Phil Clegg looks at the tightening grip that VLTs have got on the industry
The rise and rise of the video lottery terminal in recent years has been one of the big stories of the industry.
All the spotlights are currently on Italy, which continues to roll out VLTs at a steadily increasing pace, but the Czech Republic has been an excellent VLT market for years now. The US state of Illinois has recently opened up and Greece is expected to follow suit soon. Moves are also afoot, albeit in the early stages in Austria, Spain and Germany.
The thing about VLTs is that governments like them. They like them because invariably they are interconnected and that makes it easy for the government to exert a degree of control. And the tax income has proved to be very attractive too, which is why troubled Greece has chosen this path.
The technology has also come on in leaps and bounds. Server-based systems are far more stable than they were in the early days and easily robust enough to do the job required.
VLTs are, however, causing serious problems in some areas for casinos and AWP operations. Italy's four casinos have expressed concern about the potential damage the VLT roll-out could do to their slot revenues. In the UK, AWP operators have expressed outrage at the 'unlevel playing field' created by machines in licensed betting offices.
There are many companies now offering VLT solutions, among them Amatic Industries of Austria. The company's Multi Lottery Terminal is a fundamental solution in the server-based and server-monitored gaming market. It combines security, transparency, simplicity and flexibility. All features and mathematics are performed by the server, leaving the gaming machines to simply portray the game from the server. The game server handles the complete process online in real time, including the machine payment management system.
Security is key to the solution. It incorporates a 128-bit SSL encryption and offers the true benefit of remote maintenance. Updates are done in real time, such as firmware, drivers and system patches, thus maximising machine uptime and therefore contributing to greater machine revenue and profits.
Being server-based, this complete solution is not limited to VLTs. It is also available as a complete internet-based solution. Thus the Amatic game mix can be offered to customers of all gaming environments: casinos, VLT and online.
The VLT solution from Amatic comprises of five components. The first of these is the game server which performs random number generation, calculates gaming outcome decisions, links a whole family of servers and software together (such as game logic servers, database servers, gaming machine software update servers, game machine software and ticket validation software in a high availability environment) and supports and manages game play payment and game win.
The second is the gaming machines that provide the real gaming experience to the player, incorporate a banknote reader, TITO printer and RFID reader for player authentication and cash card functionality. Third is the inspection unit, which incorporates a touchscreen and is operated by gaming personnel to pay out gaming wins and equipped with barcode readers to control and validate ticket win and RFID equipment for personalisation.
The fourth component is the management and information workplaces, which are designed to allow use on any commercial PC with browser function. These offer a host of reporting features for a multitude of purposes, such as financial control, marketing and sales planning and budgeting. Information can be tailored to the requirements of the local jurisdictions, offering a transparent, controlled gaming environment and thus generating the required tax reporting details. Also, problem gamblers are monitored and can be approached in good time.
The fifth and final component are the games themselves. There is an extensive library of high-performing games which have been tried and tested successfully in many countries and jurisdictions.
Synot of the Czech Republic has been operating VLTs since 2004 and started manufacturing them in 2005. The entire terminal production process is completely under the company's control, which means that Synot is able to react more flexibly to the suggestions, needs and wishes of its customers. It also allows the company to be cost effective in production and thereby make the produce much more competitive.
The main product is the range of interactive video terminals, covering around 50 games and six different cabinets. The company's best market is its domestic Czech one, but it also does well in Slovakia having a total of 15,000 units in these markets. Synot had a historically strong position in these markets previously with its AWPs.
The Synot VLT product is completely server-based, which means that each game is decided by the generator on the server. Therefore, the company can do all updates remotely, upgrade other system administrations, switch machines on and off and control cash in real time, as well as controlling the working hours of individual arcades and other functions.
Synot has recognised a trend in the Czech Republic, where around 40,000 VLT terminals are operated, for operators running more than one system are tending to administer them from one platform. The trend is also being seen in Italy as well. The company also expects that systems will be used for advertising campaigns and loyalty systems.
The key element is absolute control over the system and money inserted into the terminals or paid out. This has been especially important in the Czech Republic, where there has been a history of stealing from machines.
Synot believes that the AWP business has been hit by VLTs. “AWPs have been pushed out of the market because there is almost no control and management in comparison to VLTs,” said a company spokesperson. “AWPs will never leave the market completely as many players and operators will return to this type of machine, but they will never reach the popularity that they had a couple of years ago. As in other industry fields, progress and technological development cannot be stopped in the gaming and lottery business.”
Synot is due to launch a new product at the Forbes show in Prague - the Black and White cabinet. This is a completely new terminal with an ergonomically shaped button panel and the possibility to choose from two different configurations - double screen or triple screen. And the new cabinet will have five brand new games.
“Unlike the competition we do not use so-called 'skins,' which are graphic clones of already existing games,” said the spokesperson. “These five games will be brand new and customised for the individual markets they are intended for. The games have been designed in close co-operation between two development teams - Synot and Boss Media. We used the best from each team: Synot brings knowledge of the market and players and Boss Media its expereience of game development and creation.”
Synot is not involved in the Italian market, concentrating instead on its domestic market, but the company is watching the situation in Greece. “In Greece the question is: how will it happen?” said the spokesperson.
