What Forced Aruze Gaming into Bankruptcy?

I just read that slot manufacturer Aruze Gaming is going out of business. How did this happen? I remember their fishing game with the giant mechanical fishing reel being quite popular. When is the last time a slot machine manufacturer went bankrupt?

[Editor's Note: This answer is penned by David McKee.]

It’s been so long since a major slot manufacturer went bust that both we and Deutsche Bank analyst Carlo Santarelli had a hard time remembering one. Eventually, we came up with three. There was a double-whammy in 2009 when both Mikohn Gaming and A.C. Coin were staring insolvency in the face. The latter evaded legal peril by selling the company.

Mikohn wasn't so fortunate. Its lack of fortune was so adverse that it filed a drastic Chapter 7 bankruptcy, listing assets of $263,600 against unsecured debts of $5.6 million. Mikohn had liquidated its asset base to IGT just before the bankruptcy filing. Its creditors were undoubtedly unamused, as they were left holding the bag. The company employees were likewise in the dumps; all 300 were thrown out of work.

More recently, obscure Georgia-based Lucky Bucks entered Chapter 11 on June 9. It announced that it would be reducing its $500 million debt load by liquidating its equity to its creditors. That would include 2,300 gray-market slots strewn over the Peach State. According to Reuters, the firm “suffered from increasing interest rates on its debt, an inflationary environment that reduced consumers’ use of slot machines, and a regulatory crackdown on slot machine operators in Georgia, according to its court filings.”

As for Aruze, it's keeping mum about its shutdown, which is scheduled to take effect on August 18, when roughly 100 employees will be laid off. The company’s January Chapter 11 filing blamed a “garnishment judgment resulting from a separate judgment against Aruze’s shareholder.” That shareholder is Aruze owner Kazuo Okada, former friend and partner turned nemesis of Steve Wynn and apparently the cause of the calamity.

The Wynn connection is relevant, though it's a story too long and sad to tell here. Suffice it to say that after a decade-long friendship beginning in the late 1990s, the two had a falling out in 2010 that was so serious, they started suing each other on two continents. Considering Wynn's fate over the past five years and now Okada's company's bankruptcy, neither gets the last laugh.

Meanwhile, just as this answer was scheduled, it was announced that Las Vegas-based slot-manufacturer Play Synergy will acquire Aruze’s slot business, which includes land-based and online gaming for a $7 million at the bankruptcy auction. Also, Las Vegas-based automated-table-game developer Interblock USA bid $14 million to buy Aruze's Roll to Win electronic crap game.

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David Sabo Jul-26-2023

BUBBLE CRAPS

I have enjoyed playing their shoot to win automated craps game.  I  like placing small bets and getting free drinks.

Kenneth Mytinger Jul-26-2023

Here's another example

I had the fortune (or misfortune?) of working for three companies.  In order of employment, back then, they were named Bally Gaming, Anchor Games and IGT.  (Anchor was bought by IGT, so maybe it's 2½ companies)

Anchor was the best to work for.  After the IGT takeover, still a good working environment here in LV, but big brother up in Reno was always bugging us.  Still interesting work, though.

OK, now to the punchline, back to Bally.  It was taken over by an outfit named Alliance Gaming.  They couldn't have done worse if they imploded the building.  When it was Bally, there were maybe three levels of management between us workerbees and the company President.  Everybody knew everybody.  We periodically had meetings with the big boss, where he presented lots of executive, proprietary stuff.

Kenneth Mytinger Jul-26-2023

Another example, ct'd.

Alliance displaced the entire engineering dept to a building over on Pilot Rd (apologies to those who aren't familiar with local area).  The Bally HR dept was a small corner with just three offices/ladies.  Alliance took over the area where eng'g used to be, and gutted everything.  They established their version of an HR dept, consisting of dozens of offices, each with somebody sitting at a desk, doing nothing.  Many of us supported the production lines; so lots of time wasted walking between our desks and the factory.

One time, returning from production, I see lots of security guards in/around my building.  I go in, and see everybody with boxes packing up their stuff.  I'm still thinking about some problem over on the assembly line, when my boss shows up with the bad news.

Alliance had apparently declared bankruptcy, or something catastrophic ...

Question of the Day - 26 July 2023

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