Harrah's vs. IGT - Slot Machine Feud

Recent slot machine news has created speculation about a feud between Harrah’s and respected slot machine maker, International Game Technology. While some industry experts dismiss the whole matter as just a money issue, others insist that the rift between the two giants runs much deeper.

By the way, you might want to try the slots over at Bodog‘s online casino. They never get into feuds with anyone (besides the U.S. government).

HARRAH’S VS. IGT

The whole matter started with participation slot machines - games in which the casino shares up to 20% of the revenue with the slot manufacturer. After reporting losses of nearly $100 million in their second quarter, Harrah’s was said to have wanted to decrease the amount of shared revenue. Needless to say, this did not please IGT one little bit.

In order to reduce expenses, a number of slots have recently been pulled from casinos operated by Harrah’s, particularly Bally’s Casino (but also as far away as Atlantic City). Dozens of participation slots have been pulled, and all of these machines were manufactured by IGT (including the popular Wheel of Fortune slot). The blank spaces were then filled by non-participation slots, which allow the casino to keep all the revenues.

According to Gary Thompson, spokesman for Harrah’s, “We try to offer our customers the games they like to play, which we determine through volume of play and regular surveys of our guests.”

PLAYING HARDBALL

So at this point, Gary and Harrah’s are essentially saying that IGT slots are no longer popular. Of course, anyone who plays slots knows this to be untrue, so this is nothing more than a negotiation tactic by Harrah’s.

Harrah’s will pull the machines. Since IGT relies on the revenue from participation slots, they’ll quickly feel themselves getting squeezed. In the end, they’ll be forced to renegotiate with Harrah’s and agree to a lower percentage of the profits. And there’s really nothing that IGT can do about it.

To make matters worse, other casinos may get the same bright idea. Within months, you might see the majority of IGT machines pulled from Vegas casinos. If you enjoy Wheel of Fortune, you might want to get in a few extra spins, as it might not be around for a little while.

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Harrah's vs. IGT - Slot Machine Feud