Some random thoughts on G2E 2012

The annual gaming show, Global Gaming Expo (G2E), is the place every year to see the latest products designed and built for casinos – and that is primarly slot machines.  It is also the place to hear industry leaders recap the previous year and forecast the future; actually that is what the slot manufacturers are trying to do as well, forecast the future of slot machines.  Some hit it on the head and others do not; mostly the speeches are company-line speeches.  So one can expect Caesars, MGM, IGT and others to describe a future that fits their business model.  However, there are so many companies and individuals represented that one still gets a very wide variety of futures to contemplate.  In a way, that is what everyone is there to do, catch of glimpse of the future and asses how to fit it into their personal futures.  I have been to many gaming expositions and conferences since my first one in 1979.  This year G2E felt as it was tinged with those previous years; nothing was completely new and everything was just a copy of things I had seen and heard before.  At the same time, it felt like a future time when nothing was familiar or comprehensible to me and everything was new.

 Global Gaming Expo will focus on improved machines, Internet play;”People are more return-oriented in their purchasing and application of capital. When capital is scarce, I think people are more judicious on how they apply it.” Nevada (G2E) – – It wasn’t enough that slot machines with the likenesses of Judge Judy, Spider-Man, Dolly Parton, top NASCAR drivers, and the Oompa Loompas will be unveiled at this week’s Global Gaming Expo…Gaming equipment manufacturing industry leaders believe this year’s four-day trade show and conference is focused more on the game, rather than the economic downturn that has depressed sales of new slot machines going back four years… “I don’t think the replacement cycle will ever make its way back to the high point,” Hart said in an interview at IGT’s Las Vegas offices last week.  Howard Stutz, Las Vegas Review-Journal, 9-30-12

 Slot manufacturers more than anyone else in the industry are looking toward the internet for their future growth.  There are a couple of reasons for that, one with a slowed replacement market, more competition and a future for expanding into new jurisdictions that is not as bright as the past, slot manufacturers need new markets.  And two, they have already invested millions and millions of dollars, (IGT has hundreds of millions invested), in preparing for online gaming.  The casino companies have done their share of investment in the Internet also, but except for Caesars it is a defensive strategy – whereas the for the manufacturers it is an offensive strategy.  For them it is a place they want to go, for casinos it is a place they are being forced to go.  Regardless of whether you are looking forward to online gaming or opposite it, online gaming was the hot topic in Vegas this year.  Off and on 2012 has looked like the year that online gaming just might happen; but the forecasts coming out of G2E are not optimistic.

 Casino-entertainment professionals gather this week (October 2-4) at G2E 2012, the premier trade show and conference event for the international gaming entertainment industry, taking place at the Sands Expo and Convention Center in Las Vegas, to see and learn the latest innovations in the gaming sector at a worldwide level. “The G2E show floor is poised to be the event’s largest since 2008,” said Frank J. Fahrenkopf, Jr., President and CEO of the AGA.  Today, the main manufacturers of gaming products, as well as 120 new exhibitors, will start showcasing the latest games, products and services at G2E 2012. The event also provides gaming professionals with access to cutting-edge products and technologies, valuable networking opportunities and unmatched educational programming. AGA and Reed Exhibitions announced that G2E 2012 has experienced exhibit hall sales not seen since 2009. More than 413 companies have registered for more than 24,061 sqm of exhibit hall space-an increase of more than 4 % compared with the 2011 event. These 2012 sales figures include more than 65 international exhibitors with more than 3,901 sqm of exhibit space. Yogonet, 10-2-12

 Brick-and-mortar casinos are opening in more states around the country, including Ohio, Illinois and Maryland. Massachusetts is developing a regulatory structure for gaming in the Bay State. But during a state-of-the-industry speech Tuesday, American Gaming Association chief Frank Fahrenkopf Jr. is expected to focus on the popularity of online gambling abroad while Congress and federal regulations prohibit Internet poker and other games in the U.S.  Fahrenkopf is appearing at the annual Global Gaming Expo in Las Vegas.  He’ll talk about how technology is changing the relationship between casinos and customers, and how the commercial casino industry needs Congress to develop a clear framework for regulating Internet poker. Ken Ritter, Associated Press, 10-2-12

