When slot machine manufacturers look over the Class II market, they see not a teetering segment, but one filled with opportunity.
“The demise of the Class II market had been rumored for years, but the products continue to be viable profit centers for our tribal customers and their economic growth,” said Gavin Isaacs, chief operating officer of Bally Technologies. “At Bally, we are committed to this market and believe there will continue to be opportunities as evidenced by planned new Class II casino openings and recent expansions of existing properties.”
Jim Coleman, product manager for Class II gaming at International Game Technology, said “Now that the National Indian Gaming Commission has published its final Minimum Internal Control Standards (in October of 2008), our (Class II) challenges have diminished or have been drastically reduced.”
Manufacturers including Class II market leaders Bally, Cadillac Jack, IGT, Rocket Gaming, Video Gaming Technologies, and others continue to put their stamp on products for the Class II market. WMS Gaming has seen the opportunity and has joined the competition in a direct way.
WMS has long provided game content through licensing arrangements with other manufacturers that serve the Class II market. In July, at the beginning of WMS’ fiscal 2010, the Waukegan, Ill.-based company struck out on its own.
“WMS has been a participant in the Class II market indirectly in the past through licensing agreements with Bally, Sierra Design Group in Washington primarily, and also Multimedia,” said WMS executive director of Class II central determination Bob Hays. “The WMS games not on WMS hardware have been in the Class II market for a period of time. With the beginning of our fiscal year ’10, we ceased that structure as to how we participated in the Class II market and switched to a direct participation, which is the establishment of our own central determination Class II business and product offering.”
WMS has chosen to focus on the Washington and Alabama markets, along with states with Class II gaming where the company already distributes Class III slot machines.
“There is Washington, which is actually Class III with a video lottery description to it that operates similarly to traditional Class II markets, which are almost entirely tribal outside the state of Washington,” Hays explained. “Alabama, being entirely Class II makes it a secondary opportunity. Washington is just the sheer size. You look at roughly 25,000 units in the marketplace. Alabama also has a large number of tribal as well as charitable gaming.”
By putting its game content on its own hardware, WMS is able to leverage its Bluebird I cabinet, with ergonomic features that have established it as part of the Class III landscape. The content in the initial rollout consists of G-Plus games, multiline video slots with second-screen bonus events that have long been a WMS mainstay. Among the eight titles in the launch are Jewels of the Night, Lucky Meerkats and Village People Party - a take on the WMS standard Jackpot Party that uses music and graphics of the disco-era favorites, the Village People.
“We’re definitely leveraging our player-proven G-Plus category,” Hays said. “We want to make sure we execute effectively and provide what is expected out of the gate. As we grow and develop over time one would expect us to bring a more premium product to the marketplace beyond the G-Plus category.”
Bally TechnologiesFor Bally Technologies, content is key, Isaacs said, noting the importance of variety and breadth.
“The majority of our Class II games are ports of existing Class III games, either from Bally (like Hot Shot) or from our partners whom we license content from (Aristocrat, Konami, Ainsworth, and Atronic),” he said. “What’s great about that is we can take a look at how the games performed in Class III and understand through historical customer response which titles are appealing to players, which, in turn, allows us to provide our Class II customers strong and proven games.
“Since 2003 in Class II, Bally has strived to bring compelling and proven content to bingo players throughout the market, with a track record and performance-backed games that benefit our customers with content variety. That is not to be overshadowed by bringing new firsts into bingo, such as the first ‘poker style,’ the first widescreen, as well as the first million dollar jackpot progressive, to name a few. We will continue to invest in new Class II concepts and hardware.”
Among new developments, Isaacs points to a number of games he said are aimed at bringing the Class III gaming experience to the Class II market. Bally’s 1,000,000 Degrees series is brings million-dollar wide-area progressives to Class II. Reel Winners, Ultimate Series and Tower Series games feature special top boxes with wheel and ladder bonuses that players would expect to see in a Class III casino.
“Additionally, to support these games, we’re conducting on-site marketing promotions with models and promotional giveaways so that players get more of a Class III experience than has historically been available at many Class II properties,” he said. “Our systems in Class II have grown and we offer a full suite of products, from iVIEW player-interface displays to Power Winners and Power Coupons as well as one ticketing solution and portal to peripherals such as ticket-redemption machines.”
