“ With recurring-revenue games, both parties are highly invested in the success of the game. When a game performs exceedingly well, both parties win, creating a situation where there is a unified daily interest in performance.”
— Ken Bossingham, Senior Vice President of Sales, IGT
Manufacturers, meanwhile, got hooked on the steady stream of revenue from leased games, and pumped a similarly steady stream of R & D dollars into the dual development of ever-more-innovative hardware with high-profile, premium game families to match.
As operators and suppliers both benefited from recurring-revenue agreements, it soon became clear that the lease model was here to stay.
MIXING THE MODELS
These days, most operators offer a healthy mix of for-sale and for-lease games in stocking their floors. As many slot operations executives will confirm, there are benefits specific to each model.
“ The ratio of for-sale versus leased games in the marketplace has remained relatively steady over time,” says Ken Bossingham, senior vice president of sales for IGT.
“ The leased-game category has segmented to include sub-categories such as stand-alone progressives, WAPs, premium MLPs, video poker, etc., but overall, the ratios have generally stayed consistent. Both types of games play crucial roles in IGT’ s business strategy, as well as our customers offering their players the best gaming experiences.”
“ Over time, we’ ve observed a marked shift toward leased premium games on the floor,” says Chris Nemlich, senior vice president, commercial strategy & data analytics for Light & Wonder.“ This trend has largely been driven by operators’ efforts to optimize floor layouts— creating more inviting configurations that highlight high-performance games. Additionally, industry analytics have recommended replacing older, underutilized machines with newer, stronger-performing leased units, further accelerating this transition.
“ Our customers appreciate having a dual approach. Purchasing games outright allows them to invest in long-term, stable hardware assets, offering predictability and durability. Leasing enables them to diversify their offerings quickly and adapt to market trends without a heavy up-front capital commitment.”
Many veteran operators still prefer to buy games outright, even while conceding the earning power of many leased games.“ We always like to own what we can within reason,” says Cliff Paige, slot director at the South Point Hotel and Casino in Las Vegas.“ The manufacturers have been putting out some good‘ for sale’ games for the last few years. This was not always the case in the past.”
Paige says slot manufacturers recently have increased the number of quality for-sale games they offer to the casinos, a development he says is the result of feedback from the operators.“ Back some years ago, the manufacturers seemed to only have their best games and content for lease,” he says.“ Now, you can own some pretty good product.
“ I think they finally started to listen to the operators a bit, but also, they probably started to see some pullback from casinos taking leased or nonowned product from casino floors. With that, they finally started looking at what casinos could buy, and providing better( for-sale) games.”
Allen Schultz spent 25 years in slot operations for Yaamava’ Casino and its predecessor San Manuel Casino, and was slot performance director there for six years before moving to the supplier side last month as director of product research for Bluberi. Like Paige, Schultz has preferred to buy games, but high-performing leased games make budgetary sense.
“ This is something I believe many operators struggle with from a budget perspective, and it’ s a shame,” Schultz says.“ If you have the cash to buy games, the preference is to do so. However, if those games aren’ t performing while premium games are exceeding expectations, you must expand that footprint to meet guest demand.”
Schultz says the number of leased games has risen, and operators have profited from some of the lease deals.“ Negotiating beneficial deals with manufacturer partners can ease the burden of the rise( in participation product),” he says.
Both operators acknowledge the inherent benefits of leased games— often called simply“ gaming ops” by the manufacturers to reflect the partnership in operating the games in terms of profitability and convenience.
“ The biggest benefit is the performance increase over most owned products,” says Schultz.“ Performance drives everything, and I know I’ ll sound like a broken record, but it’ s a supply-and-demand game for your guests. If recurring-revenue products start to dry up in favor of owned titles, the paradigm will easily shift the other way.”
“ The ability to change themes, signage and cabinets is huge,” adds Paige, noting that participation games simplify the replacement of the non-performers on the floor.
“ Recurring-revenue slots offer significant advantages,” says L & W’ s Nemlich.“ They provide operators with the flexibility to dynamically manage and refresh their game portfolios, ensuring an ever-evolving and engaging gaming environment. This model often grants access to unique hardware configurations or newly licensed content that might not be available for purchase outright.
“ Moreover, supplier-managed cabinet maintenance and features like widearea progressive jackpots help reduce operational costs and liabilities, further enhancing their appeal.”
“ Leased games offer operators a range of benefits, the most apparent being the absence of up-front capital investment,” says IGT’ s Bossingham.
“ With recurring-revenue games, both parties are highly invested in the success of the game. When a game performs exceedingly well, both parties win, creating a situation where there is a unified daily interest in performance.
“ Additionally, leased games help our customers keep their gaming floors competitive and fresh, enabling them to offer the‘ latest and greatest’ in terms of themes, hardware, merchandising and mechanics— all on physical assets that they are not required to maintain.”
Those benefits often allow continuation of big hits, with a parade of sequels
APRIL 2025 www. ggbmagazine. com 15