Bally is a winner in the Macau systems market
The first battle for casino equipment makers in Macau was to populate the vast gaming floors of the new resorts with as much of their own slot and multiplayer product as possible. The Macau electronic games market is now maturing, contributing 5.5% of the gross last year.
The increased economic value of electronic gaming in the Macau market is in turn making the operators look more closely at building the operational efficiency of that segment and its integration into the management of the entire floor. That may involve operators making fresh capital investment to ensure they optimise their customer relationship management processes—such as the way they gather and use information gleaned from loyalty cards. It also involves maximising the efficiency of hardware management to ensure each machine taking up valuable space on the casino floor spends as little time ‘down’ (and therefore not earning) as possible.
As a result, the secondary battle for the casino equipment makers in Macau and other Asian markets is in the supply, sale and rolling retention on the floor of casino management systems. Systems require a lot of research and development effort by the suppliers, but when they’re a success they have the benefit of providing typically a better margin for the suppliers than slot machine sales, and if retained over several years by an operator, provide the prospect of recurring revenue from management contracts and system upgrades. Casino management systems are not confined to the management of electronic games. They are also used increasingly to create what is sometimes described as the ‘slotification’ of the floor, whereby tables are also centrally managed and subjected to data analysis for factors such as player ratings and betting patterns.
SJM’s Casino Lisboa, one of Macau’s legacy casinos [those built prior to market liberalisation in 2002], has recently installed its first floor management system. Properties built in Macau since 2002 have had systems installed from the beginning. But some are now reassessing their existing equipment and current and future floor management needs and are either considering replacing or are actively replacing their original systems.
Winning hand
The main winner in this new round of Macau competition appears to be Bally Technologies Inc. In January, Bally announced a deal with Macau casino operator Galaxy Entertainment Group (GEG) to provide comprehensive table, slot, and casino management systems across its StarWorld Hotel & Casino and Galaxy Macau properties. StarWorld Hotel & Casino, Galaxy’s flagship property on the Macau peninsula, will be the first casino in the Asia Pacific region to use Bally’s iVIEW Display Manager™ and Business Intelligence solutions. Installation was due to be completed in May.
Bally also has a strategic agreement to roll out its gaming management products across several Macau gaming properties operated by SJM, Dr Stanley Ho’s casino operating business. The products include: Bally Table Management Systems™ (TMS), a suite of technologies for automated table tracking; Bally Casino MarketPlace™ (CMP) casino management software; and Bally Slot Data System® (SDS) for slot floor monitoring. Bally installed TMS, CMP and SDS at L’Arc when it opened in September last year and at Casino Oceanus at the time of its December launch. In addition, Bally went live with the 40-yearold Casino Lisboa’s first table management system earlier this year.
Inside Asian Gaming caught up with Ramesh Srinivasan, Executive Vice President Systems for Bally Technologies, at the company’s 4th Asia Pacific Systems User Conference at the Venetian Macao Hotel Resort. Mr Srinivasan, one of the architects of the company’s successful systems sales campaign in Asia, gave his engaging take on the reasons for the company’s competitive edge in the systems segment.
Inside Asian Gaming: Why have you had so much success in systems in the Macau market recently?
Ramesh Srinivasan: I would probably say two factors: rate of improvement and support and services. That’s the reason why somebody makes a momentous decision, a big decision, about moving from one system to the other. Both in terms of money and in terms of managing the transition, it’s a huge change.
But when you compare us to the other vendors, the other vendors’ products are not moving forward at the rate that ours are. Five or six years ago, we made a decision to take systems very seriously.
We can move forward at a much faster pace than our competitors. And that’s what customers want. They get impatient if a system has been built and supplied to them, they ask for enhancements in the light of their operational experience but five years later the system is still the same. If that happens they [the operators] feel ‘You guys are not listening to us’. For most of the vendors in this industry, systems are an afterthought—games, tables, are a much easier way to make money—why bother with systems?
The other factor is support and services. Business systems are not like consumer systems. With cell phones, or computer software such as Microsoft Excel, when you create a product you can sell 20 million copies of it. For us life is not like that. We sell maybe twenty copies of our system in a year. If you don’t like Excel, you have help desks or online forums, but you can’t call the Microsoft engineers that actually created it. You don’t have that level of access. Here at Bally Technologies we are in direct touch with our customers. Each implementation is different. It is not an exactly repeatable process in the manner of a consumer product launch. In our case each implementation has separate challenges. So you need a lot of staying power, a lot of patience. Customer support and service becomes very important. In our view the other [systems] vendors are not taking that as seriously as we are.
