Investor Week: The slot makers speak; More Ohio expansion

Themes! Themes! Themes! That was the promise made by WMS Industries, which plans to introduce no fewer than 55 of them between now and year’s end. I’d thought we were past the era in which slot manufacturers indiscriminately licensed every theme imaginable, but guess again. CFO Scott Schweinfurth (below) was summarized by J.P. Morgan analysts as saying, “The goal is to get new games on the casino floors as well as upgrade their existing games … to regain lost ship-share.” WMS rolled out a pair of new, sell-through games: Colossal Reels and Power Spins. It’s also trading free upgrades to a half-dozen, unspecified casino operators, in return for performance data, which it will use to market its games to the remainder of the casino universe.

Recently approved were Journey to Oz, Epic Monopoly and Clue. This summer, Super Teams and Aladdin should become available. Game of Life and Monster Series are slated for December release. WMS also hopes to compensate for a flat replacement cycle by selling 8,000 machines to new jurisdictions, including a pair of Ohio casinos and to Cordish Gaming‘s mammoth Maryland Live. Social gambling on the Internet is a low priority (only seven products available), as the company concentrates on share repurchases, for which it has set aside $161 million.

In what was described as a “fireside chat,” Shuffle Master CEO Gavin Isaacs (right) and CFO Linster Fox were “relatively positive.” The recent purchase of Ongame Network was characterized as a long-term investment, predicated on eventual U.S. legalization of Internet poker. Additional acquisitions are not off the table. Most of Shuffle Master’s gains are coming from overseas, particularly Australia, were it enjoys 20% market share. Rival firm Scientific Games is betting big on 2012 legalization of online lotteries and instant tickets. New Jersey, Ireland and Greece were identified as potential markets for Scientific’s management skills, following early success in Illinois, with SGMS possibly being up and running in Greece by year’s end. Bad weather in Italy and a regulatory bottleneck in China were blamed for “soft” instant-ticket sales in those countries.

Fresh off the debut of Grease, Bally Technologies is gearing up for a summer release of Michael Jackson, consistent with a strategy of two “meaningful brand” launches per year. CEO Richard Haddrill (left) and Treasurer Michael Carlotti reported Grease to be outperforming other wide-area progressives, to the tune of $160-$200/slot per day. Management identified progressive games as a priority area: Bally has a thousand, a third of the number fielded by WMS, while IGT outnumbers Bally as much as 15-to-1. Despite that flat replacement trajectory (estimated as 4,000-6,000 games, less than a fifth of the number that will be replaced in Canada), Haddrill and Carlotti hope to increase their North American market share by 54%.

VLT routes in Illinois continue to proceed at tortoise-like speed. Bally is now looking toward next winter as the possible time of deployment. One factor contributing to this glutinous pace is the sheer number of bars which are seeking state approval. Prospects in Italy are disappointing, countered by potential gains elsewhere, including provision of systems to Sands Cotai. While the right acquisition target would tempt Bally to forgo its low-leverage priority, it’s keeping $110 million in the kitty for share repurchases.

Finally, International Game Technology sent investor-relations veep Matt Moyer, perhaps worried at the grilling CEO Patti Hart (left) would receive. The Las Vegas Review-Journal‘s Howard Stutz has reported that IGT is in bad odor on The Street, stock pickers being puzzled and displeased by Hart’s choice of executive team. Hart needn’t have worried, as Moyer had hardly anything but good news to dispense. MegaJackpots revenues and placements continue to inch upward, as does IGT’s U.S. market share. However, slot deliveries to Horseshoe Cleveland and Hollywood Toledo could get pushed back into July-September. Causes for managerial hope included: The introduction of Megabucks to Macao (“a solid start,” with more boxes on the way); the rollout of Big Buck Hunter, which sounds like a porno but is in fact a slot game; possible new markets in Latin America and the Pacific Rim. A new pact with Lottomatica is anticipated to fast-track IGT’s penetration of Italy, with low upfront cost and high ROI projected over the coming year. Defending its controversial, recent purchase of online social-gaming outfit Double Down, Moyer pronounced IGT “bullish on the revenue traction.”

Softest opening ever?

Taking no chances with the debut of $2.4 billion Revel, ownership is scheduling no less than eight weeks’ worth of “soft opening” (euphemistically termed a “preview,” as though no actual revenue were being booked), starting April 2. Of course, Revel management could pretend to open on April 1 and enjoy a big laugh at Atlantic City‘s expense, but I somehow don’t think that would kindle warm feelings amongst potential players. The megaresort is so large — 1,800 rooms, 20 acres, three clubs, 10 pools, 14 restaurants, massive retail and convention spaces — it takes three hours to tour the whole shebang. Revel-ry doesn’t commence in earnest until May 25, with Beyoncé shaking her booty in a sort of secular consecration.

Four is not enough. That’s what casino proponents in Youngstown are saying. Rick Lertzman, late of Mahoning Valley Downs says “Phooey” to Gov. John Kasich‘s unilateral introduction of racinos to the state. Lentzman wants the whole, Vegas-style enchilada and is collecting signatures in order to put the question to Buckeye State voters this December. Penn National Gaming, which just cut another side deal with Kasich (pictured), blew Lentzman a raspberry. Faced with a Penn racino in nearby Austintown, Lentzman upped the ante to a stand-alone casino. He’ll have to collect a lot of autographs (at least 350K) and Penn likes to play dirty, but voters are liable to think, ‘Hey, what’s one extra casino, more or less?’