One of the main attractions at last week's Southern Gaming Summit was the expo, where a variety of vendors showed off some of the newest slots, table games, and technologies. Conspicuously absent from the exhibition floor this year was Motley Fool Stock Advisor pick Shuffle Master
Some of the greatest innovations are coming from the slot manufacturers. Server-based gaming continues to be a hot topic, though the impression I get from the slot makers is that the prospect for replacement demand is somewhat overhyped by Wall Street. The transition is expected to be somewhat gradual and will affect perhaps a quarter of the slot floor at first -- far from the previous mass replacement spurred by ticket-in/ticket-out (TITO) technology.
Industry Rule Maker International Game Technology
IGT also brought a full menu of new games, the most noteworthy of which were the new Wheel of Fortune and Indiana Jones multilevel progressives, both of which included a new widescreen monitor.
Another noteworthy WMS product is the Transmissive Reel, which is an LCD screen layered over a five-reel mechanical slot. The interesting thing about this is that this technology is basically standard in Japan's pachislot industry, which currently consists of about 2 million pachislot machines. Recent Motley Fool Global Gains wild card Sega Sammy is the pachislot industry leader, consistently accounting for one-third of unit sales, and manufacturers and distributes pachislots for the two largest slot manufacturers in the world -- IGT and Australia's Aristocrat Leisure. The wonder is that IGT hasn't yet adapted this technology.
Aristocrat has also been a key video slot innovator. I believe the company is responsible for such game features as the Reel Power ("243 ways to win") and games that offer 50 lines for $0.25. The thing that gets me about the company, however, is that the games are way behind in terms of graphics and sound. By that measure, Aristocrat is the Atari 2600, while everybody else is to the PlayStation 3.
Speaking of Atari, Bally Technologies
The table games business is a difficult one, and the only company really making any money at it -- Shuffle Master -- is having accounting problems. That said, there were probably about a dozen new games on display, even in Shuffle Master's absence. The theme continues to be poker-related games, and the vast majority of the games involve some bastardization of Texas Hold'Em. In general, these types of games have done well lately on the strength of poker's boom. However, there's a lot of competition in this space, and many of the new games don't rate to make it.
Otherwise, truly innovative games are rare and also face an uphill battle. The problem for any new game is that you have to convince gamblers to invest time to learn how to play a game that is designed to beat them. On top of that, you must convince gamblers that they like the game better than existing alternatives. This year, the Spin N Win game utilizes a pair of eight-sided spinning tops, and you simply bet on which side either or both tops will land on. The game passes the simplicity test but may not hold up against the competition in the casino.
Electronic table games
Electronic table games are another hot spot in the industry. Of course, Shuffle Master -- the leader in this space -- wasn't there. So far, one of the most successful products has been Shuffle Master's Rapid Roulette, which uses a live dealer with electronic betting stations. This product has already made its way into many of the Harrah's-owned
Another area is electronic table games without dealers. Aristocrat brought its own version of the dealer-less Roulette game, called the Megastar.
Lastly, the best electronic table game of the show was PokerTek's
While it's not clear to me that one table is necessarily that much better than the other, PokerTek has both the first-mover advantage and now a key partnership with Harrah's Entertainment, which owns the World Series of Poker. There was actually a third company with a new electronic poker table at the show, though I don't think the product is particularly competitive with either PokerPro or Lightning Poker.
For more on the Southern Gaming Summit:
- The Future of the Mississippi Gulf Coast
- From the Southern Gaming Summit: Part I (2006)
- From the Southern Gaming Summit: Part II (2006)
Fool contributor Jeff Hwang is an expert blackjack player and a semi-professional poker player. Jeff owns shares of Shuffle Master, International Game Technology, WMS Industries, and Sega-Sammy. The Fool has a disclosure policy that can't be beat.