Future Predictions Prospects Bright

29 October 2003

More than 23,000 people affiliated with the industry attended the 12th annual
Global Gaming Congress & Expo G2E held in Las Vegas, organized by the American
Gaming Association (AGA) and Reed.   Some 700 companies presented an array of
new products designed to entice gamblers.   Priscilla Presley unveiled the new
Elvis slot machine by Reno-based International Game Technology (IGT) designed
to display footage of 14 Elvis concert selections via a video display screen.

Issues addressed in more than 100 seminars:  problem gambling, unattended children/minors,
second-hand smoke, how the Media shapes the public image of gambling.   Al Martinez-Fonts,
assistant secretary for private sector coordination at the US Dept of Homeland
Security, shared his insight on how the post-Sept 11-world presents new challenges
for American businesses in gaming.  Other security-related discussions focused
on guarding the safety of casino customers, advanced surveillance systems and
protecting the casino's operations.   CNN's Emmy Award-winning talk-show host
Larry King caused much laughter when hosting G2E's annual State of the Industry
panel discussions.   He informed National Indian Gaming Commission (NIGC) Chairman
Ernie Stevens that he had always suspected the Indians were really Jewish like
King.  When Stevens made the remark about the role of women in casino management:
"Our chiefs don't do anything without first checking with our women, "King,
doing his shtick all the time, was quick to quip: "Further proof of my Jewish
theory."    Stevens added that the industry's federal regulator, NIGC, revealed
that 330 Indian gaming facilities generated almost $14.  5 billion in 2002,up
14 percent from the 2001 total of $12.  8 billion. 

"The high end is alive! It could be better, we think it will be in 2004,"said
JP Morgan casino industry analyst Harry Curtis."  Las Vegas is very successful
as a city ripping conferences away from other cities," said MGM Mirage's President
and CFO, Jim Murren, extolling Mandalay Bay's new convention center."  Our company's
bread-and-butter high-end business is improving."  MGM Mirage controls about
60 percent of the Strip's big-bet action."  The business is coming back," said
Murren, citing the months following the terror attacks of Sept. 11, 2001 as
the segment's low point.  Major gaming companies were bullish in their comments
on prospects for the Strip and the Las Vegas locals market.  Mandalay Resort
Group President/CFO Glenn Schaeffer said: "The most important thing anyone can
do is create jobs, even though most politicians don't know it.  The jobs casinos
create are not fast-food jobs, but jobs you can grow in and support a family.
Now, for the first time since the 1990s,the issue is becoming the number of
new jobs that will be created. 

The Casinos of Year 2020 Future Shock seminar: Bruce Row, founder of Renaissance
Casino Solutions, said: "Inevitably, the casino floor will mimic technology
found outside the market.  The casino industry lives on trickle-down technology.
Common platforms and industry standards will lead to more plug and play."  Scott
Kreeger, VP Station Casinos Green Valley Ranch, said design and development
will be driven by five to 10year old technology and economics."  The most interesting
technology is integration of player reward and loyalty incentives.  Slot machines
will become personalised to the player allowing for continuation of progressive
play thereby creating ownership game play."   Kreeger explained. "  Customers
will want machines that are less volatile.  They will come in and want entertainment
to play for a certain amount of time.   Like other forms of entertainment, players
are going to demand the same amount of entertainment time for their gaming dollar."
The success of Station Casinos is their firm belief in the award of player loyalty
and slot machine play. 

Major predictions: that security issues will increase, become more complex
and movement from game-centric to system centric will drive this.   Future technology
realities, slot machines will become multi-function, network-centric, computer
industry standard comms protocols, single wireless network connections, and
multi-state progressive games that allow for larger payouts.   Eventually, we
will see games downloaded directly from game creators/suppliers, diminishing
the need to physically replace machines on the slot floor.   Bob Luciano, president
of Reno-based Sierra Design Group, said: "We lag behind most technology-driven
businesses because economics rule in casinos and we live in a regulated environment
that didn't anticipate such changes."  Player tracking is likely to evolve where
systems cover the entire property, retail locations, shows and restaurants.

