Park Place placing order for ‘cash-optional’ slots

David Strow

Tuesday, June 19, 2001 | 11 a.m.

So-called "coinless" slot machine technology took a big step forward today, as Park Place Entertainment Corp. of Las Vegas announced it would purchase 15,000 coinless slots from International Game Technology of Reno over the next three years.

The move will mean the machines will finally begin appearing in force on the Las Vegas Strip, a market where casino operators have been reluctant to use the machines for fear of driving away slot customers. Park Place said it will install IGT "EZ Pay" slots at Caesars Palace, Bally's, Paris Las Vegas and the Flamingo, as well as its five Atlantic City casinos, beginning this year and continuing through the end of 2004.

The value of the deal wasn't disclosed, though Park Place spokeswoman Debbie Munch said the company's spending on the machines will come from the 5 percent of revenues Park Place normally allots in maintenance capital.

"It's very significant, because it signals the acceptance of cashless technology among the more tourist-oriented casinos," said gaming analyst Harry Curtis of Robertson Stephens. "That has been in question."

But Park Place and IGT were both careful to emphasize that coins can still be used with the new machines. IGT, in fact, discourages the use of "coinless" to describe the EZ Pay machines.

"We have found that cash-optional transactions are a convenience that our guests expect and appreciate," said Park Place Chief Executive Tom Gallagher. "The operational efficiencies are obvious. More important is our players' enjoyment as we reduce the interruptions and delays in filling coin hoppers."

"These machines all accept coins," said Ed Rogich, vice president of marketing with IGT. "One of the big things you want to do in Strip locations is accommodate customers with buckets of coins. That hasn't changed. It can be anything to anyone who wants to use it."

The EZ Pay system offers casinos the option of paying customers with a printed ticket, rather than coins. Customers can then take this ticket to a cashier to be paid, or the ticket can simply be put into the bill receptor of another slot machine. Machines with such systems can also be made "multi-denominational," meaning the customer has the option of playing with nickels, quarters or dollars on the same machine.

"It's going to enhance (Park Place's) customer service, which will improve their operating profits on their slot floor wherever they deploy the technology," Curtis said.

Park Place will set a certain payout threshold for its EZ Pay machines, determined property-by-property and by denomination. Customers will be paid in coins up to this amount, and will receive tickets for anything over this level.

The technology has been gaining a foothold in Las Vegas, though not on the Strip. Following a successful trial by the Fiesta one year ago, EZ Pay machines have appeared at a number of Las Vegas off-Strip casinos, including the Suncoast near Summerlin, Terrible's Casino on Paradise Road and Texas Station in North Las Vegas. To date, IGT has shipped more than 20,000 such machines to 38 casinos around the world.

But the machines didn't make an appearance on the Strip until December, when Bally's converted 100 machines to EZ Pay in a trial run. The test went well enough to convince Park Place a far larger roll-out was necessary.

As far as customer response was concerned, "one of the biggest concerns of players was that they didn't have it on more machines," Rogich said, with an approval rate of about 95 percent.

And that could cause more Strip operators to take a harder look at following Park Place's lead, Rogich believes.

"We certainly think this could set some trends for the industry," Rogich said. "There have been ongoing discussions of tests and (installations with Strip properties) ever since we put this into the market. Long-term, I think some will watch this and see how it goes. Maybe this will change their opinions down the line."

For IGT, the benefit comes not only from selling the systems, but selling new slot machines. While most new slots can accept the ticket printers, older slots can't, forcing the operator to buy an entirely new slot machine to use EZ Pay. IGT's hope is that if EZ Pay takes hold, it could speed up the normal replacement cycle for older slot machines and push up sales.

The Park Place deal, Curtis said, "solidifies (IGT's) ability to deliver over 15 percent earnings growth over the next several years."

"It depends on the place with which the operators want these machines installed," Curtis said. "While Park Place's installation will be gradual, it's somewhat faster than we originally expected."

IGT rose 21 cents to $63.94 in morning trading.