“Enabling online legislation at a federal level in the US would be helpful”

How has this year been for Aristocrat,  including in your country, Australia?
Aristocrat operates around the world. We have a large list of customers in Australia as well as in the Asian region, Macau, Singapore, the Philippines, which are very large markets for Aristocrat. I’m responsible for North and South America. In North America we are one of the four/five major suppliers, both in Canada as well as the US. In Latin America, in some markets we do well. Argentina is a strong market for us, as well as Chile and Uruguay. We are just emerging in Colombia, where the business has grown significantly over the last three years, and we are very pleased with that. We also continue to be strong in markets like Peru. In Mexico we are doing well in certain parts of the country. The country is strong in the Class II market, but as we are not a Class II supplier we do not have a strong footprint in places like Mexico City, but in Monterrey our games do extremely well, so we are very proud of what we have achieved over the last couple of years.

Aristocrat over the last 3 or 4 years has been in a turnaround situation, where we have an emerging team come together, new technology teams, and particularly over the last 18 months we have started to see the benefits of a lot of investments that we’ve made. We’ve traditionally invested in products for the high-volatility-low denomination market. We’ve expanded and now 30% of our games are low-volatility. These games can have a strong visual impact. There’s our entertainment series, so a player can come and play for a long period of time but without losing the focus on our core gamblers. So we still want to be the providers’ choice for core gamblers and grow our entertainment business in the world – hence we are launching about 30 games over the next 12 months for the entertainment environment.

We’ve also made a lot of investments in our leased games, our participation games. We’ve launched Tarzan, one of the most successful games in North America, into the Latin American market over the last 8 months and it has been a hugely successful product. It is doing incredible numbers at Palermo horse-racetrack (in Buenos Aires, Argentina), and in Conrad Punta del Este (Uruguay). 

We are going to expand our footprint. Apart from Tarzan there are other games in that cabinet footprint, brought into Latin America. 

There are some special new game designers that help us to continue in our jackpot base where we have our core strength. One of our game designers worked for IGT and is considered a legend in the industry because he created the Wheel of Fortune series, Sex and The City and the original Hangover game.  So he is producing a lot of very exciting games for us at the moment. We have a whole new series of Batman and Superman movie games and also several new licenses for him to develop for us. As well as our mechanical reel stepper he is building for us, he also built the Rolling Stones game and the Flashdance game.

We are really looking forward some strong output coming forward on the products’ side within our business. As you know we are also a big systems’ provider in North America. We have the largest footprint of any supplier. We have 294 casinos across North America, so that’s another important part of our business and, more recently, we started to make a lot of steps in the digital and social space. We’ve started to provide content and we’ve also applied a technology platform and completely revamped it. 

And what are the main markets right now for interactive gaming?
There are many markets in Europe, particularly the UK, that ‘s been where we sold games before, but typically for other platforms.  IN the last 18 months we required other platforms completely redeveloped, so we really focused on North America, so we are selling a Free-to- Play platform in 6 different states today in North America on a free-to-play basis and we still gonna go live in New Jersey, with real-money wagering, and also in Canada.

What do you think, as a manufacturer, about the state-by-state approach regarding online gaming in the US?
There are several models to be followed. It is logical for us to go state-by-state in the United States just because of the way the gaming law is. There is a constitutional split existing between the federal government and the state governments. Obviously, enabling legislation at a federal level would be helpful; it would make things quite simple. I think any games that require liquidity, like poker, will suffer on a state-by-state basis, because Nevada, Delaware, two of the states that enable legislation for poker, are very small in population. So I think until there’s federal legislation or states like California or Florida to create gaming legislation, we won’t see the right number of players of poker. Or if medium-sized states like New Jersey, Georgia, Michigan create state compacts  where they can share liquidity I don’t think poker can be a successful game. In Europe poker has become much more profitable. 

And what about Latin America, where regulators don’t see online gaming as a business?
I think there are many illegal players in Latin America today that are doing very well.  I think Brazil has a large illegal sports-betting market. I think in Mexico the market is not legal but is not illegal, is not prohibited. I think the market has a good size. I think that, again, country by country there has to be positive legislation. At the moment, there is no legislation. I think Argentina will be huge market, just like the casino industry. Mexico will also be a huge market. Brazil, if they allow online gaming, will be the biggest market maybe, and there are lots of opportunities, but we are waiting. 

Do you think the Soccer World Cup and the Olympics will boost casino regulations?
My thought here is that if ever in the history of Brazil there was a good chance or a good political reason to promote gaming -  and not just casino but also sports-betting, or wide area gaming, or street gaming – it is now. With both the Olympics and the World Cup this is the perfect moment to create it. Now it’s too late for the World Cup, though not for the Olympics, but with all the lobbying that has been performed, I don’t see any positive results. 

What are your expectations for next year in Latin America?
We have had a very positive growth in this market. We think that growth will continue. We have a small market share in Mexico so we think there is a lot of opportunity to increase it. In Colombia we will grow our presence in a more meaningful way, so I think for Colombia and Mexico we see serious growth opportunities. I think Argentina, despite the political situation, is becoming more stable, and we think there is an opportunity to expand. And we will continue to have a strong presence in Panama, in Peru as well as in Argentina, Chile, Uruguay and Paraguay. That would be excellent for us. I think there are some changes in licensing legislation in Chile next year, and that’s very exciting again.