Casino Data Systems considered a merger play

Gary Thompson

Thursday, Feb. 18, 1999 | 11:52 a.m.

Two top officers resigned their positions at Casino Data Systems Inc., prompting speculation the Las Vegas-based slot manufacturer is about to merge with another game maker.

Casino Data said Howard Yenke has resigned as chief executive officer and Diana Bennett as president, chief operating officer and a director. Casino Data Chairman Steve Weiss will assume the CEO duties, while Chief Financial Officer Lee Lemas will take over the COO position.

"A company like ours needs to be mean and lean and focused," Weiss said today. "And it's hard to accomplish that if it has too many top executives.

"Thanks to Lee's efforts, we have strong internal processes and financial controls and a good financial sensibility that we didn't have in the past. And I have years of gaming experience and a vision of where I want to take the company so it can realize its full potential."

The management changes come in the midst of a widening power struggle between slot makers and casino companies, some of which are backing a move to make revenue-participation games illegal in Nevada.

The battle has some casino operators threatening to pull such games off their gaming floors, and slot makers mulling strategic moves to counter the threat. One result could be mergers or acquisitions among slot makers to strengthen their positions.

"A corporate restructuring in most cases involves top-level executive disagreement over how best to proceed," said Dave Ehlers, chairman of Las Vegas Investment Advisors Inc.

"It may that Steve Weiss wanted to 'sail his own ship,' since he owns about 2.6 million shares, or about 15 percent of the amount outstanding.

"It may also be that the services of Yenke and Bennett were no longer going to be required because of a potential purchase or other corporate change," Ehlers said.

"I'm inclined to believe the company, in view of its new Bandit game platform and very successful Bingo game, combined with its substantial engineering capability, may have substantial value to a potential acquirer."

Weiss didn't disagree.

"I think we're in the driver's seat right now," the Casino Data executive said.

"If you want to compete in the markeplace in video gaming, Silicon Gaming is having well publicized troubles, International Game Technology doesn't have a high-end video platform and while their company has some great strengths to it, they're not known as a great game-content design company," Weiss said.

"So far, Bally Gaming's Game Magic platform has been a disappointment and its parent company Alliance Gaming is also having well publicized problems.

"Contrast that with WMS Industries, which seems to be doing a lot of things well right now, and Casino Data Systems becomes a good strategic partner," he said.