During a recent trip to Great Falls, the Tavern Times paid a call on Bill Stedman at American Music, a major Great Falls and Hi-Line region gaming and amusement machine vendor. We also talked about a sister company, American Gaming Technology (AGT), a small-scale gaming machine design and manufacturing cercern.
Stedman points out that since he joined American Music about eight years ago, the scope of company's vendor routes has grown as has the number of pieces of equipment arrayed along the routes, from about 700 gaming machines to near 1,000.
Stedman notes the growth has ocurred due to diligence and good customer service, as opposed to the easier path some other vendors have taken: route acquisition.
"We need to give our customers something extra and unique," Stedman says, "since we are all vending essentially the same equipment."
American Music augments its gaming machine business with a full complement of other amusement games such as table-top trivia games, pool tables and juke boxes, darts machines and other promotional devices such as the "Green Machine."
These "trade stimulator" devices such as the Green Machine which feature proprietary games such as "Kings and Queens" and "Johnny Cash" help an operator build customer loyalty and repeat business, help monitor staff attention to promotions and, most importantly, allows formation and careful control of players clubs and the associated customer database, Stedman says.
They also help an establishment operator to firmly control promotional costs, which Stedman says three percent of gross is a reasonable target. The promotional games are completely custom programmable for the needs, objectives and whims of any given establishment.
However the promotional tools are only as good as the operator makes them, Stedman warns. "The location must work the program. If so, 95 percent of the time it will be a great promotional tool. You can really build a lot of excitement and traffic as the game winds up toward its conclusion."
The trouble generally with many current promotions is that they tend to flood a place with patrons only briefly, then they are emptied just as quickly, Stedman says. A correctly designed promotion will attract a constant level of traffic with more frequent promotions and awarded prizes.
While these devices "are good for the location, they're also good for American Music," Stedman admits. "It's just one more thing we can offer a customer that our competition can't ."
Another new promotional device now offered by American Music is what they call "the balloon game." It can be operated in any kind of retail establishment--restaurant, retail store, car dealership--and generates interest and fun in players of any and all ages, Stedman says.
Essentially the video device floats balloons up and across the monitor screen, and customers can choose to "pop" any one of them to earn a prescribed purchase discount or bonus.
He also ackowledges the performance of the proprietary AGT keno gaming machine, developed and built by a sister company, indicated it was perhaps too little and too late.
The gaming machine evolution curve seems to becoming steeper all the time. In the last three years machines regulations--and thus the machines--have changed to offer both poker and keno on one platform while newly approved bonus rounds have seen game play entertainment values expand exponentially.
Some machines may offer as many as 24 different versions of poker and keno; some even offer a bingo game.
Yet for the small manufacturer like AGT, it is easy to get caught behind the curve.
Just as the AGT "Wizard of Odds" keno machine was released, exclusively to American Music vended routes, multi-game function was authorized and quickly became the norm. And when new rules shortly afterward allowed bonus features, nimble designers at other brands soon incorporated them.
Thus, the small maker may find themselves always at the drawing board trying to play catch up instead of trying to get ahead.
But Stedman's steady, calm demeanor may be a reflection on how American Music and AGT operate: steady, methodical progress without the radical spikes up and down and swings forward and back.
A new AGT game suite has been submitted to the state lab and is nearing approval, Stedman said. This game chip-set will include 10 new poker games and three new kenos, all fleshed out with plenty of high entertainment bonus round features. Of course it will come with new glass upgrades as well.
In addition, Stedman says, a new slant-top with all associated components upgraded will also soon be submitted to the state for approval in 2008.
The machines will feature sate-of-the-art hardware, more memory and a faster processor, according to Stedman. And, most importantly, it will have some feautres no other machines sport, he said.
"You only need one or two exceptional games for a machine to be a hit," he says.
"I've really got to commend the owners of AGT and American Music for their commitment to bring their location operators something unique and different. The investment in designing a game, then building it is so huge."
AGT uses programming facilities in Texas and graphic artists in Seattle with assembly conducted in Great Falls.
Stedman also warned that the state's machine earnings performance data can appear skewed to those who don't take report parameters into account. He notes the reports are for establishments with 20 or more games, and another version for places with with 19 or fewer, both with two or more of a given machine model in operation.
Since only around 100 of the original "Wizard of Odds" AGT units were built, almost no establishments have two or more units under permit.
"Some performed real well, others not so well," he says.
Stedman echoes what other business leaders have been saying lately: "The business is evolving and becoming very competitive. Machines doing what they did 10 years ago is not enough; all the costs are up."
He also notes American Music is somewhat choosey about which locations it will vend.
"We're looking more for quality than quantity," he says. At the cost of today's modern machines--$10,000-$11,000--a vendor can't afford to put these big equipment investments in the smallest, most marginal locations; it simply takes too much time to earn back the investment, he says.
American Music has been buying and placing a lot of Summit and Speilo machines as well as upgraded IGT's, Stedman says.
And with the pending release of the U.S. Treasury's latest version of the five-dollar bill, the consequent costs of bill acceptor upgrades or wholesale replacement is going to hit with equal force vendors and operators who own their own machines.
However, Stedman suggests one way to delay or partially escape the impact is to "train customers to use 20-dollar bills (which old and new bill validators will handle) instead of the old fives."
Business is brisk at American Music, Stedman concludes. "We set a new location every seven weeks during 2007. We're buying a lot of equipment and we're paying a lot of taxes."
Source: The Montana Tavern Times, February, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.