It’s been three years since Video Lottery Terminals [VLTs] entered the Italian market. That time has seen the country’s gaming market become something of a blueprint for other countries and governments considering the many benefits of shifting to this streamlined, efficient gaming model. The benefits are many – fresher gaming content for customers, which is frequently refreshed; for the operator and regulators, the taxation and back office reporting is simple and efficient, and for the government, it makes cheating those taxes that much harder.
So Italy’s market has settled down, but what does that mean for the future of gaming in the country? At the recent ENADA show, we saw a downturn in visitor numbers and a flat atmosphere which could only really be attributed to one thing – pending legislation change to Comma 6a products. It’s one thing for a government to suggest change but any industry needs to know when it’s likely to happen as much preparation is usually needed. The Italian gaming industry is not getting this from its government and the industry, as a result, is flatlining. Sure, the VLT market is steady, but even with the announcement of new concessionaires, is there really room for growth in a country with such major economic issues?
Probably, yes. Why? Well, if the Comma 6a Plus legislation comes in to power, there is likely to be a migration of players from the 6a machines to VLTs. Part of the new legislation demands that 6a players – AWP players – must sign up for a player card, so their habits can be tracked, playing time, spend and so on, should the operator want to. This can obviously help with problem gamblers, assuming staff training is in place to back up any data analysis. But it’s also something that players are often uncomfortable with, says Martin Lucas, Managing Director, Europe and International VLT for Inspired: “You have a different player base between Comma 6a [AWP] and VLT, because VLT is a random product, where Comma 6a is a compensated product. The stakes and prizes and the reason for playing are different. But if you put a barrier into a street market like a player card, you are clearly going to put some players off who don’t want to have to register to play; and there’s a fear among some players too, they think that if they register their card then ‘they’ know when I’m winning and they’ll stop me winning too much, which is obviously completely untrue but there is this scepticism about registering details. And some players simply don’t want their playing habits known to operators, which is how a lot of people feel about loyalty cards at retail level.”
However, Martin concedes that this barrier can become a positive in the hands of a forward-thinking operator. He adds: “There are benefits though and I think the key operators will understand and capitalise on this – offer their best players a free meal, cup of coffee or whatever, and incentivise. But it will change the player base and I think it will ultimately reduce it; economic times are hard in Italy, you don’t need to give players another reason not to play. So it might be a bad thing but you can turn this into a positive; some concessionaires are looking at introducing optional loyalty schemes onto their VLTs and we’re working with some on that. But if you force it and make it law, like is going to happen in Greece as well, and there is an alternative where player cards are not required, there will be a certain amount of migration.”
But the Comma 6a market is certainly not dead, he adds: “Comma 6a was affected a little bit by VLTs though they are complementary products they tend to operate in different style venues. What you’ll see is a reduction of Comma 6a machines in larger venues, and growth of VLTs in slot halls or casino-style venues. But Comma 6a machines can be sited in places where VLTs cannot, like in bars, so they have a place in the market even though the overall numbers and turnover has reduced.”
Magic Dreams’ Diana Parasmo concurs; she told us: “When VLTs have been introduced historically it has been about finding balance, because the market has been all Comma 6a; now with VLTs operators have to find a new balance. In some gaming halls VLT and AWP [aka Comma 6a] have been co-existing, and the revenues in the Comma 6a machines have decreased.”
Because Italy was one of the first countries to embrace VLTs, it also meant that finding out what games would work was part of the challenge. Inspired is a content provider as well as platform operator – in fact, many well known slot companies are entering the market as content providers, such as APEX Gaming, Magic Dreams and WMS, and many of these leading companies are operating on Inspired’s platform; recently at ENADA Inspired, for example, showed the WMS Bluebird II cabinet running WMS games, but on their platform for the VLT market. But finding the right mix of games for VLTs was more difficult than was at first assumed by some experts, says Martin: “Our first customer in Italy was Sisal and they own a lot of betting shops, so we chose, with our first five games, to put roulette into the market because we thought it would appeal to players that would go to a betting shop, as it does in the UK, and it has worked; then we did four slots. We did different types of slots, we had a jackpot game, a freespin game, we had variety because nobody knew for certain what would work. Everybody said you have to have poker, but it turns out it’s not the most popular game for a VLT.”
