Casino industry head: Things haven't changed much

LAS VEGAS (AP) - Things haven't changed much in commercial gambling the past year, the head of the casino industry's top trade group said Tuesday.

Frank Fahrenkopf, chief executive of the American Gaming Association, said gambling revenue in commercial U.S. casinos rose 1.3 percent in the third quarter to just over $8 billion. That's about $100 million more than casinos took in during the same period last year.

"The impact of the recession has been deeper and the recovery slower than nearly everyone predicted," Fahrenkopf said. "Consumer discretionary spending has been significantly depressed throughout most of the year, which means that the gaming industry, and others like it, have continued to struggle."

Fahrenkopf said revenues have been almost flat all year.

Companies that have a strong foothold in Asia have fared better than those that don't, he said. The Chinese enclave of Macau is the world's top gambling market, and Fahrenkopf said Singapore might soon surpass Las Vegas despite having far fewer casinos.

Fahrenkopf spoke at the Global Gaming Expo in Las Vegas. The four-day expo and conference gathers casino executives and managers with vendors of everything from slot machines to uniforms for cocktail waitresses.

Organizers say attendance is up this year, though it was down heavily last year.

"Everybody would love it to be back to where it was in 2007," said Eric Tom, chief operating officer of International Game Technology. "But if you really think about it, if you are going through this economic downturn, you're not really sure when the players are going to come back and start spending more."

Tom told The Associated Press that casino operators are playing a game of chicken against one another, waiting to see who will make the first move to freshen their slot floor.

Big, flashy games based on the Batman installment "The Dark Knight," "Wheel of Fortune" and "The Hangover" attracted plenty of eyeballs on the show floor Tuesday for their video game-like aesthetics and crowd-pleasing familiarity.

"We actually think at some point sometime in the next three or four quarters, somebody's going to want to take that first move or advantage, and then everything cascades from there," he said. "The challenge for us is we can't predict when that is. Somebody has to do it first and nobody's indicated to us that they're going to be first."

Larry Pacey, chief innovation officer at WMS Industries Inc., said casinos need to be convinced that what they're buying will improve their business, make them different from competitors and make their systems more efficient.

"They don't have to reach into their wallet and buy more slot machines unless there's a compelling reason," Pacey said.

WMS has been pushing advances to its networked games that allow multiple systems to talk with one another and play many games on a single machine. New deals will allow WMS systems to fully integrate with others sold by Konami Gaming Inc. and IGT, making it easier for casinos to pick what they like and make them work together.

Pacey said getting slot machine systems to coexist has been crucial for pressing ahead on gambling technologies and showing casinos what's realistically possible.

"This isn't where we're just telling them, 'What if?' and 'How come?' and 'Aren't these great ideas,"' Pacey said. "These are the things that are really important, are providing must-have product."

Fahrenkopf said casino professionals who answered his group's annual, nonscientific survey indicated more pessimism about recovery than last year about business returning pre-2008 levels within the next two years. He said about two-thirds of survey respondents said most growth in the industry during the next 10 years will come in Asia. They also said online gambling and server-based slot machine games will have the biggest effect on the industry in the next 10 years.

Most online gambling remains technically illegal in the United States, though there are significant exceptions. The trade group changed its position in March to support some online gambling, but it has not backed any of several bills that are making their way through Congress.

Fahrenkopf said midterm elections were generally favorable to the industry, but he doesn't know if there will be any movement on online gambling bills and doesn't think it will come during the upcoming lame-duck session.