Doubling Down: Interblock Focused on Strategic Growth

Rob Bone, Interblock president, North America, and Interblock founder and Chairman Joc Pečečnik are enthusiastic about the company’s prospects in 2015 and beyond. Photo by Wayne Wallace
Rob Bone, Interblock president, North America, and Interblock founder and Chairman Joc Pečečnik are enthusiastic about the company’s prospects in 2015 and beyond. Photo by Wayne Wallace
With a portfolio of sleek and successful electronic tables games, a strong leadership team in place and a focused plan for the future, Slovenia-based Interblock is doubling down on its market-leading status to grow its footprint in North America and beyond.

“Our vision is to be a leading supplier of electronic table games (ETGs) within the gaming sector, while providing our customers with the highest level of innovation, service, technology and products, which will enable them to remain competitive within an ever-changing market,” said John Connelly, global chief executive officer for Interblock. “In 2015 Interblock will spend more on R&D and acquisitions than in any other period of our company’s history. We strongly believe that the electronic table game segment is perfectly positioned to address a new demographic of casino player, while reducing the operating expenses of our casino customers.”

Interblock is fortunate to hold a market-leading position in this area and will concentrate much of this year on releasing the next generation of ETG products for the gaming industry, Connelly said.
“We are in effect doubling down and raising the stakes,” said Rob Bone, president of Interblock North America.

“The company’s had an unbelievable amount of success, but now we’ve got to add process and a lot of different business viewpoints to getting this company from where it is now to being the dominant market share provider going forward,” he said. “You can have a certain amount of success by having great product, but the way you service your customers, the way you have very transparent product roadmaps, the way that you adhere to business process, that’s where we’re going to be going forward so we can be the provider of choice.”

Bone, a former longtime WMS Gaming executive who joined Interblock in late March, and Connelly, who took the CEO helm in January after spending the bulk of his career with Bally Technologies, are among the newest additions to the Interblock team. Colleen McKenna, formerly with Symantec, rounds out the newest team members as vice president of marketing.

Going forward, the company is strategically focusing on new jurisdictions and new markets, “and being very purposeful when we go into those markets to get critical mass,” Bone said. “There’s no legal market globally that we won’t look at, but again it’s what’s prudent, which ones will be most impactful.”

While larger gaming suppliers may have 350 gaming licenses, Interblock has about 130, giving the company plenty of opportunity for growth. “2015 will be spent building an infrastructure of virtual highways around the world with some of the best employees to help maintain and operate them. This will then position Interblock with the infrastructure necessary to deliver additional products through this network in 2016 and 2017,” Connelly said. “Our goal is to combine our R&D efforts with new market expansions, so as to maximize our growth rate in the coming years.”

Interblock’s Diamond Roulette
Interblock’s Diamond Roulette
Right now, Bone noted, the company has 3,000 units in North America and approximately 30,000 worldwide.

Bone said he and Connelly will focus on extending that footprint. “What makes it a great partnership with me working for John is his forte is largely new market openings internationally whereas my history and experience is largely in the United States and Canada,” Bone said.

The timing is right for the company to capture a larger market share, particularly in the United States, said Joc Pečečnik, the company’s founder and chairman.

“Operators now are looking for new challenges. They are asking for the new products because they know that they need to bring something new and fresh onto the floor,” he said. “Unfortunately changing the slot floor every three months is not the way to go from a financial perspective and from the players’ perspective. Now is the time to move, and we’re ready like never before.”

Pečečnik estimates the U.S. gaming market offers about 1 million electronic gaming positions. Just 1 percent of that market would represent 10,000 player stations and 3 percent would equal about 30,000, he said, noting that in Europe the average percentage of electronic table games is about 8 percent. “And those are numbers which can really explode if we will be able to manage our product segmentation the proper way,” he said.

Interblock has already taken important steps to move the company forward, Pečečnik said, by bringing experienced gaming executives such as Connelly and Bone on board and by fostering a team that believes in the company’s business vision and opportunity.

Interblock has built a following with its line of luxury electronic multiplayer table games that include the popular Organic Roulette and Mini Star Roulette, as well as electronic blackjack, craps and baccarat products.

