Casinos Consider Slot Strategy in Tight Market

Now that the G2E dust has settled, industry experts have had a chance to evaluate and assess the impact of new casino offerings – notably slot products – on an industry in decline.

Most experts view the latest, high-tech slot machines as "innovative" and "competitive" from a creative and technological perspective, but none of the major manufacturers unveiled a "game changer" that would significantly alter their market share dynamics.

"Ultimately, the critical driver for the suppliers in the next year will be the willingness and ability of casino operators to upgrade slots with limited capital," said analyst David Katz of Oppenheimer & Co. Inc. "The key question remains … how conservative casino operators will be."

The limited number of new casino openings and expansions over the next 12 months will make it even more critical for slot manufacturers to expand the replacement market for existing casinos, Katz said.

That might not be easy, given the current cut back in spending budgets, Katz said, adding, "The purchasing strategies in the near term remain somewhat uncertain."

What is certain is that regional casino markets, as well as tribal gaming casinos, are "larger and remain stronger" than older, more entrenched markets such as Las Vegas and Atlantic City, Katz said.

For the complete story, please see David Stratton, Are slots set to pay off?, Gaming Today, December 2, 2008.