Sabby Gill

In Buenos Aires, Ricki Chavez-Munoz had the opportunity to catch up with Sabby Gill, Senior Vice President of International Sales, IGT, who trots, or should one say, high flies from his base in London to Asia, South Africa, South America, and now also Mexico, after taking charge of this exciting new market, as part of the broadest executive brief in the industry. RCM: Tell me what do you think about this market, the South American market, about your product? SABBY GILL: The South American market to us is a growth market, and not to the extent I believe it was last year, so I think it single digit growth. The biggest key market for us is Argentina. We have some challenges in some of the other jurisdictions; many through regulatory changes. So we know Chile has huge potential but they’re introducing some further regulations which are going to potentially restrict our ability to put products out there. There’s places like Colombia, Peru, Panama, where we still see significant growth, new openings, expansions; challenges in places like Mexico because of the new law and regulations that are due out in January, so we are watching that space very closely to see how that market is going to look with all the existing operators and everybody. The good thing is even with all the regulatory and restrictions that we are seeing in the market, we are seeing a huge demand. So we are building a back log of machines and orders, as machines become available in the region we are fulfilling those orders and doing what we can to make the customers happy. RCM: What else can you tell us about the Argentine market and gaming preference in the region? SABBY GILL: The good thing is Argentina’s performance in the region which is still showing some progress. We’ve also introduced a fair number of what I would say are market-attuned games for the region. Mainly the high-volatility games; the bonus features have been reduced, so if you think about it, core gamblers which you tend to find more of than the entertainment player in Latin America are individuals who don’t want to have a long drawn out bonus feature. What they want to know is: have I won or haven’t I, in the quickest way they can. You’ll see with some of the new games that we ended up showing at G2E and some of the new games that are coming down here to the region, it is really stripping out all of those other features. If you look at the presentation as well we’ve removed a lot of the information and data that was around the screens and it is just pure reels, so when someone sees it they know what they’re going after. To us we’re excited about the opportunity. We’ll watch its space and see how it goes. RCM: In other markets, you’ve got a Baha Mar opening in Nassau and also the casinos in Jamaica. Your services are also going to be active over there, in those markets? SABBY GILL: Yeah. We’ll go wherever the market is open. So based on new expansions that we’re seeing, we’re seeing some of the stuff in Baha Mar, we’re seeing some of, as you mentioned in Jamaica. Jamaica is a different market for us at the moment because of some of the regulatory approvals and everything that is required there in relation to, you know are the licenses only going to be given to 5 star hotels, or operators? We know that there are a couple of operators who have got licenses but we are not really sure how legitimate they are, so we are in the process of actually going through our compliance department, and we go through a very thorough check in relation to the types of individuals, people, the operators. Especially in those regions, you know, they want a lot of financing to be able to buy the machines so we are very diligent in relation to who we put our capital out to, so we’ll continue to just watch the space, but we’ll never say no to anybody who’s wanting to buy a machine and we’ll make sure we do it diligently. RCM: Some of them also want to finance I expect other people who are going to develop the casino in Ciudad Del Este in Paraguay in the border with Brazil, where Hard Rock just got the licensed about four weeks ago, and I think that’s going to be a very interesting property, which is definitely going to be looking for some finance. SABBY GILL: Yeah and you know for someone like that where it is a Hard Rock, in those instances what we tend to do, we’re more than happy to help finance the machines but we don’t tend to finance the construction and everything else. Both people have got to have skin in the game, our belief is if people have got skin in the game of building the infrastructure and they’ve got a valid license then we’ll have the skin in the game of being able to provide an adequate financing so that people can have our machines out on the floor. RCM: This is probably the question that looks into the future in regards to the recent merger with GTECH; you experience something, would you like to put for the record that you can give us your view on the merger and integration? SABBY GILL: Yeah, from my perspective it is probably the best thing that could ever happen to both companies. This is the coming together of the largest global casino supplier with the largest global lottery solutions company. When you think of lotteries, you think of GTECH and when you think of casino gaming you think of IGT. The product portfolios of both companies are very complimentary. They have an extremely strong lottery business we have an extremely strong casino business. IGT of course does have some presence in lottery but more as a VLT provider, and GTECH through its Spielo brand does participate in the casino market. Another example of the complementary synergies of this transaction is in the interactive area. We obviously have great game content and GTECH has a powerful interactive game platform and product solutions in verticals we are not in today such as sports betting and bingo, so there are great synergies there. GTECH is not in the social gaming segment, while we own and operate one of the largest social casino sites in the world with DoubleDown Casino. So from that perspective it is an exciting story. Also when you look at from a financial perspective, the two combined companies generate combined revenues of 6 billion dollars. That is still twice as big as the nearest competitor. From an EBITDA perspective, which I think is one of the most important financial metrics, the combined company generated last year over $2.2 billion. It’s going to be an interesting year as we turn our focus to the opportunities for growth with questions such as, how else are you going to provide innovation, how else are you going to provide content, how else are you going to be able to provide really good value in return for your customers. The only way you’re going to be able to do it is if you end up with spending the amount of money in innovation and R&D, so it’s going to be an interesting time. RCM: One of the things I hear you mentioning is the Double Down acquisition in the way that DoubleDown is practically everywhere in social media gaming, that is a brand that is leading the new kind of gaming for the future. How is that going in the Latin American market? How is Double Down doing in the Latin American market? SABBY GILL: Social gaming for IGT is still one of the most important parts of the business; I think most recently we just announced our results for last year, $238 million is I think close to 28% growth year over year in relation to the increase that we saw. The thing around social gaming, and a lot of that is really regulatory dependent in a large number of jurisdictions, so where it is available we do have it available in Spanish so it is available to operators to be able to link into their casino websites, as well as available to the public. To us it is really wherever we can provide it. It doesn’t require any special infrastructure and it doesn’t require any additional investment. It is still tied to Facebook if it needs to be, and there are different ways we can configure it. Our overall view of this at the moment is that it is a strategic part of our business because one of the great things about DoubleDown has been; many of the top performing games are the IGT-branded games. We’ve also expanded and made available things like Wheel of Fortune and Jeopardy which are now being released on social gaming on DoubleDown and are the most top, are among the best performing games that we’ve seen since the launch. Any new launch you see an uptake but there’s been a bigger uptake in relation to Wheel of Fortune and those sorts of things. Also the key measurement that we measure social gaming is really around the RPU, so really check the revenue per user. There we saw 43 cents for every user and that’s been an increase, that’s been over the whole year. In Q4 alone, I think it was up at 46 cents so the real big thing around social gaming is how well can you monetize free play against pay for play and I think what we’ve been able to show when you have revenues as high as we’ve got with 238 million, is just how well it can be monetized if you have the right content. RCM: Fabulous, now finally on the Argentina situation. What’s your view on the future situation in Argentina in relation to imported machines? SABBY GILL: It’s been a challenge now for the last almost two years since the restrictions came in. The thing from our perspective is that we’re still able to get machines into the country; we’re still very committed to the region. You can see, looking around and I took a walk around the show earlier today, some of the large players have sort of deserted the show, and it’s a shame because the operators are now the ones who are really looking around at who the people that still continue, when things are bad you need to show your commitment to the operators, to the regions and do what you can. It saddens me to see some of those individuals no longer here at the show and will it change? I believe it will. Let’s just see what the future brings, we’ll continue to commit ourselves to the region, to our employees and their families who have put their faith in IGT and we’ve got to make sure to we return that faith to them and the rest of our operators, so we’re here and we’re here for the long run.