Cadillac JackDuluth, Ga.-based Cadillac Jack has grown along with Class II gaming. And while Class III products are an increasingly important part of its mix, Cadillac Jack retains a prominent position in Native American casinos as well as Latin American bingo markets.
“Our install base has doubled in the past 12 months,” said Chris Korpi, Cadillac Jack vice president of sales. “We’ve achieved this through increased game performance, an extensive product portfolio, and strong customer service. Not only have we increased our footprint, but we have also successfully gained market share this year over many of our Class II competitors.”
At this year’s Global Gaming Expo in Las Vegas, Cadillac Jack expects to continue to stretch its Class II wings with the introduction of its Mega Money Maker multilevel progressive games and its Genesis cabinet. Mega Money Maker features five independent Mini Game bonus events, linked to five multilevel progressives. Each Mini Game has its own pay table, symbols and progressive jackpot value.
It will be offered exclusively in the Genesis cabinet. The company said server-based compatible Genesis features dual screens and allows for expedient game changes and quick floor optimization. It will be available to Class II markets early in 2010. Content initially available on rollout will be Mega Money Maker and Cadillac Jack’s new 40 Line games.
So Hot, Cadillac Jack’s most popular and best-performing games, kicks off the 40 Line series. The 40 Line version will feature hot new graphics, vertical wild symbols and a flame-inducing free spin bonus. Four new 40 Line themes - Queen of the Delta, Galapagos, Truck Stop Jackpot and Barnyard Blastoff - will be launched during G2E.
With a history of success in Class II, Cadillac Jack rolls out its new products with confidence.
“We put excitement into all of our Class II games by ensuring feature rich content, entertaining game themes, a variety of bonusing options within the same product range, and unique pay styles,” said Mauro Franic, vice president of product management and marketing. “Players are drawn to our games because of the strong entertainment value and the variety of products to fit a variety of player styles.”
International Game TechnologyFor International Game Technology, recent breakthroughs in Class III products, such as IGT’s Advanced Video Platform, and Multi-Layer Display screens for 3-D images on REELDepth games give Jim Coleman, product manager for Class II gaming, confidence about the company’s place in the market.
“In a very short time, IGT has become a force to reckon with in the Class II arena,” Coleman said. “We believe that our game content continues to greatly improve and our install base is evidence that we are headed in the right direction. We also pride ourselves on our service and system support. Our customers are very pleased with the reporting and security of our on-line bingo systems.
“IGT is currently migrating all of our games to our latest platforms using the AVP technology. This allows us to use the latest Multi-Layer Display technology for stunning 3-D graphics on REELdepth games, as well as five new machine models. A new bingo player interface has been designed to accommodate the new platforms.”
IGT’s approach includes both transferring successful Class III concepts to Class II and developing Class II specialty products.
“Typically we are leveraging game content for our entertaining display from our Class III library, which has some really exciting new concepts such as MultiPLAY, where players can play their favorite game up to four times with individual outcomes, all on the same machine,” Coleman said. “These games are performing well above house averages. We are also designing a new line of four card Latin style bingo games that are really popular in Mexico and other international markets. We plan to introduce this style game in the U.S. shortly. In addition to this we have some exciting new multi-level progressive games that can be utilized across an entire floor.”
Multimedia GamesWhile games originally designed for Class III have had an impact in Class II, Multimedia Chief Marketing Officer Ginny Shanks has confidence it can work the other way around, too. She points to Multimedia’s new Class II game Smokin’ Hot Devils.
“Smokin’ Hot Devils is an original title that was developed by our Class II game developers and we think it will ultimately translate successfully to the Class III market as well,” Shanks said. “Smokin’ Hot Devils is a 5-reel, 30-line video reel game specifically designed for our Player HD cabinet and is packed with cutting-edge technology, including high-resolution 23-inch LCD video displays and a premium ‘focused sound’ system with 3-way speakers. Smokin’ Hot Devils features graphics and sound packages that are on par with leading games in both Class II and Class III markets. We keep the bonus feature simple but it has a volatile math model and the main excitement for the player is a frequently occurring free spin bonus feature, which can award a large number of initial spins.”
