Eilers told investors. "While the financial impact is fairly modest and spread out over two years, we believe the contract is important."

Galaxy currently operates the Starworld Hotel-Casino in Macau with 800 slot machines but is also building a large resort complex on the Cotai Strip, which is expected to house 1,200 slot machines.

Bally Technologies Chief Executive Officer Richard Haddrill said there is interest in customer data collection and play marketing beyond American casinos. Through its deal with Las Vegas Sands, the company will provide its iView system at the $5.4 billion Marina Bay Sands in Singapore, which opens in April.

"More and more operators see its potential for dramatically improving customer service, player tracking and promotions," Haddrill said.

Eilers noted Bally's deal with Galaxy displaced a similar systems product controlled by International Game Technology, but it was software the slot machine giant acquired when it bought bankrupt Progressive Gaming.

The first placement in the U.S. for Bally's iView was at the Pechanga casino in Temecula, Calif.

Eilers thinks IGT, which has a similar system that was recently deployed at the Aria casino at CityCenter, and Bally will have to work more cooperatively on server-based gaming products in the future.

"We believe more operators will put further pressure on IGT to grant Bally permission to install its iView (display monitors) on its games," Eilers said.

The contract with the somewhat smallish Boot Hill Casino in Kansas, gives Bally a live showroom in the market that is expected to grow over the next few years. The Wild West era-themed casino opened it first phase at a cost of $90 million, but expansion is planned. Kansas is also expected to see a casino added in other markets, including Kansas City and Wichita.

"It's an honor to have been selected the systems provider for Kansas' first state-owned casino," said Rob Jackson, Bally's vice president of system sales for western North America.