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IN-DEPTH 4 July 2017
IGT CEO Walter Bugno: A world of opportunity
Walter Bugno is one of the most experienced figures in the gaming industry, and presides over one of its most recognisable brands. GI sat down with IGT's CEO, International to hear about his plans for expansion into new markets
By Tom Lewis

What initially drew you to a career in the gaming industry?

My first exposure to the gaming industry goes back nearly 20 years when I was contacted to join the board of Star Games, a gaming machine manufacturer in Australia which was eventually bought by Shuffle Master. I was in a completely different industry at the time, working in fast-moving consumer goods, and it exposed me to a new world. Not long after that I was headhunted to join a casino group as the CEO, at the time known as Tabcorp Casinos but now under the heading of the Star Entertainment Group. It was one of those industries that seemed to really appeal, and I’ve been part of it ever since.

What are the major changes that have occurred in the business since the completion of IGT’s merger with GTech in April 2015?

It’s been two years since we became a merged entity, and the biggest change is that we have developed a singular focus on innovation as our core driver of growth. Everything we do – the way we have structured ourselves, and the manner in which we choose to invest – is all aimed towards achieving our growth ambitions, while at the same time bringing a whole series of innovations to market. This is true of the products we have available now and the products we are developing for the future, and in short, it’s an exciting time.

What are your short and long-term targets for IGT?

To talk specifically about the international side of the business, we define IGT International as two distinct regions, alongside two sub-regions, these being EMEA, LatAm, Asia and Australia. Within those we have varying positions in terms of market share and growth potential. The European market is very stable and mature on the casino gaming side, and our goal there is to continue to offer our great content and innovations to build on our strong market share position. We are also very focused on growing our lottery business in European markets, which affords us a number of opportunities as lotteries begins to move from the more traditional channels into innovative channels through the growth of online. We now also have many more European governments looking at VLTs as an opportunity, and we are of course very well positioned globally to take advantage of that.

LatAm is a very significant market, and we are well placed in both gaming and the lottery business. There is a world of opportunity there. Growth rates are significantly higher than in European markets, and there are also some markets that are now starting to open up to gaming from a regulatory perspective. Across the LatAm region we are seeing new casinos being opened and new licences being granted, and the prospect of online opening up in various jurisdictions. Our team in LatAm has a very busy few years ahead of them.

Across the LatAm region we are seeing new casinos being opened and new licences being granted, and the prospect of online opening up in various jurisdictions
In Asia, I would say we are under-represented for the reputation that we have as a business. It’s a territory where, particularly through the efforts of our design studios in being able to develop and bring games to market that are more attuned to the interests of the Asian player, we should be able to see a very positive growth in our market share compared to where we are today. The lotteries market is ever changing and we see lots of opportunities there, and we are still chipping away every day looking for the key to the safe that is the Chinese market, with a particular view to the lottery business given that gaming is prohibited in China. We think we have more potential to grow on the lottery side in China. We have been in Australia and New Zealand for a long time – it’s a very important market apart from its size, being the second largest individual gaming market in the world, and it has also been a trendsetter for some of gaming’s biggest success stories. We want to be a strong participant in that market, and traditionally have been, and we are working very hard to regain market share in the region.

What are the main issues that you have had to tackle in the last 12 months, and do you expect to face the same ones in 2017?

When you operate in as many jurisdictions as we do, you always need to be aware and knowledgeable of the intricacies of each regulatory environment. There is no standardised process or requirements, and we constantly need to be aware and ready to adapt as a result.

Of course, with social pressures present all over the world, the issue of responsible gaming is always something that we need to be very cognisant of and well-attuned to, to ensure that we meet our responsibilities as a provider in terms of what the market and regulators are expecting.

Aside from that, I would say the inherent competitiveness of the market presents a concerted challenge – there are so many great operators and suppliers in the global gaming industry, and everyone tries to chip away at our market share, which keeps us on our toes in terms of the products that we are developing and the service that we provide to our customers. We have to be fit to keep on succeeding.

How significant a factor is localisation for IGT, and how do you attune your products for different regional markets?

It’s not just a significant factor – it’s a necessity. There is no global solution, because there is no global player. Whilst we do develop some themes that we deploy globally, we are very conscious of our market-attuned content, and we are increasingly doing so more effectively. I don’t think any operator or supplier has perfected this, but at IGT we are becoming significantly stronger. This extends beyond just the content, and into our hardware and cabinets. We have a global footprint of design studios that are attuned to helping us meet that.

Are you able to shed any light on IGT’s mobile gaming strategy moving forward?

With regards to our online focus, everything that we do is aimed at both desktop and mobile – we don’t differentiate between devices in aiming to cover the full spectrum. But, we have also started to look to mobile as a pure device for gaming, as opposed to online gaming simply being offered on mobile. One of our greatest innovations here is PlaySpot. PlaySpot is perhaps the best representative of what we’re doing here, bringing together land-based and online gaming on a mobile device.

