Acres Manufacturing with Noah Acres

Morning, Dan. How are things in Vegas today?

Morning, Nick. They're great. How are you doing? I know you guys are in the midst of a historic heat wave next couple days over there, so hopefully everything's good.

Oh, man, it is boiling hot over here. So we'll hit 32 Celsius. I got 93 Fahrenheit today and it's supposed to go up a few points tomorrow, and remember, no air conditioning, right? So we have to deal with this. Also, Dan, I forgot to check in with you regarding your World Cup favorites. So considering that van Dijk, Gakpo and Gravenberch are all Liverpool guys, I assume you're an honorary Dutchie. Is that the deal?

Oh, I don't know. For you, I am. Sorry. They can't see, but I don't have my orange on today, but I'll get it next time, Nick.

Okay. So, who are you backing?

Oh, I don't know. There's so many good... I mean, honestly, for the first time ever, the US has actually got a chance to make a run here. Not saying they're going all the way.

They do not look all that bad.

But everybody's pretty excited about that, but there's a lot of folks in the running, right? France, Argentina seem to be the favorites.

Yeah. Yep, yep. We'll see where it goes. I'm just hoping that Mbapp will completely ensure that Messi never gets on the record book for closing the tournament. I don't like that guy.

Yeah. Everybody over here has been spending their time watching YouTube videos of random Dutch and German folks experiencing Buc-ee's and Texas barbecue and all kinds of stuff. So, US culture is expanding. It's great.

There was a shot in Houston of an orange river. I mean, it was so many thousands of people walking around. So yeah, they're pretty good about visiting their team well abroad. Okay. Dan, we have a great listener question on which both of us would like to opine a bit and we have an awesome guest here today. So, I'm going to skip the news section part today and just plow straight into the question. Before I do, let me say that we'd love to tackle any questions that anybody listening may have. So if you have a question about what we're presenting or something you'd like us to present, please drop us an email at reelcast@reelmetrics.com. Again, that's R-E-E-L-C-A-S-T at reelmetrics.com. Our policy is to keep all questions anonymous, so please speak directly and don't worry about us revealing your identity. That's not something we do.Dan, this comes from an operator in Nevada who asks, "Hi, guys. I have a question about floor layout. We're discussing a new approach where we group slots by customer segment. We would have hosted player zones with their favorite games, grind zones with junk games and everything in between. In your experience, is this an effective approach? Do you know of casinos that have tried this and failed? If so, what did they do wrong?" So, many thanks to listener for that question. I love not only the content there, but also how you phrased it. Dan, I'll toss in a few points here, then turn it over to you if that's all right.On that first question now, is this an effective approach? The answer is a highly enthusiastic yes. I would say it's the approach. In fact, ReelMetrics has spent a ton of time and money creating market basket apps that facilitate this approach precisely. We've seen plenty of operators implement this successfully, and indeed, I do know a few who blew it. I would say what's critical here is that you're selecting products based on proven resonance with specific segments and not potential resonance. What would be the difference there? I would say that whereas proven resonance is arrived at quantitatively by studying consumption trends by segment, that potential resonance is arrived at qualitatively by reviewing designs and par sheets and speaking with AEs and things of this nature. So if you focus on proven, it's going to succeed. You focus on potential, very decent possibility it won't. Why not? Because those qualitative choices, they just contain too many assumptions and opinions on what drives resonance.I guess what I would say here is forget the designs and the par sheets, really study that player, the player preferences, find out what they like, cluster that product by segment and then very importantly, make sure you have enough of everything. So you want to keep that core occupancy dialed in around 40%, premium 65 to 70. If you want new stuff that you don't know about, you can just go to our real hot index, which you can find at cdcgaming.com/reelmetrics, which does everything that you need there. So the resonance is broken out by segment and then we have that ISR metric or inner segment resonance, which will show you those that appeal to multiple segments, and therefore need to be placed in larger quantities. So that was kind of my two cents. Dan, I know you have a lot of thoughts about this as well.

