Patel: Online gaming key to growth

In late January, GTECH Corp.’s Rome-based parent company Lottomatica Group SpA announced its decision to re-brand to GTECH SpA, pending shareholder approval. Along with the name change, the group also announced plans to reorganize its business structure from units focusing on their respective products to focusing on geographic regions: the Americas, Italy and international.
The Americas region includes North America and South America as well as the Caribbean. GTECH Corp.’s current president and CEO, Jaymin B. Patel, will head up the Americas region, as president and CEO of GTECH Americas.
Patel was born in Nairobi, Kenya, and grew up in the United Kingdom. He was appointed president and CEO of GTECH, which he joined in 1994, in January 2008.
The reorganization won’t have any immediate local impact, says Patel, but it does put him in charge of continued growth in the Americas. He expects interactive gaming to play a big role in that growth.

PBN: What led to the reorganization of Lottomatica Group?
PATEL: This is a natural step in the evolution process of our group. GTECH was acquired in 2006 by Lottomatica and since that time, the businesses have worked together. GTECH, the Italian business and a business called Spielo … pretty much operated independently, with some relationships and integration, but we realized that more and more of the customers that we are servicing want an integrated approach.
Take Rhode Island or Texas as an example. Those customers typically operate multiple types of gaming: lotteries, VLTs or slot machines, and they offer interactive poker and Bingo where it’s legal. You have a full complement of offerings within those customers. It makes great strategic sense to have an organization where all of the gaming business is offered via geography as opposed to having three businesses come in and have to supply those services to that one customer.
PBN: Why do you think Lottomatica chose to rebrand itself as GTECH rather than take the name of one of the other companies?
PATEL: GTECH is a really well-recognized global brand in the lottery and gaming industry. It’s a huge endorsement from our shareholders that they have recognized the strength of the GTECH brand. … It’s good for us; it’s good for our customers.

PBN: Do you think the name re-branding and restructuring will have a big impact in Providence?
PATEL: Not any impact at all really, locally, because we’ll still maintain our GTECH name like we always have in the local markets in North America. We are going to have a joint headquarters of our business globally: Providence and Rome. From the standpoint of our customers here, we will now be able to service customers through one organization rather than having two sets of people within our organization service those customers: one for lottery and one for VLT.

PBN: With the restructuring, are you planning on taking a look at where your offices and manufacturing facilities are within the Americas region?
PATEL: No. We certainly will expect over time some efficiency in the ordinary course of our business, which is something that we did anyway. But this reorganization is more about focusing our attention on geographic centers so we can service our customers and less about cost-cutting.

PBN: Do have any plans to increase the head count?
PATEL: I certainly intend to increase our head count as we win more business. In the last 12 months alone, we’ve won substantial new business in the Americas and international as well. … There are many new pieces of business that we’re looking at in South America, in Costa Rica, in Paraguay. So as we develop the business and win it, we have to hire more people to service it.

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PBN: How big a market opportunity do you think there is in the Americas?
PATEL: Part of our thinking is that we want to focus our people on the fastest-growing areas of the world and we’re putting a big emphasis on the Americas as a part of the world that will deliver the most growth over time. Outside of Italy, it’s our largest business by far, and we think it has the most promise; both North [America] and South America. For GTECH and the group [South America] is a substantial part of our business. We have operations in Mexico, Chile, Argentina, the Dominican Republic, all over the Caribbean Islands, Colombia, Costa Rica: We are, by far, the market leader in Latin America and the Caribbean.

PBN: With the reorganization, you’ll be leading the Americas region, what challenges are you expecting?
PATEL: I’m expecting the challenges to be all about growth. We have to make sure that we are identifying the right opportunities for the company to invest its capital, its people. … A second area is helping our existing customer grow same-store sales. Same-store sales, for us, [are] very important because our compensation structure is a percentage of ticket sales. As volumes grow in the market, we do better and better. We have a lot of people and expertise focused on helping our customers launch new games, make their existing operations more efficient. Also, interactive gaming is fairly substantial in Europe, and I think over the next two or three years it’s going to be more and more accepted and legalized in the U.S. Offering games on the Internet is a growth area and part of our strategy that we’re going to be working very hard on.

PBN: Is the recently launched Lottery Developer Network going to play a role in that?
PATEL: It’s absolutely part of our strategy. At the moment, the Department of Justice has authorized U.S. lotteries to offer their products on the Internet. So in response to that, we developed the Lottery Development Network, which allows anybody to present their game ideas to us so we can present those games to consumers. It’s very similar to the iPhone App Store. It’s a framework that allows developers to provide their creative ideas and content in a framework that we can then offer to our customers.

PBN: What are some other strategies you have for growing interactive gaming?
PATEL: They all revolve around getting our customers to adopt online, interactive gaming. Getting those customers to adopt new games so that we initially start by offering draw-based games and then moving on to more exciting games like instant tickets that consumers can play more frequently on the Internet. The other area that’s really important from a growth point of view for us is looking at private-manager contracts in the Americas. In North America there have been several states … that have awarded privatization-manager-type contracts. We think over the next few years there’s going to be a substantial wave of these types of opportunities as governments are looking to outsource their lottery operations to companies that have the ability to offer innovation and drive high levels of growth. •

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