SPIELO: 20 Years In The Game

It is always a time for celebration when someone moves from their teenage years into adulthood. This June, SPIELO turned 20. Looking back on its past two decades, it’s impressive how much this humble Canadian company has already accomplished: SPIELO has more than 30,000 gaming machines installed in 36 jurisdictions across North America and Western Europe.

At SPIELO’s inception, its primary focus—and reality—was to gain a large market share in a vast majority of government-sponsored jurisdictions. Today, SPIELO has a long and impressive list of customers, including Atlantic Lottery, Rhode Island Lottery, Delaware Lottery, West Virginia, Alberta, Saskatchewan, Iceland, Oregon, New York State, Montana and Pennsylvania, just to name a few. In 1996, SPIELO gained international leadership by providing solutions to Svenska Spel, the Swedish national lottery. Today, 100 percent of all Svenska Spel VLTs are SPIELO cabinets. SPIELO is also a member of the Gaming Standards Association, and supports open industry standards such as the Game to System (G2S) and System to System (S2S) protocols.

SPIELO has also grown and expanded into areas beyond the VLT and lottery market. In 2004, the company expanded into both the U.S. and Canadian casino markets, and SPIELO products are now in more than 120 casinos. This expansion and SPIELO’s continued success have led to a series of important events that poised SPIELO for the position it’s now in.

Based in New Brunswick, Canada, SPIELO is a capable and proven organization with over 420 employees. While Eastern Canada may not immediately evoke thoughts of high technology and a highly-skilled labor pool, according to SPIELO, its home base in Moncton rivals Las Vegas, Reno and Atlantic City in its advanced information technology workforce devoted to the gaming business. It may come as a surprise, but Moncton was even short-listed as one of the world’s Top Seven Most Intelligent Communities in 2009. Many large high-technology firms, both Canadian and international enterprises, find their home there. “In Moncton, we have access to IT resources in a business-friendly, competitive environment,” noted SPIELO President and CEO Victor Duarte. “With a number of universities, businesses and great resources, this has worked very well for us.”

SPIELO was formed in June 1990 by a small group of innovative professionals who saw the business potential behind a public policy that was moving toward carefully managed, legal and fair gaming programs. This humble beginning would turn out to be a solid foundation for SPIELO—a group that had the foresight to see a trend and respond quickly to a need. The company hasn’t abandoned this philosophy, and even after a whirlwind of acquisitions and mergers, it still maintains an agile existence.

SPIELO’s corporate structure and ownership may appear confusing because of organizational changes over the last few years, but it is nonetheless an important aspect of SPIELO’s capabilities—and one that shows how powerful the company has become in the gaming industry. GTECH, which is the world’s largest lottery company and processes more than 70 percent of worldwide lottery transactions, acquired SPIELO in 2004. Then, in August 2006, Lottomatica S.p.A., acquired GTECH Holdings Corp. The De Agostini Group, a century-old publishing, media and financial services company, is the majority owner of Lottomatica, one of the world’s largest commercial lottery operators and a market leader in the Italian gaming industry. In 2008, GTECH also acquired ATRONIC, completing the formation of a large, well-rounded group of gaming companies. ATRONIC brought with it a strong portfolio of licensed products, linked and wide-area progressive solutions, and a worldwide distribution network. Today, ATRONIC Americas distributes SPIELO’s commercial casino products and games to the United States market.

The group of companies under this corporate umbrella includes well-established, well-known gaming organizations that cover several gaming areas, namely VLT, lottery, casino gaming and online gaming. The group has also established a very large talent pool that can be shared throughout the entire organization, bringing fresh ideas into each sector of the market and allowing new innovation to cross over from one market segment to another. “SPIELO’s resources are excellent,” Duarte said. “Many members of my team work all over the world. They are comfortable working in North America as well as jointly going into international markets like Italy and Sweden.”

Duarte started at GTECH 15 years ago, and he was responsible for integrating SPIELO’s business with GTECH’s. “During the SPIELO integration, we had to identify areas where we could find revenue synergies and cost synergies,” he explained. “For instance, at the time, GTECH was a leader of government-sponsored central system solutions … SPIELO was at the time developing a central system on its own. At SPIELO, we wanted to provide an entire solution to a government-based system. GTECH had the same philosophy. We found a lot of valuable activity taking place in each organization, so we combined the Moncton and GTECH central system teams. This provided a large base of trained resources that could create a common system. Putting those resources together created incredible synergy and helped both companies.”

Today, on the central system side, SPIELO provides INTELLIGEN™, which is known for its security. Together with GTECH, SPIELO is now a major player in central systems, and since 2005, it has won nine of the 11 central system procurements. With unparalleled customer support, experience and financial strength, their INTELLIGEN system has a proven track record.