Yeah. No, I think it's a great question. I feel like it's a question that in different shapes or forms keeps coming up over the months and we've talked about from a few different angles, but I think it's the question every operator has on their mind, that it's where everybody's trying to get. I'm just a simple operator, so I'll give the operator perspective here. I think a lot of folks have had success in different avenues here, right? So the basic, the listener said, hosted players, right? To me, that's the easiest, and whether that's a technical data-driven approach or whether that's just listening to your host team, listening to what players are talking to slot attendants and slot managers about on the floor, that seems like the way to dip your toe in here is focus on the high limit room where you get the most bang for the buck and make sure you have games there that are resonating with your players, and I think a lot of operators are doing that.I don't remember if they said, used the term junk games. I'd probably phrase it a little different. The goal, and I think you'd agree, is let us try to the best we can get those junk games off the floor, or at least put them in DF locations to where players can avoid them if they want to. But I always think in terms of whether you're calling it old favorites or classic titles, the obvious example is Buffalo, but there's a lot of titles from 10, 15 years ago that still resonate. So, I've seen a lot of success in small scale in casino operators, whether it's on new hardware or old hardware, grouping and creating these old favorite sections.Then the third area that keeps popping up is this concept of the lounge, whether that's your link lounge with your Dragon Link and your Ultimate Fire Link, or whether that's more of a theme or mechanic-driven lounge, like your Huff N' Puff zones and things that have popped up like that, I've seen a lot of success. Beyond that, you're way more of an expert than I have, but I feel like everybody wants to go down this avenue but is finding it very difficult to do so and is finding it very difficult to find the tools. I don't know if that's because we've talked about this convergence where everybody's copycat, everybody's changing the mechanics that where do you differentiate or how do you make it obvious?I think there's some mechanics that are very apparent that operators, whether it's mechanic are finding the ability to group certain games or whether it's theme, again, putting all my pig games together or things like that. But I think folks are looking for tools and most operators don't have that tools to understand, "Hey, I want to go down this route. What's a simple way for me to identify the resonance that you're talking about?" So whether it's with ReelMetrics or something else, I'm curious from you, are you able to talk a little bit more on how does an operator that may not have the most sophisticated data system in the world, or are there easy tricks on how they go about identifying which are these games they should be grouping together?

Yeah, I would say in our case, I mean, we're just doing this all the time, right? So we're looking at what's going on by segment, right? This is exactly how we look at the world generally. But where I get concerned sometimes is I'll see an operator say like, "Okay. Well, in this section we want to have a high hold ultra volatile three pot hold and spin," without considering the fact that most of the titles that fit that description absolutely suck, right? They're not performing and that's the copycatting that you'll see. So we see a game that hits, and then by the time we get to G2E, we see a hundred copycats. Fast forward to the subsequent G2E, 90 of those are gone.So that's just where I'm always really forceful, as I say, you just want to make sure that the resonance with the group that you're targeting is absolutely proven, that you're not just taking risks on this because that happens a lot and then it just ends up disappointing people. But yeah, in terms of what they can do on their own, I mean, if you have the ability to really look at through your CMS or whatever else and really dial in on preferences by segment, that's obviously the way to go, but you of course have to have good segmentation too. So that's part of it.

Yeah. And start small, I'm guessing you'd say.

Yes. Your point about starting with that A segment, a high limit. Interestingly enough, I don't have any hard data on this, but it just feels like this anecdotally, I've been traveling a fair bit recently and it does see to me as though high limit rooms are kind of going away to an extent. I see fewer and fewer of them out there and more and more people moving those top players out onto the floor, but I don't know.

A lot of mid-denom, right?

Yeah.

Denom's been a big thing. And then just with multi-denom, you're going from penny all the way up to dollar, $2 with 70, $80 max bets that that game on the main floor or just outside of Highlander seems like it's accomplishing what you need for your real players.

Yeah, 100%. Well, anyway, thank you very much to the listener for that question. We could probably spend a full hour talking about this. It's a really good topic and really good question, so thanks again for that. Okay. Dan, we're going to move on to today's guest. This gentleman is a graduate of UNLV where, and this is based on his LinkedIn profile, his activities and societies included sports wagering, racking up parking tickets and procrastination, which I really love that description. He started his industry career as a senior vice president of casino ops and marketing at the Riviera in Las Vegas. Then in 2013, joined his father, John Acres, as a principal at Acres Manufacturing. As is the case with his dad, he's very comfortable as an industry disruptor and as such, always has very interesting things to say. I'm referring, of course, to principal and chief operating officer at Acres Manufacturing, Mr. Noah Acres. Howdy, Noah. How are you today?

