Bingo industry is hoping technology leads to expansion

David Strow

Friday, April 21, 2000 | 11 a.m.

It might be the only segment of the entire gaming industry where Las Vegas just isn't that big of a deal.

The game is bingo, played in venues ranging from church basements to the neighborhood casinos of the Las Vegas Valley. By some estimates, North Americans spend as much as $9 billion per year on the game. Just 5 percent of those dollars, at most, come from Nevada.

As much as $8 billion in bingo wagers are made in charitable games, one industry executive said. That's given bingo an image of broadbased legitimacy across the country that other forms of gambling have yet to match, bingo boosters say.

"It's bigger than casino gaming in the number of people who play," said Joe Valandra, chief executive of BK Entertainment of Minneapolis. "Las Vegas casinos are investing more, but they're still only a small piece of the pie.

"Bingo is entertainment at a very low level. It's comparable to movies or bowling (in cost)."

The bingo business community landed briefly in Las Vegas last month, when "Bingo World" convened at the Las Vegas Hilton. About 1,000 people attended the convention.

At this year's convention, the buzzword was technology. The game is in the midst of a radical transformation, from the world of ink daubers and paper cards to electronic devices that can track hundreds of "cards" simultaneously. It's also about linking games together across the continent, so small bingo halls can offer the kind of big prizes that will attract more players.

Rather than trying to put more bingo games in Las Vegas casinos, "the real growth strategy is to foster conversion from paper to electronics," Valandra said. "That's the real long-term objective here."

The international opportunity is also sizable, as overseas bingo play is growing 10 to 15 percent annually, Valandra said.

BK Entertainment's latest entry into the technology field is a color-screen, handheld electronic device. Rather than purchasing paper cards, a player purchases a battery pack with cards stored electronically. The pack then fits into the handheld device.

With this device, all a player has to do is punch in each number as it's called. The device then marks off numbers on the card and displays the cards closest to a bingo. An alert sound announces a bingo.

"Players get more time to socialize, and the pace of the game increases dramatically," said Rob Powell, BK Entertainment's vice president of marketing.

The product, which Powell dubbed "the PlayStation of the bingo industry," is most popular among younger players, he said.

"The largest player segment (using the machines) is the 18- to 24-year-old player," Powell said. Growth in this segment of the bingo business, he said, "trends right along with the growth in electronics."

A competing system shown off at the show is marketed by GameTech International, a Tempe, Ariz.-based manufacturer of bingo systems. Called "TED," the color device can play as many as 24 games at once. Players don't even have to pay attention to these games, as numbers are sent to the device by radio signal.

"If they go to the bathroom, they can take this with them," said Steve Smallman, GameTech's vice president of sales and marketing.

The device could easily allow players to play other, more profitable games, such as video poker. But Smallman said that would require the approval of Nevada gaming authorities, and the company has yet to apply for such approval.

GameTech also offers "Diamond Plus," a PC-based bingo system that allows players to play bingo and do other things at the same time, such as watch television or play solitaire.

Like BK Entertainment, GameTech doesn't derive much of its business from casinos or Las Vegas -- perhaps 2 percent to 5 percent of Gametech's $42 million in annual revenues come from Nevada, Smallman said.

But Las Vegas casinos are rabid consumers of such products. GameTech systems can be found at casinos like the Gold Coast, Station Casinos properties and Arizona Charlie's.

The reason is simple: Electronic products allow casinos to make far more money from bingo, Smallman said. Since players can play more cards at once, bingo hall handle increases -- and bingo goes from a money-loser to a profitable operation.

Smallman believes that will soon cause bingo to move from the halls of North Las Vegas and Henderson to the Strip itself.

"Thirty percent of (Las Vegas) players now play on electronics, but it's 50 percent of the handle," Smallman said. "At least half of the halls in Las Vegas are making money on bingo.

"A lot of the casinos are looking at it, even on the Strip. They aren't buying yet, but they're looking at it."

One major Strip casino is going to cash in on bingo this year. In November, Paris Las Vegas will host "The World Championship of Bingo," with $1.25 million in prize money. The championship game will offer a $1 million grand prize, a prize organizers call the first-ever million-dollar bingo pot ever offered in Las Vegas. The travel package sells for $1,499.

The prize is far more sizable than anything seen at Las Vegas neighborhood casinos, but one concept is very similar. While the game will be held on one day -- Nov. 28 -- the travel package includes a three-night stay at Paris or Bally's, leaving ample time for bingo players to gamble on higher-hold games.

The locals casinos of Las Vegas are well aware of the reasons why many players love electronics. It's a simple mathematical proposition -- a player capable of playing several dozen cards at once has a far better chance of winning than a six-card player.

To prevent paper players from being put at an overwhelming disadvantage, most Las Vegas halls limit electronic players to 24 cards per device, Smallman said. To get around this, many players purchase additional paper cards.

Though most bingo is played outside of Las Vegas, small charities can't offer the kind of prizes a Las Vegas casino can. To overcome this disadvantage, bingo suppliers are turning to networked games.

"There's a lot of potential (for computer networking) in the bingo hall," Valandra said. "Charities are small, and prizes are limited by (game) size. When you can link the games together, you can really increase the prizes."

Valandra said his company is working on a variety of ways to link games across the country and the world. Such methods include the Internet, satellite broadcasts and high-speed telecommunications lines.

A Tulsa, Okla., company at Bingo World has been doing this since 1989. Twice a night from its Tulsa headquarters, Multimedia Games broadcasts a national bingo game to 40 different tribal bingo halls. Players who can successfully cover their cards in less than 50 numbers are invited to come to Tulsa, where they spin a wheel for their ultimate prize. The top prize on the wheel is $1 million.

But tribal casinos don't hold round-the-clock games. To give bingo players a chance to play whenever they like, Multimedia introduced a network of interconnected bingo machines in 1996.

Today, Multimedia has 4,000 machines installed at 87 different tribal locations, all connected by a frame relay computer network. Players can jump in on a game literally any time they like, and the game plays until a player wins the parimutuel pool. Tribes receive a cut of the proceeds.

These concepts caused Multimedia to delve into Internet bingo. In December, it spun off GameBay.com, a Los Angeles-based Internet bingo site -- and the early results of the venture show many Internet users are big bingo fans as well.

Since many states prohibit online wagering, players don't wager on GameBay. Instead, said founder Daniel Sarnoff, GameBay visitors play for free, competing for cash or prizes of their choosing -- and GameBay derives its revenues from delivering advertising to these players.

The players' choices of prizes helps the site target its advertising with great effectiveness. If a player decides to play for a steak dinner, for example, the player might see advertisements for steak sauce.

"What you play determines what ads you see," Sarnoff said.

The concept is working well by the standards most important to Internet companies. Though the site is far from profitable, GameBay delivers about 150 million ads per month. Its traffic has increased 11 times over the past four months, Sarnoff said. An average of 2,000 players participate in each of the 470 daily games.

Perhaps most significantly, players stick around for a long time. The average visitor stays at the site for nearly 75 minutes at a time, a length nearly unheard of on the Internet, Sarnoff claims.

"We're the second stickiest site on the Internet, next to CNN.com," Sarnoff said.

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