Furthermore, looking at mobile from the perspective of an operator on the systems side of our business - which is a significant contributor to our revenue across the world – we are using mobile devices as a way for the operators to be able to more efficiently drive their floors. From supervisors being able to have up-to-the-minute knowledge of what is going on their gaming floor through the use of a mobile device, to service people being alerted when a customer has an issue, the solutions that mobile offers are multi-faceted. Mobile is now an integral part of daily life, and we have to cater for it.

Having been at ICE this year under the heading of “Innovation at Play”, can you expand on how the business is currently innovating?

We are committed to innovation across three categories. The first is innovation regarding our traditional core. We have new cabinets and lots of new content, and significant new technological advancements such as our new TRUE 4D cabinet, which is an experience that blows players away with an image that they can both see and feel.

Secondly, we have innovation that spins off from our core, for example products like PlaySpot, which presents an opportunity to enhance all the technology that is operational in casinos across the globe. Finally, we have innovation for tomorrow, such as our Race Ace Arcade game, which sees players driving a car but earning credits as though they were playing a traditional slot game. We also have a new virtual reality solution. In short, we are trying to capture the entire spectrum of innovation that the gaming industry has to offer.

What do you make of the M&A activity currently taking place in the industry? Will IGT continue to assess opportunities in the market?

To talk about the industry, however far back you look there has always been M&A across all sectors – it stands to reason that there will always be M&A activity of some sort. Whether you consider it to be consolidation or as organisations annexing new technologies or business streams to their portfolio, that’s up to external people to define as they see fit.

With regards to ourselves, we’ve had a huge task in pulling together two extremely large businesses, and have gone through improving and enhancing our business which remains our focus. Of course, if an opportunity comes up, we will assess whether it fits with our strategy.

Looking at IGT’s PlaySpot, how important was IGT’s victory at the 2016 Global Gaming Awards in winning Casino Product of the Year?

We are ecstatic with that award, as we are with any award that recognises the work of our people. For PlaySpot, it provided instant awareness of the product to a global audience. During the show here, we’ve had people from Asia, Latin America, Australia and Europe, all wanting exposure to what PlaySpot is.

What was also interesting and important to us was that it was successful in the Casino Product of the Year category. It could have been deemed a mobile solution, but the truth is that it offers far more than that would indicate.

On that note, what do you think accounts for the emphasis that operators are placing on having mobile solutions that are usable within the four walls of a casino?

It’s a sign that suppliers are moving with the times. I recently spoke with an executive of one of the world’s largest casino groups, who said that if you had told him fifty years ago that the phone would be taken off the wall, made portable and provided with all the mobile functionality we see today, he would have said you were bonkers! They emphasised that in the business of operating in a casino, one needs to be cognisant of the evolution of technology, and how their patrons interact with the world around them – if we don’t keep offers attuned to what our demographics are asking for, then we are missing out.

How do successful companies in the gaming industry set themselves apart from their competition?

It’s fair to say that everyone does it differently, and there is no silver bullet for success in gaming. The simplest way to succeed in this industry is ultimately to listen to the customer. If you bring to market what consumers want, you have a chance of success. If you bring to market what you think is right, your chances diminish, and if you don’t listen to anybody, your chances are zero. It’s as simple as that. Our organisation has been built around a couple of core principles – putting our customers first, and listening to what they want in our delivery of great content, and providing them with the best service we can.

Are there any regulatory changes you’re expecting or hoping to see in the coming year?

We’ve touched on Brazil, which is looking at regulation across the entire spectrum of gaming and presents a genuine opportunity. Japan is a market where we’re watching developments with interest. In some of the smaller markets we are always vigilant on the regulation of interactive markets, and there are some great new VLT opportunities emerging, with Colombia being one such example. Many jurisdictions are looking at significant expansionary projects, and they are all interesting to us.

What is your assessment of Japan specifically? With a view to Macau, are there many more opportunities for the gaming industry to expand at that kind of rate?

Macau is a case all of its own, and I don’t think we will see what happened in Macau replicated elsewhere. Japan is interesting – it is a very large gaming market, it’s just that it is a unique gaming market with the prevalence of pachinko. How big will Japan be? I won’t hazard a specific guess there, but I can say with certainty that it will be an important market, both locally and potentially as a tourist destination. However, in terms of its eventual size, I’d say it’s too early to call, as we don’t yet know what the eventual regulation and legal parameters will look like.
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IN-DEPTH 13 November 2017
Mexico: Bringing order out of chaos
Industry experts believe it isn’t a matter of if but when Mexico’s fundamental legislatory revamp will come to pass. However, after years of pushbacks and delays, it’s understandable to question why the situation has yet to been addressed. We looks at whether or not this fluid situation will crystallise into a solid platform for growth
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