2013 Gaming Industry Forecast: Part 1

Tom Hoskens AIA, LEED AP
Vice President and Director of Strategic Development
Cuningham Group

Cuningham Group’s outlook for 2013 is optimistic and encouraging. We believe the coming year will continue to improve as clients are able to securing financing for both new construction and renovation projects.

On the international front, there is no denying that the growing middle class in Asia and South America represents a distinct group of shoppers, diners and gaming clients that seek an engaging experience. Having worked on urban entertainment centers and gaming destinations in Asia for more than nine years, we understand how to integrate a variety of amenities that are as fresh the first time as they are after repeat visitations.

The appeal for regional gaming destinations to become more than a place for locals, but rather a neighborhood gathering place, will continue to have a big impact on future designs. Regional destinations, such as the new hotel for the Potawatomi Bingo Casino and Ho-Chunk Casino in Wisconsin, are projects where our design and planning expertise are coming together to create a new mix of offerings for those seeking public places for social and community engagement. These new regional destinations can include expected amenities such as dining, retail and a component of entertainment in the form of performance venues or theaters, along with the growing trend to include bowling alleys, rock-climbing or wave/surfing experiences, to name a few.

There is no denying that technology and the advances in online gaming and server-based gaming operations are directly changing everything from the look and design of the gaming floor to the check-in experience for hotel patrons. Technology continues to influence our social interactions and the spaces we design. For example, we firmly believe that when integrated properly, technology can enhance authenticity rather than distract. This happens most effectively when an attraction and place is scripted and the design is driven by a story rich in metaphors, cultural immersion and authentic branding language. Our design work at Harrah’s Cherokee Casino Resort in North Carolina is a prime example. Spaces are programmed with light, sound, air and water to capture the excitement around the gaming floor.

We are also highly anticipating the intersection of social gaming into land-based gaming operations. Social networking sites and electronic gaming draw a large audience that is completely comfortable posting, tweeting and tagging friends continuously. When legalization of Internet gaming comes ashore, we see new alliances being formed that will help energize both parts of the equation—the online and physical realms.

The most exciting transformation we are designing now is a gaming floor that blurs the edges. We are breaking old paradigms by incorporating changes from the inside out. “Neighborhoods of Gaming” is our concept that marries the best of social activities with the ultimate ability to program spaces for action and engagement. We see tremendous potential for lounges, bars and social areas becoming mini-hubs of engagement with gaming clearly and easily accessible without the confines of countless slots in endless rows. The social gamer is completely comfortable multi-tasking—perhaps gambling on a handheld device and engaging on a tabletop game, all while watching a sporting event and talking with friends. These new social hubs become neighborhood draws whereby the actions are intimate yet immersive, and the energy of the crowd feeds the excitement in the “neighborhood.” It’s much like taking the amenities on the edge and placing them strategically on the interior so that the gamer becomes the center of the action. This is a concept we are exploring both here in the states and in our international urban entertainment centers.

Dike Bacon 
Hnedak Bobo Group (HBG)

Indian and commercial gaming continue to be a primary industry focus for HBG. We’ll be very interested to see how the returning administration treats gaming-related issues and specifically Indian gaming land-into-trust issues. One of the most critical pieces of legislation Congress should address in 2013 is the legislative implementation of a Carcieri fix, which has been unresolved entirely too long. Supreme Court rulings like Carcieri and, to a lesser extent Patchak, create too much uncertainty in the financial markets, which can lead to a difficult lending environment. The federal [government] needs to address the regulation and oversight of Internet gaming as well. The best effect Internet gaming could have on the design industry is the notion of driving a whole new type of customer to brick-and-mortar facilities.

The implementation of sustainable initiatives and practices in the gaming sector continues to trend up and we’re glad to see that transformation across the industry. Our own sustainable initiative, HBGreen, works by establishing a platform to engage our gaming clients with sustainability and introduce key concepts that can help their resort facilities perform better and more efficiently. It’s a core strategy of our design philosophy. Encouraging energy-efficient practices is not something we just “add on” to a project to make everyone feel good. The appropriate sustainable practices and initiatives are integrated where feasible into every project, as well as our own daily operations. We introduce sustainable objectives that have been identified as high impact, high value and low cost as a benchmark to measure each project through all stages of project delivery.

The most advantageous method for integration is when the applications are what we call “budget-neutral,” meaning there is no long-term hit to the bottom line. Using a proprietary tracking system, we track the energy saving potential of a project at every phase, exploring sustainable alternatives, cost implications and client feedback at every step. This method provides our clients with more informed choices about these types of practices that provide long-term operational benefits and the potential for greater returns on their investment.

The past year was a strong and productive year for HBG. Business conditions have been steadily improving and most of our clients’ balance sheets continue to strengthen as well. In general, the underserved, undersupplied, low competition markets are performing extremely well and new investments in these locations can be quite robust. In some instances, however, the highly competitive fully mature markets are still very challenged because of oversupply and low demand. It will be interesting to watch the impact and resultant opportunity of a dramatic increase of new gaming supply and competition in the Northeast. The challenge for existing operators in that region will be to turn the threat into opportunity. That may include a complete reinvention of the business model for some those facilities. The challenge for new entrants is, of course, aggressive competitive differentiation. The commercial gaming design opportunities for firms like ours in Pennsylvania, Illinois, Michigan, Massachusetts and New York are substantial and we remain optimistic that those state legislations and gaming commissions will reach consensus in 2013. It could be an exciting year indeed.

Bill Dow Jr., RA, PP
JCJ Architecture

One could characterize the past 10 to 15 years as formative years for the gaming industry in the United States—marked by the development of geographically diverse, statement-making properties. Despite continued uncertainty in financial markets, consumer spending and the course of U.S. domestic policy, JCJ Architecture believes there are reasons to be optimistic that the gaming and entertainment market will continue a path of positive evolution throughout 2013. We see the following trends as being part of this evolution: team integration, redevelopment of existing properties, property diversification and focus on maintaining budgets.

Architects and other design and construction professionals are working in a more competitive market than ever, and one that continues to have high expectations for visual impact and quality of execution. The benefit to developers comes as teams work as more integrated and effective groups. Time is money—not just to the owners, but to each one of the associated firms. This is a case where all parties need to adjust to the “new normal.”

In response, JCJ has developed a vigorous project initiation process we call JCJ Insight. This process brings all stakeholders—the owner and their stakeholders, construction managers and consultants—together for a multi-day immersion workshop to share collective expertise and insight. Our team uses the live workshop format to drive the design process forward and to shape and form the project’s vision. Once the workshop is complete, many of the project’s design and functional parameters have been set and are ready to go into a full design development. This activity does not short change the process; rather, it compresses the “dead air” between steps and makes the most of everyone’s time and effort.

The future is also a place where existing properties are being renovated and repositioned. We work with owners who are looking to introduce operations into urban areas and need to rehabilitate and reposition existing facilities, and owners that are focused on broadening their patron base and maintaining their existing market share by adding amenities and renovating existing spaces. We have seen that additional care and scrutiny at the feasibility and programming phase will pay significant dividends in project implementation.

When JCJ worked with Genting on the Resorts World Casino New York, we took the historic but dilapidated Aqueduct Raceway and breathed new life into the location. The regulatory hurdles and the issues of working with a building that had been largely neglected were only a few of the challenges the team faced. Careful analysis and thorough programming were two of the many factors that enabled the project to open to rave reviews and record-breaking attendance and earnings.

The last trend that is part of our collective past, present and future is focus on cost control. Maintaining budgets is a top priority. Utilizing more complete documentation, hard bidding the work and slightly extended schedules are a few of the strategies we have recently seen. Project planning allows owners to create a new suite of project controls that start with the design and construction process and extend into creating operational efficiencies and more comprehensive business strategies. Owners who have been able to maintain payments on their debt and show strong record of meeting financial obligations have done well. They have gained financial support to invest in their growing properties, while others, seeking to grow or improve their product, have been finding the financial side difficult.

Through our 20-plus years in the gaming and hospitality market, JCJ Architecture knows that being an adaptable and flexible organization is one of the many keys to success. It’s not enough to provide a good up-front process, or delivery creative design and great documents. The firms that will survive and thrive need to take steps to more fully integrate with their project teams to work smarter, more creatively reposition existing properties to perpetuate their value and maintain a high degree of control over project process to provide the best value to owners and their clients.

Jeff Ehret 
The PENTA Building Group

We are a Las Vegas-based construction manager and general contractor, with hotel, casino and hospitality construction being a core competency, both in Las Vegas as well as in Indian country.

Although the Las Vegas hotel casino construction market is slowly starting to recover, the recovery is not as far along as I would have predicted at this time last year. I believe that renovation, remodel and minor expansion projects will continue to be the order of the day for a few years, until demand catches up with the overall existing supply of Las Vegas “product.”

The renovation market is fairly robust. In the past, Las Vegas used to demolish and discard hotel casinos like Kleenex; now older properties are being renovated. There continues to be the incessant need to keep properties “fresh,” fueled by the large critical mass of properties in Las Vegas, as well as by the built-in, highly competitive nature of the owners. I believe this bodes very well for Las Vegas to be the ultimate resort destination of choice for the long term.

The hotel casino construction market in Indian country, where we have now completed projects for 10 different tribes, is completely different from Las Vegas, primarily due to being highly fragmented. Many tribes got caught in the recession, building and opening properties at the wrong time (like Las Vegas). However, there are several tribes who did not get caught, and who have been able to fund and build projects during the recession.

Both in Las Vegas and in Indian country, pulling together the equity and lending side of financing for projects continues to be painfully slow. This has had the following effects on companies:

-While the duration to close on their financing takes longer, owners, for the most part, push to maintain their original, anticipated project completion dates, which serves to compress the schedules for construction.

-Compressed schedules for construction are actually more difficult to contend with now, compared to the boom years. Building departments (for plan review and inspections) and designers have all downsized and have difficulty ramping up to meet owner schedules. With subcontractors, it has been worse, as many have thinned their project management and project supervision resources to dangerously low levels, and they are extremely cautious about ramping up resources quickly at the tradesman level. Also, material and equipment, which used to be “off the shelf” four or five years ago, are now custom orders, which further strains schedules.