Hey, guys. I'm doing good. How are you?

Fantastic, man. Great to see you. First question I have for you is, do you have a dollar amount for those parking tickets that you react up there?

Well, you know what's funny is I did actually get a lot of parking tickets. If you're familiar with UNLV, they have the Thomas & Mack Center's, a really big parking lot where I used to park every day. Back when I was going to school there, it wasn't like these electronic recorded parking tickets. They would just write you a slip and put it on your car. I kind of figured out pretty quick they were actually not recording those anywhere, and so I just didn't pay them and it seemed like a voluntary sort of thing. So I did get a parking ticket a couple a week, seemed like, but I never paid them.

I saw that on there and I do recall they did have huge parking problems there that many years ago. I remember this. It was like it was impossible to park there around the campus anyway. Anyway, okay. So plenty of folks listening today, they know your dad, know you grew up around gaming. Can you maybe first just walk us through your decision to jump into the industry and your decision to join that?

Yeah, that's, I mean, kind of funny. I don't know that I ever really made a conscious decision because I think growing up, I kind of always had a job even from when I was a little kid. I would organize electric components or magazines, catalogs, things like that for my dad's office and grew on to do assembly and testing equipment and stuff like that. Even though I wasn't doing the thinking work, I was always really fascinated by gaming. I can't really remember having another industry that I wanted to go work in besides casino gaming.

Now, I imagine that in your house growing up as a kid, just for some reason I imagine this, I don't know, but you guys must have had a slot lab somewhere in your house. Just imagine a room with disassembled slot machines.

Yeah, exactly. That's why I was like, I think I started working when I was super young, seven or eight years old, because we had a garage and all that stuff was in there. I have a lab over here and a lot of it just reminds me of the garage when I was a little kid.

I can imagine. Oh, perfect. Okay. Before we go into some of the missions and stuff that are really driving you guys, maybe you could give us an overview of your product portfolio. I know you guys are doing quite a bit of stuff, so maybe you start with Foundation and everything that you guys have built there and what you're doing so people have an idea.

Yeah. Basically, we created this data platform called Foundation and it provides a real-time stream of really well-organized data from slot machines and it also provides this sort of credit meter control. If you live in that world, then that means that you can take sort of any game outcome and turn it into a bonus. You can do loyalty things like free play. You can do cashless gaming, which we've done. So this platform, Foundation, it kind of allows you to do all the things that maybe your CMS can't do. And because it can work alongside the existing CMS hardware, which is a pretty novel skill, it's been pretty disruptive in allowing operators to adopt some of this technology without losing their existing CMS or loyalty functionality. But since that time, we've gone on and we've developed a full CMS where you can actually completely remove your legacy hardware and just run everything off of Foundation.

Now, can you maybe talk a little bit more about the CMS? I got to know your company a few years ago and I think in the early days of launching your CMS with a couple operators in the Eastern United States was incredibly impressed. My sense was you were really, and you are really trying to do something very different and redefine what a casino management system is. These are typically very expensive, very challenging pieces of applications to maintain. Can you touch on with Foundation and your CMS launch, how are you thinking about a CMS differently in terms of streamlining and in terms of value add? I guess when you talk to operators or when you think about what you're attempting to do, is it really stripping down the CMS into the basics that you have to have and then trying to differentiate? So maybe talk about those two different things.

Yeah. I mean, I think that kind of sums it up. You got to break it down because it's like, "Well, what is a CMS? What does it mean?" It really kind of depends on who you're talking to and why they're looking for a CMS if it's an operator that's on our RFP or something like that. A lot of times some of their hardware is out of date and they have to upgrade anyways and they're just looking for something. I would say that, look, if you work with Acres, we're going to give you more player acquisitions and we're going to give you the ability to market to those players more efficiently. To me, why you would want to use our CMS is because you're going to modernize how you do player acquisitions and player marketing.There's also components like TITO and accounting and machine database and stuff like that, which I think are really nice compared to maybe some other providers, but it's not going to make you more money really. The casinos, I think that they should be really highly focused on that, those questions, how do you acquire players and how do you efficiently market to them really over anything else. Frankly, sometimes I talk to operators and they're like, "Hey, well, I really like the UI of the Players Club login because it has this feature over here and that feature over there and make this call." I just think that's really frankly the wrong way to be looking at it because that's not what's going to differentiate your operation from a competing casino.Where you're going to succeed is by enrolling more players and finding a way to bring those players back and that's the start and end of it. Also, when you look at all the advancements that we're seeing with AI, programming is becoming incredibly faster. It's becoming really fast to make some of these developments. So the Players Club UI can change and the machine database UI can change incredibly a lot easier than it could in the past. But I think that where operators really need to be spending their time is how do you acquire new players and then how do you most affordably bring them back for a repeat visit?

