By Marc Saltzman

Video gaming machines are not just for fun and games. Business leaders can learn from the technology, too.

Video Gaming Technologies manufactures gaming machines for lease to casinos in emerging U.S. markets. The company, founded in 1991, makes the popular Vegas Blackjack and Treasure Quest series, using 3-D graphics, CD quality sound and hit ratios that keep players playing. VGT, with offices in Tennessee, Oklahoma and Virginia, was the fastest-growing company on the Inc. 500 in 2005. Inc. Technology spoke with founder, president and chairman Jon Yarbrough talks about using technology to motivate workers.

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Casino VIPs examined VGT machines up close and on the casino gaming floor. VIPs met VGT sales, marketing, promotional and technical representatives, were treated to an excellent dinner hosted by The Point Casino and were entertained by VGT promotional characters Crazy Bill and Lucky Ducky. Casino VIPs were able to socialize and share industry information and market trends.

Leo Culloo, general manager of The Point Casino (shown top-left), shared, “It’s nice to do business with a company that delivers what is promised from planning to promotion. And, although it has only been a few days, the VGT Class II games lead all other vendors in coin-in.” Kristy Ampe, gaming machine manager at BJ’s Bingo (shown top-right), shared, “The VGT sales, marketing and installation teams performed above expectations. I am very pleased with the early performance of the VGT machines.”

VGT is the largest Class II manufacturer in the world with the highest number of top-performing games in the market.

Let me give you some background information so that you can see the unique place Class II gaming plays in protecting tribal sovereignty. Class II gaming only exists on Indian lands as defined in the Indian Gaming Regulatory Act (lGRA). All other gaming played outside of Indian lands is either legal or illegal. If games are played outside of Indian land, they must be defined by a state as legal or they’re illegal.

The framework set up by IGRA and the regulations of the National Indian Gaming Commission (NIGC) recognize the importance of Class II. Class II is defined by IGRA in §2703(7)(A) as follows:

• The game of chance commonly known as bingo (whether or not electronic, computer or other technologic aids are used in connection therewith),
  • which is played for prizes, including monetary prizes, with cards bearing numbers or other designations,
  • in which the holder of the card covers such numbers or designations when objects, similarly numbered or designated, are drawn or electronically determined; and
  • in which the game is won by the first person covering a previously designated arrangement of numbers or designations on such cards, including (if played in the same location) pull-tabs, lotto, punch boards, tip jars, instant bingo and other games similar to bingo.

NIGC Regulations §501.2 states:
c. Class II gaming on Indian lands shall continue to be within the jurisdiction of an Indian tribe, but shall be subject to the provisions of the Indian Gaming Regulatory Act and this chapter.

Lastly, and arguably most importantly, the federal courts (See California v. Cabazon Band of Indians [480 U.S. 202 (1987)] and Sycuan Band of Mission Indians v. Roache [54 F.3d 535,538 (9th Cir.1955)]) have consistently recognized that the authorization and regulation of all Class II gaming activities on Indian lands remain within the tribe’s sole jurisdiction, to the exclusion of the state.

Given all of this legal support, it continues to be a fact that tribes are not supporting Class II gaming. Some say that Class III is better than Class II. To me this is like saying that apples are better than oranges or that Bach is better than Beethoven. If tribes only serve apples and play Bach, they are not giving the public a true choice and service cannot be the best it can be.

There are tribal operations that choose only Class III for their gaming floor. Making this choice is like practicing discrimination. What we really have is a situation that looks like racism being imposed on Indian country. Those that only want Class III games and look down on Class II remind me of those people back in the day that had colored people “sit at the back of the bus.” If Indian country does not take active steps to protect Class II—a sovereign right—it will be lost.

The premise is simple: If a game—no matter the class of game—makes more money on a dollar-for-dollar basis, but an operation will not make it a part of their gaming floor, they are following a practice that will ultimately destroy a sovereign right of the tribes.

I must remind you that Class III games have had their biggest technological advancements based upon Class II research and development. It was Class II that developed TITO, gaming systems, downloadable games and so much more. Each class of gaming is dependent upon the other.

It continues to be my strong point of view that tribes must support Class II or it will be lost. When it is lost, tribes lose not only a precious sovereign right, but also the last economic bargaining tool in compact negotiations completely under tribal control.

I urge all tribes to adopt the following approach:

1. Tribal Gaming Commissions should:

• Adopt the IGRA definition of Class II gaming verbatim [lGRA §2703(7)(A)] both in the definition section of their rules and in the sections dealing with game classification.
• Adopt the NIGC regulations dealing with electronic, computer or other technologic aid [NIGC Regulations §502.7] and electronic or electromechanical facsimile [NIGC Regulations §502.8] in the sections dealing with game classification.
• [Note: Taking these steps also firmly puts the evaluative rules in the hands of the tribe and the federal laws and regulations that created Class II gaming as unique to tribal gaming.]

2. We must educate the operators that Class II and Class III should coexist on all gaming floors.

It is my suggestion that every tribal operation look at games that comprise the bottom 10 percent (coin-in or net win) of their floor and put the newest best Class II games in their place. You may be surprised by the results. Not only will your operation make more money, but you will also be protecting tribal sovereignty.

from Native American Gaming, February, 2010

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