 The gaming industry will need a little gambler’s luck to get Internet poker legislation passed in the lame-duck session after the November election, a trade association official said.  Frank Fahrenkopf, president and CEO of the American Gaming Association, said he’s skeptical that a bill can be approved before new lawmakers take office in January.  Fahrenkopf addressed reporters this morning before today’s opening of the trade show floor for the 12th Global Gaming Expo at the Venetian.  Fahrenkopf said he isn’t concerned about Republicans seizing control of the Senate, even though the party has opposed legalizing Internet poker in its platform. Richard N. Velotta, Las Vegas Sun, 10-2-12

 Passage of federal Internet poker legislation during Congress’ upcoming lame duck session will “take a little bit of gamblers luck,” the casino industry’s chief Washington, D.C., lobbyist said Tuesday in Las Vegas.  American Gaming Association President Frank Fahrenkopf Jr. said legalizing Internet poker in the U.S. continues to be an overriding issue for the casino industry, which officially kicked off the Global Gaming Expo at the Sands Expo and Convention Center. The four-day conference and trade show is the industry’s largest annual meeting. Howard Stutz, Las Vegas Review-Journal, 10-3-12

 With widespread Internet lottery sales likely to help escalate jackpots to unprecedented heights, brands will only grow stronger with time. Jones said he envisions a purse reaching $1 billion in the future, which could even attract casino gamblers who wouldn’t typically play the lotto. In the battle for online gambling in cyberspace, Nevada casinos and multiple state lotteries could be close to a showdown — one that will shape the U.S. gaming industry forever.  The lottery, referred to as “the most popular form of gambling in the world” by Illinois Lottery Superintendent Michael Jones, just months ago broke ground on the Web. Jones, who was speaking on a panel at G2E held Monday in Las Vegas, has so far seen about 100,000 people in his state use the Internet to buy tickets.  Lotteries are powerful entities, gaining acceptance from the residents of a state because a large chunk of the money they lose goes to “good causes,” as lottery directors say.  In order to generate even greater revenues, lotteries are also eying casino gambling. Some in Illinois want it under the control and supervision of the lotto. In Delaware, which has legalized web gambling, a synergy will be formed between the lotto and the three local casinos. Card Player Magazine, Lottery Post, 10-3-12

When the Sands and Caesars were contrasted this week, I remembered another time Caesars was contrasted in my mind with another operator.  In the early 1980s I heard two speakers at one of the conferences that predated G2E; one of the speakers was a very young Terry Lanni and the other was also a much younger Steve Wynn.  Lanni had much the same speech as Loveman had this year, damn but we have a lot of debt and that makes sleeping at night difficult – it was a half empty speech.  Wynn, like Adelson and LVS this year, saw the glass as half full and was charging forward, enthusiastic and certain that he would conquer the gaming world.  Now Adelson is far from the 40 years old that Wynn was then, but he is still charging forward, enthusiastic and certain that he is the king of the gaming world.  I have heard some great speeches over the years, but my favorites are always the ones given by the likes of Steve Wynn – the hard chargers with a bright, exciting vision for the industry’s collective future; my lease favorite, but no less important for understanding the industry are the debt-ridden, anxiety-filled cautionary tales.