The relationship with ATRONIC has proven just as valuable. Because of ATRONIC America’s strong commercial casino sales force in the U.S., SPIELO started using ATRONIC America as a distributor. This has created tremendous logistical synergies, removing redundancy and placing tasks where they are best suited for completion, capitalizing on the resources available and creating an efficient system. ATRONIC’s Chief Operations Officer Ken Bossingham says ATRONIC Americas, likewise, is benefiting from a targeted approach to its markets. “We work hard every day to focus our resources in the proper areas so that we can maximize our performance in the greater organization,” he said.

Following the fine-tuning of an efficient and effective sales team came the integration of marketing functions. The most challenging aspect of this involved product-level integration. Prior to integration, both SPIELO and ATRONIC had video upright machines and a platform. Back then, the companies had been moving in different directions on content and game development strategy. However, over the past year, the two companies have developed a vision for a common platform with common cabinets.

Content Cooperation
ATRONIC America’s Las Vegas game studio is now being used to put content into a new joint product with SPIELO. While this could have resulted in less need for SPIELO’s game development lab, this strategy saw SPIELO’s content development group become a cooperative entity that can support ATRONIC and further both companies’ development potential. “We are poised, as a cooperative unit, to be a stronger gaming manufacturer,” Bossingham explained. “The message is that we’re really working hard to create a competitive environment between our game development teams. We have to make our games better every day and bring the best entertainment experience forward. Using our European, Canadian and Nevada game development teams brings the best forward.”

“Unemployment rates in Nevada are high, yet we are hiring and growing and continuing to bring talented people to our team,” he continued. “We can still leverage all of the content built in Moncton with a strong market validation and market research effort. We are chasing the vision that we are after, while maintaining one standard of excellence. We continually listen to our customers and players and need to find more ways to develop our gaming expertise and be a customer-first company.”

SPIELO’s and ATRONIC Americas’ first major cooperative effort is the Deal or No Deal Join’N Play™ linked community gaming solution. The European version was launched by ATRONIC International at G2E in 2008. This spring, ATRONIC Americas and SPIELO launched a project to update the game and target it to a North American audience, with plans to show it at G2E 2010.

Join’N Play utilizes a linked controller, GAMEBOSS™, developed at SPIELO’s facility. SPIELO’s lab created the foundational technology, which includes three components: the gaming machine cabinet, designed and manufactured by SPIELO; the core software of the gaming platform; and content that sits on top of that platform. The game math is also coordinated in Moncton, while the game designer is based at the Las Vegas studio. It is interesting that the companies did exactly what the game title suggested; Join’N Play saw two companies joining together for the common good. This is a testament to their ability to work together, cutting though any potential administrative problems to develop and maintain true synergy.

“The Deal or No Deal family of games is one of our crowning products that has performed extremely well for us over time,” said Bossingham. “We are very excited about how the technology has come together in our latest Deal or No Deal product, Join’N Play. We believe there is a lot of excitement around community gaming right now, and we have an exciting community gaming product. We discovered a number of ways to enhance anything that we’ve put out under the Deal or No Deal franchise.”

The product also includes Howie Mandel—most people’s first reference point of Deal or No Deal. “We’re obviously very excited to have him part of the new release, Bossingham said. “Market research on the familiarity and attractiveness factors of Mr. Mandel as a host, and as a host of a gaming show, shows that he scores very high on the factors that we believe will bring additional excitement. As a player approaches the game and they look at someone like Mr. Mandel, it evokes a positive response. We believe that will help the overall entertainment package.”

prodiGi Vu
Another major organizational goal was the combined support of the prodiGi Vu cabinet. The launch of the prodiGi Vu has seen extremely positive feedback from operators and players alike. A large component of the design phase included market research. Leveraging 20 years of machine design resulted in a positive, innovative cabinet. The goal was clear, but it involved a number of complicated components, Duarte noted. “When we developed the prodiGi Vu, we knew it would have to see a great many things to come together,” he explained. “Our objectives were many: a completely downloadable solution, minimize down time, make the cabinet extremely operator friendly, maximize the comfort of the player and enhance the player entertainment experience, all considering the results of player feedback.”

The cabinet’s download ability means games can be converted without having to change glass. It also features an award-winning color digital button board to allow the machine to modify the buttons for different languages, graphics or features. The entire game can be modified via download or the game software. One of the best features of the prodiGi Vu, however, involves the hardiness of the cabinet design. The first objective was to have any technician involvement minimized. With SPIELO’s history in the VLT market involving route operations in bars, restaurants and remote locations, the cost of technician involvement is considerably higher than in the casino environment. The prodiGi Vu cabinets are designed to stay running and maximize uptime. Even when technical involvement is required, the cabinets are designed to be easily and efficiently repaired or upgraded. The modular design allows the removal of many major components without tools. The high MTBF results in cost-savings for the operators.

