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Video Gaming Meets Gambling As Skill-Based Slots Launch Nears

An arcade-style gambling machine with a video game controller attached to it sat in the corner of a ballroom at Harrah’s convention center in Atlantic City as gaming industry analysts and executives took turns playing GameCo’s first-person action video game. 

It was late May, and Blaine Graboyes, CEO of the game developer GameCo, was showing off his company’s video game gambling machine (VGM) for the first time at the 20th East Coast Gaming Congress and iGaming Institute in Atlantic City. 

“We want to bring the arcade to the casino,” Graboyes told GamblingCompliance during the two-day conference. “We are working very hard on being in the casinos before G2E (Global Gaming Expo) in September.”

Casino games that play like “Space Invaders” or “007 Legends,” based on the James Bond movies, in which a player’s performance can materially influence the outcome, are closer to reality for casino owners in Las Vegas and Atlantic City. 

Nevada adopted landmark regulations to allow skill-based games last year, and New Jersey followed suit in February.

Graboyes told GamblingCompliance his company plans to test its first machines in the fall at four Atlantic City casinos, as it seeks regulatory approval to deploy them on a permanent basis.

“We will be announcing our launch partners within 30 days,” Graboyes said in a phone interview on Tuesday.   

GameCo is a small, privately-held video game manufacturer that develops video slot machines that are similar to electronic poker or blackjack but feature popular video games. 

The New York-based company licensed a “first-person action engine” from publisher 505 Games for a “skill-based experience” aimed at casinos first in Atlantic City. 

“We are working with partners to come up with rollout strategies once our games are approved,” Graboyes said.

Graboyes declined to identify the Atlantic City casinos where GameCo will begin field trials, or any specifics of the games being tested by Gaming Laboratories International. 

He said his company’s machines combine skill-based video games with real-money casino floor gaming, to create a new category of gaming device: the VGM (video game gambling machine). 

“We are engaged in conversations with movie studios and television companies about potential games,” Graboyes said. “We are developing a driving game based on a popular movie series. Sports are another big opportunity.”

Details on what movie titles or television shows might be attached to any deal are not yet available. When asked if GameCo’s forthcoming driving skill-based slot was based on the popular Fast and Furious movie franchise, Graboyes fell silent and declined to answer.

In terms of sports-related VGMs, GameCo could develop a home-run derby for baseball fans, an end zone challenge for football and a three-point challenge game for basketball.

Graboyes said GameCo is looking to develop games that meet a casino’s core demand of “finding a replacement for a slot machine to attract younger players, but keeping up revenue.”

The company is one of several start-up groups that are seeking to capitalize on the new regulations of Nevada and New Jersey, which break with the previous paradigm of requiring the outcome of slots games to be determined purely by a machine’s random-number generator. 

Based in Glendale, California, Gamblit Gaming was founded in 2010 as a digital gaming company and makes skill-based games for casinos.

On its website, Gamblit shows off a number of free-to-play games for smartphones or tablets, but none of the games posted online are real-money gambling games.

Among the free-to-play games listed on Gamblit’s website are Spinnr, which is a trivia game that allows players to wager real-money to solve a word puzzle with three guesses, and RAZE, a game of “strategic conquest, intense conflict and world domination.”

“We are trying to fill a need in the casino industry,” Eric Meyerhofer, CEO of Gamblit Gaming, told GamblingCompliance.

“Our big focus now is Nevada,” Meyerhofer said. “By the end of the first quarter [of 2017], we expect to be done testing on casino floors in Nevada.” 

Meyerhofer said Gamblit was also working with several video game publishers interested in developing skill-based games for casinos.

Gamblit in September announced a partnership with Wicked Witch, an Australian mobile game developer, to produce a casino version of the developer’s mobile game Catapult King, which has been downloaded more than 27m times.  

The development of slots blending social or video games and slots comes as casinos-resorts have spent billions of dollars to upgrade their non-gaming amenities in the last decade to appeal to a wider demographic, and yet fewer people are gambling.

In 2015, gambling accounted for 36 percent of total revenues in Las Vegas, compared with 61 percent in 1990.

Meyerhofer said what his firm’s games do is attract younger players, and even “tech savvy people in their 50s” who do not play traditional slot machines. 

“Slot machines are a more passive experience,” Meyerhofer said. “It was just clear that product wasn’t trending young.”

He said that it is not about cannibalizing existing slot machines and their revenues, but instead it is about creating a new market for skill-based slots.

Graboyes agreed about the opportunity for skill-based slots in the U.S., saying there are 93m adult Americans who play video games.

He said that GameCo was committed to New Jersey as the first jurisdiction to launch its VGMs, but it is in the process of completing its license application in Nevada. 

So far, only Massachusetts has followed Nevada and New Jersey in developing regulations to accommodate skill-based slots in casinos.

Graboyes said that GameCo is looking at 15 other states with commercial and tribal markets, as well as worldwide distribution of it games, in the next year. 

“We are excited about the field tests and eventual launch of our VGM in Atlantic City,” Graboyes said. 

“The New Jersey Division of Gaming Enforcement (DGE) has been extremely supportive of our efforts to get a new generation of games into the casinos.”