Group established to study emerging gaming technology
Pub Date: 5/1/2008
Huntington pitched a proposal to form a working group that would examine and make recommendations on emerging technology and changes that would inevitably come to the business.
"What will equipment look like five years down the road?" he asked.
He said already on the industry's screen is the issue of new U.S. Treasury currency that is forcing bill validator changes, with some of the oldest machines not capable of upgrades. Further, the end of impact printers could be coming which would require an overhaul of record keeping regimens. Even downloadable games may be making their appearance soon, he noted.
He said he thought some planning maybe even consensus in advance of these perhaps inevitable events would be beneficial for both operators and regulators.
"We should give folks a chance to weigh in. What are the political issues, the solutions, the alternatives?" Huntington said. "Should we have a framework for planning?"
Tooke agreed that changes in technology are a "major ongoing concern for industry people. My view is that we need to maintain a healthy environment" for gaming businesses. "We should get ahead of the curve on obsolescence issues. We need to have all the interests present to present their views, to plan for new technology that is coming, mitigate possible problems. We don't want the Montana market to be the bottom of the barrel" when it comes to new game developments.
Carson said he believed "revenue increases come from the industry re-inventing itself constantly. We will always be faced with this stuff coming forward. There's no better time to start this discus
Staples agreed manufacturers and vendors, "our friends," need a seat at the table, but admonished the group to remember and understand the importance of the licensee location operator in these equations.
"The small licensees feel they are being pushed into obsolescence whose time on its own accord has perhaps not come. Don't forget it was those licensees who did the hard work to get legalized gaming in Montana in the first place. The location operator is the bedrock upon which all the rest of you stand. They need to know they will be included in discussions of how to deal with the effects of technological advances."
Citing the effects of the new five-dollar bills, Staples said, "My (MTA) members are saying, 'Find a way to deal with the five-dollar bills.' Others are saying, 't here is no supplier (of upgraded bill validators for old machines) out there.' But there is an entity out there (who could supply the upgraded units) but they run into (machine) manufacturer resistance when it comes to getting involved in their (proprietary machine communications protocol) software" which is necessary to make the bill validators work with the machines.
"If that's the crux of the issue, then that ought to come out," Staples said. "We need it out in the open." Given situations like this, Staples said, "the unvended private (machine) owners have got to be at the table."
Tooke quickly acknowledged Staples' points, stating, "That group is the foundation. We want an open and transparent discussion. But in many cases Montana is the bottom end of the after-market'; It's tough to design product with only Montana in mind. We need to get ahead of the obsolescence issue."
Manufacturers in the audience were called upon to comment, including IGT's Terry Geurin.
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"Definitely maybe," is how he replied to an inquiry regarding IGT's position via obsolescence in Montana. "I applaud your efforts and look forward to that dialogue. I urge you to keep an open mind and don't try to legislate technology. Keep an eye on emerging technology in other jurisdictions.
"But I'd like to address Mark Staples' comments," he continued. "We look at all the options" to keep existing games viable. "We don't try to introduce obsolescence. We have machines that have been here since 1987."But "as a manufacturer, we must protect the integrity and security of our device. Our bill acceptor manufacturer (JCM) said it can't be upgraded. If someone finds an alternative, we'll look at that."
Morris then asked Geurin, "In Las Vegas It's all 't icket-in/ticket-out' (cashless gaming). Is IGT going to that? Will we have to deal with that in Montana?"
Geurin replied, "Yes. Seventy-five percent of the machines in North America are (using) ticket-in/ticket-out. Players have accepted it. Some say the day is coming when no machine will take bills.
"Ticket-in/ticket-out (technology) is protected by patents," he continued. There is a one-time license fee of  $1,195 per gaming device for other manufacturers to use the technology, Geurin said, but no recurring daily or weekly fees. However, "systems that support ticket-in/ticket-out may be cost prohibitive for Montana, but costs are coming down and it could be cost effective in the future.
Thom Propp, Fleetwood Manufacturing general manager, said he drew his perspective through industry experience with manufacturing, a route vending and now location operation.
The economics are, We're a small manufacturer in a small market," he said. "The cost (per device) is substantial. I echo the sentiments being expressed'; emerging new technology should be examined. It is an industry issue across all levels."
Fleetwood is not facing the bill acceptor conundrum, since its machines are all of recent make, Propp said, "but we are concerned about the (potential obsolescence) of impact printers. Ithica is the only source."
Montana and South Dakota are reportedly the only gaming jurisdictions where impact printers are still used or required.
Some have speculated that as Ithica's sales volumes fall and prices continue to escalate, they could abandon impact printer manufacture. The printers are integral to producing hard-copy records of machine game play data and thus are the basis for proving operator tax liabilities.
"Some things must change to bring us forward so We're not so far behind the rest of the jurisdictions," Propp concluded.
Blaine Bowman, sales manager for Spielo Gaming which manufactures gaming machines for the international markets, said like Fleetwood, Spielo is relatively new to the Montana market so is facing no issues with the bill validators. But the national and international decline in the requirements for, and use of, impact printers does affect his company and machine costs, he said.
"Our Montana cabinets are the only ones we make to accommodate impact printers," Bowman continued. "Others are using thermal printers and central reporting systems so hard-copy record keeping is not critical." The Spielo cabinets' doors designed especially for Montana and its required impact printers cost $400 more than the doors for other jurisdictions, he said.
"What if Ithica quits making (the impact printers)?" Bowman wondered. "we'll be scrambling, looking for used equipment. We should get ready to make the switch. We should be looking at technology that's used in other markets. No one wants Montana to be a one-off (market). We need to look at record keeping requirements. we've got to get started. It's time."
Kris Rose, representing Summit Gaming, said the previous comments "make sense. It's needed and we need to move forward."
And Carson lodged one final observation: "When this conversation starts, its going to be about a lot more than just bill acceptors and printers. It's a vast world."
Chairman Tooke, stating a desire for an "arms-length view" of the subject, quickly appointed Mark Kennedy, Murnion and Rep. Blasdel as a steering committee for a working group. That group is now to meet in "a workshop format" in Billings June 25, from 10 a.m. to 3 p.m. at the MSU-Billings Conference Center (see Huntington's personal column elsewhere in this edition for more details).
Source: The Montana Tavern Times, May, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.