 Las Vegas Sands, Caesars singing different tunes at G2E;  Las Vegas-based casino operators Caesars Entertainment Corp. and Las Vegas Sands Corp. face remarkably different financial issues.  Las Vegas Sands executives, speaking this week at the Global Gaming Expo (G2E), said their problem is that the company is so profitable that it now must decide what to do with a growing stack of excess cash.  Caesars Entertainment, on the other hand, is weighed down by $19.9 billion in debt and hopes to turn around after losing $511 million during the first half of this year. Steve Green, Las Vegas Sun, 10-3-12

There are two major components to each G2E; one is the semenars, panels and keynote speeches and the other is the exposition hall and the products and services on display – or the world of words and the world of things.  Both deserve and get a great deal of attention from the industry and the media.  The wordsmiths also operate on two levels, today and tomorrow.  The today side is the state of things at the moment and training for people in operations; the tomorrow side is an attempt by industry leaders to peak into the future – a thing that they are no better at than anyone else on the planet.  In the thing side, particularly slot machines, it is just as much of a guessing game; those devices on display are the engineers’ and salespersons’ best guess on what games casinos will be buy in the next 12 months; at that they are also no better than the average citizen of the planet.

This year no one on the word-side of G2E could ignore the Internet, but neither could the thing-side people, both offered a prediction and a taste of the future with a twist of online gaming for spice. It was, as I said before, the hot topic of the show.

Representatives from MGM Resorts International, Las Vegas Sands Corp., and several other casino operators and suppliers on Wednesday expressed optimism about their industry, with continued expansion in Asia and online gambling leading the way in the next five years.  Michael Leven, president and COO of Las Vegas Sands, and other panelists said they don’t expect any new resort openings in Las Vegas, and agreed that the industry must use technology more effectively to capture the next generation of gamblers. Chris Sieroty, Las Vegas Review-Journal, 10-4-12

 Gaming executives predict industry growth over the next 5 years; Panelists expect the legalization of Internet poker in the United States would lead to expansion of gaming in land-based casinos in the same way that the expansion of gaming in other states and on Indian reservations ultimately led to growth for Las Vegas. Nevada (G2E) – – Representatives of six gaming companies are optimistic about what the future holds for the industry with expansion and technological advancements leading growth in the next five years. While executives aren’t predicting any major resort openings on the horizon, they are enthusiastic about the potential for new venues internationally and using technology to more effectively market to younger players. Most of the panelists also view the legalization of Internet poker as a potential driver for more customers in their brick-and-mortar casinos. Richard Velotta, Las Vegas Sun, 10-4-12

 Gambling chiefs race for share of U.S. online gaming;”Online gaming is here. Our biggest challenge is converting the 25 to 35 year old to becoming participants in our industry,” said Brian Gamache. Major U.S. casino operators are racing to embrace internet gaming, even in the absence of federal standards, as they gear up to attract younger consumers in a market expected to reach $10 billion a year by 2017.  Some bricks and mortar casinos are teaming with online game developers, and casino executives say they are rushing to put in place safeguards on their own services that would combat fraud, money laundering, underage and compulsive gambling, and players falsifying their location. Sue Zeidler, Reuters, 10-4-12

 A story came out after the show that summarizes what the future of casino gaming maybe; electronic, portable and without regard for big buildings or expensive slot cabinets.  The casinos may think they win by lowering the cost of a slot machine, but in fact the new technology can and will marginalize both the casino and the slot machine.  In my mind, the casino industry is beginning to resemble the newspaper industry; one that technology is going to change dramatically and one whose current business model may not be sustainable.

The makers of iPads and other similar devices do not need slot machine companies – they have their own game design people and their own delivery systems and device– and they don’t need a casino to house the game – any place will do.  Apple, Microsoft and the other big players are much larger than slot or casino companies – they have research and development budgets that dwarf their casino industry counterparts.  So as we rush into the future, we may just be rushing into a place that is not a trip back in time, but truly a new paradigm for a new industry of gambling; one in which all current participants, except of course, the key player – the gambler willing to spend the money, are rendered redundant – in the English sense, no longer necessary and therefore terminated.