The cabinet features a 22-inch widescreen LCD screen and fantastic graphics. Players have been very receptive to the resolution and quality of graphics. The prodiGi Vu has also seen the installation of multi-channel audio added, and it is an overall thinner machine, with a sleek design and an all-around package that leverages space and just “feels good” to the player—in the end, player comfort and ergonomics are incredibly important.

SPIELO has also innovated an additional feature called the remote play button, allowing a player to hold a tethered controller, lean back and continue to play in comfort, without being forced to lean forward over the fixed play button. The company is investigating other options to take advantage of this technology.

Set Apart
With the prodiGi Vu cabinet, an integrated design and development team, sibling companies GTECH, ATRONIC Americas, and ATRONIC International, and parent company Lottomatica, SPIELO is poised for an even more positive future. But what exactly sets SPIELO apart from its competitors?

SPIELO’s primary focus has always been in a different area. Starting as a VLT company, it built competency in an industry demanding hardware and software uptime and dominated by strict government regulations. Its casino strategy, accelerated through ATRONIC Americas, has helped it become stronger and more uniquely positioned to provide solutions. It understands the customer base, the industry as a whole, the regulations, and the commonalities between markets—as well as the differences. This results in a well-rounded view that allows it to work in changing environments.

“We have a huge parent company behind us,” Duarte noted, “yet we are very agile. For example, the Italian market for VLTs opened up last year. This 56,000-machine market is important to VLT providers, given that it will be the biggest VLT market in Europe, and perhaps the entire globe. It is very competitive, technical, and requires a server-assisted gaming system. It is fascinating from an operational, technical, and competitive aspect. We are among the first one or two companies to get products through testing phase with regulators, and we expect to be the first one or two to launch products in this market. We are poised to move forward in emerging markets, changing markets, new areas, and any dynamic environment. We can modify on the fly and come to market first. This is a testament to what we have in SPIELO.”

“The global spread and success outside of North America in the VLT side is extremely important,” affirmed Bossingham. “Italy is the big market in the press, but with Lottomatica as our parent, it provides us a certain advantage. Many of the analysts only cover the North American gaming companies, so we sometimes get left out of that discussion. But I think that we are going to be the most successful vendor. Running under the radar a bit can be an advantage.”

“As ATRONIC and SPIELO undergo functional integration, I think for me the single greatest change has been that we are North America-focused gaming organization, where we were previously much more globally oriented,” he continued. “We really stepped back and had to define what we are going to be best at, then redefine our strategic objectives, detailed execution plans, and determine where we need to focus our energies. We put our focus on measuring results, and how we will ensure success going forward. All companies need to step back and look at themselves candidly and see how to move forward—put the foundation in place to ensure future success. In the community gaming arena, future success is centered on the overall success of the product. We have to bring forward entertainment, fun, and bring that experience forward for the players.”

This is a goal that Bossingham particularly takes to heart. “That is fun and entertaining, but at the end of the day, as a leader of an organization, you really believe where you are going,” he said. “You have to ask yourself this at the end of the day in order to have anyone follow you. In many regards, we are taking baby steps and running under the radar, but we will do it right. It’s fun for everyone who is involved in the activities. There is a phenomenon regarding fun games, social games, the Internet and people playing games for free. Currently there is a real attraction to that kind of gaming. What is the convergence of the casual, social gamer to the active gamer in a casino? We have worked with a number of companies supplying these online games and are presently close to signing a deal with one company. How do we build on our core competencies? How we take the social gamer, the casino gamer, adapt and get them to converge? What appeals to the social gamer, and how do we build a solution to get them to play on the casino floor for money? We are in a position to answer these questions and bring forward a product to help drive that convergence.”

Coming Together
“We have an advantage in bringing our resources and companies all together,” Duarte said. “We have leveraged the entire infrastructure and brought the best products forward that have the best chance of success. We have synergy. We can leverage the economies of scale through all areas of business, and share where possible. Identity and branding are two of the largest challenges. We have in the past, and continue to in the present, worked to position the casino business so people know who we are and where we are going. We are maximizing our resources around the globe to provide the best solutions for the operators and the players, no matter what market or location they may be.”

To do business in all of these different areas, there are great economies of scale. SPIELO has always been a company that hits the ground running, and it maintains an agility and talent base to ensure that its momentum never slows down. The seemingly complicated mixture of companies, market segments and countries around the globe is a tremendous asset. All of the parties involved capitalize on the potential while reducing obstacles and duplication. This is a testament to the small Canadian company with humble beginnings on the Atlantic coast. It has become part of a much larger entity over the past two decades, and promises to become an even bigger global player in the future.

Happy birthday, SPIELO!

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