Acres Manufacturing: Featured Cover Story in Global Gaming Business Magazine
John Acres wants to completely change the way casinos serve their slot customers.
He’s done it before. More than once.
Acres invented slot player tracking technology, sold by the company he founded in 1981, Electronic Data Technologies. (EDT was eventually acquired by IGT.) The existence today of player loyalty clubs that reward repeat play can be traced to this invention.
John Acres and Noah Acres on the cover of Global Gaming Business Magazine
More innovations would come from Mikohn, which Acres and a partner founded in 1986. The innovator of the modern progressive jackpot system, Mikohn, created for an initial investment of $120,000, was sold for $6 million to Progressive Gaming International (the assets of which ultimately were acquired by IGT).
Next was Acres Gaming, and another transformative technology, bonusing, within the system known then as Acres Advantage, now the IGT Advantage casino management system, after the supplier’s 2003 acquisition of the Acres Gaming assets.
According to Acres, the ensuing 18 years saw slot system technology pretty much on pause. He has stressed to anyone who will listen that casinos are basing their loyalty programs on technology that was created in the 1990s.
“The best analogy I can give you is that today’s casinos are operated like Blockbuster video stores,” Acres says. “Everybody wakes up every morning, thinking about how to arrange the cassettes on the shelf, how many late fees they’re going to collect and where to put the licorice next to the checkout stand. And this is the age of Netflix. You’ve got to think about what the players you have want—but more importantly, what do the people who aren’t yet your players want? What do you have to give to get that new business?
“The casino management systems that people are using today are just too old and too weak to be able to do the things that today’s consumers expect. Our games are too simple. Our loyalty programs are too simple, too much oriented towards entitlements. We can’t make any rapid changes in our technology and our offerings. And so, our industry has run tired. Our costs are too high and our revenues are too low.”
Acres is addressing the challenges of modern loyalty systems as CEO of his latest company, Acres Manufacturing, along with son Noah Acres, the company’s chief operating officer. The company is currently preparing for an initial public offering that will occur in the coming weeks, proceeds to be used to expand the company and to maximize the benefits of the product Acres says will effectively address the problem of the antiquated CMS, a system called Foundation.
Foundation is not a traditional casino management system, but a technology that super-charges any existing system by collecting data directly from each slot machine—according to Acres, 1,000 times the data collected by a traditional CMS, a richness of data that frees slot officials to court, reward and retain players in ways they’ve never done before.
“The casino systems we have today are closed,” says Acres. “They’re proprietary. The system supplier refuses to allow you to share your own data with third-party vendors. With Foundation, just about all the data is shareable. And we think that revenues will rise because of that.”
Direct Data Access
“We call it a GMI, which stands for gaming machine interface,” explains Noah Acres. “You plug this directly into the slot machine and it extracts all of the SAS data in real time. Every single event, every meter that’s reported on the game, comes across this in real time. And we present it to the casino in the manner where they now control and own the data in the way that they want.
“This is really big in terms of learning player behaviors, and adjusting to player behaviors in real time. And this can can actually write credits directly back to the game.”
One of the advantages of this last fact is that Foundation is a perfect system addition for adding cashless functionality, as Penn National is currently doing using Foundation in combination with systems from both Everi and Scientific Games at some of its properties nationwide, using the Acres Wallet cashless module to transfer funds brought in from outside sources by the CMS and translate them instantly into credits on the player’s machine.
But it’s also perfect for rewarding bonuses that are precisely the right player perk at precisely the right time. John Acres notes that Foundation records not only how much people are wagering, but the manner in which they’re wagering. “We can record how long people pause between button presses—whether they started with $100 or $10, what their credit meter balance is,” he says. “We’ve got a very rich data set, and we have that data in real time.”
The other benefit is the freedom the operator has to use that data in a way not possible with traditional proprietary systems that control the disbursement of data and shut out other systems. “The data is free to the casino to use in any way they want,” says John Acres. “There are all kinds of third parties out there with lots of capability for analytics and decision-making that are unable to couple to the existing CMS systems in ways that can bring brand new capabilities, brand new profits to casinos if they can utilize this data.
“We’re providing the bridge through which they can access that casino data, as well as the building block upon which they can build cashless functionality.”
