IGT’s robust third quarter sales reported last week was fueled by the transition to ticket-in, ticket-out slot systems as casino operators move to a cashless slot floor.
During the quarter, IGT sold 17,500 replacement units, which represent nearly 75% of all North American slot sales, according to industry analysts.
That level of sales should continue, analysts say, at least for the next three or four years, as casinos scramble to convert to ticket-in, ticket-out technology.
At that pace, it’s a wonder that any of the traditional "coin clinking" slots still exist. But IGT officials point out that the process of converting to all cashless slots is an arduous one.
At this point, only about "25 percent of the overall installed base of machines in North America has been converted to ticket-in, ticket-out technology," according to David Durst, IGT director of Gaming Systems Sales.
"Approximately 130,000 machines are now doing some form of ticketing," Durst said, adding "This has taken place over the past 2Â½ years."
With an installed base of nearly 700,000 slot machines in North America, the math would suggest it could take another six to eight years to convert the total inventory to ticket-in, ticket out. "That’s difficult to say," Durst said.
In the United States, 16 states have casinos that have converted or purchased IGT’s cashless system called the EZ Pay system.
"Illinois is one of the few remaining states that has not officially adopted ticket-in, ticket-out," Durst said. "But it is in the process of now reviewing regulations to allow ticketing."
What’s holding some casinos back from adopting ticket-in, ticket-out technology is the need to convert their entire casino accounting system.
The process of conversion starts with a ticket printer, firmware, certain harnessing and cabling, and possible glass changes to the slot machine.
Then the casino’s accounting system must be updated with a server and other computer equipment such as cashier workstations, soft count and auditing workstations, and possibly wireless ticket validation equipment.
In recent weeks Station Casinos, Argosy Gaming and Horseshoe Casinos have all signed major new agreements to add ticket-in, ticket-out technology.
Station Casinos recently signed an agreement to purchase up to 8,000 new EZ Pay machines over the next three years for all of their locations in Nevada as well as the new Thunder Valley Casino in Auburn, California.
Texas Station was one of the first casinos in the country to offer EZ Pay machines, and at least some machines at every Station Casino currently are equipped with printers for ticket payouts.
"Our goal is to offer ticket payouts on more of our machines to enhance customer service," said Stephen Cavallaro, Station Casinos’ chief operating officer. "Our customers have adapted to tickets and enjoy the added convenience of ticket-in and ticket-out."
Argosy Casino signed an agreement to purchase up to 4,000 new EZ Pay machines, as well as retrofits for up to another 1,000 existing machines. This agreement will help facilitate a complete changeover to ticket payouts at its six casinos.
"Our target is to offer the convenience of ticket-in, ticket-out technology to our guests in 100% of our gaming machines by the end of calendar year 2004," said Richard J. Glasier, Argosy president.
Finally, earlier this year Horseshoe Gaming Holding Corporation entered into an agreement with IGT to upgrade its Horseshoe Casino slot floors in Bossier City, Louisiana; Tunica, Mississippi; and Hammond, Indiana with the EZ Pay ticket system.