Revenue rockets as VLT vendors integrate the latest slot advances into their platforms.
Whether they’re in a tavern with five games or a racino with thousands, players who sit down at video lottery terminals are playing games with familiar sights, sounds and feel.
“Players will come to us and say, ‘We saw this machine in Atlantic City or Las Vegas. Do you have it?’ We have it,” said Steve Keener, director of operations at Dover Downs, one of three Delaware racetracks permitted 2,000 VLTs each.
Added Todd Elsasser, technical compliance director for Cyberview Technology, which is focused both on bringing server-based and downloadable technology to video lottery jurisdictions as well as up-to-date game content from independent designers, “The differences between a Las Vegas casino slot machine and a video lottery terminal are razor thin. A couple of protocol commands are the only difference.”
But what’s meant by a video lottery terminal isn’t necessarily the same in every jurisdiction. Games can have spinning reels, video displays, even electronic versions of table games. Each player interface, though, is a representation of the lottery game played within.
“From a hardware perspective it’s essentially a slot machine that may require a variety of options depending on the jurisdiction,” said Jim Borden, director for lottery accounts at WMS Gaming. “Generally sales are made directly to or through a state agency such as a lottery commission where the regulator and the customer are one and the same.
“From a regulatory point of view it becomes less clear-cut, since pretty much any type of gaming product can be called a VLT,” Borden continued. “A VLT, therefore, is essentially whatever the enabling legislation defines it to be.”
As the video lottery industry nears its second decade—South Dakota led the way with legalization of video lottery gaming in 1989—it’s an industry facing changing conditions and challenges from within and without, and meeting those challenges with up-to-date technology.
Growth from a $160 million industry in its 1990 infancy to a $5.6 billion industry in the United States alone in fiscal 2006 has brought challenges to video lottery jurisdictions. Keeping a pace with player preference in casino slot machines is just one of the challenges. Monitoring systems and keeping lottery games secure is another concern. And for operators in established VLT states such as Delaware, facing new competition is another.
“Each state has its own unique issues, but the biggest concern for most is the impact of new machines in a contiguous state,” said Mark Zetzmann, manager of business development for IGT. For instance, Delaware and West Virginia will be impacted by new locations in Pennsylvania.”
The Delaware State Lottery anticipates a $10 million decline in revenue for the fiscal year ending June 1 due to the effect of the expected addition of VLT gaming in Chester, Pa., early in 2007, video lottery deputy director Don Johnson said. Part of Delaware’s challenge is offering a competitive product.
“We’ve done a number of things in the last few years,” he said. “We’ve gone to 24/7 operations, except Sunday mornings 6:00 a.m. to noon. We have ticket-in/ticket-out, and that was customer driven. We have automated table games. Those things hopefully will keep people wanting to play here.”
Hazy definition
What video lottery gaming means is as varied as the jurisdictions. Some, such as Delaware, include games with spinning reel displays as well as those with video displays. Delaware also has recently introduced electronic blackjack and poker games from Shuffle Master, with video representations of a dealer.
Video lottery terminal games outside North America, however, can be much different. In Israel, using monitoring technology from Austin, Texas-based Multimedia Games Inc., the display is more basic. “There’s no sound,” said Gary L. Loebig, executive vice president for sales at Multimedia. “The animation is simple. You see a display like a scratch ticket, and when you press the button, you just see a jagged scratch.” In the United States, players want something more than an onscreen scratch. “There are almost two distinct VLT markets,” said Elsasser, who spent 15 years as executive director of engineering at GLI and has been working with video lottery terminals since South Dakota first legalized them. “There’s the U.S., and then there’s the rest of the world. The markets are evolving at two different rates, two different paces. The international market tends to be a traditional VLT market, though they’re starting to do some interesting things in the United Kingdom. The video lottery games are true to the traditional sense of the lottery.”
And even in the United States, different jurisdictions mean different kinds of outlets. VLT installations can be huge, as in racetracks with 2,000 machines as in Delaware, 750-unit sites in New Mexico, unlimited numbers in New York or at Louisiana tracks, or numbers set by the commissions in Delaware and West Virginia. Or the outlets can be smaller venues such as bars and taverns with five games in Oregon, 10 in South Dakota, truck stops with 50 in Louisiana or fraternal and veterans organizations with 10 in West Virginia.
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Whatever a facility’s size, it expects top, current product. “VLT markets now get top games, the newest, latest greatest products,” said Craig Bullis, vice president public gaming and VLT operations for Bally Technologies“
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Whatever a facility’s size, it expects top, current product. “VLT markets now get top games, the newest, latest greatest products,” said Craig Bullis, vice president public gaming and VLT operations for Bally Technologies. “We’re rolling out CineVision, our 26-inch wide screen slant top, and Delaware is one of our first markets. We introduced CineVision early on the East Coast, in Delaware, and the acceptance has been outstanding.
“They’re trying our new product in Delaware and New York. At Yonkers Raceway in New York, they have our widescreen upright, and the Bally brand is the highest earning brand per device at more tracks than IG or Spielo. At Yonkers, all their stuff is cutting edge. The Bally games are all CineVision and widescreen upright.”
