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Casino Industry Eyes New Slot Machines

LAS VEGAS – Oct. 5, 2001 -- In the adrenaline-fueled world of slot-machine sales, few moments were more supercharged than the minutes leading to the opening of the sales floor at this week's Global Gaming Expo.

Armed with their logod polo shirts and a belief that their companies' array of machines are guaranteed winners, teams of salesmen from the world's biggest slot manufacturers huddled Monday, psyching themselves for the pending rush of prospective buyers.

"Two years ago it was all about the games, which game is hot," said Mike Fields, video poker business development director for International Game Technology. "Now we've got to be able to explain how machines can grow their customer base, improve service and cut costs."

Fields was itching to do just that.

"Our video poker products meet the operators' demands, and we're ready to go," he said.

Slot machine sales are big business, with manufacturers using the convention to preview products they'll roll out over the coming year.

The U.S. casino industry will replace about 20 percent of its 500,000 slot machines this year, with most new devices selling for $8,000 to $12,000 apiece. Ticket printers and player tracking systems are extra.

Other games are leased to U.S. casino operators, who share with the game makers 20 percent to 30 percent of the revenues generated by the machines.

"The show is a beauty contest," said Dave Ehlers of Las Vegas Investment Advisors. "All of the casino slot managers are there. They'll see the new product and decide which machines have the most appeal."

Seemingly oblivious to the pent-up energy of the sales staffs, IGT Chairman Chuck Mathewson calmly strolled toward his company's chunk of the Las Vegas Convention Center floor.

Mathewson runs the world's largest slot-machine maker, a behemoth that has sold or leased two of every three machines on American casino floors.

He also was one of the gambling-industry executives responsible for breaking ties with the World Gaming Congress, which for 14 years has been the center of the casino-business universe every fall.

When negotiations with WGC-owner Gem Communications fell apart after American Gaming Association representatives demanded an equity stake in the established show, Mathewson and the other directors of the industry's Washington, D.C.-based lobbying arm decided to run their own show, creating the Global Gaming Expo.

Abbreviated to G2E, the expo attracted the world's top manufacturers. IGT and some other industry heavyweights opted out of this year's World Gaming Congress, slated for Oct. 17-19 at the Sands Expo & Convention Center.

"This show has been a knockout winner for IGT and for the AGA," Mathewson said. "Its future success is assured."

On the trade show floor, salespeople weren't concerned with G2E or WGC, AGA or Gem.

There, the buzzword was "license," because licensing deals dominated the expo floor like never before.

Famous persons, dead celebrities, classic and current TV shows, board games and pop culture icons were among the hundreds of licensed slot machines on display this year.

"Obviously, the big trend is licensed product," Mathewson said. "I think it may have reached a plateau this year, although I'm sure licensing will stay very important. I can't imagine it getting much bigger than this."

Anchor Gaming has an American Bandstand machine featuring Dick Clark. WMS Gaming has Whoopi Goldberg and her Hollywood Squares TV show. IGT has Regis Philbin.

And it's much more than pictures of the stars - their voices and trademark expressions are also captured and sold.

You want dead celebrities? Lucille Ball, Marilyn Monroe, James Dean are all licensed to appear on slots.

Board games? There's Pictionary, Scrabble, Battleship, Jumble, Monopoly and Yahtzee.

Pop-culture icons? There's Harley Davidson, Pac Man and Spam?

TV shows? The list seems endless, including current mega-hit Survivor.

"Survivor is a very important product for us, as it's our first foray into multi-site progressive jackpot games," said Orrin Edidin, chief operating officer of WMS Gaming. "It'll have a life-changing jackpot, and this will definitely be a series-extending brand."

WMS pioneered brand extensions with its Monopoly license, Edidin said, and will definitely roll out future versions with partner IGT, which manufactures the game.

Licensed-games Survivor, Hollywood Squares and Monopoly are WMS' top sellers this year, he added. IGT's new The Price is Right game, Plinko, is the Reno-based company's hottest product.

IGT marketing guru Ed Rogich said casinos want a wide variety of games to attract different groups of people.

"Some people want hit frequency (a larger number of small wins), some want large jackpots," Rogich said. "But the most important thing (in attracting gamblers to play a machine) is the package itself. It has to be appealing."

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