GTECH plans expansion into Nevada

May 3, 2005 4:17 AM

Gaming giant GTECH Holdings Corporation, which supplies about 70 percent of the nation’s lottery systems, is setting its high-tech sights on Nevada for expansion.

While a Nevada lottery is still a political football, Rhode Island-based GTECH will be setting up shop in the Silver State to develop gaming operations in the areas of brand licensing, slot systems, game development and other business opportunities.

Spearheading the operation in Nevada is Bruce Rowe, who was recently named as GTECH’s corporate vice president of business strategy, gaming solutions and general manager of Nevada operations.

Rowe told GamingToday last week that GTECH is currently looking at sites and should have facilities in Las Vegas within 90 days.

"We’re very excited about expanding into Nevada," Rowe said. "Not only do we feel we have vision, but the resources to make a difference in this segment of the industry."

Rowe has more than two decades of experience in slot management and operations. Prior to signing on with GTECH, he was a senior executive with Harrah’s, where he oversaw the openings of 16 casinos while managing more than 42,000 slots.

"Bruce understands the market, the needs of the players and the requirements of gaming operators," said GTECH Senior Vice President of Gaming Solutions Marc Crisafulli. "His years of experience in slots and information technology give him an unparalleled view of games, systems and casino operations."

Even though GTECH supplies nearly three-quarters of the nation’s lottery systems, it is a relative newcomer to electronic gaming in commercial casinos.

But Rowe points out there is a technological convergence going on between government-sponsored gaming such as video lotteries and commercial casinos. Thus, technology and game content are being integrated between the two market segments.

GTECH’s contribution to the equation, Rowe added, is its expertise developed through very large-scale and highly-reliable transaction processors that are used in government-run lotteries.

The company’s stake in slot management systems and slot games increased dramatically when it announced last December an acquisition agreement with Atronic, the largest slot manufacturer in Europe and the third largest slot maker in the world (behind IGT and Aristocrat).

The purchase of a controlling 50 percent equity in Atronic, valued at about $100 million to $150 million, is expected to be completed in December 2006.

Atronic officials said it plans to release about 40 new slot titles this year, to go along with its library of about 80 active games.

That would give GTECH a strong and instantaneous foothold in the video gaming market.

"We intend to expand that footprint even further through future acquisitions," Rowe said.

Rowe said that integrating a library of games with operational systems such as video lottery terminals is already ongoing in different gaming jurisdictions. Class 2 tribal gaming is one application; another is server-based or downloadable slot systems, which are being developed in jurisdictions outside of Nevada.

"There’s currently testing (of server-based systems) in California with two different vendors," Rowe said, adding that GTECH is testing its own server-based systems.

He predicted, however, that downloadable slots, while inevitable, must overcome a variety of security and operational concerns before being embraced by gaming regulators.

In the meantime, Rowe will have plenty to do, identifying electronic gaming trends and formulating corporate strategies.

In the past, Rowe has been an advocate of slot games that had ties to gambling, such as Wheel of Fortune, and games with a puzzle or game-board component.

At an industry conference two years ago, Rowe criticized slot makers who flooded the market with games with frivolous themes that offered no link to gambling.

Today, Rowe believes the trend toward lower denomination games — nickel and penny slots — will continue, and that "more creativity" will be implemented to create second chance and bonusing rounds that will give players more opportunities to win..