Casino industry finds new niche markets

February 13, 2010 05:27 pm | Updated 05:27 pm IST - CHENNAI

The casino gaming industry, which had seen a dip in its fortunes during the economic downturn, is now betting on growth opportunities in newer markets. For casino gaming, which is a part of the entertainment business, the southern region of South America and South Africa offers enticing growth possibilities, according to Richard M. Haddrill, Chief Executive Officer, Bally Technologies.

According to him, countries such as Italy, Brazil, and the U.S. are now looking at casino gaming as an important medium of generating income for their region. Beginning with Macau, the Asia-Pacific markets are planning to expand this business into their country in a big way. Ditto for Eastern markets, where Bally is re-entering in that market, both from the machine and the system perspective.

Bally Technologies, one of the oldest slot machine manufacturers in the world, is looking at expanding its business international by setting up centres for both slot machines and systems. Casino gaming is considered the biggest revenue generator for any country. When the disposal income is more in a particular country, gaming will increase the spending habit and, in turn, increase the revenue of the state through taxation.

During general economic recession, the casino gaming industry also saw a slow down. Last year, the revenue came down by 5 per cent. However, the industry sees revival through newer markets. Though the existing markets had seen a dip during the economic slow down, the newer markets are bound to expand and grow. For example, countries such as Brazil, Italy and the U.S. are seeing markets for casino gaming, says Mr. Haddrill.

Bally has gaming and systems businesses going strong. Though it is among the top four in the gaming segment, it is the leader in the systems business. When the company entered into systems business, there were no other players. This has given Bally an edge over others. However, gaming, which includes making of slot machines, design, art, graphics and creation of games, generates the maximum revenue for Bally. Out of the total revenue of $883 million during 2009, nearly $630 million came from gaming; $220 million from systems and the balance from its own-run casino business.

Gaming is still a revenue generating business in this industry. There are many new markets that are looking at this business in big way. In Macau, the slot market is still growing. The slot machines are used for the first time in many of these countries. So, the market for these slot machines will never go down instead it is bound to increase, he adds.

Ramesh Srinivasan, Ballys Executive Vice President of Systems, says that gaming business is located in seven centres across the world. Chennai and Bangalore bring a major portion of gaming business for Bally. Similarly, systems businesses are located in eight centres across the globe. The two centres in India concentrate on both the systems and gaming business.

The Indian centres also handle the R&D for the Ballys business, which is one of the 12 such R&D studios around the world and the only one in Asia. According to Mr. Srinivasan, Ballys system business is fast growing. It took up this business as a core competency, while other competitors entered the business little later in the market. Ballys system is the backbone for most of the casinos across the world. Ballys system is operating and maintaining the casinos back office operations. According to him, the Indian centres are contributing to both the gaming and systems businesses. Out of 2,800 employees across the world, about 700 are located in India. The company plans to recruit over 100 people by the end of the year, he adds.

The company is also looking at introducing Internet games in the casinos. Works in this regard are being done from these centres.

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