-It seems to be more prevalent now for equity firms and lenders to insist on a “guaranteed” budget or GMP contract as a condition precedent to the negotiation of a financing package. We have adapted to this by working with owners to arrive at a GMP contract much earlier in the design phase, so as to give them a three or four month jump on pulling their financing together.

While the road to recovery seems to have taken a detour, there has been some forward progress. As a company, we have had the ability and good luck to not wait on the recovery to come to Las Vegas. We made a strategic effort to diversify, both geographically and by project type, which has worked out well for us. The mood is upbeat in our company, and we are definitely ready for an upswing to kick into full gear.

Dick Rizzo
Vice Chairman 
Tutor Perini Building Corp.

Optimism combined with business flexibility and a renewed esprit de corps is our approach to 2013. All of the companies in Tutor Perini Building Group—Anderson Companies, James A. Cummings Inc., Keating Building Co., Rudolph and Sletten Inc. and Tutor Perini Building Corp.—are actively involved in pursuing or building gaming projects throughout the nation. In spite of an unstable market and federal government cemented in gridlock, we are optimistic about the new year.

While it is hard to predict the health of any market segment, if our most recent gaming project, Resorts World Casino New York, is a bellwether for gaming, we are all in luck. Resorts World is New York City’s one and only casino. Not only are New Yorkers enjoying their first casino, as the property’s 20,000 daily visitors prove, but state and local coffers are reaping the benefits as well. On an annual basis, the casino contributes $350 million in state tax revenue to support education, with 1 percent of pre-tax profits donated to the local community. The ability for state and local governments to raise money relatively effortlessly through gaming will undoubtedly continue to fuel the gaming expansion.

Regionally, we see the most opportunity in the East and Southeast. Tutor Perini, lead by Roy Anderson, has three casino projects currently underway in the Southeast, including Hard Rock Hotel in Mississippi Margaritaville Resort and Casino in Louisiana and Creek Casino expansion in Alabama. As for the rest of the East Coast, there are a number of projects poised to start but are waiting for the green light—be it legislation, timing or financing.

Las Vegas, where Tutor Perini has been building casinos for the past 60 years, is still on the upswing. Reports indicate tourism is back on track, but spending remains lackluster. Las Vegas visitors continue to hold their wallets closely and are not yet willing to spend at pre-recession levels. With that said, during the lull, casinos and resorts are investing in renovations and upgrades that will ultimately impact competition and consumer expenditures as the economy improves.

The most lucrative U.S. gaming market points to tribal nations. According to Casino City’s Indian Gaming Report, from 2000 to 2010 the average annual growth rate for commercial casino gaming revenue was approximately 1 percent. During that same time, the annual growth rate for Indian gaming was roughly 9 percent. Based on the steady rise of gaming revenues of Native American facilities and the number of tribes in the queue waiting approval for land-in-trust and compacts to be approved, Indian gaming has room to grow and is positioned for even more success as the economy shifts into gear. Currently, Tutor Perini has a number of Native American projects underway, including Creek Casino expansion in Alabama, Graton Resort & Casino in California and Vee Quiva Casino & Hotel in Arizona.
After a bumpy couple of years, we look forward to 2013 and anticipate a much smoother ride.

Barry Thalden, AIA

Thalden • Boyd • Emery Architects

We made it! We are truly grateful that after Thalden ● Boyd ● Emery Architects celebrated its 40th anniversary we’re still here and still enjoying providing creative and beneficial services to our clients.

If you are reading this article, the world did not end in 2012 as some had predicted, based on the end of the Mayan calendar. My own belief is that the Mayans simply ran out of paper (or carving stones), and really didn’t care much about what would happen 3,000 years into the future.
After a blistering election and having survived the “great recession” and the “fiscal cliff,” perhaps we are ready to move on. The elections are over. Let’s get on with building our future.

Finally, the elections are behind us, and the politicians and the fear mongering, divisive media can stop telling everyone how bad things are. This verbal drag on the economy has been a self-defeating phenomenon. How can we expect economic growth beyond 2 percent per year when the media keeps telling us how bad 2 percent growth is? Let’s get on with working together and building our future.

My predictions published in my annual column over the past two years have proven accurate. One, that “The recession is over,” but “the recovery will be slow.” Two, that “We can anticipate the unemployment rate (a lagging indicator) at about 8 percent at the end of 2012, based on past recessions.” And three, that “There will be no ‘double dip’ recession, as some have been warning.”

The good news about the economy is the continued positive growth. GDP has increased for 40 straight months and is currently at a historic high, the stock market has almost fully recovered (and I predict that it will reach a new all-time high this year), retail sales in the U.S. are the highest in history, and unemployment continues to fall (I maintain my projection that it will drop to its 50-year average of 6 percent by the end of 2014, a full five years after it peaked). Finally, gaming revenues continue to increase, as I had predicted two years ago. The advantage of slow growth, in my opinion, is that it is more sustainable over a longer period of time, versus a “boom and bust” cycle.

OK, maybe “boom” is a little overzealous, but the economic expansion has begun. The mood at G2E was completely upbeat, as gaming revenues have stabilized and risen. This is particularly true in Indian country, which overall did not experience a decrease in revenue throughout the entire recession. And in 2011 there was a 3 percent increase in revenues, which has likely been topped in 2012.

Thalden ● Boyd ● Emery Architects has steadily remained quite busy. We are fortunate to have been selected as the architects for many of the newer casino properties or property expansions. One of our current projects is a new racetrack and casino near Cincinnati—a joint venture between Delaware North Companies and Churchill Downs Inc. Our firm is also working on numerous renovations and expansions of existing casino properties, including some high-profile projects like a renovation for the lobby and lobby bar at the Four Seasons at Mandalay Bay in Las Vegas.

Casino projects our firm completed this year include Wildhorse Casino and Resort expansion in Oregon, Indigo Sky Casino and Resort in Oklahoma, Cypress Bayou Resort Hotel in Louisiana, Soaring Eagle Indoor Waterpark Resort in Mt. Pleasant, Mich., Prairie Sun Casino in Oklahoma, and FireKeepers Casino Resort expansion in Battle Creek, Mich. We also opened several renovations in Las Vegas, including a renovation of La Cave Restaurant at Paris Las Vegas, Gordon Ramsay Gastropub at Caesar’s Palace and a high-stakes gaming room in Planet Hollywood.
In 2013, casinos will expand, renovate and grow. But what will be the priorities? Our prediction is we’ll see more hotel rooms, renovations that add new “life” to the casino floor, a focus on expansions that will produce a high return-on-investment and iPad gaming opportunities.
We look forward to a peaceful, fun, and prosperous 2013 and wish everyone in the industry a rewarding year.

Frank J. Fahrenkopf Jr.
President and CEO
American Gaming Association (AGA)

In Washington, and many other places across the country, 2012 was dominated by the presidential election and other important, down-ticket races, and it was difficult to get a lot of legislative work done in such a politically motivated and contentious environment. At the American Gaming Association (AGA), we are looking forward to the many things we can accomplish on behalf of the commercial casino industry in 2013.

Acting as the voice of the commercial casino industry on Capitol Hill is one of the AGA’s primary roles, and in the coming year, we plan to work tirelessly advocating for those issues most important to our members and the industry as a whole. This will include educating lawmakers about the importance of federal legislation that would allow states to license and regulate online poker, and representing industry interests during debates on issues such as tax and immigration reform.

In addition to its work on federal issues, the AGA will stand up for the industry across the country on issues regarding  restricting Internet sweepstakes cafes and promoting regulatory reform, while also educating key stakeholders about the real and positive impacts our businesses have on communities.

In addition to its government affairs work, the AGA will spearhead a number of industry-wide initiatives in 2013. Early in the year, the AGA will celebrate the 10th anniversary of the implementation of the AGA Code of Conduct for Responsible Gaming by releasing an update of the code that addresses the modern industry and the way it interacts with its customers, employees and the public. Also on the responsible gaming front, the AGA will continue to work with its affiliated charity, the National Center for Responsible Gaming (NCRG), and will develop new, interactive tools for responsible gaming education.

The AGA’s Global Gaming Women (GGW) initiative will build upon the momentum it generated during 2012 with more mentoring and networking events across the country and worldwide. GGW will also create more online tools for women in gaming, and during the first quarter it will unveil a new online mentoring network to connect industry women around the globe.

The AGA also plans to continue the success of the year-long “All In” campaign that showcased the industry’s corporate social responsibility (CSR) efforts,  by repeating research initiatives to quantify the impact of industry CSR programs in the areas of philanthropy and environmental sustainability. Another CSR area that will garner attention during 2013 is diversity; the AGA will be releasing the latest version of its employment diversity study—the first such report since 2008.

Creating business opportunities for the gaming industry is another primary focus of the AGA, and during 2013 we will do that through the Global Gaming Expo (G2E) family of events. So far, exhibit sales for G2E Asia and the flagship G2E event in Las Vegas have been brisk, showing signs that there could be significant growth for each this year. G2E will also create resources like webinars and virtual conference sessions that will allow gaming companies, the public and the media to stay up-to-date on key industry issues such as the burgeoning i-gaming sector.

The AGA is proud of its efforts to represent, support and promote the commercial gaming industry, and we look forward to continuing this work in the coming year.

Valerie Spicer
Executive Director
Arizona Indian Gaming Association (AIGA)

An architect can omit the 13th floor and a host may plan a dinner party with just 12 guests, but those of us in the gaming business have no choice. Numbers are our game, so despite all superstitions, we must deal with 2013.

My prediction is that 2013 will be action-packed and exciting. This is a safe statement since the action has already begun. As a nation, we’ve survived what appeared to be a never-ending presidential campaign. We know President Obama has been re-elected and we’ve learned that our Arizona delegation will look different. By every measure, our red state has turned more purple. Votes are still being counted as I write, but in a highly publicized contest, Arizona voters elected Jeff Flake (R) to the Senate over former Surgeon General Richard Carmona. Flake, who is also a conservative, will replace retiring Sen. John Kyl (R). We thank Kyl for his long service. Since Flake is a longtime congressman, he’s not an unknown entity, but he and his staff will be new to that Senate office, so we’ll need to get to know each other.

