In: Press Releases

"85% of all vehicles in the US are financed, and most slot machines cost the equivalent of a brand-new car"

The former Scientific Games executive says PDS does not take a “one-size fits all approach” to financing, and at G2E he saw a big opportunity ahead for the firm due to the rising cost of gaming equipment. The company is having discussions with "several sportsbooks" regarding the capital burdens they face.

Alex Dungan joined PDS Gaming in February 2018 as CEO upon the retirement of PDS’ founder, Johan Finley. With more than 27 years of gaming industry experience, he held positions at Scientific Games (Bally Technologies, Alliance Gaming) that included Vice President of Gaming Operations, Vice President of Sales and Vice President of Business Development. 

In that company, Dungan oversaw its Global Operations unit, he was integral in the mergers and acquisitions undertakings of the firm, and growth of cutting-edge technologies in new and existing domestic and international markets. 

Asked about his recent participation at this year’s edition of G2E Las Vegas, he tells Yogonet it was “one of the best” he has experienced, with attendance and traffic apparently “up quite a bit” compared to past years. “I was told by my colleagues who’ve been at PDS longer than I have that this was one of the top years for visitors stopping by our booth,” he adds. “We felt there was greater appreciation for our platform, and OEMs and operators seemed to really get excited over how our financial and leasing solutions can be individually tailored to help them address their business and capital needs. Furthermore, attendees were very upbeat, seeming to celebrate the uptick in the economy and the resulting business improvement over the past few years.”

Have you participated in any of the education sessions? What learnings, hot debates for the gaming industry and conclusions could you mention?

I haven’t since I came to PDS, as I have really spent all my time and energy on educating the market about our business and our capabilities. That said, I have been in this industry long enough to see how capital-intensive manufacturing equipment and operating casinos can be. I see the problems both OEMs and operators have in obtaining the financing they need to expand their product lines, put enough resources behind a new concept to get it get off the ground, or invest in their facilities. We’re helping to alleviate some of the capital limitations the industry faces so that manufacturers can get their products onto the casino floors more quickly and operators have the purchasing power they need to upgrade their offerings.

What overall insights could you provide into PDS Gaming’s current services and business areas? What would you identify as the distinctive values of the company to stand out from competition? How do you leverage your 30+ years of experience in this business?

PDS is in a unique position within the gaming community and we have benefited greatly from the industry’s expansion. During the growth of the industry over the past 25 years, PDS provided casino operators with a great deal of capital in the form of slot leases and FF&E (furniture, fixtures, and equipment) financing. The creativity, flexibility and understanding of the inherent risks of gaming were recognized and utilized so individuals and corporations could build their business. As the industry reaches maturity, PDS is in prime position to once again provide OEMs and operators with the capital they need to fund their growth because of our unique ability to tailor our products specifically to their needs. We do not take a “one-size fits all approach” to financing. Walking around G2E, it occurred to me how big the opportunity for PDS is going forward, especially due to the rising cost of gaming equipment. Every other industry uses structured financing to provide access to goods and services for business and private individuals. Eighty-five percent of all vehicles in the United States are financed, and most slot machines today cost the equivalent of a brand-new car. The financing that we offer provides casinos that don’t have large capital budgets a means to ensure their casino floors always feature the latest equipment while reducing the burden on their checkbook. Financing is also an important tool manufacturers can use to increase sales, ship share and cash flows. In addition, there are several very good small companies that have developed great products, are ready to deploy and have capital constraints. PDS is in position to serve all of these segments.

What’s the impact of emerging technologies such as blockchain, cryptocurrencies, AI and machine learning in the gaming industry, and how does this affect your business areas?

We have had discussions with several companies on the use of blockchain in particular, and while the ideas are compelling, the time of acceptance by regulators may slow down deployment. 

Could you provide your personal assessment of the regulatory framework, including taxation for gaming operators and suppliers, in the jurisdictions where you have operations, and in the markets you’re looking to enter? Could you mention examples where regulations could be improved in order to optimize your business areas, in the benefit of all stakeholders?

Regulation in gaming is part of its allure, and what makes PDS unique is that we have decades of experience in this industry, so we are very familiar with the laws as they relate to the national landscape and the individual markets in which we operate. While regulation can be cumbersome, especially for those who aren’t as experienced in the idiosyncrasies of the laws from state-to-state, it strives to ensure that gaming entities are operating with integrity and players feel they are getting a fair shot in a secure environment. Standardization of regulatory process and procedures would be a positive, but we have operated successfully for over 30 years in the current structure and will be fine if gaming regulations remain the same.

How have your customers’ demands evolved recently, for instance, since the US sports betting market opening, and what are your prospects in that sense? What are your expectations and approach for the US and LatAm emerging markets?

Sports wagering is still in its infancy, but we do see a strong market opportunity ahead, especially as it becomes more mainstream and local governments permit both online and in-person betting. In fact, we are currently having discussions with several sportsbooks and informing them how we can relieve some of the capital burdens they face when it comes to building out their facilities or installing kiosk hardware.