Excellent.

Gotcha. What makes you guys so nimble, I guess? Is it the hardware? Is it the infrastructure? Is it the database structure or is it just you guys are small and able to move on a dime based on what your customers are looking for?

Yeah. I mean, I think it's a little bit of both. When you're a new player in a smaller company, you don't have hundreds of millions of dollars of recurring revenue coming in. You're not loyal to the old. You're more in a position where you have to disrupt to survive. But really at the core, we have a much more modern technology stack than any other CMS provider, and that's because not because we're like super geniuses, but our hardware is a lot newer and it has modernized capabilities. It's versatile. It's just more modern. I'm sorry I'm not coming up with the words. But a lot of the CMSs out there today, frankly, they were bought, not built by the provider and that original acquisition was 20-plus years ago, and so that means a lot of the hardware is actually older than my kids.

Yeah. Yeah. Still a lot of serial communication out there.

Exactly. Exactly. So when you say like, "Hey, how do I issue a player here, a different offer than a player there?" Well, if you don't have the ability to measure that data in real time and then communicate to the game to serve that player, you're not going to be able to do it, and that's why we need to modernize the technology.

Now, Noah, so you guys have taken... Both you and your dad have taken some pretty critical positions about the state of the industry over the years. As somebody is also on that disruption side of things, I really do find myself agreeing with you two more often than I don't. One of the positions you've taken is that the industry really in terms of its technology and a lot of its practices really remains kind of stuck in the '90s about 30 years ago. Could you maybe unpack that a little bit and talk about which of the sacred cows that are out there do you feel really are most problematic and holding everybody back?

I mean, I always go back, I think the biggest thing is the acquisitions. How do you enroll somebody in your database so that you can market to them and then how are you creating those offers, what data are you using? To me, the biggest problem I really see in the industry is the enrollment process for the player card. That leaves us in a quite challenged position compared to other industries because now our players or our customers have to walk over to a player's card desk somewhere, pull out their ID, fill out a bunch of forms, provide a bunch of information, get a physical card and then remember to use that card on every subsequent trip. I think it adds a lot of cost and a lot of friction and a lot of negative user experience.

Yep. As I recall discussing with you in Slovenia, we both had roughly the same percentage, which was that roughly two-thirds of the people who enroll in that program, you're never going to see again, right? They're never going to come back into the casino. I think you had around the same number as I recall.

Yeah. People enroll and there's a huge percentage that just never return, but I think that there's things that we can apply to the data, there's filters we can apply to the data to really predict what's somebody's likelihood of returning or what's the likelihood that maybe somebody... It's their first time here, but it seems like they're a player, maybe they're a player somewhere else and that's a player that we can begin to compete for with having... Not where we're bound to like, "Hey, they're going to get our new member offer and they only played this little bit, but hey, there's signs that this person could have a lot more depth to them and so let's market to them based on what our mathematical prediction of their value is going to be."

Okay. Yeah. So the perfect segue into what I want to discuss next, which is that you've been very vocal about free play and I share a lot of your views on this. One metric that you reference is that American operators are vaporizing around 37 billion in profits annually on free play awards, which, and I think a lot of the industry is going to agree, aren't all that effective in terms of revenue and loyalty levers. I'd love to hear just more color on this topic and some of your thoughts on what you feel are really the better approaches than something like free play.

