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Howard Stutz

Nevadan at work: Konami exec, others relay message: Nothing has changed

24 November 2014

LAS VEGAS -- Konami Gaming, Inc. isn’t a party in the multibillion-dollar buyouts involving Nevada’s two largest slot machine manufacturers.

That doesn’t mean Konami Senior Vice President Thomas Jingoli hasn’t felt effects of the mergers.

Konami, which is headquartered in Japan but houses its North American offices in Las Vegas, has been increasing its share of slot machine floors controlled by the larger, American-based gaming equipment companies.

Meanwhile, the slot machine landscape is changing through GTECH Holdings’ pending $6.4 billion purchase of IGT - International Game Technology and Scientific Games Corporation’s completed $5.1 billion buyout of Bally Technologies, Inc.

Jingoli, 47, and Konami officials have spent the summer explaining its standing with casino operators. The message is: Nothing has changed with Konami.

“We have been focused on organic growth for 15 years,” said Jingoli, who is Konami’s chief compliance officer. “You look around with these conglomerates being created and we’re still focused on building our brand and building up our product lines. We’re not focused on merger integration initiatives.”

Jingoli joined Konami in 2003. He previously worked in regulatory compliance for casino equipment provider Sega Gaming and Station Casinos, Inc.

It’s the type of gaming career Jingoli envisioned when he gave up a four-year job as an investigative agent for the New Jersey Gaming Enforcement Division in 1994. He spent the next two years earning an advanced degree at UNLV’s William F. Harrah College of Hotel Administration. He was honored by the school as a distinguished graduate in 2011.

Jingoli credited late gaming executives Dennis Gomes and Shannon Bybee with encouraging him to attend UNLV while he was sidelined by a two-year cooling-off period after leaving the enforcement division.

Jingoli is one four “C-Level” executives at Konami, a team with Chairman and CEO Satoshi Sakamoto, Chief Operating Officer Steve Sutherland and Chief Administrative Officer Ryoichi Kimura.

“Our roots are in Japan, but the company is run much like a U.S. company,” Jingoli said.

Konami is in the process of more than doubling the size of its manufacturing facility south of McCarran International Airport. The company is adding a 193,000-square-foot building attached to the its 123,000-square-foot space. It’s expected to be completed next summer.

Since 2009, Jingoli has also served as president of the Association of Gaming Equipment Manufacturers, which has more than 145 member companies and works to further the interests of gaming suppliers worldwide.

Question: Where does Konami Gaming fit into the changing equipment manufacturers landscape?

Answer: It’s an interesting question that we’ve been getting from our customers. When you look at our industry, if you have good products, they will find a way onto a casino floor. In both games and systems, we have focused on delivering a good product that will stand up against anyone else’s. That’s what we tell our customers. We’re not worried about cutbacks and layoffs. We’re expanding our facility here because it’s driven by (research and development) efforts. We’re creating more manufacturing space and more administrative space.

Question: Does Konami seek out popular culture names and titles to use on slot machines?

Answer: We’ve had success with some strategic partnerships, such as “Rock Around the Clock” and “Dungeons and Dragons.” The company has been happy with the early results. It’s hard to pick and choose in that environment. It’s expensive. With every hit you have, there are two or three more that fail, and that’s money paid upfront. Konami has been successful by looking into its own portfolio of video game titles, such as “Dance Revolution” and “Frogger” and turning them into slot machines. We displayed “Contra” at the Global Gaming Expo, and we think that will be our next big game.

Question: Is there room in the gaming industry for smaller slot machine companies?

Answer: Our goal is to grow and compete in the space. Small companies have done well. The competition is significantly stronger. There are maybe 20 to 25 manufacturers operating in our space. About six or seven years ago, there were 10 or 12 operators. We’ve been in a tough economy and the slot machine replacement cycle is down, but the companies are developing good products.

Question: Is Konami involved in the off-and-on casino expansion discussions in Japan?

Answer: The parent company announced it was forming a business for investment opportunities. Obviously, we’re well-known and recognized in Japan. Konami could be viewed as a local partner with a casino operator, and that’s an opportunity we would explore. We’re a manufacturing company and that’s what we will continue to do. Once a casino bill is passed, it’s something we will take under advisement.

Question: How did you get into the manufacturing side of the gaming business?

Answer: Dennis and Shannon encouraged me to attend UNLV. When Shannon headed the International Gaming Institute (at UNLV), I was his graduate assistant. I worked for Station and then saw an opportunity at Sega.

The manufacturing side always intrigued me. When Sega sold its assets to Shuffle Master, (gaming attorney) Tony Cabot, who represented Konami, said the company was looking for a compliance officer.

Question: How does consolidation in the slot machine industry affect AGEM?

Answer: These mergers have really changed the landscape of our board. We’re encouraging a lot of new guys to get involved in the process. It will hit us on two fronts because we’ll lose some membership. Also, the key driver of our revenue comes from G2E and, clearly, consolidation means fewer companies and less floor space at the show.

It won’t take away from AGEM’s mission. We see a lot of opportunities for gaming expansion in the U.S., and we will continue to be active in that space.
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