Tribal Government Gaming 2019 | Page 32

The value of Class II to gaming tribes in hybrid jurisdictions lies not only in their play and earning power , but in the leverage they give tribes in negotiations when it comes time to renew Class III gaming compacts . After all , there is no revenue sharing for Class II games , so the closer the play experience comes to Class III , the more viable it is to load a slot floor with Class II and pay nothing to the host state .

There is , in fact , still much more variety in Class III game libraries , which is why tribes in markets like California and Florida continue to add them . However , James Starr , president of VGT , says Class II suppliers are working diligently to close the gap .
“ We have an opportunity to expand Class II hardware and content to provide variety similar to that available in Class III ,” Starr says . “ We as well as other manufacturers are slowly making progress toward delivering more of the form factors and content for Class II . Now , Class II options are better , and technology is definitely better .
“ Historically , Class II technology and products have been perceived as inferior . Some in the industry have caught on to the fact that the technology has advanced rapidly , particularly in the last three or four years .”
He says the acquisitions have fueled the acceleration of development on the Class II side . “ Some people perceive that Class II is still where it was 10 to 12 years ago . That ’ s one of the things we ’ ve had to work hard to overcome , historical expectations , and it ’ s our biggest challenge going forward .”
Class II vs . Compacts
Although technological advancement has made the play experiences of Class II and Class III nearly identical , gaming tribes in many states where both classifications are authorized still lean on the traditional Class III games . That may be changing , but compacted tribes are sure to continue to take full advantage of the ability to offer any and all new slot games from the major suppliers , not to mention a full complement of table games .
In addition to variety , Minard of Eclipse Gaming notes that while very close , Class II games are not yet identical in play to traditional Class III slots . “ The speed in which you can do the ball calls and bingo results has created just a nominal speed difference ,” he says . “ I think the math models are still a little bit different , but bingo still has a finite amount of outcomes . So , there are things you can do with Class III that are maybe a bit more challenging with Class II .”
One more difference that is not normally noticed at the larger casinos but is still a Class II rule : At least two players must be active for a Class II bingo game to proceed , so on a near-empty floor , a Class II machine may pause after the spin button is pushed to wait for another player to join the server-based bingo game .
Minard stresses , though , that improvements in processing speed are all but wiping those differences out , from the player ’ s perspective . The evolution of Class II has made them a viable substitute for Class III where both classifications are available , he says .
VGT ’ s Starr offers Oklahoma as a prime example , where there is significant Class II growth in what he estimates is the largest hybrid Class II / Class III market today . “ We have seen a trend the last few years in Oklahoma where it ’ s crept up from around 40 percent Class II to over 45 percent today ,” he says . “ You also are starting to see some markets like California and Washington add some Class II — not at the rates you ’ re seeing in Oklahoma , but even in some states like Wisconsin , you ’ re seeing some Class II , more as a trial . As we become successful , I ’ m sure
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