Slot makers at the Gaming Investment Forum were optimistic: Gaming will proliferate.
Deutsche Bank analyst Marc Falcone said suppliers would continue benefiting
from domestic and international expansion, along with the introduction of new
gaming technology and favourable demographic trends for long-term growth in
the casino industry.   Merrill Lynch VP David Anders emphasized that investors
love slot makers because "intellectually they make so much sense." 

Highlights of other seminars included three arguments in favor of expanding
gaming: generating new tax revenues, creating new jobs and expanding tourism.
The new driving force is job creation. "With unemployment numbers up, the job
creation element is beginning to manifest itself again," said Steve Rittvo,
president of The Innovative Group.   He predicted that Maine, Maryland, Kentucky
and Pennsylvania are most likely to pass measures to expand gambling by early
2004.  American Gaming Association President Frank Fahrenkopf said the industry
must emphasise the jobs argument, and chances are good it will be as effective
as in the early 1990s."  When governors and legislators look at the jobs created
then, they will see a tremendous impact on local economies."  Chuck Brooke,
vice president of International Game Technology (IGT), warned that the industry
is captive to the political process."  Legislative and initiative petition action
are highly dynamic right now."  While governors and state legislatures are pushing
to legalize gambling in new jurisdictions, liberalize regulations where it is
already legal,  casino companies will keep the ball rolling because according
to Chuck Attwood, chief financial officer at Harrah's, "the pearl is worth the

Merrill Lynch vice president David Anders reminded attendees that efforts to
expand gaming stalled in 2002/03 because "a lot of US states became victims
of too many fingers in the cookie jar.  Too many entities tried to grab part
of the opportunities and that muddied the water."  Glenn Schaeffer predicted
Las Vegas on the upswing."  The rule of the Las Vegas Strip is that room rates
go up 5 percent a year, unless there's a catastrophe.  We're back to normal,
back on the upward curve where we belong."  Schaeffer and other CFOs are not
worried about the effect of California tribal casinos on their Strip properties,
but it is predicted that less developed markets in Laughlin and near the border
could suffer.  Schaeffer is planning Project Z, a new resort at the northwest
corner of Russell Road and the Strip."  Our destiny is on the Las Vegas Strip."
Schaeffer plugged his recurring role in the new NBC television drama "Las Vegas,"
and joked: "NBC probably won't put out a show on its fall lineup called 'Indian
Casino.'  "Gaming does not define Native American Tribes, but rather Tribal
Governmental gaming has provided a means by which Tribes are realizing economic
diversification, financial stabilization, proper infrastructure, and education
goals for current and future generations of Tribal members," noted Deron Marquez,
chairman of the California-based San Manuel Band of Mission Indians.  "Furthermore,
Native Americans have historically been portrayed in television and movies in
a manner that is derogatory and as such, we would not wish for a television
show of any sort." 

Goldman Sachs analyst Steve Kent, said that industry business trends seemed
healthy."  The two major themes for the G2E: the strengthening of Las Vegas
trends, we are seeing stronger room rates, better occupancy, more convention
traffic than last year, and slot manufacturers have unveiled their new line
of games with huge queues at the booths.  We think that the stock and earnings
momentum of the Vegas operators may continue."   Finance chief Maureen Mullarkey
said IGT is investing more than $90 million a year in R&D."  Chances are
good gaming restrictions would be liberalized in California, Maryland, New York,
Pennsylvania, before end 2004 thus boosting slot machine sales."  It looks like
gaming markets are poised for expansion, with 450,000 unit sales likely worldwide
in the next three years,  compared with 750,000 units already installed.  Deutsche
Bank revealed that gaming will spread domestically, and projected an installed
base of 1 million slot machines by 2010 in North America alone. 

The Interactive Gaming Pavilion highlighted the premier online gaming suppliers
of software and website products/technologies, major exhibits: Boss Media, Cryptologic,
Densitron, Integrated Games, Outbound Systems, Casino Careers Online, Interactive
Gaming Council, Gaming Floor and The River City Group.

Marlene Prendeville is a member of the International Federation of Journalists.
She has an MBA from London University and Trinity.  Contact her at Tel: 00-1-702
369 4138 prendeville@cox.net 534 Tam O'Shanter Drive, Las Vegas, Nevada 89109.

Related Links
Global Gaming Expo (G2E) 2003