I'm not trying to be critical of any operator or anything like that when we say that the free play is largely wasted and I think that they're in a tough position because what else do they have to offer? So when you operate a casino today, you don't have the ability to give a player a win. You don't have the ability to correct too many losses. The only thing that you can really do to affect the play experience is give them free play. So I think that we want to give people offers and so we want to give an offer. The only thing we have to give is free play. That means we're going to spend a lot on free play. I think that the one thing that people don't really take into account when they measure the cost of free play is the time value of that free play because most people are time constrained, as well as budget constrained.So you come in, and if the first 20 bucks or 40 bucks or whatever of play is on the house and that can carry me, I don't know, 10, 15 minutes and I'm only going to spend 30, 40 minutes of playtime, well, now you've taken up a really big chunk of my spend potential. So I think that we need to develop more tools as an alternative to free play. One thing I think would work tremendously well is what if you could just control the timing of the free play and give it at the end of the trip instead of the beginning of the trip so you're not so much burning that time value.?The player would have to stay extra time to use it.

Yeah. It's a very interesting point that you make there because that, and it's particularly problematic at the high end because that's typically where you see the strongest budget or time constraints, right? So you see it in the A segment, those people are very, very rarely not time constrained. So it's even more problematic in your marketing to these year better players typically. It's a very interesting perspective.

Yeah. You know what else is I feel like a lot of the free play waste is also attributed to the acquisition program, which is sort of the carrot that's required to get you to go through that painful process of signing up to begin with.

Sure.

I can't remember what app I downloaded recently or what website I went to and I wanted to enroll for the first time in the service, which is always a pain even though you have auto-fill, it's like nobody likes to fill out forms, but I noticed more and more websites have this like sign in with Google, sign in with Apple, sign in with whatever else. You just click that button and you're signed in and that operator, that app provider, they're getting all of your information, like your marketing information so that they can send you an email with the data that you already provided to Google and I didn't have to lift a finger as a consumer. So, why can't we do the same thing in gaming? When you're sitting there playing a slot machine, sign in with Google or sign in with Apple, sign in with whatever. That leads to a lot of free play burn when we have to get people to go spend their own time to go through these painful processes.

Fair enough.

Yeah. I don't remember if you used the exact word personalization. I think you may have earlier, but I'm getting from what you're saying that you're not necessarily saying casino shouldn't give free play. You're just saying free play if done in a more real-time way in a personalized way to the right person in the right way at the right time is going to be way more efficient, drive much more ROI and probably you can spend less than you're spending today and getting a better return. If that's what you're saying, is that kind of personalization happening now at scale, right? Is it actually being deployed in the field and can you shed some color on how?

Yeah. We do have a partner. One of our key CMS partners has developed their own offer engine and they use it to deliver personalized offers to every player in their database every day. So every player gets an offer every day and they call it one-to-one personalized marketing instead of tier-based marketing, right? So when we first started working with them, what they said was, "We know that the more we segment our offers, the more our profitability goes up." But at a certain point, it becomes so time-consuming to segment the offers and the database and the system can only handle so much and things break and we got to fix it. So we have a point where we have a max return at that level. When they evaluated Foundation, it was to get over that hump.So we've done this now at three of their casinos. The numbers are actually quite a bit up. I think that year over year, they're in the 20 to 30% up revenue on slot win. I'm not going to say that's all because of Acres that are a great operator, they're doing a lot of things on their own too, but we've clearly played a role in this and/or our technology allows their strategy to work, and I think that a lot of operators should be looking at doing that. I think a lot of people are looking at doing that. It's like what's the technology that's going to get you there? That's always the question, right? What's the technology that's going to get you there? Who can you trust or what tech can you trust and then what's it take to get it installed? There's a lot of people in the industry going down this path. I don't think everybody's going to be successful though.

Yeah, for sure. It's fascinating. Not saying you've said this, but as the technology allows operators to become better and better, whether that's AI or whether that's just more immediacy and the ability to act more nimble, there's a psychological aspect, right? When we talk about, "I assume this player, we get a better ROI by giving them their offer upfront. This other player, we know if we give them an offer at the end, that may extend play." As you become better and better and essentially get to a segment of one, which is the ultimate goal, I think you start to run into responsible gaming questions that haven't necessarily been answered yet.I'm curious, is that something that you think about? Is that something that comes up either in your conversations with operators or your conversations with regulators on how as an industry we define that line to make sure, yes, of course, we want to be more efficient, and of course, we want to create more value and create offers that drive the most play, but also be responsible to whether it's responsible gaming or gambling addiction or whatever, making sure that we understand the psychological aspects?