Our new congressional delegation will present challenges and opportunities. First and foremost, we will need to educate our new congressmen and women about our issues, and identify ways to make our concerns relevant. On a national level, I am certain that Arizona tribes will be working hard to make our case for the issues that affect us the most. We will certainly pay close attention to Internet gaming, along with other issues of concern with regard to health, education and welfare.

On a state level, our challenge is to protect our position as the exclusive provider of gaming in Arizona. Ten years ago, Arizona tribal leaders ran a campaign asking voters to extend tribal gaming compacts to keep tribal gaming regulated and limited to tribal lands. After voters passed this initiative, we did an outstanding job of running our businesses, sharing revenues with all Arizonans and dramatically reducing fears of any “imaginary horribles” with which our opponents tried to brand us. We’ve been so competent that we’ve nearly erased the fear of gaming, which has brought us a new spate of challenges.

Like many other states, in the last few years, Arizona has faced the most severe budget deficits in its history. Commercial gaming factions took this situation as an opportunity to press their case for expanded, private gaming. We succeeded in blocking these challengers in 2012, but we fully expect them to be back in attack mode in 2013.

Because 10 years is a long time in political life, we are taking the offensive. We launched a social media campaign this year to build awareness for the benefits of gaming and call attention to gaming revenues, with an elegant anniversary evening that focused on a decade of tribes giving back to Arizonans. In 2013, we plan to step up our game and share our story even more aggressively with our targeted audiences. We know we have a short time with which to build a foundation of support that will protect our industry. How we tell our story and to whom we tell it is our immediate challenge, and a major area of focus in 2013.

Marcus Prater
Executive Director
Association of Gaming Equipment Manufacturers (AGEM)

The past 12 months stamped 2012 as another good year for gaming suppliers that succeeded in an improving but hardly robust economic environment. Casino operators spent more to upgrade their gaming technology than they did in 2011, and perhaps the current landscape is indeed “the new normal,” to borrow a trendy phrase that apparently means the good ol’ days are gone. Gone are the days of turning over 15 to 20 percent of the casino floor with new machines. Gone are the easy decisions to install a new casino management system because the money was in the budget. Gone are the major gaming expansion projects designed to upgrade the game mix and offer players fresh new experiences.

So where does that leave us? In a pretty good spot, the truth be told. The reality is that gaming suppliers continue to invest significant amounts of money and manpower in research and development during a time when sales across the board and overall revenue are down from historic highs. What has emerged is a flood of new products, games and general creativity, along with an influx of new companies eager to get in the game. While the established suppliers may not like new competition, the market will ultimately decide who wins the business battle. And casino operators certainly appreciate new options.

The competition among slot machine companies is as fierce as it has ever been. More of the small companies that have been comfortable selling into smaller regional markets are now seeking licenses in marquee markets such as Nevada, where the standards are perceived to be higher and the stamp of approval can open doors in other markets.

As executive director of AGEM, I have seen this growth among suppliers first-hand, as companies apply for membership in AGEM seeking a different kind of stamp of approval. As of this writing, AGEM’s membership stands at an all-time high with 126 companies. Moreover, AGEM’s members are now based in 18 different countries.

AGEM is an international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, key components and support products, and services for the gaming industry. AGEM works to further the interests of gaming equipment suppliers throughout the world. Through political action, regulatory influence, trade show partnerships, educational alliances, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM has assisted regulatory agencies and participated in the legislative process to solve problems and create a business environment in which AGEM members can prosper, while providing a strong level of support to education and responsible gaming initiatives.

AGEM’s growth has come from the traditional suppliers, even as the interactive segment has exploded. That’s because those same suppliers are the ones leading the way in this new segment, with a good push from more established entities in Europe. During 2012, the Nevada Gaming Control Board published online gaming regulations targeting poker and the Nevada Gaming Commission approved them. That, in turn, started a parade of companies seeking an interactive license from the most respected regulatory bodies in gaming.

The new year will bring an even greater focus on this new segment as companies seek ways to overcome the malaise of the traditional market, while finding new outlets for creative content. Whether it’s play-for-free gaming on social sites, smartphone apps for playing your favorite slot games for fun, the expansion of legal sports wagering while on the go in Nevada or the actual go-live of online poker in Nevada, we are on the brink of a new world of gaming. It won’t replace or threaten what we have now, but it will be a growth segment that once again gives suppliers a unique chance to use technology to shape the way gaming will look in the future.

Daniel J. Tucker
California Nations Indian Gaming Association (CNIGA)

As the year winds to a close, the California Nations Indian Gaming Association (CNIGA) is gearing up for a year that promises to be full of issues of great interest to tribal governments. The largest, and most obvious, being Internet gaming.

In California, tribes will again be focused on statewide legislation that would legalize intrastate Internet poker. The reasons are threefold. 1: The California market is an important and large business opportunity for tribes as online gaming develops. California online poker represents 20 to 25 percent of the potential online poker play and it is critical that this is preserved for California entities; 2: It is a sound “defensive” move by California tribes to limit online gaming to poker only and wall off a massive expansion of gaming in California; 3: The benefits of Internet poker must impact California, not the federal government.

CNIGA has been at the forefront of this issue and will continue to provide a forum for discussion among tribal leadership. Last year, the CNIGA membership was able to identify specific areas of concern that will apply to any draft that is proposed in the coming year. CNIGA believes that unity among California tribes is a critical component to the successful passage of such a bill.

As chairman, I have spent the year listening to the CNIGA membership, as well as discussing this issue with numerous tribal leaders. Most recently, Councilman Steve Stallings of the Rincon Band of Luiseño Indians stated: “Starting with the tribes, Rincon has pledged to bring various stakeholders together over the next few months to come up with consensus on legislation that meets the needs of the various entities who desire to pursue this great opportunity. While we understand there are diverse interests, we are confident that agreement can be reached upon legislation which meets all our needs.”

I agree with Stallings. It will take hard work and careful consideration by leadership, but I believe that a tribal consensus can be reached.

In addition to statewide efforts, CNIGA will be closely monitoring all federal activities related to Internet gaming. Starting with the lame duck session and moving into the 113th Congress, we expect to see a flurry of activity. CNIGA will be coordinating closely with NIGA Chairman Ernie Stevens and the NIGA membership on federal activities, and will work with Congress to protect California’s tribal governments.

Outside of Internet gaming, CNIGA will continue to educate Californians about the positive economic impacts of tribal government gaming. According to a recent study commissioned by CNIGA, tribal gaming is generating $7.5 billion for the California economy. Tribal gaming has created more than 52,000 good-paying jobs and $2.7 billion in income for Californians. For a complete copy of the economic impact study, visit www.cniga.com.

The CNIGA membership will also continue to focus on issues relating to tribal-state gaming compacts, taxation, a Carcieri fix and the overall protection of tribal sovereign rights.

Bill Rutsey
President and CEO
Canadian Gaming Association

The big noise in Canadian gaming in 2013 will be happening in Ontario, with the biggest bang potentially in Toronto.

The Ontario Lottery and Gaming Corp. (OLG)—the provincial government agency charged with conducting and managing the sale of lottery products, casino gaming, slots at racetracks and e-bingo—announced in spring 2012 the outcomes of its strategic business review, elements of which are to become more customer-focused and aim to expand the private sector delivery of lottery and gaming, including through online offerings.

In a nutshell, we plan to call for OLG to renew and enhance its oversight role, while at the same time transferring ownership and day-to-day operation of its gaming facilities and lottery to the private sector.

This is a huge potential opportunity for the private sector. The OLG is currently responsible for 23,000 slot machines and more than 500 table games, as well as 27 gaming facilities and more than 10,000 lottery terminals. The plan for increased customer focus includes closing or relocating underperforming facilities, ending the direct support of horseracing through the slots at racetracks program, and allowing new gaming sites in convenient locations where there is customer interest and tourism potential, including a new gaming entertainment center in the Greater Toronto area. OLG will be launching a full online offering in 2013 for lottery and casino-style games.

The potential jewel in the crown would be the development of a destination resort facility in downtown Toronto, should the city approve.

The modernization process has begun, with a request for information (RFI) having been released, seeking private sector feedback on new facilities development and ongoing conversations with municipal governments throughout the province. This is to be followed by requests for pre-qualification (RFPQ) from parties interested in developing and operating gaming businesses, and then requests for proposals (RFP) from qualified developers and operators. Overhanging the process is the likely provincial election expected early in early 2013.

2013 is also the year that will bring clarity as to whether or not single event sports betting will be legalized in Canada. A bill to amend the Criminal Code of Canada is in the final stages of progress through the Canadian Parliament. The matter may well be decided prior to the publication of this article.

Should the bill pass, look for provincial lottery and gaming corporations to offer it in a variety of forms, including in casino sports books, online and potentially on mobile devices.

Throughout Canada, growth will come for those most creative and able to develop and penetrate the new demand channels, and 2013 will see Manitoba Lotteries in strategic partnership with the British Columbia Lottery Corp. launch a full online platform for its customers and we look forward to more developments in the online space from the provinces.

The Canadian Gaming Association will continue to be an important voice for gaming in Canada by representing the industry on important issues and opportunities that arise. We are planning the biggest, most content rich Canadian Gaming Summit ever, to be held in Montreal June 17-19, at Palais des congres. The summit brings more than 1,000 Canadian gaming executives together for the country’s only trade show and conference. Mark the date and plan to join us!

Lois A. Rice, CAE
Executive Director
Colorado Gaming Association

The November 2012 elections bring more than 30 new legislators to the Colorado House and Senate for the new legislative session that begins on Jan. 6, 2013. In addition, both the House and Senate now have Democratic majorities. It will be a challenging year for the Colorado Gaming Association (CGA), as we educate the new legislators on industry issues, as well as determine how leadership changes will affect political outcomes.