But in some ways the company’s success has created issues of its own. As demand for the company’s games has grown stronger, it has underscored the company’s need to grow infrastructure and its customer service and sales staff, Bone said. Plans are already underway to hire new personnel to augment its current staff. “We’re going to increase our touches, not only for new jurisdictions but also for existing jurisdictions,” he said.

Interblock’s Organic 8 Craps
Interblock’s Organic 8 Craps
The company’s creativity is at a high level, led by Pečečnik and a strong engineering and R&D team, and continues to move forward, Connelly noted.

“As a market leader within this area, Interblock has long been known as the innovator for ETGs. We will continue to bring new products, play actions, features and functionality to this sector in the coming months,” Connelly said. “Initial indications from our customers are that they want more products, not less, and see ETGs as a means by which to help transition their casino floors toward the next generation of players.”

Right now, the company is focusing efforts on its current product portfolio, which includes its popular roulette products as well as enhancements to blackjack, craps and baccarat. “There’s a lot of low-hanging fruit,” Bone noted, and inroads made in the U.S. and Canada showcase the revenue-producing power of the games.

Just Who is the ETG Player?
One way the company plans to build for the future will be to embark on research examining the demographics of the electronic table game player today.

“I think it’s important to understand who the ETG player is because that’s probably where we start to take risks in evolving them into something more,” through new segmentation strategies, Bone said. “Right now I think the market’s grown enough to where it needs to be segmented and profiled.”

With a clearer understanding of the player profiles, new gaming bonus features, perhaps a pick ’em slot-style bonus for the traditional slot player or an experience appealing to the traditional table player, can be offered where appropriate.

The research also may provide insight into an increasingly important question to the gaming industry—what can the industry do to attract millennials and other younger players to the casino floor to help deal with the aging core player population?

“Everyone’s trying to crack the strategy of what’s going to bring the millennials in,” Bone said. “Clearly it’s nongaming amenities so you’re looking at nightclubs, day clubs and certain restaurants, but I also think the gaming experiences we’re offering are not compelling to them, and so we have to find new platforms, new types of content that are interesting to them.”

Electronic multiplayer table games clearly are seen as part of the answer, because they bring a communal gaming aspect to the experience, Bone said, noting millennials tend to enjoy sharing group experiences. Already casinos are also starting to group electronic table games in branded areas to create fresh, exciting atmospheres.

Interblock’s products are pulling in younger demographics at a fast clip. “The rate of play for an ETG helps provide an instant gratification type of environment, which is very conducive to this player group,” Connelly said. “The Interblock product is also seen as the sexiest ETG in the market, which helps attract a certain type of player to our machines. We will be introducing additional products before the end of 2015, which will be much more targeted to this specific demographic.”

Both Bone and Connelly point to electronic table games’ ability to reach casino customers who might otherwise walk past the slot floor or table games pit.

“We want to profile this ETG player because we feel it very much is incremental play to the casino floor,” whether it’s a slot or table player trying something different or a millennial drawn to the game, Bone said.

Players of tomorrow will have less free time, require a greater sense of instant gratification and demand technology that is associated to their everyday lives, Connelly said, adding that the company continuously conducts market research on other forms of competitive products attractive to Interblock’s players, as well as the level of technology, graphics and user interfaces players are accustomed to using in their day-to-day lives.

“When considering these factors, you quickly realize that with Apple, Google, Samsung, Facebook and many other channels, the next generation of players are going to expect more. Either you invest and create competitive alternatives or the casino industry will have a difficult time evolving,” he said.

Interblock’s Diamond Blackjack
Interblock’s Diamond Blackjack
The Look of Luxe
One attractive aspect of the products is the design of the games, which have a sleek and sexy feel and feature components that often took many months or even years to get just right.

“It really is a premium brand. There’s a sense of panache with our electronic table games,” Bone said. “You look at the design elements of our games versus that of our competition, there’s so much thought that goes into creating a sense of esteem and prestige, and that is a compelling element to electronic table games.”

It also sets the company apart from its competitors. “If you look at our competition, especially with the consolidation that’s taken place, these are slot companies that happen to make table games,” unlike Interblock, which is laser-focused on electronic table games, Bone said. “We want to lead the trends as opposed to react to trends.”

