David Hirsch says he hears some version of the same two-part reaction whenever he tells casino-industry veterans about the games he invented.
The first half is something like “‘Man, you’ve got a lot of stuff,'” he says. The second is the key: “‘And it all seems to be good.'”
|Company||Platform Gaming Technologies Inc. (PGT)|
|Location||Indianapolis, Ind.; https://pgtech.games|
|Product description||Massive-multiplayer poker and lottery games; single-player casino games (video poker and table games); and proprietary sports formats including Reverse Bracket and Top-X.|
|Current # of employees||6|
|Elevator pitch||PGT has a portfolio of patented content, including PokoMaximo, the world’s first massive-multiplayer poker game, and Reverse Bracket, a format that makes contests for bracket-based tournaments like March Madness easier to play. (Game demonstrations on PGT website)|
Hirsch is CEO and a co-founder of Platform Gaming Technologies of Indianapolis, Indiana. Despite a limited background in the gaming industry, he’s confident that PGT’s four patented games and concepts, plus one that’s patent-pending, provide fresh approaches that appeal to players, casino and sportsbook operators, and lotteries.
PGT’s offerings fall into three categories:
- Casino games: A variety of single-player video poker games use a Texas Hold ’em format as the base game and offer such player options as picking their two hole cards from five displayed face-down on the screen, the ability to replace the two starting cards for less than the cost of a fresh hand, and the choice of cashing out before the flop with a profit or a portion of their initial bet, depending on their cards. The games were designed to be played on existing video poker cabinets and can offer massive jackpots for seven-card royals or other rare hands. Demonstration games on the PGT website allow the bettor to play one to four hands and make separate decisions on each.
- Sports-based bets: The company’s “Top-X” format challenges players to predict the best-performing teams or athletes during a contest period, such as the Top Five quarterback performances in a week of NFL play (X refers to the number of picks, from one to eight). It can be used for any major sport and it allows prop bets. Another offering, the patent-pending Reverse Bracket, is used for predicting results of a multi-team tournament, such as NCAA’s March Madness or the MLB playoffs. Bettors first choose their projected champion and runner-up, then their third-place finisher, and so on. For a full NCAA tournament bracket, that cuts the number of decisions from 63 to 32.
- Massive multiplayer games: These online games allow a theoretically unlimited number of people to play simultaneously in real time. PokoMaximo, another Hold ’em derivation, requires an ante and two bet-or-fold decisions, with potential multi-million-dollar payouts for a royal flush or quad aces. Payouts are based on the strength of a player’s final hand; for example, a full house pays more than two pair. Each round takes about 90 seconds. A 5 percent rake on an average bet of $2 per hand would yield $175 million a year in gross revenue for 5,000 hands dealt around the clock, the company says. As with the video poker games, an individual can play four hands at once and make separate decisions on each.
“The single-player games are probably the ones that have the easiest path to entry,” Hirsch said. “I’m hoping we get those out relatively quickly.”
“A sea of startups”
Hirsch is among a recent influx of entrepreneurs determined to make their mark in the industry.
July’s SBC Summit North America in Secaucus, N.J., attracted “a sea of startups,” said Bill Allsup, a partner in RubinBrown’s Business Advisory Services and Gaming Services groups. He said the expansion of legal sportsbooks and online wagering triggered a surge in new firms with a variety of services, including affiliate marketing, geolocation, payment processing, and security.
“(Gaming’s) a special niche market,” Allsup said. “You’ve got to get licensed; you’ve got to have background checks. It’s created its own ecosystem.”
Daniel Holmes, a RubinBrown partner and leader of its Gaming Services practice, said entrepreneurs who see gaming as the “new frontier” for tech startups should understand the high level of regulation in the industry. The common tech approach of “build it and then figure out how to control it” doesn’t work, he said.
“In gaming, if you take that approach, you’re going to find yourself on the wrong side of the regulations or the regulators very quickly,” Holmes said. Likewise, he cautioned against working in “gray-market” jurisdictions with unregulated gambling. “If you then try to go into a regulated state, it may not be looked upon favorably.”
