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John Acres has been searching for the key to delivering player self-esteem for over five decades.
The “Thomas Edison of Gaming” is a technological icon and entrepreneur who built four companies and created some of the bedrock gaming systems and products that we take for granted today.
Before John Acres helped create them, gaming did not have electronic player tracking using loyalty cards, bonuses paid directly on slot machines, progressive jackpots systems, or free play.
After selling three of his companies, Acres came out of retirement to develop his latest Holy Grail of casino rewards, the ability to systematically reward players in real time based on an artificial intelligence analysis of how they play casino games.
After 50 plus years as a brand, Acres holds 193 patents and nearly every casino in the world uses at least one of its inventions.
John Acres was inducted into the American Gaming Association Hall of Fame in 2016 and is recognized as a top tier disrupter, innovator, and the inventor of casino systems technology.
In 1981, Acres started his first business, Electronic Data Technologies. EDT created a system that allowed casinos to track slot machine players by using loyalty cards, offering gamblers rewards based on how much they played. In 1984, Acres sold the company for $1 million after inventing the first player tracking system.
He started his next business, called Mikohn, in 1986. Mikohn devised the modern progressive jackpot system in which slot machine jackpots increase over time, creating growing excitement for players. When Acres and his partner sold the company in 1989, Acres’ initial investment of $120,000 had turned into $6 million.
His third company, Acres Gaming, invented a system in which slot machines awarded instant bonuses based on current or accumulated play. Acres Gaming took a $17 million investment to reach consistent profitability; Acres sold it in 2003 for $143 million.
His current company, Acres Technology, has $70 million invested, with a goal of achieving a significantly greater ROI than at his past companies.
From airman to repairman
In 1972, John Acres was an 18-year-old United States Air Force airman working on flight simulators. He was earning $362 a month and looking for a part-time job while his wife worked selling shoes at JC Penney. He found work repairing radios when a customer asked him to help repair a casino sound system.
The casino was Mister Sy’s, a small operation off the strip where Acres met his mentor, marketing director Norman Little.
A casino philosophy is born
Acres described the early events that launched him into a lifetime quest.
“Norman Little was an early pioneer of bonusing and had an amazing grasp of player psychology. He watched for players who were low on coins and might be thinking about leaving. To encourage them to stay, Norman would introduce himself and engage in a brief conversation. If he somehow felt the player had gambling money left in their pocket, he’d open their slot machine and move its reels into a winning outcome. Players were always amazed to see free money pour out. He wished them good luck and walked away.
“Then he’d stand in a corner outside the player’s sight to watch what happened next. Most of the time, the player spent back their entire bonus and continued gambling with their own funds; exactly what Norman wanted. Sometimes, though, the player only wagered a few bonus coins before grabbing the remaining coins and bolting for the door.
“Norman told me, ‘If you can ever predict beforehand who’s going to stay and who’s going to bolt to the door, you’ll be very successful.’ That challenge became my life’s work, and I’ve spent the 52 years since striving to understand why people gamble and how to motivate them to spend more,” Acres said.
Lunch with the titans
Little’s mentorship to Acres took the form of weekly lunches with the titans of gaming like Steve Wynn and Benny Binion.
“Steve Wynn taught me that casinos sell self-esteem, not jackpots. That slot machines are just the cash registers where players pay for their experiences. He said what matters most is that his brand makes the player feel important and respected, not whether they win or lose at a game.
“Another lesson came from Benny Binion. He said, ‘People hate to be fooled. If you trick somebody, if you lie to them, they will resent you forever. But people love a chance to fool themselves. And I give it to them.’
By example, Acres describes Binion’s free paycheck wheel. “Anyone could take their paycheck to Binion’s and cash it for free. And everyone who cashed their check got a free spin of a bonus wheel that had prizes ranging from a free drink to a doubled paycheck.
“Benny said most customers fooled themselves by thinking they’d just cash their check and leave. But most ended up staying and gambling, even though they had no obligation to,” Acres explained.
Electronic data technologies
Eventually Norman encouraged Acres to go out on his own and develop a progressive jackpot system.