He adds that the ways of drilling down this data to benefit the player/operator relationship are practically endless. For instance, Foundation can merge data on the credit meter balance with the time between wagers—“whether or not you’re slowing down your wagers or speeding up, whether or not you’re increasing or decreasing your wagers,” John Acres says.
“With those hints, we can start to ascertain what your satisfaction level is. Are you becoming tired of the experience? Are you disengaging? And if we can time a bonus or a challenge to you at that exact moment of discouragement, when you would otherwise get up and leave, we can transform the gaming experience.”
“It’s more than just the segment of data that we gather,” adds Noah Acres. “It’s also the real-time nature of it. If I go to the casino today and I sit down and I play, the casino has no way of monitoring my experience in real time. Therefore they, they have no way of adjusting or modifying my experience.
“We collect everything in real time, giving the casino the ability to see if the player is having a good experience, a bad experience—perhaps, even, if an experience is going to jeopardize the person’s loyalty. (The operator) can then jump in and respond with either a bonus, a message or some type of incentive or personalized communication.”
It’s the kind of personalized experience to which customers—particularly younger customers—have become accustomed thanks to the internet. “The success of the internet cannot be ignored,” John Acres says. “The combined revenues of Facebook, Google and Netflix are 48,000 times bigger than 20 years ago. Gaming industry revenues have increased by a factor of 2, just barely keeping pace with inflation. Why is the rest of the world exploding while we’re thrilled to death to have a 20 percent increase in one year? It’s because of personalization, mobile interactions and social connectivity. These are all facets the gaming industry has ignored.”
He says Foundation and the technology coming behind it is all about “resetting expectations” among operators. “It’s about getting casinos to realize that it’s way better if we all take a smaller share of a giant pie than the majority share of a little tiny pie. That’s the difference between open and proprietary. Open has worked in every industry it has been brought to, and we’re really excited about bringing it to casinos.”
Changing the Game
Beyond changing the way casinos marshal all the data that could be at their fingertips, Acres Gaming is looking to change the slot experience to better fit the emerging younger player demographic.
“We’re stuck in the same basic game platform we’ve had in the 50 years since I’ve been in the business, which is basically spinning reels that spin and stop, and you win or you lose,” John Acres says. “Our next step beyond Foundation is what we call Coherence. That’s where we create an entirely new gaming machine.”
He says this new machine will have no bill acceptor or ticket printer, and will be built from scratch for cashless play only. “But it also will combine the loyalty information with the random number generator at the same time,” he says.
“So, when you sit down at the game in our vision of the future, you’re going to hold your palm up against the machine. It will recognize who you are, your funds will transfer, and the game that you see will change to match your personality.”
Acres says this will apply regardless of the casino you’re in, as long as it is equipped with Coherence. “You’ll go to any box anywhere in the casino, sit down, hold your palm in front of it, and you’ll see the game of your preference, the game that we believe is most likely to fit you.”
He adds that Coherence will fit the mobile, social media world in which today’s consumers exist, with opportunities for side wagers and other interactions with players you know, instant replays of your wins on social media, or even to identify someone across the casino who is winning and wager on their game.
“We believe that with those rich new opportunities, we can attract new players,” says John Acres. “A lot of those new players will be younger, but I know a lot of my friends find casino slot machines very boring as well. I think this will attract people across all demographics.”
Acres’ plan is to do no less than transform the casino experience. “If I walk into a casino today, it’s like reading an article that’s written in all caps with exclamation marks after every sentence,” says John Acres. “It’s just so overwhelming and confusing, and there’s no choreographic experience for the player. It’s flat. There needs to be this undulation, this roller-coaster ride of quiet and excitement and quiet and excitement.”
“And at the end of your budget,” adds Noah Acres, “at the end of your time in the casino, we want you to be satisfied. We want you to go home thinking about how fun it was to win that $100, and maybe not thinking about the $200 you spent to get there. That’s our goal. And we believe that to get there, we need this new platform, and then that platform needs to be open to everybody.”
“They did $600 billion in (sales through) the App Store this year,” says the elder Acres. “We can bring that to the casino. We can have all these bright people that are sitting at home with ideas express themselves on this new platform, and they’ll win or lose, they’ll succeed or fail based upon how well their content is accepted. Many will fail, but those who succeed will completely transform the experiences that we have.
“And keep in mind that if you want the old experience, you can still have it, because Foundation provides the bridge between the old games and the new games.”
