ISMS CEO Sam Arnold shares his vision for the company and discusses his investment strategy for further expansion: Interview by Glyn Thomas
What are your plans for office expansion worldwide?
Within the last two weeks, we have approved plans to build a $5 million, purpose-built factory in Las Vegas. At the moment, we have only one office in the U.S.A. - our office in Miami - and while this is one of the biggest in the country, it’s not big enough for us, hence our decision to expand in North America. The Las Vegas factory will be our biggest yet, far bigger than at any other location.
This 60,000-square-foot facility will be able to accommodate 20,000 slot machines at any one time. Supporting this large warehousing infrastructure will be a remanufacturing plant, not too dissimilar from what we currently have in Miami. It will feature a fully equipped manufacturing line that transfers slot-machines via a conveyer system to three or four different departments for preparation. They emerge at the end of this process fully configured, and fully set up for the jurisdictions in which they will be played.
The Las Vegas facility will have the largest warehousing capacity within our group of companies; our parts department, alone, will be three times the size of what we have in Miami, and I think that demonstrates the level of after-sales support we are prepared to provide for our clients. It’s important that when our clients re-order parts, they receive them within 24 hours, and we can only do this if we have them in stock. We shall also offer a repair service from our fully equipped repair center planned for the Las Vegas development.
As I mentioned earlier, our machines are configured for the jurisdiction they’re going to. That includes bill validators, ticket printers, as well as the software and games that are installed into the machines. It is important that the game content in a used slot machine is original content and not copied. Our partners and clients are confident that the game content we supply to them is 100 percent original and that they will have no problems with intellectual property buying machines from us.
Because we supply globally, it’s also very important that we offer gaming choice. Indeed, we offer full gaming choice to all of our customers, whether they’re big or small, or in whatever jurisdiction they operate. Everybody gets gaming choice. It’s not about the cabinet: it’s about the game within the cabinet and this ensures that our partner gets a return on their investment – and we get the repeat business. We give our customers gaming choice, content which works, content which performs and also game-performance warranty.
The Las Vegas development will also feature a large showroom with bar, set up similarly to a casino; all of our products will be displayed in this showroom/casino and we will extend the hospitality of the bar to our customers so that they have an enjoyable and relaxing time with us. The facility will have a welcoming reception area, supporting offices, up to three separate conference rooms, and our own administration department, which, alone, covers an area of 5,000 square feet. It is a big project, an exciting project — exciting because it will be our second office in the U.S. and we are looking forward to it being fully functional and fully operational by early 2018.
Here at ISMS, we don’t do things by half. If we do something, we go 110 percent. When we begin shipping product from Las Vegas, as the majority of our suppliers are in Nevada, we can assume that we will be transporting a lot of machines across the country, from Nevada to Miami. It would be fine to do that if we’re moving one or two trucks at a time, but the ISMS way is to move 20 trucks at a time. At $5,000 that adds up to millions and millions of dollars a year. With our new facility in Las Vegas, there will be opportunities to reduce some of these operating costs and we can pass those savings on to our customers.
What are your plans for this year’s G2E show?
I find it interesting and intriguing that among all the used market businesses, we’re the only company that exhibits. This is the 15th time that ISMS has exhibited at the Las Vegas show, and as things stand at the moment, we are the only exhibitor at G2E showing used casino equipment. It’s a testimony to ISMS that, after 15 consecutive years of exhibiting at G2E, we still seem to be the only company showing used casino products. Maybe I’m missing something!
What qualities do clients exhibit when buying used, pre-loved slot machines from you?
Our machines are usually only three to six months old. Everything that we offer — the latest technology, the latest cabinet, the latest software — as a general rule, are used product, and about a third of the cost of a new product. If you were to put a refurbished machine next to a new machine, you wouldn’t tell them apart.
How has the year been so far for ISMS?
Well, my answer might sound a little bit greedy. In the sales business everybody wants that little bit more. But our revenues are much as they were last year and the year prior to that. We’re on track to make all of our revenue forecasts, but we would like more than our budget, more than our forecast.
For those casino operators who have never considered used slot machines, what would you say to them?
If they’re not buying from us then they’ve got too much money!
Image top right : Sam Arnold President at International Slot Machine Sales