Yeah, I think that problem gambling is... Every time gaming technology comes up, people will say, or every time we come out with a new idea or new product, some people say, "Oh, that's great. People are going to love to play that," and there's some people say, "Oh, no, people are going to love to play that. What about the problem gambling?" It is a concern, and we do as an industry have to provide society verification that we're monitoring it and we're trying our best to keep people from developing or increasing a problem. I just think that the more data that you have and the more communication that you have with players, the more you can detect problem gambling and then intervene when it becomes a problem, right?Right now, if I had a thousand machine casino, it'd be really difficult to say what players are doing what on the floor right now compared to what they've done in the past and are there any signs for problem gambling, where now you come in with... The way we view it is like you come in with a real-time system like Foundation that's recording data and also comparing it to prior visits, we can see is somebody increasing their play? Are they increasing their visits? If the operator decides that they want to come in and intervene, I don't know how that intervention works exactly, but we give you the tools to decide how you want to handle those scenarios.

Very good. Now going back for segue now to offers and whatnot. So you've also advocated that in awarding incentives to players, operators should try to migrate away from average daily theoretical, ADT, in favor of a metric that you refer to as player budget. Now, this is fascinating to me. Can you break this down for us, explain how that works and then explain how it differs from ADT and the approach?

Yeah. I mean, I think that if we really just look at the whole player acquisition and loyalty process from... If you were building it from scratch today, it would be completely different from how we operate it, right? In my opinion, a marketer wants two pieces of information. They want to know how much you're worth and how to contact you, and that's it. What's your projected or potential spend and how do I issue you an offer, right? What's your email address? What's your phone number? Whatever.I think that this metric that we call player budget is the fastest and most accurate way to predict a player's spend potential because instead of averaging or theoretical or actualizing a win, we're taking your in session lowest point. How much did you get down? I might've gotten down $847 and then hit a $700 pay, walk away only down 140 bucks and I got $30 a theo, right? The most important information would be, "Hey, that guy got down $840 and I want to bring him back." There's other players that would have the same actual and the same theo, they should not get my same offer because they didn't show the same spend potential that I showed.

So you're looking at a risk profile on that player, like what they're willing to put at risk? Is that-

Exactly. Yeah. The risk tolerance.

Okay. Yeah. That's a very interesting way to look at this. Yeah. Okay.

What we see is really that players for the most part... I mean, because people come in and they go on instant win sessions and things like that, but for the most part, they show a pretty disciplined level of how much they're going to expose themselves to the downside. I just think that you could put this whole loyalty program on fast forward if you just use that metric at least as a sanity test compared to ADT and actual, and even points and things like that. I feel like most of the offers in gaming are the discretionary offers where the operator just decides each month what they want to reinvest in somebody. I just feel like there's no better way or there's no better metric than how deep I got into my own pocket on a visit.

Yeah, it's a very interesting approach. Now, do you find that do players understand this in the loyalty programs and whatnot? Do they adapt to this pretty readily?

Well, so this wouldn't be something that's really shared with the players. Another potential problem, is it a good thing that there's a core group of players who know everything about our loyalty programs and exactly how to get an edge on them and how they're earning rewards and how they can redeem them?

Yeah. People are writing books on this, right?

Yeah. I go to Amazon, they just know what to serve me and I think that's kind of the approach that we want to provide in gaming.

Okay. Gotcha. Okay. And then you've obviously done a lot of work on the cashless gaming front, which is over here in Europe, I was just down in Albania last week, wall to wall cashless. It's just smooth. They put their deposits down, work it, et cetera. Now, my sense is that you guys and others in the space have been pretty frustrated by the pace of adoption on cashless just generally.I guess what do you feel principally really is the stumbling block here? Is it more regulatory barriers, implementation costs, fear of change, this type of stuff? So it just feels like as an industry, when we put in tickets, I remember first of all, everybody was just wetting the bed, freaking out saying, "Oh, this is never going to work. These ticket things are never going to work." But it was effectively, we were launching an obsolete technology 30 years ago. It was the new thing and it was already kind of obsolete. I guess maybe share some of your thoughts about cashless generally and really what do you feel is really holding back adoption more than anything in the industry?

