Progressive Gaming announces plan to acquire VirtGame

Tuesday, Jan. 25, 2005 | 10:41 a.m.

A Las Vegas gaming equipment supplier intends to solidify its bid to be a major player in next-generation casino games with the acquisition of a San Diego company.

Progressive Gaming International Corp., formerly operating as Mikohn Gaming Corp., announced Monday that it has begun negotiations to acquire VirtGame Corp. in a stock deal valued at $20 million.

In a filing with the Securities and Exchange Commission, executives with Progressive Gaming said they expect to incorporate VirtGame's technology into their CasinoLink gaming systems.

VirtGame, which last year tested software in kiosks in four Las Vegas bars, has developed gaming software focusing on the delivery of central server-based games. The company also once pitched the city of Las Vegas with a deal on an Internet casino.

Server-based games are considered to be part of the casino of the future because several games can be downloaded from a central server for use on multiple machines. Several companies are developing their own server-based systems for consideration by regulators. Server-based games have yet to be approved by Nevada regulators.

"We believe casinos will be able to increase their gaming revenues at a lower cost and provide significant flexibility in the type of game that is delivered to the patron," said Russ McMeekin, president and chief executive officer of Progressive, in a press release announcing the agreement with VirtGame.

"We also believe the future of slot games is through the use of this type of technology and is clearly within the core competency of our technology-focused organization," he said.

Progressive plans to integrate the technology into its CasinoLink systems and is developing a product called the Casino Link Game Station to be released by the fourth quarter.

"We intend to license these modules to our installed base worldwide on a recurring fee basis," McMeekin said. "In addition, we expect to continue to integrate our slot management, table management and multigame progressives along with the VirtGame modules into an integrated yet modular casino management system to be name CasinoLink Enterprise Edition."

The Enterprise Edition includes a suite of 10 software modules, including player tracking, chip tracking and slot and table game systems in addition to five new products.

Progressive currently manages 45,000 slot machines and 1,500 table games worldwide.

Company officials said they expect to draft a definitive agreement within 10 days. The transaction would require regulatory approvals.