“Information from Greece changes every day, so it is impossible to adopt a strategy. We are in touch with several Greek companies and operators, but often even they don't know what will happen next. We keep monitoring the situation because we are active in surrounding countries and believe that our position in this region is good.”
With 20 years' experience in international VLT markets, Spielo International is uniquely positioned to provide an end-to-end solution tailored to Italy's new VLT network gaming model. As a result, Spielo's flexible central system, player-tested cabinet, scalable wide-area jackpot product, large library of games and dedicated support and service are expected to earn the company a minimum 24 per cent market share when its programme is fully implemented.
“We have applied dedicated resources to tailor our VLT, central system, jackpot and games to the specific needs of Italian players, concessionaires and regulators, and to ensure that our Intelligen Central System could deliver these required special features and functionalities,” said Walter Bugno, CEO. Since Spielo entered the market, it has undertaken an aggressive roll-out schedule and really made the most of its leading position. As of July 2011 it had deployed more than 8,000 VLTs in Italy. In total, the company expects to supply at least 5,400 more VLTs to the market by the time the current licensing programme is complete.
Spielo's installed base currently represents approximately 38 per cent of the total VLTs operating in this market, which the company puts down to the successful performance of its system, its games and also, importantly, its jackpot system.
E-gaming was established in 2005 with a plan to devote itself to producing only a server-based VLT system. The result was the Multi Lotto VLT system, which was followed by the Multi Bonus linked system. The company's main market is the Czech Republic, where is has 15,000 units in operation.
The company produces the complete system - cabinet, game content plus VLT OS and server-based system - so it can provide a complete customised product for each client. The client has total control over cash flow and governments can also monitor the systems. With the E-gaming system it is easy to remotely set everything, a fact much appreciated by its customers. The company is currently preparing new products for the Czech and Slovak markets in co-operation with a well-known global gaming company.
MEI designs and produces peripheral equipment that help VLTs operate more effectively. Since its entrance into the gaming market in the late 1990s, the company's portfolio of coin and note payment systems has helped improve product reliability and, ultimately, the player experience.
Its signature product is the Cashflow SC note acceptor, which has raised expectations for note acceptor performance by redefining industry expectations for jam rate, acceptance rate, security and total cost of operation.
MEI participates in VLT markets globally. The markets that have garnered the most attention of late are Italy and Canada due to the large investments that are currently under way. Several jurisdictions in the US operate VLTs as well (Maryland recently opening and Illinois on the way).
The reliability associated with Cashflow SC make it ideal for distributed markets were the installed base is spread across large geographic areas.
“We see continued growth for VLT networks,” said the company's Mo Fahey. “Financial concerns are leading government officials to determine the means to generate additional revenue. The Italian VLT network is response to earthquake relief. Greece is under strong consideration to generate much needed revenue for the country. And several US jurisdictions are also looking at additional tax revenue. The second factor, which is driving efforts in Canada, is the opportunity to implement new technology that will create new efficiencies in how data and revenue is collected and used to maximise operations.
“VLT manufacturers continue to improve the player experience. Games are becoming more dynamic and better able to adapt to player desires. And the systems are increasingly reliable, while delivering valuable information that drives performance and maintenance information to the properties to improve operations.”
Regarding the effect of VLTs on the AWP market, she said: “VLT networks should work hand-in-hand with AWP and FOBT to offer players a diverse experience. We think you are seeing this today in both the UK and Italy. The players will migrate to the game, as well as the stakes and prizes, that best fit their individual interests.”
Merkur Gaming has been manufacturing VLTs for three years and offers an innovative product portfolio meeting the special demands of the VLT sector. It combines high-class multi-games featuring innovative game systems with classic games for maximum diversity. All game packages are available in a state-of-the-art slant top cabinet as well as WB4 casino cabinet, both offering maximum comfort and therefore ensure customer loyalty.
Merkur's innovative VLT products have already been well established in such European countries as Czech Republic, Slovakia and Italy. “The VLT sector is the most promising one in Europe,” said managing director Peter Amling. “More and more countries are following the trend and opening up VLT markets. The state authorities benefit from this particular sector, as they have better control and regulation possibilities.”
He sees traditional AWPs being gradually replaced by VLTs in the arcades over the next few years.
JCM Global has been making peripheral devices for the VLT market since 1990, when it introduced the World Bill Acceptor. Since the company has followed up with other award-winning products including the Universal Bill Acceptor and iVIZION.
JCM recently won a contract for Resorts World New York City at Aqueduct, which will be the single largest placement of iVIZIONs to date, as the facility will have 5,000 VLT devices when it is complete.
The company predicts continuing growth in Italy. “The consensus is the market place will have more than 50,000 VLT units in operation in the next few years and we expect our presence there to grow along with them,” it says.
“Server-based VLTs have been a very positive influence on the expansion of the sector and whether VLTs are server-based or traditional configuration, JCM products are equipped to work in both situations.”
In the coming months JCM will announce a new note validator product called iPro, which is fully compatible with the UBA, and any operators currently using UBA can easily switch to iPro without any hardware or mechanical changes on the cabinets. iPro is loaded with the new sensor package using seven wavelengths, dust and liquid protected PCBs, and the industry's best anti-pullback mechanism. The low cost of ownership and the full compatibility with UBA make iPro a good choice for the VLT market.