Well, I think it's an interesting question. I think there's just too much friction, right? First of all, TITO is... I guess if it wasn't for TITO, people would still be lugging coin buckets around.

Yeah. Crazy to think. Yeah.

TITO is a really convenient service compared to lugging coins around. I think that what we're finding is that cashless is really convenient for the players who are willing to do the onboarding process, but we need to make that onboarding process a lot lighter. We need to make it really clear to the player why they want to do cashless and we have to make it really easy for the operator to adopt cashless. When we first started doing cashless, I thought everybody's going to do it, but what I found out is that, well, not every operator can create their own mobile app or even support one that they buy. Not everyone can train their employees and their players and run a marketing campaign and onboard a wallet and all these things. So it's like this multi-headed beast that operators have to onboard.Frankly, like most casinos, they're spread pretty thin and they don't have people that specialize in like, "How do we onboard new tech?" I spent a lot of time thinking about this over the past year or so, like, "Why aren't people doing this?" The one thing that casinos do do is they buy games and they put new games on the floor because they're plug and play and it's just like put the game on the floor and it works. So, what we've done is we've gone back and we've made a new version of cashless. It's this plug and play. So you don't need a wallet. You don't need a mobile app. You don't even need a player card. It's just we put a QR code screen onto the game, you scan it and you say, "Instant online checkout process for a slot machine."So, we're starting to release that. I think that just removing all the friction is key. That's why it hasn't been adopted. There's still too much friction, both friction between the experience and the player and friction between the operator and onboarding all these services and people just have to figure out if we're going to succeed, we got to figure out how do we continually remove friction until people want to onboard it.

Well, what is the customer experience you think that wins out? Because I know you all really were pioneers with your casino partners on the first mass rollout of an app, a traditional wallet-based solution in the US. But you talked before and you just touched on, you talked before about the casino and logging in with your Google account, which is less of a loyalty player's card-based experience. It's more semi-anonymous, or at least I'm not logging into the casino's program.Do you think the kinds of solutions that you just touched on, which are more point-of-sale type experiences or non-wallet based, but it's being enabled at a slot machine, are those the kinds of solutions that you think win out, or at the end of the day, is it there's going to be all these different types of experiences and you pick your level of engagement and for the most loyal repeat visitors, we're going to have solutions that are app-based because they're going to go through that lift to get there, but for other people, we're going to make it as easy and seamless as possible? Is it going to be an ecosystem where everything is out there and customers just pick what is the way that I want to access the experience?

I think that if I put myself in the shoes of a casino, I want to give my players the widest variety and easiest methods to pay, right? I don't want to just have one wallet. I want to have wallet and I want to have instant direct pay and I want to have maybe a marker system and a front... I want to have everything that my players could possibly want to use because we know if you ever tried to get money down on an online casino or a land-based casino and you don't have cash on you, it's tough. If you're a player, you've probably gone through a few different payment methods trying to find a way to get money. So, the operator should want to offer as many payment methods as they want.I think that if I was to predict the future, I think that this anonymous direct funding is going to account for the bulk of the cashless funding and then a small... Well, some people will like the wallet. People who want to carry a balance, people who are high limit players, they don't want to carry cash ever, but most people that are just playing a few hundred bucks, they're going to come in and they're going to do this direct funding and I think that the reason is because... And this is why TITO works and why cash works is because there's no signup process for cash or TITO, like anybody can use it. So we're already making it harder to use cashless if we require you to sign up or provide any additional information than you have to for TITO or cash and we have to make it as easy or easier than TITO or cash to use it.

Noah, the application that you're providing now, so the way that this works, I just want to understand the UI. So you walk up to the machine, there's a QR code that you then scan with your phone and then that takes you out to a website where you hook up your bank and everything. Is that the way that works?