Bally is not the only company infusing slot-type innovation into VLT product. “WMS video lottery terminals today share a common platform with our casino slots,” Borden said. “This benefits our lottery customers in many ways: It eliminates the risk of obsolescence, allows our lottery products to evolve with our casino products, and opens the VLT markets to our vast library of highly successful game themes. In fact, many of our hottest games are getting solid play in VLT venues—hit video themes such as ‘Kaboom,’ ‘Jackpot Party Progressive,’ and ‘Men In Black,’ as well as five-reel mechanical games from our innovative new series of ‘Hot Hot Super Jackpot’ games and also coming soon to WMS VLT is ‘Monopoly Big Event.’”
That includes WMS’ most up-to-date technology. Games in the video lottery markets are housed in the ergonomic Bluebird slot cabinet, and driven by the CPU-NXT game platform, just as are WMS’ newest casino slots.
“As successful as it has been, the Bluebird continues to evolve as gaming changes,” Borden said. “Now sporting a belly LCD in the upright mechanical reel version, the Bluebird has brought interactive help and pay table display and multi-coin functionality to traditional mechanical reel games. This touchscreen display utilizes the same logical information sequencing as the larger LCDs found on the video Bluebird cabinets. In order to maximize its customers’ investment in this product, WMS has ensured that the Bluebird cabinets can be easily upgraded to support server based gaming.”
The crossover from slots to VLTs applies to International Game Technology, too, along with themes specially developed for VLT markets. “IGT establishes a strong brand identity and uses the same cabinet and game theme styles as found in other traditional gaming markets,” said Jim Coleman, IGT marketing manager, Class II and Lottery. “That brand identity includes game aesthetics, game play features and proprietary game play features that set us apart from the competition. We have also introduced unique game concepts tailored to each venue.
“IGT is proactive in offering as many products as possible to the lottery market.” Coleman added. “We have engineering teams and product marketing support groups that focus solely on that market. We work with the state lotteries to educate them on developments in other gaming venues around the globe, and we create plans to bring popular themes and game types to their markets. We recently introduced the first widearea progressive ‘Wheel of Gold’ game to Delaware. We are constantly looking at ways to increase revenue to lottery operations by offering exciting multi-game products in bar and tavern markets as well.”
VLT markets have picked up tricks from Indian gaming markets, too, with multi-state linked progressive jackpots such as those common in Native American casinos. In 2006, Spielo introduced its multi-state progressive system, Cashola.
“We have 28 of those here,” said Dover Downs’ Keener. “We’re part of a link of 240 games, here in Delaware, West Virginia, and Rhode Island. They do well. The size of the jackpot runs up because of the quantity factor. There’s a buzz about that.”
Keeping current
Meanwhile, content providers are doing their best to drive play with up-to-date games. That’s a challenge manufacturers must meet to keep floor space. In Delaware, Johnson said the lottery replaces games with below-average performance with games from manufacturers with above average performance.
With the pressure to perform, it’s no wonder WMS is turning to Bluebird and CPU-NXT, IGT is rolling out Wheel of Gold progressives, Bally is placing CineVision and Spielo has Cashola in lottery markets.
“VLT markets are growing in quality and variety of product,” said Bally’s Bullis. “We were just awarded 20 percent of games in Oregon for 2007, and 100 percent of the Bally units will be CineVision. That comes to 2,300 units. We’re going from zero percent of the market to 20 percent, and we’re very proud to offer them the combination of our multiple game library coupled with the CineVision technology.”
The latest and greatest games and the latest and greatest technology—that’s the key to competitiveness in VLT markets, for manufacturers and the lotteries themselves alike.
By John Grochowski. Reprinted with permission from International Gaming & Wagering Business magazine John Grochowski is an Illinois-based reporter and freelance writer.
VLTs may lead downloadable revolution
While the casino industry ponders the future of downloadable technology, a number of VLT jurisdictions have already embraced the tenants of central system control and are putting it to good use.
In New York State, where video lottery gaming is in its infancy, race-tracks with VLTs are monitored centrally by a system designed by Multimedia Games Inc.
“All sites are connected to the same system,” said Gary L. Loebig, executive vice president for sales at Multimedia.
“They’re connected via land lines and satellite, so the system is redundant and double redundant. Down time is almost negligible. We monitor every transaction. With central determination, it’s all about control.”
And, said Loebig, VLT markets are on their way to downloadability. “VLT markets will probably beat the casinos in downloadability,” he said, pointing out that in New York downloadable capability was built into the original product.
Downloadable gaming is also where Todd Elsasser, technical compliance director for Cyberview Technology, sees the VLT market going.
“Downloadable is tailor made for the video lottery,” said Elsasser, pointing to Cyberview’s server-based and downloadable products. “Look at Oregon, with five VLTs in a bar or a tavern. In Oregon it would cost a fortune to individually monitor all those remote sites.
“The biggest thing is security. The games have to be bulletproof.
Control of the lottery has to be secure. That’s where we get into a lot of new stuff, with remote diagnostics.”
John Grochowski
Multimedia Games’ MGAMe is one component of a system designed to help VLT operators in New York and elsewhere manage and monitor games from a centralized location