Due to Colorado’s limited gaming environment and the location of our casinos in remote former mining towns, gaming expansion continues to be an issue, particularly as the state continues to face budget challenges from the recession, primarily affecting education and Medicaid funding. During the 2012 legislative session, the House introduced a bill that would expand VLT gaming to a facility in the Grand Junction area of Colorado, on the Western slope, the proceeds marked for education funding. We opposed this bill, as did the community college system and other current recipients of gaming tax revenue that would be threatened by the cannibalization of existing gaming markets. The Colorado constitution currently provides that any expansion of gambling beyond those three locales must be approved by a statewide and local vote. We expect that there will be another bill introduced in 2013 to expand gaming in some fashion to address the state’s funding shortfalls. However, we are hopeful that Colorado legislators are learning from other states that funding important state programs, such as education, with gaming revenues does not always guarantee increased revenue streams, as consumers remain uneasy about economic issues and are more conservative with their entertainment spending habits. Our annual industry polling continues to illustrate that 70 percent of Coloradans still oppose expansion of gaming activities to the Front Range, either through Native American ventures, lottery expansion, racinos, card rooms and other means.

On the federal front, we are carefully monitoring developments with proposed Internet gaming legislation, with the hopes that our existing brick-and-mortar casinos may, at some point, offer their products electronically. Passage of Internet gaming legislation not only protects the consumer from a currently unregulated industry, but would also provide additional tax revenue to Colorado—money that now goes overseas to foreign gambling interests.

The CGA continues to be front and center on issues related to responsible gaming, and continues to provide a $30,000 annual stipend to the Problem Gambling Coalition of Colorado, to support awareness, education and treatment. Unfortunately, Colorado lags behind other states that fund gambling treatment programs through lottery proceeds and other means. During 2008, the CGA was instrumental in getting legislation passed to divert $140,000 of the Colorado Limited Gaming Impact Fund to the Colorado Department of Behavioral Health to provide services to persons with gambling addiction. However, due to the state’s budget shortfall, those funds have not been continued and we must find new ways to fund responsible gaming initiatives.

During 2008, voters approved a ballot measure to raise the casino maximum bet limit from $5 to $100, add the games of craps and roulette, and allow our casinos to stay open for 24 hours. The additional revenue generated from these expanded bets, hours and games was earmarked to supplement the state revenue dedicated to the community college system. Although the revenues generated since have fallen short of the state’s budget office original projections, we are pleased that we can help support Colorado’s community colleges with additional revenue that they would not have received without these changes to existing gaming regulations.

We look forward to 2013, which may bring the return of past challenges, but will also provide the industry with opportunity to educate our new legislators and state leaders on the significant financial benefits that our gaming industry brings to Colorado.

J. Kelly Duncan    
International Masters of Gaming Law (IMGL)

In 2013, we will see continued expansion in gaming as governments around the world strive to address—in the least painful way—budget shortfalls. Because of this, the preeminent role of the International Masters of Gaming Law (IMGL) in educating the world of gaming has never been more important.

IMGL is a non-profit association of gaming attorneys, regulators, educators, executives, in-house counsel, compliance officers, accountants and consultants from around the world, who are dedicated to education and the exchange of professional information concerning all aspects of gaming law. IMGL membership consists of more than 270 members from 38 countries, with members in 32 states and the District of Columbia in the U.S. Membership is for those who have truly distinguished themselves in the gaming industry and by invitation only.

Given its global membership of distinguished members and focus on gaming education, one or more IMGL members regularly participate as speakers at gaming conferences around the world. Moreover, each year IMGL produces two of the preeminent gaming conferences in the world—one in North America and one outside of North America. These conferences offer unprecedented insights and a stimulating exchange of ideas on issues facing the gaming industry worldwide. Additionally, the IMGL is creating a substantive body of gaming law work with its four magazines—Casino Lawyer, Canadian Gaming Lawyer, European Gaming Lawyer and La Ley del Juego, its Casino Law and Looseleaf Service, and its sponsorship of the UNLV Gaming Law Journal and the Gaming Law Review and Economics publication.

In the United States in 2013, the need for individual state governments to stimulate economic growth and generate non-tax revenues in the face of a slower economy will continue to spur an expansion of brick-and-mortar gaming within states that already had gaming and to states that heretofore eschewed gaming. IMGL will continue to help shape existing and new gaming regulatory regimes to ensure they are both effective and reasonable.

2012 brought great anticipation that, in view of the U.S. Department of Justice’s opinion on Sept. 11, 2011, Internet gaming would finally be embraced as a source of revenue, not only for individual states but also by the federal government. As several states rushed to be the first to adopt enabling legislation designed to allow them to participate in the Internet gaming industry, leading casino companies and gaming manufacturers created alliances with existing Internet gaming companies in order to be at the forefront of Internet gaming in the United States. Congress, however, has yet to adopt federal legislation that will provide for an interstate Internet gaming industry that is acceptable to states and the qualified Indian tribes. Absent federal legislation allowing interstate Internet gaming, only a few, highly populated states have the liquidity to make intrastate Internet gaming viable. The recent re-election of Democratic President Obama and the retention of a Democratic majority in the Senate is a cause for optimism that federal legislation may be adopted in 2013. However, bills such as the one most recently proposed by Senate Majority Leader Harry Reid (D-Nev.) and Sen. Jon Kyl (R-Ariz.), that would legalize online poker, but ban other games of chance over the Internet, have been met with formidable opposition by the National Governors Association, which argues that the aforementioned bill constitutes a preemption of state regulatory authority, among other things. Critical to the passage of federal legislation that creates a national platform for online gaming in the United States, will be legislation that addresses not only the states’ concerns of federal preemption of state regulatory authority, but also Indian tribes’ concerns that their businesses will be adversely affected by interstate Internet gaming. The collective experience of IMGL members, who are integrally involved in Internet gaming around the world, will be a significant resource for helping shape the development of Internet gaming in the United States in 2013.

Wes Ehrecke, CAE
President and CEO 
Iowa Gaming Association

The November elections resulted in the Iowa House and Senate remaining split with no change in makeup; there will continue to be a Republican and Democratic majority respectively. However, the margins of control have tightened, so bipartisan support will be needed to pass legislation to get anything to the governor’s office for his signature. While there will be continuity in the leadership positions, there are 23 new legislators. This means a concerted effort will be underway to educate them on the business and benefits of the industry, as well as to provide specific details on how the gaming industry is a viable part of Iowa’s economy and adds value to the state’s entertainment and tourism industries.

There are currently 18 commercial casinos that comprise the Iowa Gaming Association. Issues that are important to the members in the upcoming legislative session are maintaining the current stable tax rate environment so more capital reinvestment is possible, maintaining the smoking ban exemption on the gaming floor and allowing casinos to offer Internet poker that would be regulated and structured by the Iowa Racing and Gaming Commission (IRGC).

It is doubtful there will be anything debated with regard to the first two aforementioned topics. For Internet poker, the addition of many new elected officials—with several receiving new committee assignments—could likely negate some of the traction that has been in place during the past few years since this issue was discussed, debated and passed one chamber. A strategy members need to address is what level of urgency might emerge from the continually evolving rapid convergence occurring throughout the country on i-gaming technology, and what will it mean for Iowa, as various states might allow casinos, lotteries or social gaming sites to have some kind of presence.

There are also some member companies preferring a federal solution to online gaming, so they will be watching the congressional lame duck session with added interest for a possible window they can use to tack Internet poker authority onto a must-pass bill.

Within several casinos, there are positive signs that reflect that the economy is trying to improve and turn the corner. Examples include two significant hotel projects with newly built or renovated rooms, an outdoor amphitheater and golf course; they are also moving from a riverboat gaming area into an existing convention area for more spacious accommodations. In addition, there are two cities in negotiations with the IRGC to gain final approval to move from existing riverboats to land-based casinos in 2013, in order to offer many more attractive amenities.

Also developing in the counties with Iowa’s two largest cities, there could be efforts by developers to seek approval from IRGC for another casino license in the upcoming year. At least one of the two proposals will require the county’s citizens to approve or decline the opportunity to apply via referendum. With regards to the other initiative, it may be decided in court whether a referendum vote is needed. In both cases, there are existing casinos nearby that will oppose any new facility due to concerns about cannibalization. Recently the IRGC has expressed caution on approving any more licenses with the uncertain economic conditions and to not jeopardize existing investments.

A positive opportunity is evolving with the IRGC and Iowa Gaming Association, as members are discussing possibilities for areas to streamline regulations while maintaining integrity and high standards, and reviewing rules that could be updated, since some were written up to two decades ago when compliance was in a different gaming environment.

Wade Duty
Executive Director
Louisiana Casino Association

As the year draws to a close, Louisiana has 13 operating riverboat casinos, but expectations are that in 2013, the 14th and 15th casinos will be online. This will represent the first time all 15 of the statutorily limited Louisiana riverboat licenses have been issued and operational. Ameristar’s $500 million project in Lake Charles has been moving earth and driving pilings since the summer, and it appears to be on track to provide a nicely appointed option for local and southeast Texas players to enjoy. In the northwest corner of Louisiana, the Margaritaville project is also on track, bringing what is expected to be a well-known and -received brand to the area, as well as drawing from the Dallas/Ft. Worth market. Concerns remain as to how much the seventh casino will grow this market.

Considering Texas, in 2013 their legislature will likely take up the concept of legalizing commercial casino gaming to address perennial budget shortfalls again. A non-binding referendum this year passed with a majority—but a less than overwhelming margin—of support. Operators in Louisiana will of course be watching not only for any tangible legislative movement, but also the humor to be found in the whimsical revenue projections that both business and governmental proponents of the measure have always put forth. In 2011, we noted projections that exceeded the combined gaming revenue of New Jersey, Nevada, Louisiana and Mississippi. While Texas is a fascinating state to visit, it is not credible to expected gaming revenue of that magnitude. Additionally, such projections deliberately and blissfully ignore the significant revenue diversion the state will experience as the sure-to-follow Native American casinos lure away customers from any prospective commercial casinos that might be paying state gaming taxes.

