GPWA Times - Issue 21 - May 2012

COVER STORY Denmark go the way they have, because those events set the stage where we can actually go back to the people who have been using our products without permis- sion and talk to them. Now I say talk to them: We’re not a litigious company by nature. We’ll protect our intellectual prop- erty and we’ll vigorously defend it. But we’d much rather partner with them; we’d much rather find a way to work together. The biggest infringers are potentially our biggest customers. VN: Now table games I get. Are you go- ing to move in the development of on- line slot machines? CASTLE: We already have slot ma- chines. Shuffle Master has four busi- ness units. One of them is EGM. We have a really great position, we’re num- ber three in the Austra- lian market, and we might even be number three or number two in ship share, we’re doing really, really well there. We’ve got a large library of slots as well. Those haven’t been adapted to the on- line space yet, but we’re certainly looking at that. VN: Social gaming is an aspect of this. Talk about what social gaming does for a company like Shuf- fle Master, and how you manage the progress of a player from the social realm through the play- money realm, the real- money realm, and how that relationship is managed. CASTLE: First of all, my background gives me some insight into social gam- ing and what the differences are between those businesses. I would say first and foremost our strategy at Shuffle Master is to develop for-money products online as well as for-free and socially enabled prod- ucts to help our operators be successful in that space. We’ve come at this from a very different angle than most. We’re not looking to go directly to customers in the social media space. We’re looking to facili- tate our land-based and online customers to be able to go directly to the customers. VN: So in a sense it’s very different from Double Down Casino, which is going right from IGT to the player. This is you creat- ing products for the operator. CASTLE: Right, and customizing them for our customer base, so that when our products get launched, they’ll be launched underneath the flagship and brand of our casino customers, online as well as land- based. In the case of land-based casinos, where they are affirmatively legal to also operate online, they usually also have on- line sites where we can do a pretty nice circular reference there where people can play for free, level up, earn some rewards, go play online, or maybe even go to a ca- sino and use a reward that they might have earned. In the case of places where you don’t have the online regulation, but it’s still legal to do the social side, then we actually tie back to the land-based casino and offer incentives in that way. So we re- ally are focused on being a partner for our casino customers and being a strong B-to- B provider in helping them be successful in the social media space. VN: So what sort of response have you had from your U.S.-based clients in particular? CASTLE: It’s phenomenal. They’re very excited about the idea that someone is finally coming to them and saying, “We have a good solution, a rounded solu- tion for you that today gives you a way of offering somebody a product and mak- ing some money, but more importantly is focused around building your brand, bringing your brand into the social me- dia space, and helping prepare for po- tential legalization.” VN: As you look at the casino industry as a whole, how prepared are they to enter the social gaming space? Do they know what they need to know? I’m trying to get a feel for where they are. Lots of people are talk- ing about it, and I’ve been hearing people talk about it for years at this point. But the only implementation I’ve seen so far is Boyd Gaming going with social gaming as part of their B Connected Player Loyalty program. CASTLE: You’re going to see a lot more of those. You’re going to see a lot more peo- ple entering the space, for sure. I think the operators are coming at the social media space from the angle of their current business, and in fairness to them and to anybody, there’s only a handful of companies in the world that really un- derstand how to make a social media entertainment product work profitably. And they’re the likely can- didates, the Slotomanias and Double Downs and Zyngas of the world. Those companies really do un- derstand a particular way of lighting up the social media grid and monetiz- ing their customer base, and obviously land-based casinos are kind of ill-pre- pared to deal with that kind of thing. I also don’t think it’s necessarily the operator’s job to try to figure out a new market. That would be like saying if you’re an operator that had table games all your life and one day all of a sudden slot ma- chines are legalized, would you expect the operators to have to be experts at making slot machines? I don’t think so. I think it really falls to the software providers, what we currently call casino suppliers. VN: To not only make the games, but also develop the strategy. CASTLE: I think it falls to companies like Shuffle Master, Bally’s, IGT. The partners they’ve always had. I don’t want to just speak for our company. Of course we’re in this space, but we believe Where to now in the U.S. – and who’s driving ?