In the past casino executives sometimes have balked at the large footprint of some multiplayer games. Today, many casino operators are more focused on optimizing the yield of their floor, rather than unit footprint, Bone said. “Some of our executions may require more space, but if [our product] earns and if it provides the associated ROI, then I think customers are more apt to embrace it.” Still, Interblock is cognizant of and responsive to concerns of some operators, he said, noting it has developed more compact designs, such as its Mini Star G5 product.

Joc Pečečnik, chairman and founder
Joc Pečečnik, chairman and founder
John Connelly, global chief executive officer
John Connelly, global chief executive officer
Rob Bone, president, North America
Rob Bone, president, North America
Operator Insights
Count Judd Boyer, director of slot operations at Parx Casino, and Ron Wong, director of gaming operations at Resorts World New York City, as Interblock product fans.

Boyer has seen firsthand how Interblock’s Organic Roulette has enhanced the Bensalem, Pa., casino’s gaming floor over the last two and a half years. “It doesn’t matter what time of the day, it is usually pretty busy,” Boyer said. “Depending on the month we usually do two and a half or three times house average on coin in,” on each of the game’s eight player stations.

Boyer said the game attracts play from both slot machine players and traditional table players.

Electronic tables are more and more viewed as an amenity to traditional tables, Boyer said. “It allows your average slot player who’s a little bit intimidated by tables a chance to test them out,” without fear of annoying an experienced table games player on a live table. Boyer also has seen traditional table players move to the electronic games to manage their gaming budgets or just to try something different. “Typically, that table is a lot less to cover than your live roulette table,” he said, noting the electronic game is $5 versus $15 for the live table.

Players also are drawn to Interblock’s attractive games. “People think it’s a really cool design. I really think that it helps bring the younger player over,” Boyer said, noting the sleek, modern form factor is more in line with what millennials are used to and that the lower price to play the game versus a table game is also appealing.

Customers also enjoy the spirited play that the communal games engender. “You definitely see people interact and have fun and high-five each other. It definitely creates a really fun environment,” Boyer said.

Players also have told him that they like the personal space afforded by the electronic table game. “It’s more of a comfortable feel. You have your own seat, your own unit, so if you’re a person who likes their own personal space, it’s the way to go,” he said.

Boyer is looking to add at least one more bank of the games at Parx.

The longevity of the game and its error-free play also has been impressive. “It’s really had some good legs. It’s a great little unit that helps bring crossover play both ways,” he said. “I think they did a really good job; I’d like to see more from them.”

Interblock’s Big Six game
Interblock’s Big Six game
At Resorts World New York City, electronic table games bring vibrancy and variety to the gaming floor, where they make up about 20 percent of the floor, according to Wong.

“Being electronic, they provide a consistent exciting game pace, as well as eliminating many of the factors that detract from an excellent customer experience,” he said. Staff members are able to focus their time interacting with customers and meeting their expectations. “Our customers delight in the fact that they can focus on their gaming, and, at the same time, share in communal excitement with the large number of positions that are provided with each game.”

Wong noted that the electronic baccarat games brought the casino an untapped incremental Asian demographic almost immediately. “And the Asian baccarat customer segment also brought with it incremental Asian slot play.”

The casino then brought in roulette, which has built up a solid base and has not cannibalized baccarat or slots.

The games are not only pleasing traditional casino players but also drawing younger players as well. “Both current players and new, younger demographics are finding electronic entertainment, video gaming and social media ubiquitous,” Wong said. “ETG acceptance is quick, especially for those new to gaming. The entry to gaming for new, younger patrons is less intimidating without the pressure of being a ‘Newbie,’ and our staff [members] are there to help them to ‘level up.’”

Wong praised Interblock for being very entrepreneurial in its relationship with Resorts World. “More of a ‘start-up’ mentality than a ‘big company’ culture, they’ve been responsive to our needs and requests, and have reached out to us to see how they can better serve our needs. We hope that they don’t lose that spirit as they get more successful and larger,” he said, noting that the company’s competitors also are knocking at the door. “Interblock will need to stay competitive by continuing to focus on their customers for product development and by delivering service responsiveness.”

Interblock, with its two decades of experience and a commitment to customer service and innovation, is up to the challenge, Connelly said. “To be a leader, you must take calculated risks and continue to push the envelope for the future. Having this foundation and team to build from, we are able to create some of the most innovative, reliable and successful products within the gaming industry.

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