Changing a floor management system is a big step financially and organisationally for casinos. What makes them decide to do it?
That’s a good question. It comes down to the operator’s level of impatience with the status quo. If you as an operator want to try new things in a management and operational sense on the floor, you may find that your existing system isn’t giving you that flexibility. In that case you’re going to look at the suppliers you think will give you that level of flexibility and innovation.
The analogy I use is this. I’m a hotel owner and buy a chair from you. Every day I sit on it and I’m happy with it. But if I’m a very dynamic kind of hotel owner, I may want to change the colour of the chair frequently to match a change of décor or design in the hotel. If you as the chair supplier say ‘Sorry, can’t do it’, that causes problems. So exacting customers, who want changes, want enhancements, want things to be done, they get tired of your product very fast.
What enhancements to casino management systems are we taking about? More data, more ability to dig down into the data?
It’s not only about more detailed data, it’s also about more promotional tools and about my system being able to do more things for my customer. For example, I think a factor in StarWorld’s decision to use Bally systems technology was L’Arc going live with our system. When you see a neighbouring casino has access to new tools via its management system, you want that as well. And it’s not just about the present, it’s about where an operator wants to be in systems terms in one or two years from now. An operator wants to know whether the gap between his or her existing system and that of a competing system is going to get bigger and bigger and whether that means the operator is going to get left behind in the market.
A way of measuring that from a casino operator’s perspective is how many times they have raised issues with their system supplier and how well the supplier reacts. If the operator feels they’re not getting the service they need, they get nervous. They start to think ‘I better make the switch now, rather than waiting another year or two’.
Are there any other systems suppliers that are going head-to-head with you in this area?
Absolutely. We had one case where a big customer left us for a competitor for exactly the reasons I mentioned. They got tired. The operator was telling us about improvements they wanted to see in Bally SDS and we didn’t have engineers to get it done at that time—this was back in 2006 The operator moved to IGT. Four years later, they moved back to us. It works both ways, but when our competitors do presentations on competitive replacements they often show what happened four or five years ago. In our presentations, we show competitive replacements we have done in the last 24 months. The trend has definitely been towards us in the last couple of years. And it’s up to us to keep it that way.
Is the work and research to maintain your competitive edge coming out of the R&D centres in India or is it global?
We started our India operation because we wanted more R&D capacity across the board. At that time, we had about 400 people in systems. Now we have about 950. It’s not only from India. We have added about 15 more people to our systems operation in the US.
Trying to run any R&D operation below capacity is the exact equal of not having enough doctors to run a hospital. Patients come in, you’re nice to the patient, but there’s no doctor to fix the disease, to create more medicine, or come up with new techniques. At that time we were losing money as a company, but the investment in the India centre was cost effective. We needed hundreds more people, and that kind of talent, in that kind of mass quantity, is not easy to hire in the US. Number one, they are costly and number two, places like Las Vegas, Reno, Atlantic City, are not primarily technology centres. My boss, Dick Haddrill [President and CEO of Bally Technologies], and I and several colleagues had started Indian R&D centres in our previous jobs. We knew how to do it and how to manage it.
The product developments and enhancements we have made in the past four years would have been impossible without India. In terms of talent and in terms of numbers they’ve done a phenomenal job. But the US R&D is also there. It has been a giant effort between the two.
After you install a system, are you able to offer operators support through analysis, either remotely or on site?
Most of our Macau office is made up of locals, Macau-born and very hard working and very intelligent. It is only a matter of them learning the trade. We also support them with our team from the US or India. We also have US specialists who come to Macau very often. Bally has created a service culture whereby if the customer wants us there, we are going to be there. We have product development and services as two separate teams. The product development people are focused on preparing the product and improving it. The services team supports the customer, helps them analyse data, works with them, installs the product and helps train the customer’s staff. The services team helps the customer become more and more self-sufficient. The biggest challenge in business systems always is the ‘usability gap’. By that I mean people don’t use more than 30% to 35% of the system. Increasing that to at least 55% to 60% of the system is something this team works very hard to do.
So, the Macau services team is getting better and better every day, and we are supported with the veterans from both USA and India.
On the product development side, how do you create casino management systems that are easily accessible and relevant?
You need to listen to your customers. And you need to ask them relevant questions or ask them to ask their people relevant questions. I would always advise the following. Ask your people to imagine an ideal world, with a system that can give you anything. What kind of challenges do you face, and what kind of reports, what kind of analysis, would you like to have? The chances are that whatever they come up with, Bally Technologies has a product that already does that.