“I quit my job at the casino and started my first company with $200. About the time I got my first demo product built, Mr. Sy’s went through an ownership change and Norman left the casino. I was left with a family to support, an empty bank account and no customers. I’d never sold anything in my life, so I had to learn quickly.
“Our phone was disconnected for nonpayment. To save on gas, I’d park at one end of the strip and walk from casino to casino carrying my jackpot display. Most managers didn’t understand my product, but Ray Silvestri, the slot manager at the Aladdin casino, did. He gave me a $3,000 deposit on the condition that I install it three weeks later. The deposit was a lifesaver, but I couldn’t get the final product to work before the deadline.
“I was supposed to finish the installation on a Friday afternoon. I installed all the hardware the day before, but my computer code wasn’t working. I worked on it all night and took the code to the Aladdin early Friday morning. Disappointingly, it didn’t work. That afternoon, Ray came by and was justifiably upset when he saw I wasn’t finished. He said to me, ‘Here’s the deal. You can stay as long as you want to get this thing running. But if you leave the casino floor, don’t come back.’
“I couldn’t afford to refund the deposit. I thought about giving up and going home but realized I wouldn’t actually fail unless I chose to quit. I put a chair inside the slot carousel and worked there to complete my code. I finally finished around 4am Monday morning and took it upon myself to open the carousel for business. People started playing and everything worked as it should.
“Ray came in at 7am and smiled when he saw it running. Then he told me to go home and take a shower. The next day, Ray scolded me for costing the casino three days of revenue. Then he paid the balance due, saying he admired my work ethic. That experience taught me to never give up and to be more careful about my commitments,” Acres declared.
A second Steve Wynn lesson
Based on the successful installation at the Aladdin, Steve Wynn wanted progressive jackpot systems for five carousels of slots in Atlantic City and agreed to pre-pay $35,000 to get the order going.
“We did the deal on a handshake. Steve just said ‘Listen, if you take this money and don’t do what you’re supposed to, I’ll make sure that you never work in any casino again. On the other hand, if you build what you promise, you’re going to do a lot of business, and I’ll help you.’ I chose the latter path, and it worked out great,” Acres said.
Bophuthatswana, Christmas Eve, Speak & Spell and player tracking is born
“Later that year, Steve hired me to build ticket dispensers for his dollar slots, with one ticket issued for every $50 wagered. Players took great pride in accumulating tickets, which could be redeemed for discounts at the casino. We sold thousands of dispensers to casinos around the world.
“Just before Christmas of ’83, I visited the Sun City casino in Bophuthatswana, South Africa. I was given a card to open my hotel room door instead of a key. Of course, cards are common now, but it was a new idea back then. I was so impressed that took my room card home with me.
“I get home on Christmas Eve. My wife was putting out Christmas presents for our kids and asked me to put batteries in one of the toys: a Texas Instruments Speak and Spell. The toy had a beautiful blue-green display that I’d never seen before. I took it apart and removed the display.
“I found myself sitting at our kitchen table with my hotel room card, the Speak and Spell and a list of customer ideas about what casinos didn’t like about my ticket dispensers. A common complaint was they didn’t know a player’s worth until the tickets were redeemed.
“It suddenly dawned on me that I could replace paper tickets with electronic points and mimic the airline’s just-introduced frequent flyer programs. I diagrammed how it could work using the hotel room key card and the Speak and Spell display. A month later we demonstrated a prototype to Harrah’s. They immediately bought 150 units for their dollar slots at the Marina casino in Atlantic City and that’s where electronic player tracking was born.
“A lot of smart people believed electronic player tracking was a dumb idea. I remember one casino manager asking, ‘Do you really think that I’m going to put a card reader on all of my slot machines?’ Today, nearly every slot machine in the world has a card reader and a player tracking system that works pretty much like my original design,” Acres exclaimed.
Mike and John
Acres eventually sold his company to IGT. “My friend, Mike Stone, left IGT a few weeks after I sold out. We were talking about what to do next and I showed him a prototype of a new progressive jackpot design I was working on. He liked it enough that we decided to start a new business together.
“Back then, everyone thought Japan was going to take over the world and my wife, Jo, came up with the idea of combining the names Mike and John into a Japanese sounding word. That was the start of Mikohn Gaming.” Acres declared.
