Mikohn readying to launch themed table games for testing

David Strow

Tuesday, Sept. 14, 1999 | 11:31 a.m.

When converted from a board game to a slot machine, Hasbro's "Monopoly" became a smash hit with slot players.

Now, Las Vegas-based Mikohn Gaming Corp. hopes to accomplish the same thing, turning the 60-year-old board game into a table game.

"Monopoly Poker," believed to be the first themed table game ever, could begin field tests at Circus Circus within 14 days, pending regulatory approval. If all goes well, the game could be ready for general sale around May 2000. It is a key step in Mikohn's campaign to become as dominant in the table game market as Reno-based International Game Technology is in the slot business.

"The table games people have been losing space to the slot floor," said Greg Colella, product manager of table games for Mikohn. "We are trying to produce very competitive products that can push out onto the slot floor, get space back for the pits.

"People who never thought they would play tables can play something that's not intimidating."

Since 1996, table win in Nevada casinos has remained steady, around $2.9 billion. Meanwhile, slot win has zoomed ahead more than 17 percent.

That's decreased the tables portion of total win from 38.2 percent in 1996 to 34.5 percent today.

That leaves an opportunity for Mikohn to exploit an ignored market, one gaming analyst said. "If you can create a way for casinos to make more at their tables, and make more bottom line, they will look to those opportunities," said Stuart Linde, a gaming analyst with Lehman Bros. in New York. "No one's really focused on the table business, because the slots are so highly profitable.

"If the game is fun, not intimidating and easy to play, you can definitely get the table players. Could a casino increase (table) allocation with cooler table games? Yeah. They'll do whatever it takes to make money."

But another analyst thinks grabbing such a huge piece of the market won't be easy.

"I'm skeptical," said Dave Ehlers, chairman of Las Vegas Investment Advisors. "I don't think it will be something that can be done overnight, or will be easy."

The Monopoly game, together with a Yahtzee-themed table game, represent Mikohn's first venture into branded products, and will be officially unveiled at this week's World Gaming Exposition. To veteran table game players, they will probably appear alien.

Monopoly, for example, replaces the standard 52-card deck with a 50-card deck of "properties," wild cards and token cards. Played like Let It Ride, players are dealt four cards, with a fifth community card in the center. The goal is to accumulate all of the properties in a color group. Players start out with one base bet, and are given the option of doubling this bet or folding before the community card is revealed.

To increase betting, the game features a $1 ante bet. This bet makes the player eligible for a progressive jackpot, hit when a player receives the Boardwalk-Park Place monopoly and the green properties in a single hand, or all five of the deck's "tax" cards.

With a minimum $25,000 progressive jackpot, Mikohn hopes this side bet will appeal to slot players as well, since it offers a jackpot of a magnitude rarely seen on table games.

"This will be the king of progressive (table) games," Colella said. "One deal of the cards on Monopoly can bring a life-changing jackpot. You don't see that on table games."

Mikohn's second table game, based on Hasbro's Yahtzee, works something like Big Six. Players place bets on the potential outcome of a typical Yahtzee roll. The payoffs range from 5-to-1 for a "Chance" roll to 50-to-1 for a Yahtzee.

One of the players then presses a button on the table to "roll" a large set of electronic dice three times. (The player is not allowed to select which dice will be held.) Players may also make bets between each roll on the outcome of achieving a set hand in the next roll.

"The brand game might get people to look at it, but the game will have to make it a successful product," Linde said.

The Yahtzee game was first submitted for testing to the Nevada Gaming Control Board on Aug. 30. If approved, the game would go to field trials at Harrah's-Las Vegas within 120 days.

The game will be leased to casinos for a monthly flat fee, rather than sold -- a break from the tradition of selling table games outright.

Mikohn estimates the theoretical hold on its Yahtzee table game at 25 percent, while Monopoly's hold is estimated at 24 percent. Both holds are in line with those offered by such specialty games as Shuffle Master's "Let It Ride" and Mikohn's "Caribbean Stud," Colella said.

Keith Copher, chief of enforcement for the Gaming Control Board, said that hold is a bit higher than the high end of the holds usually seen with new table games.

"It can vary, but usually runs (in percentage) from the teens to the low 20s," Copher said. "Some have gone a little bit higher, but they usually don't last, because the customer won't play them."

The board typically receives seven to 10 new table game application a year, Copher said. During the field trial process, the board sometimes asks designers to modify the game to lower its hold if it's felt the hold is too high, he said.

Since the hold won't be known to most players, Linde doesn't think it will scare off players. But he said that the game must be easy to pick up, if it hopes to retain players.

"If it's complicated, they won't play it, because they're losing money while they're learning," Linde said. "Why should I lose $500 learning a game?"

For Mikohn, the games represent a growing reliance on table game products, begun one year ago when it bought out Ft. Lauderdale, Fla.-based Progressive Games Inc. for $35 million. With the acquisition came the rights to Caribbean Stud everywhere except Nevada, as well as several other themed games.

Mikohn still makes the largest piece of its revenues -- 45 percent so far in 1999 -- from the sale of sign products. But table games are becoming a larger and larger priority at the company.

The PGI acquisition boosted Mikohn's table game revenue by $7.6 million over the first six months of 1999. Gaming operations, the segment Mikohn records its table games under, went from $3.1 million last year to $12 million this year.

Table games now account for 14.5 percent of Mikohn's revenues, which totaled $54.2 million over the first six months of 1999. Mikohn's net income over the six-month period rose from $138,000 to $2.1 million, assisted by the high profit margin offered by leased games.

"Mikohn is looking to form a niche," Linde said. "You can't be all things to all people. They're getting away from low-margin things, like security systems, to leasing tables. They're using their other businesses to support their (table game) activities."

Mikohn will introduce yet another new product in the table game market in November, when its TableLink product debuts at Mandalay Resort Group's new casino in Detroit. Essentially, the product allows casinos to track table game players with the same ease they now track slot players, allowing the casino to more accurately target its marketing and comps.

The base system allows dealers to enter a player's "buy-in" on a computer touch screen. An addition to the system uses chips that contain microprocessors to keep track of the size of a player's bet. A third level even allows the casino to track the cards that have been dealt, allowing a property to tell how much a player is winning or losing and if a player is counting cards.

The networked system can also be used to link table games within a casino, allowing a progressive casino-wide jackpot to be offered.

"We expect (table game revenue) to rise dramatically with the introduction of our TableLink system," said Mikohn spokeswoman Carolan Pepin.

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