Jack Bulavsky chats to Marcus Prater, Executive Director of the Association of Gaming Equipment Manufacturers
Marcus Prater is Executive Director of the Association of Gaming Equipment Manufacturers (AGEM), a non-profit international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, online technology, key components and support products and services for the gaming industry. AGEM works to further the interests of gaming equipment suppliers throughout the world. The current AGEM membership roster, 143 companies strong based in 21 countries, is a who’s who of the supplier segment of the global gaming industry. AGEM is a sponsor of the Global Gaming Expo (G2E), the preeminent international gaming industry trade show and conference held annually in Las Vegas.
Jack Bulavsky, Special Assignment Correspondent for Casino Life in Las Vegas, caught up with the busy Prater for a conversation concerning the future look of slots on the casino floor.
The Nevada Legislature recently passed Senate Bill 9 that was initiated by AGEM. The bill allows for variable-payback percentages in slot machines. How did all this come about?
Over the past few years, there have been conversations and interest about skill-based gaming and games with arcade elements. AGEM has been aware of this and when the opportunity presented itself, we moved on it. That opportunity occurred when Nevada Governor Brian Sandoval convened a committee last year to conduct a study on the impact of technology upon gaming. AGEM was asked to participate along with other organizations. We polled our membership and asked what they would want technologically that is not currently allowed under Nevada law. The overwhelming response was to have the ability to allow for variable-payback percentages in slot machines that would enhance the player experience by bringing true skill-based gaming, arcade-game elements, hybrid games and other unique features and technologies to the casino floor for the very first time. However, that required a change in Nevada law. AGEM took that one recommendation and submitted it to the committee who, in turn, forwarded it to the state legislature for review. That was in January. By the end of the legislative session in late May, Senate Bill 9 was signed into law by Gov. Sandoval as part of his platform to keep Nevada as the world’s gaming technology hub. The Nevada Gaming Control Board and the Nevada Gaming Commission are now leading the process of writing and promulgating the rules and regulations that will guide this innovative new direction. AGEM believes it will inject new life into the slot machine segment of the gaming industry. The process is moving along and I expect it will be done in the next several months. When completed, this will give manufacturers the blueprint to develop these new games and already, there are some game designers ready to go with a variety of new ideas.
Do you expect new slot product reflecting this change to be shown at G2E 2015 in Las Vegas?
That’s difficult to answer. You may see some conceptual games that conform to this new landscape and I do know that several AGEM members are already there and will be able to discuss the games and the law. However, it’s going to take time. I see skill-based games submitted for approval possibly later this year, but as far as a selection of products from the bigger slot companies, that will come in 2016. Nothing is going to happen overnight. It will be a little here and a little there with slot operators treading carefully on how and when these new games are introduced. No one knows how players will react. It’s going to take some time before we really know how this entire process plays out or how unique it may become.
This could be a giant step forward for game manufacturers and for gaming operators. Can you put it into perspective?
We have seen the gaming experience become extremely prevalent among those who have a smart phone or tablet or who grew up playing Xbox games or EA games. All this skews younger and so the marriage of these games with a gaming component will create an environment that we never even contemplated, not even five years ago. The sky is the limit in terms of the type of content that can be put onto casino floors and how operators market these games. Furthermore, once the rules and regulations are written and in place, they are considered the gold standard for everyone else as Nevada has a history of taking the time to do it right when developing gaming law.
Did you meet or consult with major casino operators?
We met with representatives of the Nevada Resort Association. It’s the first AGEM has ever collaborated with the NRA and its Board. They ultimately endorsed it. Operators have their own ideas, yet they are excited about this. In the U.S., slot revenues across the country are flat and the slot machine demographic is aging. Everyone recognizes that something needs to be done. We know that visitors to Las Vegas are trending younger and spending money in places other than casinos or on slots. So this seems to be the right path we’re taking at the right time.
Don’t you believe this slot change could be considered revolutionary?
Yes I do. Not only that, but also evolutionary. Taking popular games from the tablet environment and putting them into a casino environment will be very interesting. And then there are arcade games that go back decades that can be re-introduced for a new audience. So these games that many of us grew up with will now have a gambling aspect. Now keep in mind that not all the games are worthy of being a gambling game, but many can be transformed over time. Let me give you an example. Variable-payback percentages would, for example, give all players a base game with an 88 percent payback. But if you’re particularly skilled at shooting down enemy planes in the bonus round or outracing your friends in a road rally, you could boost your payback to 98 percent with the blended overall payback selected by operators falling somewhere in the middle. For the first time, players will know they can have a material financial impact on the outcome of the game.
This has to be a real feather in the cap for AGEM?
Time will tell, but right now it could be AGEM’s top achievement and it fits with what members have been asking for. Let’s talk again in five years and see where everything is. AGEM looks to improve the overall financial and business environment of our industry and this could be monumental. That’s because no jurisdiction in the world allows for true variable-payback percentages. This is beyond transformative.