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Saturday, March 27, 2004
Copyright © Las Vegas Review-Journal
Cashless slots becoming more popular: Survey shows 77 percent
of casinos use them; not everyone thinks they're so great
The race to cashless slots is picking up
speed and should accelerate in the next two years as small-
and medium-size casinos join the stampede, a Goldman Sachs
survey released this week said.
Reno-based International Game Technology,
the world's biggest slot maker, continues to set the pace
and benefit the most, with Australia-based Aristocrat Technologies
picking up steam.
The expected boom isn't making everyone
happy, though.
Interest in Alliance Gaming and WMS Industries
slots is lagging, and some casino managers are beginning to
revolt against the trend to replace traditional slots with
cashless.
The 2004 study, Goldman Sachs' fourth annual
survey, showed 77 percent of the casinos surveyed incorporate
some level of cashless machines on their slot floors, compared
to 39 percent last year.
Goldman Sachs gaming analyst Steve Kent
said the numbers are a strong indication of the widespread
acceptance of cashless slots, which should lead to increased
sales over the next few years.
Even though the number of casinos that
have installed some cashless machines has increased, only
34 percent have more than half of their floor devoted to cashless,
meaning the trend should accelerate slot sales, at least for
a few more years.
IGT, whose "Wheel of Fortune" game was
cited as the most profitable machine for the fourth straight
year, should remain the winner in the stakes competition among
slot makers, even though the Goldman Sachs survey found the
"Wheel of Fortune" slot machine's popularity is slipping.
However, IGT spokesman Ed Rogich said demand
for the "Wheel of Fortune" game remains solid and that his
company this week started deploying an advanced version, "Wheel
of Fortune Special Edition," in Las Vegas.
Of the other major slot makers, the survey
found only Aristocrat is "making waves" for IGT.
"The increase in popularity of Aristocrat
games was remarkable. Aristocrat games were mentioned 19 percent
of the time as having the highest win per machine. This ranked
second only to IGT," Kent found.
Aristocrat President Gavin Isaacs said
his company has been pleased with the reception of its newest
slots among casino managers and that the company plans to
continue to respond to customer demands to make added inroads
on market share.
By contrast, Alliance slot machines got
little mention from slot floor managers in the survey.
"However, we note that AGI's games have
never performed well in our slot survey, and the company has
still managed to deliver strong game sales over the past few
years," the survey said.
Alliance spokesman Marcus Prater said it
is "always tough to (draw conclusions) from blanket assessments
when our industry is so widespread."
Still, he said Alliance sales and placements
have been improving recently as the company has accelerated
the introduction of new games.
WMS, which had largely withdrawn from new
placements for two years while it developed new technology,
"dropped off the chart" in the survey.
"(However) , on the bright side for WMS,
we found that 47 percent of the respondents said they planned
to purchase more WMS games this year," Kent said.
The accelerated replacement cycle started
mainly with the large casinos, but competitive pressure and
the drive to cut costs seems to be driving small- and midsize
casinos to start shifting to cashless more rapidly than they
have in recent years, the survey said
However, not all smaller-casino managers
share the enthusiasm for cashless slots.
Mike Devaney, operations director at Emerald
Island Casino in Henderson, for example, said his customer's
enthusiasm the cashless machines is vastly exaggerated and
"employees hate them with a passion."
The 7,500-square-foot Emerald Island Casino
features just 370 slots, compared with almost 4,000 slots
at the MGM Grand and more than 2,500 slots in other major
Strip casinos.
Customers, Devaney said, care most about
service.
"Why invest in a system that it takes eight
years to pay off with the labor savings when what the customers
want is workers who can provide service," Devaney said. "Tickets
are no solution for little locals casinos and our employees
would hate it."
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