Slot makers create second industry trade group to boost political clout

David Strow

Wednesday, June 7, 2000 | 10:42 a.m.

Ten of the gaming industry's largest slot manufacturers are forming an association designed to give slot-makers a unified voice in the political and regulatory arena.

It's an effort, organizers say, that will bring the same kind of political organization to slot manufacturers that casinos have had through the Nevada Resort Association and the American Gaming Association.

The Association of Gaming Equipment Manufacturers brings together a coalition of fierce rivals, particularly International Game Technology and Chicago-based WMS Industries. Other members include Shuffle Master, Mikohn Gaming, Bally Gaming and Systems and Anchor Gaming.

Bob McMonigle, executive vice president of IGT and president of the new association, acknowledged there's a history of strong competition -- and litigation -- between many of the members. But he said the slotmakers learned a lesson in the 1999 legislative battle over revenue-participation slot machines.

Other issues followed soon after, including calls by Sen. John McCain, R-Ariz., for an investigation of so-called "slots for tots" -- slot machines with themes that could be appealing to children.

"You may fight with your brothers and sisters, but if someone picks on them, you step forward for them," McMonigle said.

Slot makers found themselves put on the defensive in the Nevada legislature in early 1999 after the Nevada Resort Association pushed a bill that would have banned the practice of offering slots to casinos on a purely revenue-participation basis, rather than outright sale. After a protracted battle, the manufacturers were able to head off this effort, but ended up giving key concessions, including a provision that requires them to pay a share of their lease payments in gross gaming taxes.

"That shows what can happen when you don't have a united voice," McMonigle said. "When we go to the legislature and speak as an industry ... we're speaking as a much stronger body than we would independently.

"Hopefully we won't face any of those issues in the future, but they may come along."

But McMonigle added that the organization wasn't formed to fight the casino lobbying groups.

"We can work closely with them on issues that affect all of us," he said.

McMonigle said other needs will be addressed as well, particularly the issue of tracking and helping shape new gaming regulations in states across the country.

"When you have 15 to 20 (gaming) jurisdictions, plus Canada, there's a lot of new issues that affect all manufacturers that come up periodically," McMonigle said. "Issues can come up in any jurisdiction that affect how we operate, how we're able to deal with our customers. Some issues affect all of us negatively. Now we can speak with one voice and resolve those issues in the future."

The organization is temporarily based in the Las Vegas headquarters of Shuffle Master, McMonigle said, but should soon hire an executive director and find permanent office space in the Las Vegas area.

"We want to be close to where (our members are)," McMonigle said. "We would probably have people here, and work through relationships we all have in Washington with (federal) issues as they arose."

The organization isn't related or competitive with the Gaming Manufacturers Association, a coalition of slot makers and casino operators working to develop software protocols that can be used across different companies' slot machine software platforms.

"GAMMA's mission is very cut and dried, to promote and support standards for gaming equipment," said Marcus Prater, vice president of communications with GAMMA. "They are different goals, and should complement each other."