Multimedia does bring some of its Class III experience to Class II. It’s preparing a Class II version of its Casino Commander tournament system that has gained a niche in Class III markets.
And while expansion of its Class III business is important to Multimedia, Class II still represents 62 percent of the company’s installed base of about 17,000 units.
“As in all market opportunities, our success in Class II gaming is dependent on creating unique, winning elements in our game designs – including sound and video elements – which add to the entertainment value of the game and are a vital component for providing the best possible player experience,” Shanks said. “As an example of how we approach this today, our game development teams are creating new titles for the Mexican marketplace based on the success we’ve had in the past year with our proprietary games developed for other Class II markets.”
Rocket GamingAt Rocket Gaming, CEO Ron Harris sees the company as an innovator in an innovative market.
“The technology used in Class II gaming is unique and superior to the technology used in Class III gaming,” Harris said. “Recent advances in game design have now allowed Class II to effectively compete against Class III products for profitability. A clear example is Rocket’s new Gold Series games that are outperforming Class III games in the same facility. This advancement moves Class II games out of the overflow area and onto the main areas of the gaming floor in a way that creates demand and profits as never before.
“We see ourselves in the same position we have been from our start, as the innovator in Class II. Taking the Class II/bingo math model to new levels of fun for the player and profit for the operator.”
Harris shows particular pride in the Gold Series, which initially consists of three new, multilevel, wide-area progressive games with a starting top prize of $1 million. Games incorporate entertaining displays with multiple bonus rounds. Harris said. Rocket deployed its first Gold Series titles in May 2009, and that the product has exceeded expectations for both game performance and customer interest. He said that in the initial deployment of over 200 games in 36 gaming facilities, the Gold Series has consistently ranked within the top three best-earning games on the casino floor.
Beyond game performance, Harris said, “The Gold Series is the first product ever to be the basis of a sponsorship for the National Indian Gaming Association representing more than 180 tribes. This is a pioneering type of sponsor relationship in which Rocket will donate to NIGA a portion of the revenue generated by Gold Series games.
“I cannot say enough about our relationships with NIGA. The opportunities these relationships open are limitless and will benefit all of Indian gaming.
Video Gaming TechnologiesThe rapid change of technology can mean great expense for operators trying to offer the latest electronic gaming devices. That, said Video Gaming Technologies Marketing Director Jim Nulph, is a benefit of the VGT lease model.
“VGT believes that there are significant benefits to a lease model,” Nulph said. “Because technology changes so quickly, the Class II lease model allows operators to adapt and change quickly with technology at no cost to them, including free upgrades. When operators purchase machines, those games quickly become obsolete; this is an investment that takes time to depreciate.
“Because operators can quickly and easily change games under the lease model, their floor remains fresh, current and more exciting for players. In addition, VGT’s marketing services provide casinos with a partner that helps develop and implement effective player promotions. Excitement is generated through the execution of slot tournaments, cash/large prize drawings and live appearances by our most popular characters.”
All that, Nulph said, helps bolster tribal sovereignty and provide leverage for tribal/state compacts.
“Because Class II is primarily regulated by sovereign tribal governments, state governments are prohibited from interfering in class II gaming. Whereas Class III gaming is defined by tribe/state agreements where compacts are negotiated, Class II games give tribes leverage in their compact negotiations with states. Simply put, tribes can opt to run class II games if state governments are only willing to negotiate unfavorable terms. Class II games strengthen tribes’ bargaining positions vis-à-vis state compact negotiations.”
All manufacturers recognize there continue to be challenges in the Class II marketplace beyond competition and gaining market share. But the opportunity to grow - that’s there, too.
“Tribal governments continue to face challenges from state and federal agencies to their sovereign rights to have Class II gaming on their lands and foster their communities,” said Cadillac Jack’s Korpi. “Cadillac Jack continues to support their rights to tribal gaming and we assist by providing more advanced products with higher earnings potential. The future of Class II gaming really depends upon the political landscape, but we view it as a growing, viable option for many tribes.”