Acres Gaming
After selling Mikohn, Acres decided to set about improving the player experience and founded Acres Gaming. “By then, player tracking systems were in widespread use. Casinos used those systems to measure each player’s spend. Coupons that could be exchanged for rolls of coins were mailed each month to top players.
“The promotion was so popular, customers had to stand in line for an hour during busy times just to redeem their coupons. And just like at Mr. Sy’s, some players kept the coins without gambling.
“My big idea for Acres Gaming was to electronically transfer wagering credits directly to slot machines when players inserted their cards. We made the credits non-cashable, so they had to be wagered at least once. Of course, players could cash out anything they won. We named the process Free Play, which today is the most widely used—and I believe widely abused—promotion in the industry.
“We called our system Acres Advantage and in 2003 we sold it to IGT. That system is still sold today as IGT Advantage,” Acres stated.
Selling sequels
“The casino industry is in trouble.” That was the message from John Acres as the keynote speaker at the Raving Casino Marketing & Technology conference held in Reno earlier this year.
Acres believes the consolidation of slot manufacturers and the focus on quarterly earnings resulted in an industry that resists new ideas.
“I looked at casino revenues across the United States from 1990 through 2023. I found that although 2023 was widely reported as the highest gambling revenue year ever, it was actually 5% below the true record year of 2008 on an inflation adjusted basis.
“Even more troubling, the U.S. Gross Domestic Product—which is an indicator of consumer income—has grown by 25% since 2008. Combined, these numbers tell us that consumers are spending 30% less of their income on casino gambling in 2023 than they did in 2008.
“Our industry isn’t keeping pace with consumer desires. We don’t offer the social experiences modern consumers crave. Our games and promotions are predominantly sequels of past successes. We make minor changes to old products and call them new.
“Unlike in the ‘70s and ‘80s, casinos today are fearful of change. Their hesitancy to try new products inhibits their ability to attract new players. To restore growth, we’ve got to provide emotionally compelling experiences,” Acres declared.
Age of automation
Acres also cautions that TITO technology has inadvertently dehumanized the gaming experience. “TITO dramatically lowered labor costs by eliminating the army of employees that exchanged rolls of coins for customer dollars.
“Once change people were eliminated, few employees remained to interact with players on a human level. Many players were more loyal to the change people working at the casino than they were to the casino itself. If we don’t find a way to restore such emotional interactions, more and more gamblers will just stay home and play on-line,” Acres predicted.
Reinventing the gaming industry again with AI
Acres says, “The casino industry is more complex than ever. We have to worry about addictive gambling, money laundering and tax collection on jackpots. The processes required to combat these issues are often uncomfortable for players and diminish the joy of gambling.
“Today’s consumers are more socially connected than ever before and many won’t go anywhere without their phones. There’s a huge opportunity to provide in-casino social interactions between players and to communicate real-time offers through player phones. Yet many casinos still discourage, or even ban, the use of phones on the casino floor. That’s a deal-breaker for many younger players.
“My company has created a powerful new new electronic nervous system that efficiently gathers every detail of each player’s wagers, even as they play. We feed this data to an artificial intelligence agent that determines when players become discouraged. When that occurs, our AI instantly offers an incentive that’s personalized for each player’s psychographic and demographic characteristics. To lessen the problem of addictive gambling, the AI withholds incentives once the player spends their maximum affordable budget,” Acres explained.
Free Play Frankenstein
Acres believes Free Play is horribly abused as a casino promotion: “Casinos today use Free Play to attract repeat visits from players, but the overuse of Free Play trains players to be loyal to the best deal and not to a particular casino brand. That’s exactly what we don’t want to do.
“The best way to get players to return more often is to give them a better playing experience while they’re on the casino floor. We want players to have such an enjoyable time that they go home planning to return again soon. Free Play doesn’t accomplish that,” explained Acres.
Personalization and self-esteem
Acres firmly believes that casino gambling is about enhancing player self-esteem, not jackpots. “We can do that by adding sights, sounds, and smells that stimulate player emotions. We must provide players with an escape from the troubles of everyday life. We must make them feel important, entertained, and respected. Above all, we must help them remember the $100 they won while forgetting the $200 spent to win it.
