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After a three-year-plus enforced hiatus, DigiDeal is back on the gaming scene, and it’s a welcome return. President and CEO Michael Kuhn tell Casino International where they’ve been and where they came from…
When DigiDeal was bought by IGT a few years ago, many in the industry – including Casino International – thought they would go on to great things. A change at the top of the company meant that didn’t happen, but now the company is out on its own again and the order book is bulging. President, CEO and co-founder Michael Kuhn talks to Casino International about DigiDeal’s past, present and future.
Casino International: What was the genesis of the DigiDeal?
Michael Kuhn: I had a manufacturing background, nothing in gaming though other than the fact that I was a quasi-professional blackjack/poker player. There was no other exposure to that industry though. A former partner and co-founder of the company came to me just after I had sold a company that I had built up, with an idea to enter the industry with an automated card shuffler. After several approaches and me trying to thwart him, I said to him, “I’m fed up of hearing about the cards and what an issue they are, and the shufflers – if they’re such a big deal, let’s get rid of both!” That’s where our conversations on digital cards began. We started researching and filing patents, and the first few years were spent working on intellectual properties and working out the market, and building a prototype, and we went from there. We now have over 37 patents around electronic table gaming, and 20-plus pending.
CI: What lessons have you learned as the company has evolved?
MK: Two things we have learned are persistence and resilience. When we started we went to see several gaming experts, and I mean the upper echelons of the industry, and our first indication were that we weren’t going to get any reasonable intellectual property coverage – which was not true at all, we have very strong IP – and that we would not get it approved as a gaming device – again, not true – and that players would never play it anyway. That was our homework, and it could have been discouraging. We were so far ahead of the bell curve that even the regulatory bodies did not have a category for us, they didn’t know what to classify us as. We were the first in our class in many, many jurisdictions; we still have areas where there’s concern as to whether we are a multiplayer slot or a table game and which classification we fall under. There is now so much flexibility built in the product that we can fit pretty much any jurisdiction out there by conforming the product to meet the requirements. We satisfy all the GLI 11s and 24s and variety of other table game or multiplayer slot requirements; we can be fully-hosted, semi-hosted, fully automated, we have connectivity between tables so we can run progressives, we can do tournament play, we can do a huge variety of things.
We still run into obstacles, the industry has changed so much but there is so much more acceptance of electronic multiplayer tables. The players always accepted it but the operators just didn’t offer it because we struggled to speak to the right person in the casino – should we talk to the slot manager or the table games manager? What we found was, the economics of the tables made so much sense that we should have been talking to the Chief Financial Officers instead! DigiDeal tables offer so much more control, flexibility for players, instant gratification in terms of larger jackpots, to play novelty games and sidebets with no worries about collusion… Operators can hire a different person to be a dealer, as they don’t have to train to deal Baccarat or whatever – you have to train them to be a host instead and put some life back into your casino floor.
CI: How have things changed from the early days? How has your approach changed?
MK: We’re just coming in to the opportunity to go to casinos and show what we can offer with this type of platform; in the early days, we were forced to go to places where electronics or multi-electronic gaming devices are acceptable because they are not allowed to use paper cards. That’s what proved to operators that people will play; operators have always known that whatever they offer on the floor, with the proper promotion will most likely get played. Players are not unsophisticated, they want more, and our games offer a variety of things; you can do multiple side bets that you can’t do with felt, you can measure the player’s performance without the guesswork or sophisticated tracking equipment… You can see the industry is kind of following our path now.
The players like the technology, and it’s obvious with internet gaming, iPads, laptops and PDAs that it’s not about the technology, it’s about the operator accepting and taking advantage of the technology.
CI: After you were acquired by IGT a few years ago, you seemed to disappear – what happened?
MK: We were pretty much off the radar for just over three years. The relationship changed after TJ Matthews was no longer CEO and President of IGT; his vision was that IGT could provide an entire casino floor to a customer, including electronic table games and multiplayer experiences. It didn’t come to fruition because the difference between selling slots against actually selling to the pit, is huge. A slot is relatively simple to sell, but with a table game you may have a Pai Gow versus a Blackjack, a three-card poker… staff have to be trained to work with that as they do with any other pit game. That training process never made it into the sales force, and it was easier ultimately to just not sell it.
We’ve proven that, because since our breakup we have placed over 100 units and have a backlog of 150 units just since September. Our numbers are phenomenal in just a few months.
CI: But in that time, other companies have moved into the space haven’t they?
MK: That’s what happens. We stood on the sidelines watching it take place and were very frustrated through it all. We thought it would help us with regulatory issues, licensing, worldwide distribution, so we could get out ahead of the rest of the market and create an unbreakable stronghold – and the opposite actually happened.
We’re excited by our opportunities now though, and those recent sales show we’re back, and moving forward.
CI: Did the struggle to fit into set boxes in regulatory terms help create the flexibility that you’re now well known for, in product terms?
MK: It definitely helped us establish strong intellectual properties. It caused us to take a broader look at what we were doing; we wanted to be a table game, associated equipment. We had no intention of being a multi-player slot device, in certain territories. We looked at the licensing issues, being a table game versus being a slot device, and that led us to our relationship with IGT – we thought the two could piggyback each other but it didn’t work out.
The technology is quite different now though, touchscreen technology has really moved on and what we’re capable of now with our products is quite different in terms of functionality. So technology took us down another path and opened up those doors. Even when we were out of the limelight, we continually developed and worked on our products and properties, and we’re hoping to show some of that product at G2E Asia – if not there, at G2E in Vegas this year. We’re working on some really interesting multi-game products which have a different twist to what’s out there right now. We’re exploring the server-based arena, and broadened our base; we’ve built the foundation in our platform to take on much of what the technology allows and that the industry is going to be looking at going forward – and that’s as well as what we’re doing with more traditional table games.
CI: Is Asia a strong market for you – or will it become one?
MK: Asia will be a nice market for us. We’re getting our ducks in a row over there, our allegiances in place, and our first installation is forthcoming. Vietnam is a strong market for us, we have a lot of product moving in there; we’re excited about a lot of markets in the region.