Inside Asian Gaming

INSIDE ASIAN GAMING | November 2011 42 GSA typically going to turn around and talk to his vendors—whoever they are and in whatever field, be it gaming, hospitality etc. Here’s what’s likely to happen. The vendors will say: ‘Here are my terms and conditions’—or restrictions. The operator’s CIO then goes back to the CMO and says ‘Here are the conditions and restrictions’. Often those do not align with the business priorities of the operator. That’s the major issue and this industry has been stifled as a result. I believe there is significantly more business growth available—in mature as well as emerging markets—if an operator has the ability to innovate and complement the product offerings available today, rather than one vendor trying to vertically offer his products to the operator [a one- stop shop approach]. That’s the old model of information technology companies like Wang and IBM. But guess what? Vendors are not experts at everything. So open standards will move us towards a horizontal approach to sales promotion [joint effort between several suppliers], competition will increase, innovation will flourish and intellectual property will be a key differentiator. The net result it is that it will apply pressure to the current pricing and new innovative models will be developed based on the success of the products. But how do you sell that idea to original equipment manufacturers when many of them are specifically marketing their services in a modular, one-stop shop way? That’s the problem. They’re not masters of all trades. There are people [suppliers] who are good at bonusing, there are people that are good at accounting, there are people that are good at database infrastructure— and yet today you as an operator don’t have that choice. So do GSA open standards allow operators to choose equipment that is ‘best of breed’ by creating an interface for technology from different suppliers? That’s exactly the role of open standards. What the operator does at the moment is to spend additional capital trying to extract [from existing technology] the operational information he needs. He puts it into a data warehouse so that he can later analyse that information from his gaming and non-gaming operations and drive his marketing. Our argument is that open standards significantly streamline access and the exchange of information. With open standards, floor-wide analysis can be done in real time if necessary, to give the most relevant and up-to-date intelligence about your business. You said at a recent industry conference that you would like to see more operators become members of theGSA. What are themain challenges in achieving that goal? The challenge is that the effectiveness of technologies used by the operator depends upon information provided by its vendors. As such, it’s difficult for operators to get an unbiased view of what the opportunities are [regarding technology solutions]. Operators are led to believe that they can only get such functionality as is within the boundaries of the technology presented to them by the suppliers. Are there currently any operators in the market that are challenging this position? There’s a senior executive in Las Vegas—without naming names—in a company that operates several [casino] properties. He is investing in outside companies [outside the mainstream casino vendor circuit] to produce solutions allowing him to use that to pressure vendors into changing. For example, if the casino has a particular piece of equipment and wants a specific kind of functionality from it, the original vendor might say ‘You can’t have that’. This casino operator then invests in the outside solution and within six months he can show the vendor: ‘Look, I’ve now got this functionality I was looking for. So don’t tell me it’s not possible.’ This executive is using that as a leverage point right now. He can easily depart from buying from those vendors and develop his own solution, proving to the industry that it can be done. What needs to happen in the industry for people to see the full benefits of interoperability and data sharing? One of the things I can see is the integration of online gaming and how the bricks and mortar people handle that. Because at the end of the day you’re going to want to share information from players and accounts, across online and bricks and mortar. The large operators are already investing a significant amount of money trying to extract the information they want, to run their business within the constraints of the products available on the market. It’s something of a Catch-22, because until the manufacturers offer slot machines with the necessary capability then the operator will not have access to all the information he wants. How would you sum up the current status of standards ‘standardisation’ in the gaming industry? They have matured. It has taken a lot longer than some other industries—in some ways a ridiculously long time. But nonetheless they are now clearly defined, they have been embraced, and the industry is moving towards using these stable standards. That’s a good sign because the operators should now feel comfortable that the goal of standardisation is not a moving target. It means operators will be able to request GSA-certified products. Canadian lottery operators are in the process of doing this. They are in the middle of a C$1 billion product replacement cycle over the next four years. Unless vendors offer products that are GSA-certified, operators cannot be assured that the solutions are truly interoperable. That restricts the functionality that allows operators to grow. In essence, what the vendors do in practice is to create a symbiotic relationship that is not necessarily beneficial to the operators. Sometimes the operator is unaware of this. But the operator is then married to the vendor’s system. If the operator wants to change system vendor it can become an expensive endeavour. The marriage is beautiful, but the divorce is ugly. That’s the problem.