Unlike traditional casino slots or AWP machines, the VLT market is not driven by licensed product, though Inspired and WMS are combining to bring one of WMS’ most cherished products to the market, Monopoly. Martin is confident they will do well, as it’s not a license bought solely for use in Italy, and it is not dependent on a hit film or star: “We’re going to be doing Monopoly with WMS which may well be the first branded game into the VLT market; premium licenses work very well in some casinos but on the street market you have to take a brand people understand and are familiar with. Monopoly is a good gaming brand, it’s a board game and people equate it to gaming. We’re also launching Bruce Lee in Italy but it’s a theme not a brand as such. Licensed games can work well in street markets, but many of our own non-licensed games, such as Treasure Island, are very popular with Italian players and we have proven in all the street gaming markets we operate in that it’s all about having the best mix of games to cover all entertainment tastes. That’s why operators choose our open platform.”
SPIELO International explains it all
The first approved vendor to the Italian VLT market, SPIELO has been in the market from the beginning and installed the first countrywide jackpot on their VLT system, as well as growing in North America and with an eye on Greece. The Lottomatica VLT network’s WAP jackpot comprises one of the world’s largest networks of VLTs connected together on a jackpot. Victor Duarte, Senior Vice-President and Chief Operating Officer, SPIELO International spoke to us about what is needed to achieve a successful gaming environment for VLTs.
Q: What regulatory framework needs to be in place in a jurisdiction for VLT product to be suitable to that market? What technology needs to be in place for an operator or jurisdiction to be able to benefit from VLT machines?
A: An in-depth, detailed set of regulations must be set up, taking into account both security in distributed environments, as well as the required technological complexity that is behind the unique player experience a VLT systems offers. The framework can be divided into two categories: regulatory needs and commercial considerations.
Before VLTs can be put in place, the following regulatory requirements should be addressed:
• All aspects of the VLT program should be certified, with controls on all of the system’s different components. These mandatory checks should be performed either by the jurisdiction or a trusted 3rd party in order to earn certification;
• Full central control of each individual machine, with the possibility of remote shut down when necessary;
• Reliable online connection on a dedicated and protected network;
• Clearly defined venue requirements (e.g. credit checks, retailer has clean criminal background, etc.);
• Well-defined, appropriate Responsible Gaming features to facilitate informed choice by players, such as: on-screen educational material about gaming, allowing players to set time and budget limits, and automatic cashout once the limit is reached.
• Clearly defined product requirements, such as support for standard protocols. For example, using open protocols, such as the Gaming Standards Association’s (GSA) game to system (G2S) protocol for communication between the gaming machine and the system, encourages the introduction of new technology. SPIELO International’s central system, INTELLIGEN, was the first ever to receive G2S product certification, meaning that the G2S protocol has been implemented exactly the way GSA intended.
From a commercial point of view, operators should consider:
• Establishing clearly defined taxation methods, as each component of the value chain needs to fully understand what is required of them and how they are to be compensated;
• Warranty repairs by certified technicians or third parties, with penalties for non-compliant fixes;
• Smooth procedures for updating software features (including new games), to be verified by the appropriate regulatory body after installation;
• Fair and transparent pay-outs, to appeal to players who are used to casino-type experiences;
• Attractive jackpots, leveraging wide-area progressive technology;
• The ability to leverage titles from other gaming channels (e.g. casino, iGaming) to appeal to regular gamers where appropriate. That said, as a matter of policy, SPIELO International develops content specifically for the VLT marketplace, developing and testing games on a regular basis with VLT players around the world. Our library includes a variety of proven performers appealing to VLT player segments (see question 5 for examples).
All of the above considerations must be thoroughly tested and sound from a technological standpoint. Solid technology is definitely a key success factor when establishing a VLT program, and the jurisdiction must choose distribution partners that can show a proven track record of developing and managing systems of this complexity. With more than 20 years of experience deploying systems globally, SPIELO International is the most experienced supplier of end-to-end VLT solutions in the world with an offering comprised of top performing games and proven software and hardware.
Q: What are the key benefits to operator, regulator and government with a VLT setup?
A: If a VLT program is well distributed, professionally run, and attractive in terms of prizes and player experience, players will consistently choose this option. This is a double win, as not only will legal operators see an increase in revenues, but the grey markets will be diminished.
The regulator has the benefit of full control. They can evaluate market conditions and react quickly, with the help of the technological partner to implement required changes efficiently and seamlessly via the central system.
The government, as well as the regulator, will see a strong rise in revenue reclaimed from illegal activities, which allows them to use these proceeds for the benefit of their population. The players benefit, not only from the excitement of the new games, but also from knowing they are enjoying a fair-play experience with player-driven Responsible Gaming options.