Yeah, exactly. It's a digital QR. It's a digital screen that's embedded next to the bill validator. It rotates a QR code and some other graphics that indicate like, "Pay here." The QR code itself changes every 20 seconds or so, but you scan it and you go to a web-based checkout process where you can offer really any payment method that you want to offer your players. We're still in the early days, so we're trying to bring more and more payment options to the ecosystem, but I think that this is what players want because now it's like we can make it as easy as buying something from Amazon or checking out on PayPal or Venmo or something like that.Our intent is to bring all of the consumer payment methods to this ecosystem. One thing that's really unique about Acres and our Foundation architecture is that when it comes to cashless, the approval includes our API, so any consumer-grade payment system, whether it's like a PayPal, a Venmo, a Google Pay, Apple Pay, they can come in without submitting for additional regulatory approvals. That's a huge thing in gaming where we don't get big companies like Google and Apple and Amazon and those guys come into gaming because they're never going to submit for our licensing process, but the way we've done this is it shields those guys, and so we're going to be able to go out and hopefully bring a lot of those guys to the casino ecosystem for a checkout process.

It's a very cool approach. No doubt about it. That's very interesting.

I'm just curious to know those players who, okay, they're not using an app, they're accessing funds digitally using that checkout process, they're wanting to be anonymous, I think the answer is yes, are you still able to give those guys an offer based on your technology at the end of their session or during their session or identifying them some way?

Yeah. Yeah, for sure. I mean, that's what's really great about it is now we're learning that we can use this web experience to generate loyalty, right? So, just play this scenario out. So I do the checkout process and I get a confirmation page, "Hey, you just successfully funded Lion Link for $100. Would you like to play a game?" You've won a free game. You could win up to $100 free play. All you got to do is enter your email address or your phone number. And then you do that, you spin the wheel, you get the free play, it goes to the game or whatever the prize is. But now without ever getting that players, they never had to sign up for anything. Now you're going to have their player budget and their funding history and the ability to send them an offer, and I think that that gives you the ability to really become a modern marketer.

Yeah, very good. Noah, I didn't ask you this earlier, but I assume just based on your background and stuff, I'm assuming you've also built in the Foundation just tons of bonusing and jackpot apps and things of this nature. Is that all part of the system you built then?

Yeah. So, it certainly has the capability and it's like this pet project that we always get. We'll be releasing some bonuses soon. We haven't released any bonuses yet. We've shown some at the past couple G2Es. Essentially, what happens is we go back to the drawing. After we do it, we're like, "We need to remove more friction." I'll tell you what we've done is so last year we were making a bonus game that you would essentially take the topper off a game and replace it with a screen and that would stream a bonus game and bonus game gets triggered by a real-time event and whatever, but the problem was now we're going to have to have hardware in every game on the outside and there's going to be a setup process and we were using a database that was going to up the cost.So, we started developing this really cool new technology that we call screen. It means screen manager. So what it is, it's like a magic layer that goes over the game screen and we could put content anywhere over the top of the game screen. We actually do two game screens at once. So I can do the primary screen and I can do the topper as well.

Oh, cool.

Basically, if you imagine an Instagram reel or a CapCut or something like that, it's picture-on-picture, not like if you go to a casino that uses picture-on-pictures today that the screen shrinks and it condenses. We're going to be able to put graphics over the real symbols and turn losses into wins and things like that. So we're going to have a plug-and-play bonus library that goes over existing games and there's no hardware that goes on the outside. It's just these computer devices that go inside the game.

Yeah, very cool. Okay. This, I'm definitely going to keep my eyes open to watch this stuff. This is cool, my kind of stuff, so very good. Okay. Well, I see that guys were kind of approaching the end of our time for today. So, now, I wanted to ask you, do you have any upcoming events or initiatives or anything that you wanted to plug a bit before we sign off today?

Well, I know we're a ways out, but I just started getting organized for G2E.

Yeah. We're already having meetings now too, so yeah, I hear you.

Not that far out at all.

Yeah. I just noticed this in September this year. The last day is October 1st, but we're really excited to show this new screen technology that we have and I'll be posting some videos and doing some marketing around it, but it's really cool tech so come see it. It's going to be really cool.

Excellent. Cool. Okay. Well, Dan, did you have anything else for Noah today?

No, I'm looking forward to seeing it too and let's get all the regulators in your booth to see it as well.

Exactly. That's who we bring in. Okay. Well, thank you so much for your time today, Noah. You too, Dan, as always. Yeah, I wish you guys a lovely balance of the week and weekend. Yeah, we'll be seeing you at G2E for sure, Noah.

All right, guys. We'll see you there. Thank you.

Okay. Take care. Thank you.