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October 25, 2014

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An end to SHFL

The end will come sometime between now and Dec. 31.

So, too, will the beginning.

SHFL entertainment, the company formerly and famously known as Shuffle Master, will cease as an independent entity. The end and the beginning will come after exactly 30 years, about 2,000 employees and more than $1 billion in revenue. The end and the beginning will come when Bally Technologies, the slot and systems juggernaut, finalizes the $1.3 billion acquisition announced in July.

This Las Vegas marriage was approved by the boards of both companies, blessed by the Federal Trade Commission and ratified Tuesday by the shareholders of SHFL. All that remains is final signoff from a few industry regulators, including the Nevada Gaming Commission. But make no mistake, we’re getting hitched. Nothing short of toxic glue on the invitations will stop this wedding from taking place.

Life comes down to a few moments, as Charlie Sheen said in “Wall Street,” and one of those moments for me occurred April 19, 2000, when an executive named Brooke Dunn offered me the job of running Shuffle Master’s table games division. I didn’t care much at first for the business or the people — nor they for me, I suppose — but as the days turned into months and the months turned into years, they became something I couldn’t imagine living without.

But my start at SHFL (pronounced “shuffle”) came well after its birth in 1983. To understand the full story, you have to go back in time, which is fitting because its origin was indeed an anachronism, a relic of a bygone era when one man and one dream can transform an industry from the outside. Quick, can you name the other billion-dollar gaming supplier started by a long-haul truck driver? Trick question. There isn’t one.

John Breeding, the founding father of our company, didn’t come up with the idea for a card shuffler while standing behind a blackjack table; rather, he was sitting behind the wheel of a tractor trailer. He then scrounged up money from friends and family — some of whom remain investors today — scooped up a young, mustachioed Romanian named Attila Grauzer to lead the development efforts, and set up shop in the basement of his home just outside Minneapolis.

The rest, as they say, is history. From the humblest of humble beginnings, Shuffle Master evolved into an empire, with offices in Las Vegas, Vienna, Buenos Aries, Gibraltar, Sydney and Macau. The sun may be setting on our autonomy, but it shall never set on our legacy.

We will bow out as the worldwide leader in card shufflers, proprietary table games and electronic table games. We will bow out as one of the fastest-growing slot machine companies in Australia and the fastest-growing slot machine company in Asia. We will bow out with a fledgling Internet business that was entered into with such enthusiasm that it prompted the name change last year to SHFL entertainment.

There are larger companies in gaming and there are more successful ones, but in my view there has never been one more innovative and more committed to winning.

And that will transfer to Bally. We will evolve from being part of a tremendous small organization to being part of a tremendous large organization. It’s like boxing, and we’ve just gone up about three weight classes. These are big boys and they punch hard. Bally is the second-largest publicly traded gaming supplier in the United States (behind IGT) with 3,400 employees and a market cap of $2.8 billion. Its preeminence in the realms of slot machines and casinos systems is unquestioned and unparalleled.

Gavin Isaacs, who before joining SHFL as chief executive officer 2 1/2 years ago was chief operating officer at Bally, has given us the skinny on that company’s personnel and its ecosystem. We are joining a team of intelligent professionals and fierce competitors, he says, and we will learn as much from them as they learn from us. Probably more.

As with anything new — first step, first date, first kiss — there is trepidation and uncertainty. But there is also anticipation, a percolating and tingling excitement about what the future holds. And as the end (and the beginning) draws closer, that excitement will only intensify.

Besides, amid all that is unknown, of this there can be no doubt: Gavin is right. There are a lot of smart people over there.

How could there not be? They agreed to buy us, right?

Roger Snow is the chief product officer for SHFL entertainment.

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