In any other year but 2014, Aristocrat Technologies’ acquisition of Tennessee-based Class II gaming provider Video Gaming Technologies (VGT) would have been lauded as a significant deal. However, the purchase got lost in the backwash of bigger, multimillion dollar mergers of larger slot suppliers such as International Game Technology and Bally Technologies.
Still, the fundamentals that made the deal a “no-brainer” to begin with—a chance for Aristocrat to become a major player in the Class II gaming markets and for VGT to utilize cutting-edge Aristocrat technology and resources—still apply, and are starting to bear fruit this year with VGT’s introduction of its first wide area progressive Class II slot,Mr. Money Bags Easy Money Jackpot, at the Oklahoma Indian Gaming Association (OIGA) trade show in Oklahoma City this past July.
VGT PresidentJay Sevigny recently took some time to discuss the Aristocrat/VGT merger and the new products rising from this union with Casino Journal Editor Paul Doocey. Here are some excerpts from that conversation:
It’s been a few months since Aristocrat Technologies purchased VGT. How is the merger into Aristocrat progressing?
Sevigny:The merger hits its one year anniversary in October, so we are not quite a full year into it but the integration has been seamless. Aristocrat is a great company and the cultures have been a wonderful fit. A lot of people have been working together, and I can’t imagine an integration happening more smoothly than what we have witnessed over the last 10 months together.
Will VGT remain its own brand or will it be melded into the Aristocrat name?
Sevigny: VGT will retain its own identity. We have very complimentary businesses where we are focused in Class II with lease-only relationships and they are in Class III with some leasing. They do what Aristocrat refers to as ‘gaming operations’ where they have they have large concept games they put into a reoccurring revenue relationship.
Aristocrat has wonderful technology and they are adding a great deal of value to us as we plan our new product development looking forward. We have a lot of extra expertise in the mechanical stepper real games, which they are leveraging as they move forward with some new initiatives for Class III. So there are really a lot of complimentary capabilities between companies and a very positive common culture that facilitates the transfer of all of those skills back and forth.
At this year’s OIGA show, VGT had a major new product launch with Mr. Money Bags Easy Money Jackpot. Could you please explain the concept and how it is unique to the marketplace?
Sevigny:This is a perfect example ofthe two companies working together and coming forward with some wonderful results. Aristocrat has a couple of different progressive technologies, and we decided to use one that they refer to as MFP. We wanted to have a wide area progressive within VGT for years, and here we are nine months after the merger actually putting a wide area progressive product on the floor in Oklahoma. We will be showing it at OIGA, but we also have 200 Mr. Money Bags Easy Money Jackpot games going live this July. This is a life changing jackpot, and it is all Class II. This will be available to any tribal casino with the rights to conduct gaming. They can put our Class II progressive on the floor and offer these jackpots that start off at $250,000 and grow from there. It will be the best wide area progressive available in Indian Country across the United States. It is really a wonderful outcome of bringing our two companies together.
So VGT wanted a wide area progressive format and Aristocrat technology help put that idea over the top…
Sevigny: Wide are progressive is something VGT had desired for a long time. But quite honestly, we take these things for granted… it is no small technology to pull something like that off. Aristocrat has been doing it for years; so something the VGT had desired for a long time came to reality when Aristocrat acquired VGT. One of the first things Jamie O’Dell, our CEO, said when he took over the company was we are going to get a wide area progressive in place for VGT and that has happened very quickly.
What is really wonderful about our wide are progressive is that this is going to go on top of the games that are so loved across Oklahoma. All of our classic Class II legacy games—Mr. Money Bags, King of Coin, Lucky Duck, Reel Fever, Crazy Cherry, Hot Red Ruby—these are the games where you are going to get all the great play you had before with the throw-in of a life changing jackpot. It is really a great product now.
So VGT’s wide area progressive will run on established, successful games. Is that the primary market distinction for the new technology?
Sevigny: There are two things. One is that it is on top of established games. But this jackpot is added to the payout the consumer has always enjoyed about the games. So unlike many other wide are progressives where you get those big jackpots at the expense of some of the entertainment value of the game and its primary jackpots, you get it all… you get everything you have always received from playing these fun games, and now you get a big jackpot on top of it. It is a heck of a deal for consumers, and the casinos are really going to enjoy offering this improved value to their customers.
Why did you decide to launch this game at the OIGA event in Oklahoma?
Sevigny: Well, Oklahoma is really the heart of VGT’s business. We have over 20,000 games on the ground across the state. That is where we are really driving the coin-in activity, and that is where the install is going to happen first and in its most robust way. Of course, all this activity that is now happening in Oklahoma will be available anywhere… we can have installs in other states and they can have the benefit of a spinning meter that is being driven by games all across Oklahoma.
So plans are in place to push this wide area progressive beyond the Oklahoma Class II gaming market…
Sevigny: Yes, it can go anywhere…. This is a Class II progressive available anywhere that you can play Class II games.
What is VGT’s growth plan going forward? Is there anything else coming up beyond the wide area progressive launch?
Sevigny: There are some opportunities we are evaluating because we now have access to such expanded product development capabilities with Aristocrat. Our primary product has been the mechanical reel stepper and we have been very dominant with that. We have not been as successful with our video products, and that is where aristocrat is actually quite strong. So there are opportunities for us now to port Aristocrat games into VGT games.
Aristocrat also has an exciting new cabinet called Helix, which is for video games. We are evaluating our ability to put Class II products out on that cabinet.