Gaming revenue in Louisiana has remained steady for the last two fiscal years, though it still lags about 10 percent behind pre-recession figures. Legislative indications in Louisiana this year indicate little appetite for significant changes that would allow the state’s casinos the ability to compete with nearby jurisdictions in terms of modifying our current gaming space size, waterborne format or promotional marketing efforts. That said, however, we do not look for any increased taxation effort for the fiscal session that will start in April. The Louisiana legislature recently released a report detailing some $7 billion in current tax exemptions, credits, off-sets and other reductions, none of which have ever been available to the gaming industry in the state. Accordingly, a common sense evaluation would place casinos well down on the list of additional revenue sources, particularly since the current administration favors elimination of some current tax exemptions rather than increased taxation.

Michael Winter
Executive Director
Missouri Gaming Association

As we move into 2013, we see that a number of things that occurred in 2012 had an impact on gaming in Missouri.

In late October, we saw the opening of the Isle Casino Cape Girardeau facility, which fills the 13th and last license available in the state. The $135 million facility is a great addition to Cape Girardeau and was welcomed with much enthusiasm from the local community.

On the western side of the state, in the Kansas City area, we saw the opening of the new Hollywood Casino at Kansas Speedway, which impacted the gaming revenue in the Kansas City market. Overall, our gaming revenue for the state’s fiscal year was relatively flat in comparison to the prior year. We are hopeful that as the economy continues to improve, we will see increases in our gaming revenue, as well as increased admissions.

As we continue to oppose and defeat efforts to increase our admission fee, the general assembly sought other avenues by which to raise additional funding for the veteran program. For approximately the last 15 years, our legislature has been put in the position of choosing between early childhood development and veteran programs, as recipients of the industry’s admission fee revenue. This tug of war has resulted in the industry being pulled into the discussion as legislators sought to raise additional revenue for veteran programs without a direct impact on early childhood programs. Many of the legislative proposals have included an increase in the admission fee. The intent of the sponsors was to hold early childhood programs harmless, while requiring the industry to pay the additional revenue.

In the end, the statute was modified to return the majority of admission fee revenue to veteran programs, and increased lottery revenues became the source for early childhood programs. Any increases in admission fees were removed from the bill. Hopefully this will put the issue to rest for the foreseeable future, and alleviate the need for the industry to be put in the middle of the veteran/early childhood dispute.

The Missouri revenue outlook continues to project shortfalls for the upcoming fiscal year. Budget projections predict a shortfall of approximately $220 million. The current administration and members of the general assembly have previously taken positions against any tax increases, and will instead have to turn toward making additional program cuts to balance the budget.

In last year’s legislative session, we were successful in changing the licensing period for company and casino licenses from two years to four years. Also in that legislation, was an increase in supplier licenses from one to two years. Once again we saw efforts to prohibit smoking in public places that would have adversely affected our properties. We anticipate a similar discussion this session in which the industry will be an active participant. A number of efforts relating to smoking bans have been attempted on local levels, but those efforts have either been unsuccessful or contained exemptions for the casino floor.

Both our House and Senate continue to be controlled by Republicans who hold large veto-proof majorities. Gov. Jay Nixon, a Democrat, was re-elected to another four-year term. Given this dynamic, it is anticipated that members of the general assembly could work more closely with the administration than in previous years. However the session unfolds, the association will be active in educating new legislators and ensuring the industry’s view is represented.

Ernie Stevens Jr.
National Indian Gaming Association (NIGA)

For the Indian gaming industry in 2012, it was a year of challenges and patience. The National Indian Gaming Commission (NIGC) set an ambitious consultation agenda, an initiative Indian country had requested for years. We saw other major developments at the Department of Interior and, of course, Internet gaming legislation remains a hot topic through the end of 2012 and into the new year.

In 2013, we can expect a busy year legislatively as a new Congress takes its place and tackles the budget issues once again. NIGA will track and monitor all the developments for the coming year. This will include a focus on Internet gaming legislation. NIGA and our member tribes are actively monitoring the various legislative proposals to legalize Internet gambling. In response to these developments, NIGA and its member tribes have developed principles of respect for tribal sovereignty and self-government, which must be included in any Internet gaming legislation. As we constitute 44 percent of the gaming market, tribes are simply asking to be able to compete on an equal footing. To protect tribal sovereignty and ensure equal access to the market, any Internet gaming legislation should be subjected to the full legislative process.

Special attention will also be paid to the area of jobs and economic recovery. With the elections behind us, our newly elected leaders tackle some of the most difficult and trying economic issues since the Great Depression. The Indian gaming industry has weathered the storm well, with revenue essentially unchanged in 2011 at $26.5 billion. The revenue numbers for 2012 are not in yet, but our industry has been resilient through this crisis. Reservation unemployment remains critically high, so Indian country hopes the president and 113th Congress can work together to push hard for jobs and economic recovery legislation in 2013. Tribal governments and economic entities are ready and willing to help return this country to sound economic footing.

NIGA will also track developments concerning the NIGC and regulatory consultation. In January 2012, the NIGC published a notice of inquiry in the federal register asking for public comments on existing NIGC regulations and potential new regulations that implement the Indian Gaming Regulatory Act (IGRA). Those regulations were issued in 2012 and have become law. The current commissioners’ terms will expire in 2012, and we view their efforts as a positive direction and course set by their leadership. In 2013, we can expect to see the results of their work and it could bring clarity and efficiency to a number of issues.

In Oklahoma and a few other markets, Indian gaming continues to outperform prior years. However, fiscal uncertainty remains a key factor influencing consumer spending. Accordingly, Indian tribes and industry leaders are focused on targeted marketing, improved efficiency and cost containment, and finding innovative ways to attract customers.

While we expect 2013 to improve economically, NIGA will continue to focus on urging tribes to use gaming revenues to help diversify their economies. We are hopeful that in the long term, tribal economies will continue to build upon those aspects that make Indian country unique. This includes continued diversification into cultural and environmental tourism.

We have a lot of work ahead of us, whether it is in maintaining the strength of our existing operations or working with tribes that are still working to find economic sustainability. In 2013, NIGA will continue to work with its sister organizations in Indian country and our tribal leaders to advance the lives of Indian people economically, socially and politically.

Alan Feldman    
National Center for Responsible Gaming (NCRG)

More than 16 years ago, the National Center for Responsible Gaming (NCRG) was established with generous donations from the gaming industry and a firm commitment to better understand gambling disorders and responsible gaming. At a time when little was known about this issue, the NCRG became the first serious funding source in the area of problem gambling research, and set the bar high for the scientific studies and education programs that followed.

Today, the NCRG remains the only national organization exclusively devoted to funding research that helps increase our understanding of this issue and helps to find effective methods of treatment for the disorder. We are tremendously grateful for the almost $25 million that has been committed to the NCRG’s work since the beginning.

The coming year serves as a turning point for the NCRG. We will continue to fund the highest-quality research possible on this topic, but we also will expand our efforts to translate and communicate these research findings into programs and resources for the research, treatment and academic communities, the gaming industry and the community at large.

We understand that collaboration is necessary among all stakeholders to enhance efforts to reduce gambling-related harms, as well as to inform and evaluate public policy. This year, the NCRG will be organizing a summit of leaders in this field to increase our understanding of research, recovery and responsible gaming strategies. With this coalition, we’ll be able to move forward and work together to address this public health issue as a united group.

Our research efforts will grow by funding the second round of NCRG Centers of Excellence. With these three-year grants, our already productive research centers will be able to make even more discoveries in this field. In 2012, we funded more than $630,000 in grants and hope to expand that amount in 2013.

In 2013, it is the NCRG’s goal to increase awareness among more gaming industry leaders, treatment providers, academics and researchers through its education programs. The organization will build new partnerships with local associations and industry members to provide needed training through our webinar series and workshops for clinicians. We also hope you’ll join us at the 14th annual NCRG Conference on Gambling and Addiction from Sept. 22–24 at the Sands Expo and Convention Center at The Venetian Las Vegas.

To continue our work on youth and college initiatives, we will unveil an online screening and brief intervention (SBI) aimed at reducing gambling-related problems among college students. The SBI will be included on the NCRG’s website, which was developed as a tool to help higher-education institutions address gambling disorders and responsible gaming among college students.

The top-notch publications that the NCRG produces will expand to new audiences in 2013. Last year, the NCRG launched the Gambling and Health series. The first edition, Gambling and Health in the Workplace, was developed as a resource to help human resources and employee assistance managers learn about gambling disorders, encourage responsible gaming and understand the resources available for those who may need help. The second edition of this series will be released in 2013 and will focus on educating members of the judicial system. The NCRG will also release the eighth volume of Increasing the Odds: A Series Dedicated to Understanding Gambling Disorders that will focus on the work of the NCRG Centers of Excellence.

These are just a few of our programs and resources planned for 2013. We look forward to expanding the NCRG’s efforts to raise awareness of gambling disorders and responsible gaming through scientific, peer-reviewed research and public education initiatives.

Sheila Morago    
Executive Director 
Oklahoma Indian Gaming Association (OIGA)

There’s nothing quite like being right. I’m happy to report that my forecast for 2012 was accurate.  This year we can congratulate the National Indian Gaming Commission’s (NIGC) Tribal Advisory Committee (TAC) on its excellent job providing advice on the Class II technical standards, and Class II and III Minimum Internal Controls (MICS). The 15-member TAC committee came up with clear and meaningful recommendations and the NIGC listened. For the first time, we have relevant and effective Class II regulations.

Why does this matter? Approved Class II regulations take the guesswork out of our level of gaming. Not only are these regulations good for Oklahoma, but they provide a positive service to every state that offers Class II gaming. With the development and implementation of these regulations, our industry is free to move forward and research, and develop new machines that can further enhance the gaming experience. As we in the industry know, new games are essential to grow our business. They bring excitement to the floor and give our customers more reasons to play.

