Hi-tech slots help fuel growth in 2008

May 26, 2009 5:03 PM
by GT Staff |

Equipment sales increase 6% last year

Even though the effects of the recession took its toll on the casino industry in 2008, gaming equipment manufacturers provided a welcome bright spot as production increased by 6.7 percent over 2007 figures.

Overall, gaming equipment revenues reached $12.7 billion last year, a 6.7 percent increase over the previous year, according to the American Gaming Association’s State of the States report.

Conversely, nationwide gaming revenues slipped by 4.7 percent in 2008.

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The increase in the manufacturing sector reflects steady growth in recent years. Since 2005, production by gaming equipment makers has increased from about $8 billion to $12.7 billion, or about 18 percent a year.

Fueling the expansion has been increased demand for gaming-related equipment, as well as the expansion of casinos throughout the country.

Equally important has been the proliferation of digital, high-tech slot machines, which feature electronic displays that are systematically replacing traditional mechanical reel machines.

New 3-D technology and liquid crystal display (LCD) screens, which began appearing on casino floors about 15 months ago, have begun to transform the face of slot machines nationwide.

The next and final piece of the high-tech puzzle will be the advent of server-based gaming, which will get its first big rollout when CityCenter opens later this year Las Vegas. The MGM Mirage project will feature an entire casino floor of machines controlled remotely.

When the system is in place, programmers will be able to control nearly every aspect of the game – cost, payout, even the images that line up on the pay line. Casino operators will be able to make changes in real time through back end servers that talk to computer chips inside the slot machines.

"This is the last piece of the puzzle," said financial analyst Aimee Marcel Remey of Jefferies & Co. "These new systems are so different from the slots out there now. You feel like it’s an exact science, every time you pull."

Indeed, the next generation of slots is expected to completely revolutionize how the games are played. If Elton John is playing at Caesars Palace, these server-based slots could display images of the rock star instead of cherries, numbers or other symbols. If Elton’s image lines up, an internal printer could spit out front-row tickets to the concert.

Or perhaps the casino would like to change the mix of its games to reflect a different customer base that comes to the casino on weekends. With a few keystrokes, programmers could change the minimum bet on a section of machines to $1 instead of the penny denomination during the week, as well as offer a progressive jackpot for all the slots in the sector – or even to all the machines nationwide.

"If the NASCAR folks are coming to Las Vegas, they could change the fruits to cars," said Fred Angelopoulos, CEO of PureDepth Inc., which develops displays and software for IGT. "You can start thinking outside the box, literally."

While the new technology will be a boon for casino operators, the jury is still out on how players will accept it.

Many old-schoolers aren’t comfortable with slot games that can be altered remotely, comparing them to Nintendo-like video games. Some even say they miss pulling the handle and watching the coins dump into the bucket.

One thing that’s not likely to change in the new era of electronic slots is the slim odds of winning big.

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