“Exactly when and how to do that varies from player to player and moment to moment. By providing a rich flow of real-time data to a capable AI agent, we can maximize the enjoyment of each player and simultaneously increase casino profits,” Acres remarked.
Iteration
Finally, I asked Acres what he believes made him successful over five decades with innovations that truly rocked the industry.
“Never give up and don’t strive for perfection. Just work to make the player experience better and better. Nothing I’ve ever done on the first try worked as well as it did on the second. I’ve found at least 7 iterations are required to build a truly great product,” he said without hesitation.
“Our technology platform is designed for rapid iteration because our goal is to fail quickly and cheaply on the first few efforts. To fuel future revenue growth, we need casinos to allow innovators to experiment on small numbers of machines on their casino floors, because it is impossible to understand true player reactions in development labs or focus groups,” Acres concluded.
Five decades chasing the same dream
Sitting at lunch over 50 years ago with the early titans of gaming, John Acres discovered that the secret to gaming was creating something that will deliver self-esteem to players through personalization. Today, he keeps pursuing that dream, one iteration at a time.
Entries in the Faces of Gaming series:
- Alan Feldman – From Mirage and MGM to responsible gaming expert
- John Acres – the Thomas Edison of gaming (now reading)
- Alex Alvarado — Vice President, Casino Operations at MGM National Harbor and Casino Aficionado
- Lauren Bates — A successful VP at Konami and Chair of Global Gaming Women, all before her 40th birthday
- TJ Tejeda and EZ Baccarat – Reimagining a centuries-old game
- Chris Andrews — Don’t cry for the bookmaker
- Wes Ehrecke — From gasohol and pork chops to president of the Iowa Gaming Association
- Steve Browne – Casino philosopher, master gaming instructor and father of a rocket scientist
- Noah Acres – Shaking up the industry one player record at a time
- Kate Chambers – ICE queen, casino exhibition maven and keeper of fairy dust
- Joe Asher — From the newsstand and racetrack to sports-betting icon
- Paul Speirs-Hernandez — Randomness, chance, reward, and luck
- Ainsworth’s Deron Hunsberger — From finance and sales to president
- Roger Gros — Chronicler of the gaming industry for four decades and counting
- Debi Nutton — Everi board member, gaming trailblazer
- Cache Creek’s Kari Stout-Smith — Dancing backwards in high heels
- Andrew Economon — Making downtown Las Vegas cool again
- Richard Marcus — From the wrong side of the casino tables to the right
- Willy Allison — From New Zealand bloke to world game-protection leader
- Tom Jingoli — From gaming enforcement agent to COO of Konami Gaming
- Tino Magnatta — Interviewing the interviewer, 3,000 and counting since COVID
- Deana and Brady Scott — Still talking shop with the owners of Raving Consulting
- Kevin Parker — “Putting everything into everything I do”
- Laura Penney — Putting in the Work as CEO of Coeur d’Alene Casino
- Andre Carrier — Paying it forward
- Jean Scott — The original casino influencer, still frugal gambling after all these years
- Anika Howard — From Harrah’s First Interactive Employee to CEO of Wondr Nation
- Anthony Curtis — Gambling Guru, Las Vegas Expert, Customer Advocate with Street Cred
- Mark Wayman — An executive recruiter with a brand and something to say
- Melonie Johnson — From rural Louisiana to resort-casino leadership
- Brian Christopher — From actor, Uber driver, and cater waiter to slot celebrity
- Allan Solomon — From accountant and tax lawyer to pioneering casino owner
- Kenny Epstein — A Niche from Nostalgia
Tom Osiecki is a casino consultant who writes an occasional column for CDC Gaming called Faces of Gaming, about interesting and engaging people in the gaming industry.
Tom Osiecki is a marketing and management consultant for Raving Consulting and can be reached for consulting engagements at 775-329-7864.
If you know of a fascinating personality in the gaming industry you would like to see profiled, please send Tom Osiecki an email at tosiecki@cdcgaming.com