Since I’m on a roll, I will confidently predict that business in Oklahoma will continue to prosper in 2013. We will have new games and continue to improve our product so that our customers will enjoy an even better experience. Continued growth in Oklahoma is one of the few sure bets you can make right now. As I write this, our casinos are building new hotel towers and expanding their facilities. We are fortunate in our state to have geology and geography on our side. Our thriving oil and gas industry has kept our customer base solid, despite the downturn the rest of the national economy has suffered, and the proximity of Texas, Arkansas, Kansas and Missouri continues to supply us with a strong regional market.

While all of this is good news, I do have a word of caution. In 2013, we will continue to watch the evolving story of Internet gaming. This isn’t only an issue for Oklahoma; this conversation will be taking place in every state and on the federal level. I hope this year the tribes unite under a common position and become part of the conversation since, regardless how this issue plays out, Internet gaming will impact our business.

Cassandra’s cry that Internet gaming will be the end of brick-and-mortar facilities, but I beg to differ. Staying at home, alone in your pajamas, with your iPad or computer appeals to a certain market segment, but it’s not for everyone. The majority of our customers play for the social and entertainment value as much as for the thrill of the win. It’s up to us to build that ever-better real-time, real-place experience that exceeds their expectations. Think about it. Facebook and Twitter have yet to make print ads, radio spots or TV advertising obsolete. Why should we fear adding gaming online to our mix? I would hope that in 2013, we stop seeing Internet gaming as something to be feared and, instead, adapt our way of thinking to make it complement our product mix. The choice is ours.

Bo Bernhard    
Executive Director    
UNLV International Gaming Institute

While many have lamented (and indeed, some have celebrated) the alleged demise of Las Vegas as the undisputed heavyweight champion of the gaming business world, this perspective misses a key point for 2013 and beyond. Las Vegas has become the “Houston of the gaming industry,” evolving into a global intellectual and business capital much as Houston did with the energy industry a generation ago. This might seem an odd comparison at first blush, but let’s take a closer look: just as most of the world’s oil revenues are traceable today to a company with a Houston address (even as production has often moved overseas), so too are most of the world’s gaming manufacturing and casino resort revenues traceable to a Las Vegas HQ (even as the gambling act has become global). And just as operations approaches pioneered in Houston’s oil industry are now embraced the world over, today gaming jurisdictions from Singapore to Spain seek to construct near-identical versions of the “integrated resort” model that was invented in Las Vegas. In the board room, Houston’s managerial decisions have evolved from “oil drill bit size” to “global capital allocation size”—determining, for instance, whether to deploy capital to Angola or the Gulf of Mexico. Meanwhile, Las Vegas’ managerial decisions have also grown in complexity, from floor-level (and often gut-level) judgments on slot floor size, to sophisticated research-based determinations of global capital allocation size—such as whether to deploy resources to gaming legalization efforts in Toronto or Taiwan, or to social gaming technologies or more “conventional” Internet gaming technologies.

This evolution has meant good things and good times for Houston’s community and economy overall, as it has become a global city in every sense. And it will mean good things for Las Vegas’ community and economy as well, to the degree that the city decides to embrace its role and the next waves of change in the gaming industry.

What does this mean for those of us who work in gaming management education? It means that globalization is more than a buzzword, as global literacy has become crucial for our gaming management students in a way it was not a short time ago. It also means that the complexity of managerial decisions (and the analyses that inform them) is growing, which requires an increasingly educated workforce and leadership.

Fortunately for the global gaming industry, 2013 will see a very exciting educational development arrive. This coming year, we will witness a game-changing collaboration between the world’s two largest and most established academic programs devoted to gaming management—the University of Nevada, Reno (UNR) and the University of Nevada, Las Vegas (UNLV). While the contours of this collaboration are diverse and wide-ranging, we might highlight one 2013 development that perhaps best captures our cooperative spirit.

In May, the two universities will come together to co-host the 15th International Conference on Gambling and Risk Taking at Caesars Palace in Las Vegas. Created in 1974 by UNR’s pioneering Professor Bill Eadington and held every three years since, the conference is recognized around the world as the largest gathering of academic, regulatory and industry leaders who study the gaming industry. Those who have attended in the past will attest: there really is no conference quite like it, and attendees always enjoy more than a few surprises. Put simply, it is the place where gaming intellectuals come together to debate and solve the key problems of our day—a day that is getting increasingly complex by the hour. And it all happens, appropriately enough, in the city we might now call the “intellectual capital of the global gaming industry.” We hope to see you there.

José Luis Benavides
Benavides & Associates S.C.

From the Mexican gaming business’ point of view, former president Calderón ended his administration with business as usual. This was the administration under which the infamous declaration of “monyanna” (which means is never going to happen) was the rule of thumb, and following this rule, Calderón and his colleagues accomplished absolutely nothing during his six-year term. No matter the topic, they were without a clue.

The gaming business was never on Calderón’s political agenda, and his total contribution was only a tiny modification to gaming regulations on Oct. 19, 2012. It was a symbolic cherry placed on top of a farewell cake with no concern for, or discussion, with legal gaming industry representatives. That offense shows how important the former president thought the legal gaming industry was to Mexico. In any case, at this point, that is no longer important; it’s up to history now to judge his administration’s accomplishments and failures.

The good news is that current President Enrique Peña Nieto and his federal administration believe changes are needed. And the Mexican gaming business is wide open to his support, as well as the changes required to bring the industry into the world spotlight as a first-class regulated gaming jurisdiction and destination.

The Ministry of the Interior (SEGOB) is in charge of all the country’s gaming business and holds the first position in the Mexican Federal Administration regarding all matters involving gaming. As of writing this forecast, a new Minister of the Interior was slated to be appointed by Nieto.
Investors from all around the world that have plans to move into the Mexican market can feel safe in, and current investors can breathe easier, because Nieto has no plans to shut down the gaming industry, as in Ecuador and Brazil.

However, you can bet the farm that a new gaming bill will be placed before Congress to be discussed and decided on. Why? Because the president cannot waste this opportunity to demonstrate that former presidents Calderón and Fox were wrong with their public policies about gaming. It’s Nieto’s opinion that proper implementation of gaming regulation reform will guarantee success that would benefit the Mexican people for generations to come.

The current federal administration is now in the process of building the legal tools needed to execute several public policies. It is also being advised by highly experienced experts in each field. This is unlike the last administration, which gathered advice from public employees and proclaimed them as gaming experts, despite not one having ever been involved in gaming business or having ever set foot in Las Vegas at any time in their life.

The government’s plan is to clean up illegal gaming operations in general, both on land and on the Internet.

Their new gaming bill will focus on the battle against illegal operators (no matter if they are land-based or online); licenses in accordance with the latest gaming regulation modification (one license per application and one license per company); taxation; responsible gaming; gray areas, such as roulette, dice, slots and table games; and online gaming.

Online gaming will be a chapter in the new gaming bill, because the online operators need different treatment than land-based operators. The new administration is taking a page from the U.S. and its big time poker blackout, and will start blocking IP addresses of many gaming websites that are unlicensed. In a nutshell, the free-for-all is over and the hammer is coming down—you can bet on it!

After that, all blocked websites will be added to the federal government blacklist, no matter who they are owned by. My legal advice to the bandits is to start dealing with legal licensed Mexican operators or begin the process of obtaining a Mexican gaming license. The clock is ticking, and time is running out rapidito.

Frank Catania Sr.
Partner and President
Catania & Ehrlich P.C. and Catania Gaming Consultants Inc.

After a campaign that seemed endless and an election that polarized the country as never before, we have ended up in the same place we began. The same can be said about the state of the gaming industry in the United States as we head into 2013.

Insofar as casino gaming is concerned, it relies on discretionary spending of its customers. While the economy shows signs of improvement, renewed prosperity still seems a long way off.

Nevertheless, several states, hard-pressed for new sources of revenue, have approved, or are considering the initiation or expansion of, casino gaming. But this only raises the looming issue that all gaming stakeholders recognize and fear—potential saturation of the market.

Ideally, a state would prefer to draw customers from outside its borders. This allows for the importation of new revenues and, harsh as it sounds, the exportation of negative social consequences. If the state cannot do that because neighboring states have the same kind of gambling, it is left with only a local or in-state clientele, which raises its own issues.

For example, if in-state customers are gambling at the casino, what are they not spending their discretionary dollars on? Will new casinos cannibalize other forms of legal gambling? And what is the overall effect of redistribution, i.e., does the pie grow larger or is it merely cut into more slices?

The prospects for online gaming in the United States in 2013 appear equally modest. The “Black Friday” prosecutions cast a shadow over the industry. That shadow lifted a bit when the United States Department of Justice (DoJ) reversed its long-held position, opining that the Wire Act only prohibits sports betting. Still, the promise of the DoJ opinion has yet to be fulfilled.

A bill that would legalize and regulate Internet poker at the federal level is circulating in the United States Senate. However, that bill has not attracted significant co-sponsorship. In a lame duck Congress with more significant issues to address, an Internet poker bill seems unlikely to move. And with the makeup of the next Congress remaining largely unchanged by the election, there is no ground for optimism that such a bill would fare better in 2013.

The one bright spot is that individual states are moving in the direction of authorizing online gambling on an intrastate level, with the possibility of going interstate as more states legalize. Nevada is farthest along in this process, and other states may follow suit in 2013. One can envision a time beyond 2013 when a group of states enter into agreements creating multi-state poker operations, with revenues pro-rated and split, as is now done with multi-state lotteries.

Of course sports betting, which accounts for a huge percentage of online gambling, remains the “elephant in the room.” There is a pending lawsuit brought by New Jersey that seeks to invalidate the federal statute that prohibits the growth of sports betting. But unless that happens, sports betting in the United States will continue to benefit only organized crime and offshore operators, and the full potential of online gambling in the United States will continue to remain unrealized.