 Goodbye, slot machines; Hello, iPad slots; The slot machines you see in casinos today could soon be things of the past.  Not in 20 years, but in five.  Experts predict that the games themselves aren’t likely to change. They’ll just get more portable, as gaming tries to keep pace with customers used to being entertained by iPads and smartphones.  Instead of players sitting at big banks of slot machines, they’ll gamble on iPads installed in restaurants, bars and other parts of the casino, much like video poker screens are today, but portable.  “If we’re going to survive, we’ve got to change the way we do things,” Deana Scott, marketing director for casino technology company Acres 4.0, told an audience at last week’s Global Gaming Expo, where many of the ideas were discussed. “Over time, what we do now will become obsolete.”  For casinos, it’s a winning proposition.  First, a $500 iPad is far less expensive than a $22,000 slot cabinet. Second, customers are expected to increasingly demand the speed and convenience they get from their personal devices from casinos. Ron Sylvester, Las Vegas Sun, 10-6-12

 The last day of the show is a tired day, all of the big speeches have been made, most of the decision makers have gone home and that leaves the people who worked the booths, casino employees that are just curious and dedicated buyers who want more time and personal attention in the slot booths wandering the half-empty aisles. It is also the end of a long week of G2E news and the news is tired and flat like the people on the exposition floor. All of the big stories have been written and read, all that is left are rewrites of those stories and a bit of technology no one noticed earlier in the week.

 The evolution of tribal gaming in the two decades since the passage of the Indian Gaming Regulatory Act is obvious. Multimillion-dollar resorts dot the landscape in many states, replacing the original bingo halls housed in run-down trailers. Jana McKeag, president of Lowry Strategies, an Alexandria, Va.-based government and public affairs consulting firm, said the act “changed Indian country forever.” The federal law approved by Congress in 1988 established the jurisdictional framework that governs tribal gaming. The act will turn 25 in October 2013. “That time has flown by,” Tony Sanchez Jr., president of the Seminole Tribe of Florida, said Thursday during a panel discussion at Global Gaming Expo at The Venetian. The three-day Global Gaming Expo ended Thursday. Ron Sylvester, Las Vegas Sun, 10-5-12

 A former New Jersey gaming regulator, who now runs the world’s largest independent gaming-equipment testing lab, said new technology is impacting tribal casino operators as much as those who run U.S. commercial gambling halls. “In Indian gaming, new technology is not always born out of innovation,” said James Maida, president and chief executive officer of Gaming Laboratories International (GLI) in Lakewood, N.J., during a panel discussion Thursday, the final day of the Global Gaming Conference here. “It’s born out of necessity.” Maida, who worked as a regulator for the New Jersey Division of Gaming Enforcement in the mid-1980s, was among the speakers who focused on the 25 years since the Indian Gaming Regulatory Act went into effect. Suzette Parmley, Philadelphia Inquirer, 10-5-12

 Two women deal cards in the air and throw dice that float, matching bets placed by gamblers on electronic games. None of it is real, except the money on the bets.  The holographic dealers are among the more advanced technology being shown for a select group of people this week at the Global Gaming Expo in Las Vegas. Ron Sylvester, Las Vegas Sun, 10-5-12

And that is where I spent my time last week; wandering around looking at things that looked very familiar to me, but at the same time I think I saw seeing something completely new.


4 Responses to “Some random thoughts on G2E 2012”

  1. 1 October 7, 2012 at 2:04 pm

    Why would anyone buy anything but a slot machine that costs $500? Maybe all the experts will find a way to attach a tablet (doesn’t even have to be an Apple product) to a slot cabinet… Then Hart can tell her shareholders what a progressive organization she is running (while side-stepping the $400 plus million she spent on an online company!!)

  2. 2 Ken Adams October 8, 2012 at 7:10 am

    I doubt that it will turn out to be so simple or linear. But certainly the industry would like to find a way around the increasing cost of slot machines – especially given their failure rates – failure to produce adequate revenues. As to IGT’s investments – it will be a couple of years before anyone can say whether they were spot-on, or completely off the mark.

  1. 1 New Age Gaming Generation « Trackback on November 30, 2012 at 1:01 am
  2. 2 Pick 6 Leak By Kevin Bailey Trackback on August 15, 2014 at 1:43 pm

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