Acres Technology aims to leave mark on gaming industry again

In their southwest Las Vegas office, John Acres and his son, Noah, have one of those big, boxy Motorola DynaTAC cellular telephones that Jerry Seinfeld used in his sitcom as a reminder of just how far technology has come in a relatively short period.

Back in 1981, the elder Acres, armed with a big idea and the technology to support it, set out to change how casinos view their gaming customers. As founder of Electronic Data Technologies, John Acres invented the first player tracking system for casino floors.

The innovation was followed by other revolutionary technologies over the years, including progressive jackpot systems that increased play on slots, loyalty and bonus systems.

Now, 40 years after creating his groundbreaking player-tracking technology, John Acres is setting out again to change the gaming industry — this time with his son, Noah, assisting with the new company called Acres Technology, which they plan to take public in the third quarter of this year.

It’s familiar ground for the senior Acres, who, along with Mike Stone, founded Mikohn Gaming in 1985, created progressive jackpot systems that increased play on slots.

In 1992, he started a company, Acres Gaming, and through it came innovations in loyalty and bonus systems that resulted in gamblers playing more frequently.

The Acres Advantage system debuted at Crown Casino in Melbourne, Australia, and its success led to other installations at MGM, Mandalay Bay and Station Casinos properties, according to Noah Acres. That company was later sold to IGT, where the loyalty system is now known as IGT Advantage.

And, in 2009, through Acres 4.0, he developed systems that reduced costs while increasing play.

AGA Hall of Fame

Those innovations earned John Acres a spot in the American Gaming Association Hall of Fame.

“I sold my last company for $143 million and I retired,” he said of the Acres Gaming sale. “But then I noticed that Amazon was doing some amazing things with data and realized that casinos could benefit from that same technology and the technology that the casinos were using wasn’t keeping pace with what the rest of the world was doing.”

It didn’t take long for him to unretire and develop what’s next on the supplier side of the casino floor — a product called Foundation that will gather 1,000 times more data than systems that are currently installed on most floors.

Foundation is, indeed, the foundation of the new company and the Acres team has already begun showing its capabilities to the nation’s largest casino companies in a bid to take market share from IGT, which bought Acres 4.0 and its existing technology in 2004.

The Acres name itself could sell product.

“Certainly John Acres is a true innovator on the supplier, systems and technology side of gaming going back many, many years,” said Marcus Prater, executive director of the Las Vegas-based Association of Gaming Equipment Manufacturers.

“He’s the type of guy that when he announces something new, it certainly gets everyone’s attention because of his past successes,” Prater said.

“The technology side of our industry has been fortunate and we need as much innovation as we can in the supplier side of the business right now,” he said. “Overall as an industry, we need to keep innovating and I’m glad to hear John has got something new to show us.”

But just exactly what will Foundation do for the player, the gaming consumer who in 2019 gambled and lost $7.9 billion on casino slot machines to their owners?

“It’s a question we often get,” Noah Acres said in a January interview at the company’s small manufacturing plant off the 215 Beltway near Buffalo Drive. “What can I do with that constant stream of electronic data?”

Learning from players

For openers, it can help a casino company learn even more than it knows now about its customers. More important, casinos can do something proactively if they sense that players are becoming unhappy with their losses.

“I can detect when you’re becoming unhappy and I can either send an employee out to talk to you, I can send a message to your phone, I could put a message on the slot machine screen,” Noah Acres said. “The message might be something like, ‘Hey, for the next 10 minutes, we’ll double all your pays.’ It could be, ‘Here’s 20 bucks of free money.’ It could be a free drink coupon. It could be anything. It’s up to the casino what they want to do. But the fact is, right now, the casinos can’t measure an experience in real time and they can’t do anything about it and now, we’re giving them the tools to do both.”

The system does that by monitoring play. On video poker machines, for example, it can determine if a player makes mistakes in basic strategy. Rather than see a player quit or go to a rival casino for a change in luck, managers monitoring play can be proactive in how they approach the customer.

The broad capacity of data also is capable of providing bonuses to players based on what they personally enjoy.

Some players like machines that are close to a sportsbook so they can watch a particular game on a big screen as they gamble on a slot.

Sports bonuses

Maybe that particular player is a fan of the Vegas Golden Knights and is watching a game against the rival San Jose Sharks. If the Knights score a goal against the Sharks and a player’s profile indicates he’s a Knights fan, the system could trigger, for example, an exclusive 90-second bonus period during which all the player’s winnings are doubled.

Because player profiles are personalized, the system can develop customized bonusing whether the player is a fan of the Los Angeles Dodgers, the Chicago Bears or any other team.

The additional data stream will enable slot machines to tie in with whatever is on the casino sportsbook’s betting board. Noah Acres believes the personalized experience will be attractive to younger players who crave that special attention.

Noah Acres said another advantage of Foundation is that it is designed with an open platform to interface with any slot machine manufacturer’s game. That’s a huge advantage in today’s mergers-and-acquisitions world in which a company may buy multiple casinos that have their floors populated with machines manufactured by different companies.

How big of an advantage?

“The average nationwide casino reinvests 20 percent to 30 percent of what players lose back to player comps,” Noah Acres said. “A lot of that is highly inefficient and wasted. If you’re Caesars (Entertainment) before the merger, they did around $4.5 billion of gaming win (annually). So to reinvest 25 percent back in the players is over $1 billion.

“Every 1 percent efficiency, the gain is $10 million of new profit and we’re giving you 1,000 times more data. There’s a lot of efficiencies you can gain,” he said. “I think it’s going to make a massive change in the industry.”

Cashless floor prospects

Foundation also is expected to be in the center of the industry’s next big innovation, the cashless casino floor.

With the new ability to connect player accounts directly to machines through a smartphone app, a player could buy credits with a few phone clicks.

It also could speed table-game transactions. A player could punch in the proper codes to buy chips at a blackjack table and at the same time print out a receipt that is deposited in the cash box for auditing purposes.

“Our cashless solution is superior to our competition because we designed it as a component to be open to anyone and everyone to use in the way they want,” John Acres said. “Others use proprietary technologies and proprietary interfaces where only they can decide who gets to use their resources. We allow casinos to use any payment providers they want.”

The company’s goal is to be recognized as the undisputed industry leader in cashless casino transactions by the end of the year.

“We’re going to do over 30,000 machines this year throughout the nation on cashless,” Noah Acres said.

And, by the third quarter, he said, he hopes Acres Technology becomes a publicly traded company.

Noah Acres said he believes that $20 million to $30 million will be raised in the company’s initial public offering. He said friends and family already have invested in the initial IPO expenses.

Once the company is public, it will shift from its current hardware emphasis to software on the system. Because of the open platform, customer companies can dream up their own applications.

“If a developer has an idea for a bonus, report or promotion, we’ll give you the development tools for our platform and you can go out and create it and sell it,” Noah Acres said.

It’s what customers would expect from a gaming innovator who’s seen his technology evolve from a boxy cellphone to something akin to the latest smartphone over its lifetime.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.