Robert Stocker
Dickinson Wright PLLC

2013 will be a year filled with great potential and great risk. While the United States economy appears to be moving slowly on the upswing in some respects, this trend could easily stall or reverse. In the global economy that we live in, it is not just the stateside “fiscal cliff” that will present an ongoing challenge. As of the writing of this forecast, Europe has slipped into a double-dip recession and continues to be faced with a seemingly never-ending southern European fiscal crisis. As a result, the United States has replaced Europe as China’s No. 1 export market, with attendant balance of payment consequences on the United States. At the same time, the United States’ manufacturing sector is cutting back on sales projections and capital expenditures. The ultimate impact of these developments on economic trends depends upon the manner in which they are addressed in Washington, as well as by the European Economic Community. This is the disconcerting news. Notwithstanding these uncertainties, the gaming market continues to expand in the United States and throughout the world—which is good news for the gaming industry, particularly gaming equipment manufacturers, and for industry employment opportunities in emerging and growing gaming markets. In all events, expect continued consolidation in the gaming industry at both the operator and the manufacturer level.

After spending a number of years throwing cold water on the possibility of Congress substantively addressing the Internet gaming morass in a proactive manner, I see hope on the 2013 horizon. This could be the year in which Internet poker becomes legal in the United States. The latest draft of the Reid/Kyl Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012 is the most comprehensive federal legislative attempt to address the ongoing challenges posed by the multi-billion dollar illegal Internet gambling market that exists in the United States. For the first time, there is a real possibility that the Internet conundrum will actually be addressed comprehensively by Congress. By no means is adoption of this bill a certainty. However, the bill addresses a broad panoply of issues/criticisms raised by the anti-gaming crowd and the professional and amateur sports interests. It beefs up existing federal legislation, including the Wire Act and UIGEA.

Importantly, the support for addressing Internet gaming increasingly is crossing party lines. The November election results, which essentially preserve the status quo at the federal level, most certainly do not measurably decrease the likelihood of passage of such legislation, and arguably increase the likelihood of positive action. Internet gaming is still not a top 20 issue in Congress, but the first year of a congressional term is the ideal time to act on such legislation. Bottom line: 2013 has the potential of being a very interesting and perhaps very positive year for many segments of the gaming industry.

Stu Hoegner
Gaming Counsel Professional Corp.

Several overarching—and recurring—themes should be visible in Canadian gaming in 2013. First, no big changes to the structure of federal legislation as it affects gaming and betting will happen in the next year. Second, the provincial governments are all over the map on Internet gaming. Some have ambitious expansion plans. Others have decided to stay out of i-gaming for now. Finally, certain First Nations are dissatisfied with provincial approaches to gaming and betting and are forging their own path in the sector.

Sports Betting—Federal legislation purports to determine the boundaries of gaming that may be conducted and managed by the provinces and others. Bill C-290—a private member’s bill introduced in Parliament in 2011—would legalize single-event sports betting, among other things; if passed, the provincial monopolies could decide to start offering non-parlay wagering to punters. The bill has passed the House of Commons and has been reported out of committee in the Senate (the appointed upper house of Parliament). Professional sports leagues have tried to derail the bill, and Senate opponents seem confident of defeating it. Debate by the full Senate has concluded for 2012. Bill C-290 is expected to pass, but an up-or-down vote will not happen until 2013.

Ontario—Early in 2012, Ontario Lottery & Gaming Corp. (the provincial monopoly) completed its strategic review and submitted it to the provincial government. OLG has set out a plan to expand and consolidate gaming sites and increase private sector involvement in delivering regulated gaming. Part of the expansion may involve new casinos in, for example, Toronto and Ottawa, subject to municipal approval. Approval by these or other municipalities should not be taken for granted, the economic benefits of casinos notwithstanding. Ontario is also introducing an Internet gaming platform. At the time of writing, sources suggest that OLG has selected a primary private supplier to partner with and provide its Internet gaming offering, but no public announcement has been made yet. Expect OLG to roll out Internet gaming in 2013.

British Columbia & Quebec—Both BC and Quebec offer Internet gaming through playnow.com and espacejeux.com, respectively, and have entered into an agreement to allow their residents to play against each other with the objective of sharing liquidity and supporting peer-to-peer gaming. However, the governments’ poker network has a long way to go before it has anything close to the liquidity and attractions of private offshore poker providers taking wagers from Canadian residents, notably PokerStars and PartyPoker.

Other Provinces—Of the remaining seven Canadian provinces, some (like Alberta) have ruled out participating in Internet gaming for now. At least one other province, Manitoba, has expressed its desire to join the BC and Quebec governments’ poker network.

First Nations—The government of Saskatchewan recently indicated that its monopoly gaming provider will not enter the Internet gaming space. However, First Nations in the province, which already run several successful brick-and-mortar casinos there, may take a different view. A former native chief in the province has launched northernbearcasino.com, an online site offering casino, poker and sports betting. The site is part of the Geobet network, which says it has a gaming license in Curacao. The Saskatchewan government has asked the Royal Canadian Mounted Police to investigate, but has otherwise reacted very cautiously.

Watch for First Nations in several Canadian provinces to continue to pursue new gaming ventures in 2013, especially in remote gaming.

Mobile Gaming—The provincial monopolies are very far behind their private sector competitors in mobile products. This is one of the major avenues for growth in remote gaming and the provinces are effectively ceding the field to others to meet the mobile gaming needs of Canadians.
There have been important developments in the Canadian gaming sector in 2012 but, overall, Canada has stuck with its gradual approach to gaming expansion. Look for more incremental steps forward in land-based and Internet gaming and betting in 2013, but not for any game-changers.

Anthony Cabot
Lewis & Roca

Nevada’s gaming industry is still in the financial tunnel but, alas, a light appears. The question is, can we get there in 2013 before the tunnel collapses again? Maybe. The path is not easy. Our industry is archaic. We’ve done little to innovate the casino industry and the casino floor, hoping that the future will show up and drag us into the new century. We passed interactive legislation 10 years ago, but watched Europe obtain and exploit the first mover advantage. Some major gaming companies squandered the real chance to get federal legislation passed eight years ago by derailing federal lobbying efforts. We could have been the first to offer interstate pari-mutuel horse racing in 2001 after federal legislation was passed. Oregon beat us. Its handle on pari-mutuel horse racing in the last quarter greatly exceeded the entire state of Nevada for the past 12 months. Tribal casinos now get first shot at new slot machines and other gaming devices, months before they arrive in Nevada casinos, because their processes for approval are much quicker. We have no long-term strategy on federal sports legislation.

Sure, we can party like it’s 2008 again, a time when Nevada casinos made money in spite of ourselves. Or, we can reinvent ourselves as the gaming innovation capital of the world. This will take a cooperative effort of all involved. The casinos have to be willing to take risks on new concepts and equipment, and the state government has to work to attract new technology companies through lower taxes, tax incentives and abatements, and the encouragement of gaming technology start-ups. Our universities have to emphasize the education of the new breed of entrepreneurs and engineers. Our regulators have to make getting new concept and equipment approvals both cheaper and quicker.

As a state, we have made progress. The number of startups in Las Vegas has been impressive, led by Zappos’ reinvigoration of downtown. The regulators have begun streamlining equipment approvals through the use of independent test labs and other policy changes. Casinos seem more willing to look toward smaller and more agile companies for new games and concepts. University of Nevada-Las Vegas and its hotel college, under the able leadership of Dean Don Snyder, continues to take steps to bolster its gaming program through improvements to its gaming lab (courtesy of Konami Gaming), its course offerings and its external programs.

2013 will be a good year if we recognize that the Nevada gaming industry is no longer the big dog—if we continue to change our thinking, the way we do business as a state and our attitude. We need to come together as a state, including the industry, the universities, the governments and the regulators, to acknowledge that collectively we have common challenges, and that the vibrancy of our community is not assisted by the attitude that what is bad for our competitors is good for us. Instead, we must realize it will take everyone’s effort to return Nevada’s gaming industry and the community, its workers and residents to its former glory. This will not occur by a seismic shift caused by one thing such as Internet gaming, but by a thousand small changes and innovations.

Greg Gemignani
Lionel Sawyer & Collins

2013 is likely to be a year when commercial gaming and tribal gaming begin to face new competition from a long-time industry participant. While state lotteries have always been a part of the larger gaming industry, the lottery market was distinctive and, with the exception of VLTs, there was little crossover between these markets. In 2013, a likely confluence of several events is likely to result in the beginning of more competition between state lotteries and other forms of gaming.

First, the 2011 Department of Justice (DoJ) opinion regarding the Federal Wire Act has given states the green light to engage in intrastate online lottery gaming. Second, states are still faced with the one-two punch of high deficits from lost tax revenue and increased service needs from the recent Great Recession, as well as slow economic recovery. Third, several state lotteries are already engaged in some form of online activity, whether it is subscription sales, providing online extended play or limited electronic pull tab games. Fourth, federal legislation for commercial and tribal online gaming will be limited to poker if it is enacted, and enactment is far from likely. Fifth, many vendors are offering robust gaming and geolocation services that can deliver games to computing devices within a defined geography. Finally, few states other than Nevada and New Jersey, if any, are likely to actually engage in intrastate regulation of commercial or tribal gaming.

Therefore, given the pressures on state governments to collect revenue without raising taxes, the current open online intrastate market free of federal interference or commercial competition, and the ability of vendors to quickly deliver products to state lotteries, it seems likely that many state lotteries will begin offering online lottery games for consumption on computers, tablets and smartphones. Because many states define lottery games as games played when a player parts with consideration for a chance to win a prize, these games may have entertaining methods of play that simulate casino games. In states where such lottery products are offered, lottery products will have a look and feel similar to casino-style or Class III-style games, and lotteries are likely to be competing with tribal and commercial casinos in an entirely new way.

Working against such an expansion of state lotteries are (i) pressures from traditional lottery outlets such as gas stations and convenience stores that are likely to oppose sales outlets that bypass their businesses, (ii) the institutional inertia of many state lotteries that may make adaptation and change slow or difficult, and (iii) anti-lottery groups that generally oppose any lottery expansion, viewing it as harmful to the most vulnerable in the general population.

On balance, it is likely that several states will find the financial needs of the state too great and the potential for revenue from intrastate online lottery games too attractive to ignore. Just as the traditional lottery spread from one state to being active in 43 states, it is likely a successful online lottery will spread from state to state. Absent legislation, commercial and tribal gaming interests will be unable to directly compete in the same medium in the same geographic areas as online state lotteries. As a result, these more traditional forms of gaming will need to become more creative in competing in this new competition.