While the grand plan is to change the experience, Foundation has the ability to maximize casino revenues in today’s industry, says Noah Acres.
“When you think about real-time rewards and real-time messaging,” he says, “to understand the scope and the potential here, imagine you’re a casino marketer. You know every player’s specific play history, you know how they’re faring on the game right now, and you also know how much money they have in their pocket, because you know the wallet balance on their mobile device.
“If you can know all that information, there’s a tremendous potential to deliver that person the right message at the right time, to get them to take the right action. It’s going generate more profit for the casino.”
The means to generate that profit is still in its infancy as far as the Foundation technology, but John Acres says it will move forward as some of the industry’s more visionary operators see how it can change the casino ecosystem.
There has been pushback, including litigation involving some of the more traditional system providers. “The biggest issue isn’t so much pushback; it’s the inertia to change,” John Acres says. “There are many people that want to keep things the way that they were yesterday. They want to do, tomorrow, what they did last week.”
He says the more positive future for technology like Foundation will be realized by operators like Acres’ current partner Penn National Gaming. “Penn is an example of how a really visionary guy, (CEO) Jay Snowden, and a great team of people are adapting to change very quickly,” he says. “And other people are starting to see that example of what benefits change can bring. So we’re real excited about 2022 and 2023.
“We think that a whole new era is upon us. We think that we can double casino revenues. We think we can cut costs per dollar of revenue in half. We think that we can totally transform, in the next five years, the casino gaming industry.”
He adds that this does not mean Foundation is going to replace the traditional casino management systems; the technology can improve what already exists.
“Foundation is literally what its name implies—it is the bedrock upon which we build,” says Noah Acres. “It collects the data. Now we will create applications that replace every function of a CMS, but we also invite any third party to do a better job than what we do. We’re open to creativity.”
“But besides personalization for the players and creating a more challenging, interactive game,” adds John Acres, “the big challenge for casinos now is to move from the desktop era where the existing casino management systems are stuck—where a host or other casino person has to run into a back room and get onto a desktop computer to get information, and then go back out and please the player—to where that information is inherently presented on a mobile device to the person in the moment, not just something they have to dig out and think about.”
He adds that Foundation is capable of calculating the best course of action related to that information, and lay out the best actions for that host to take. “All of that information about the player is automatically ingested, automatically calculated,” he says, “and the things that that host or service person should do for the player are laid out for them on the smartphone. It tells them what to do next.”
For Acres Manufacturing, what to do next is to educate operators on the potential benefits of the Foundation technology and what will follow in the next few years. John Acres—who was inducted into the AGA Gaming Hall of Fame in 2016 and has, so far, 149 patents to his name—is relying on the partnership with his son Noah to move the technology forward.
“I can provide the experience of where the bottlenecks are going to be. From my experience with EDT and Mikohn and Acres Gaming, I’ve got some better insights as to what the stumbling blocks down the road might be and how we can work to avoid those before we ever get there,” John Acres says. “Noah, on the other hand, brings that new energy, that new look at things… I never participated in social media, so he’s dragging me kicking and screaming into it, but it’s natural for him.”
He’ll soon have a lot more help, as this year’s IPO—expected to raise as much as $60 million—will mean expansion for Acres Manufacturing. “We’re on track (with the IPO),” John Acres says. “We’re going to use the proceeds to build Coherence, and to further our patent portfolio, which we fully expect to quadruple over the next four or five years, and to hire great people—because technology is just what people use to create the player experience. We need people who will continue to evolve with that technology.
“We want to make sure that Foundation and Coherence feed into that when that becomes the norm. We don’t want to be stuck in a world where the machines that we build today look an awful lot like the machines of 20 years ago. We’ve got to go where the rest of the world already is, or we’re just going to disappear.”
For now, Acres Manufacturing is working with Penn National to bring cashless game functionality to what eventually will be all of Penn’s properties. “I believe we’re installed on around 15,000 machines so far, and we’ll probably equip 20,000 machines this year and 100,000 next year,” John Acres says. “But you won’t see those big examples until we get a significant installed base, and until we get all the regulations in place.
“So, we’re still on the runway ready to take off. But you’ll see us in the air next year.”
This article was written by Frank Legato, Editor of Global Gaming Business Magazine