How to Choose A Terminal Operator

How to Choose A Terminal Operator

Many establishment owners ask what sets us apart.  They have difficulty choosing a terminal operator amid all the marketing hype.  I’ve been operating legal, regulated gaming companies for almost 20 years, and based on that experience I can suggest a few things to look for:

1. Revenue Per Day is Everything.  Your terminal operator needs to place the highest earning VGTs in your location.  Too many operators make their VGT decisions based on whichever VGT manufacturer gave them the best deal or the best financing.  Each location and each town have different competitive dynamics.  Your terminal operator must make careful VGT decisions to produce the highest revenue.  Prairie State Gaming produces the highest revenue per machine across all the big operators*.

 2.  Size Does Matter.  In this highly regulated business, you have to invest in good accounting, legal, compliance, marketing, and technical resources.  They’re all incredibly expensive, and the only way you can afford to make these investments is to have some scale.  Of the 50+ Terminal Operators who actually operate machines, only six of them operate more than 500 machines*.  That’s the minimum size we think is viable long term.

3.  Experience Counts.  Your terminal operator must have the experience to understand which paytables to employ, how to best place machines in your establishment, how to market and promote them, and how to attract players.  This knowledge is built over decades of operational experience and is key to producing the highest possible revenue.

4.  Financial Stability is Key.  This is an expensive business to operate, requiring significant capital expenditure.  Your terminal operator has to be very strong financially.  They must be able to afford expensive game conversions to support high revenue.  They must have the staff and infrastructure to support your business at any hour of the day or night. Above all, they must be stable enough to endure the bad times along with the good times.  Some terminal operators have so much debt a tiny drop in revenue can kill them overnight.

As you can see, this is not an easy decision.  While there are more than 75 licensed terminal operators, only about 50 of them actually operate machines today.  Of those 50, there are probably only six with the size necessary to for long-term success.  Of those six, Prairie State produces the highest revenue per machine*, has the sufficient experience, and the financial stability to be a long-term partner in your success.

I hope you find this information helpful.

* In July 2013 the Illinois Gaming Board released location performance data sorted by Terminal Operator.  This allowed us to compare our performance against our competition, and we looked great!

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