I. Nelson Rose
Professor of Law
Whittier Law School

Legal gaming is a state issue. National elections are usually not as important for this industry as for many others. But the impact of the November 2012 vote will be both micro and macro: from Maryland approving a Las Vegas-style casino next door to Washington, D.C., to the possibilities for the recovery of Nevada’s economy, the expansion of Indian gaming and the opening of Internet poker rooms and casinos.

Few individuals in Congress care about legal gaming in any form. Two of the most important for Internet gambling are retiring: Jon Kyl (R.-Ariz.), whose name was synonymous with bills to outlaw it, and Barney Frank (D.-Mass.), one of the few lawmakers who consistently fought to repeal the Unlawful Internet Gambling Enforcement Act (UIGEA). No one has yet come forward to take their places.

But Nevada is blessed to have the Democrats maintain their control over the U.S. Senate, meaning Harry Reid (D.-Nev.) will continue as majority leader. Reid is no Bill Frist (R.-Tenn.), who, as majority leader, unethically attached the UIGEA to an anti-terrorist bill at the last minute. And the Democrats rarely walk in lock-step like Republicans. So Reid won’t be able to sneak through a federal bill legalizing Internet gambling. Even if he could, the Republicans still control the House.

But the power of the majority leader cannot be underestimated; Nevada casinos will get just about everything they want, at least for the next two years.

Tribal casinos will also prosper. President Barack Obama has been a good friend of Indian gaming. No one knows exactly what Mitt Romney would have done, of course. But it is doubtful that he would have been anything but an obstacle on issues like recognizing tribes, permitting new land for casinos to be taken into trust, or allowing Indian bingo halls to continue to operate Class II gaming devices that are virtually indistinguishable from slot machines.

Internet gaming is about to explode across the country. More than half a dozen state lotteries will be selling individual tickets online intra-state. And some of their games will look like the most popular social games—think Angry Birds® played for money—and video casino games. Nevada will soon have Internet poker, and Delaware, Internet casinos. Other states, probably Iowa, New Jersey and California will quickly follow. The states will soon realize there are almost no federal barriers to pooling players across state lines, or even internationally.

I expect some interesting developments in the courts. The Professional and Amateur Sports Protection Act, the only federal law preventing states from legalizing sports books and intrastate online sports betting, will be declared unconstitutional. The decision by a federal judge in New York that poker is a game of skill and does not fall under the federal Illegal Gambling Business Act may be reversed on a legal technicality. But it, and other cases, have pushed the door wide open on the drive to treat poker differently from games like slot machines and lotteries.

The most important impact of the 2012 elections will be economic. Republicans will still prevent the federal government from helping the states balance their budgets, so state legislators and governors have to turn more and more to legal gambling to bring in revenue.

But the most important development is that Romney lost and the GOP failed to take back Congress. The U.S. economy is coming out of the worst economic crisis since the Great Depression. As we have seen in Europe, which has now slid back into recession, this is not the time to cut federal spending, raise taxes on the middle class or give tax breaks to billionaires. If Romney and the Republicans had won, the country would have plunged back into economic chaos. Instead, there is general agreement that the U.S. will create 12 million new jobs over the next four years.
This is very good news for a leisure and entertainment industry. People don’t take vacations if they think they might be losing their jobs.

Jim Goodwin
Market Segment Director Casinos
Giesecke & Devrient America Inc.

Banknotes and cash center solutions are among Giesecke & Devrient’s core competencies. Casinos, cash-in-transit (CIT) companies, commercial banks and central banks are our customers. Giesecke & Devrient (G&D) delivers solutions ranging from compact banknote processing systems to entire cash center solutions, including cash management software, processing systems, material handling and services.

The casino market continues to show improvements in growth and planned expansion in many parts of the world. In view of this ongoing growth and various technical advances, many casinos are looking to introduce processes and efficiencies that enhance their ability to manage the many cash points that accompany these developments.

The casinos that G&D is working with are requesting solutions to improve their processes in several operational areas. Whether they are aiming to enhance procedures in employee satellite cages or increase the accuracy and efficiency of their soft count rooms, these casinos require that their provider offers solutions to meet their continued focus on overall profitability. We at G&D hope to continue enhancing our portfolio in order to engage in this important market.

Our brand-new BPS M5, specially designed for use in count rooms, which needs to process large numbers of banknotes and TITO tickets, quickly yet precisely, provides true continuous processing. With a processing speed of up to 33 banknotes a second, the BPS M5 can be set to process any currency intermixed with TITO tickets. It can be fitted with up to 10 high-performance sensors and 20 stackers, enabling a variety of processing types in a single pass.

Another casino area that has been receiving a great deal of attention is the satellite cage. With the addition of many non-gaming venues in the casino space—hotels, gift shops and other retail outlets, restaurants, concert halls and so on—the need for a comprehensive employee bank tracking system has come to the forefront. As these non-gaming venues continue to grow, so do the lines of cashiers waiting to receive or drop off their banks or starting tills. It is essential in 2013 that cash handling companies work on providing solutions for these changes and advancements.

Having identified the need for a solution, G&D now provides a complete bank tracking and electronic bank-out system in the form of Compass Casino and Bank Express. This system helps the casino to eliminate the cashier lines that arise in typical satellite cages by delivering any size of bank to the cashier in an average of seven seconds. In conjunction with the Compass Casino software, Bank Express provides a complete tracking system that meets the requirements and goals of casinos today. G&D will continue to provide casinos around the world with customized solutions for automated cash processing to meet their special requirements.

Mark F. Labay
SVP and GM of Core Cash Access Products

GCA has a long track record of providing innovative cash access solutions to the casino industry, with more than 15 years of operations focused on gaming. GCA’s robust technology platform and innovative product suite provides customers with the ability to reduce their operating costs while improving their operational efficiency.

GCA’s new cage-based solution, Cash Club, will be introduced in early 2013. It significantly automates capturing data from cash access transactions, and also acts as a single source gateway to our comprehensive product suite. We believe our customers will continue to be highly focused on improving the patron experience as a means to differentiate themselves.  Our solutions ensure patrons spend less time in lines waiting to gain access to their cash and more time gaming. One of our cornerstones will be our patented 3-in-1 Rollover process. This patented technology enables patrons to turn certain ATM declines into accepted PIN-based or signature-based card transactions. In customer locations where we have installed this functionality, customers have seen increases of 30 to 40 percent of their prior PIN-based debit activity. We expect to see a slight improvement in the overall economy in 2013, and products such as the 3-in-1 Rollover process helps translate significantly more dollars to the floor.

Consumer privacy continues to be an evolving concern for most consumers and merchants. As a result of numerous data breaches in the financial services industry and the overall climate of economic uncertainty, patrons are becoming less comfortable sharing personal and financial information with merchants. This poses a significant challenge to gaming operators who cash checks for gaming patrons. Unlike credit and debit cards, there are no cooperative associations to validate the existence of funds underlying a check. So gaming operators must make risk-based decisions for check acceptance and, with a declining appetite to share financial information with casinos, gaming operators face challenges in their ability to accept checks. GCA has created a check verification and warranty product to adjust to consumers’ changing needs. Our new FlexCheck product provides gaming patrons with a check cashing limit that is not based upon a patron’s social security number. This provides the patron with safety of protecting their financial information and the operator with enhanced ability to accept checks. This product is only a portion of the overall cashless vision GCA will deliver in 2013.

TableXchange, a joint product initiative between GCA and FutureLogic, is expected to be introduced in 2013. This product enables table gamers to redeem slot tickets for chips at the tables. Gaming patrons obtain the ability to easily crossover from slot play to table play, which should increase gaming operators’ crossover play while improving the patron experience.

In 2013, we expect there to be continued momentum in the Internet gaming space as well. We expect operators will build relationships with customers in an online environment, and need specialized products and services to monetize those customers in an offline environment.

GCA will use the Elements platform to provide operators of legalized online wager-based casino games a licensed end-to-end payment, patron e-wallet and management solution that accommodates both their wager-based and social gaming needs.

Michael Dominelli
VP of Marketing
NRT Technology Corp.

In recent years, there has been a debate over whether cash will be the medium for trade in the future or if we will become a cashless society. Currently, cash is king and with the credit crunch still a large factor, we are seeing the usage of cash increasing. There is just something about having a sum of cash in your hand that is empowering, and there are no strings attached when it comes to cash. In the gaming industry, NRT Technology is constantly looking at ways to reduce the cost of handling cash and make it a more efficient process than it is today.

For 2013, we are looking to implement more cash recycling and management technology. What NRT has coming will consolidate all of these touch points. It will incorporate cash registers, cashiers, ATMs, etc. Also at the cage level, with automated teller assist devices that have cash recycling capabilities, the entire casino will eventually benefit from different variants of cash recycling/management technology, making the loop or cycle of cash much smaller than it is now. Deploying smart cash cassettes that are interchangeable between devices, and the ability to track and monitor these cassettes, is one of the types of solutions you will see coming down the pipeline from NRT.

NRT’s major focus is cash access and financial services; this will always be a critical service in a casino for its guests and players. NRT’s full suite of products and solutions provide an end-to-end system in the industry, combining cash access and cash handling on one platform. Tying in the intelligent cash management/handling in with the cash access requirements will make a casino property more self sufficient and ultimately reduce the cost associated with traditional methods.

We expect the success of the Cash Handling System® (CHS) BackOffice solution from NRT will continue on in 2013. This sophisticated tool captures, manages and reports on both the transactional activity and the overall “health” of NRT machines, providing the ability to manage and monitor in real time, around the clock. The era we are in today has all technology moving toward mobile applications. NRT will be launching the newly redesigned CHS BackOffice and CHS Mobile in early 2013. This app product is already in high demand, as it will give gaming operators the convenience of their operational functions that they do in the back of the house, right in the palm of their hands.

NRT is committed to cash access, cash handing and cash management. Through innovation and execution we hold ourselves to a very high standard and will continue to stay positioned to meet our valued customer’s expectations. In 2013, you will see Innovation. Delivered.

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