Allsup likened gaming regulations to a moat that dissuades many companies from entering the industry. Licensing can cost from a few thousand dollars to more than $100,000, depending on the state and type of license. Some jurisdictions require annual audits or other recurring expenses. In some cases, licensing investigations can be “intrusive” to the point of an applicant having to withdraw for not acknowledging a minor transgression from years ago. Applicants generally withdraw rather than be refused a license.
“Regulators are reasonable people,” Holmes said. “They want to see businesses succeed, but at the end of the day, they’re the gatekeepers to the industry and you have to respect them and be forthright.”
Allsup said small businesses are vital to the gaming industry, but cautioned that many newcomers are destined to close because of “licensing issues, their product just isn’t that great, or the market’s too crowded.”
But the prospect for success is there, he added. “Some of these fantasy guys were small businesses and now look what they’re worth.”
Hirsch, the primary inventor of PGT’s games and platforms, came to gaming from biotechnology and finance. Previously, he was president and CEO of Oragenics Inc., a publicly traded biotechnology company, and before that operated a boutique legal and investment-banking practice focused on distressed publicly traded companies involved with emerging technology
His conversion to gaming began about 10 years ago, when he developed a game called Portfolio Football to teach people about diversifying their 401(k) investments. Investors field an imaginary football offense reflecting their risk tolerance, picking interior linemen from a group of government bonds or other low-risk investments, while wide receivers and other big-play positions represented higher-risk higher-reward options.
“That’s what got us into the gaming space,” Hirsch said.
The next step was even more involved. In 2014, inspired by Quicken Loans’ offer of a $1 billion jackpot for picking a perfect bracket in the NCAA men’s basketball tournament, he invented Top-X. He originally planned it for stock pickers, but adapted the concept to daily fantasy sports as DFS wagering took hold in the United States.
Then he had “some stumbles.”
He said he had capital lined up to launch the DFS program, but it dried up when the New York attorney general ordered DraftKings and FanDuel to stop taking wagers in the state. A European fund agreed to provide capital, but withdrew when its principal officer died days after approving the deal.
Things turned around in 2018, when the U.S. Supreme Court allowed widespread sports betting, the Top-X patent was approved, and Hirsch built PokoMaximo. PGT displayed a “rudimentary” version of that game at the 2019 ICE show in London.
“Everybody loved it,” Hirsch said. “It was two or three steps ahead of where the industry was.”
Later that year, the COVID pandemic began.
Now, “Things are falling into place,” Hirsch said. Gaming Laboratories International is due to perform the required certification of PGT’s remote gaming server and game formats. Also, PGT has signed non-disclosure agreements with “a couple of” major suppliers.
“Tenacity and commitment”
PGT’s nine-member advisory team features gaming-industry veterans with expertise in numerous fields, including sports wagering, interactive gaming, compliance, and lottery operations.
Advisor Michael Soll, president and a founding member of The Innovation Group, said PGT offers “new unsuspecting ways for players to engage around online products.” Soll previously held executive positions with Hard Rock International and Caesars Entertainment.
PGT exhibits “tenacity and commitment to seeing their products and platforms through,” he said, but as with many newcomers, money is a significant hurdle.
“The revolving ‘opportunity’ for online gaming growth is capital to develop aÂ competitive field of potential games and formats.” Soll said.
He described PGT’s games as “powerful products in search of a permanent home.”
Advisor Laila Mintas, who has been involved in the sports-betting and sports-data industry since 2006, said the Top-X format “leverages the human tendency to rank things.” She has held executive positions with FIFA, professional soccer’s global governing body, and sports-betting companies Sportradar, Bet.Works, and PlayUp.
Mintas lauded PokoMaximo as “a totally new concept” and called Reverse Bracket “a real game changer. PGT has developed a broad suit of products that will innovate the markets,” she said.
More games in the works
PGT’s game roster could grow even more. Its patents allow for the redraw and cash-out options to be applied to other games, including online or machine slots and blackjack. Redraw blackjack could be adapted for use at a casino table game, Hirsch said.
“I’m really jazzed about redraw blackjack,” Hirsch said. “You get your two cards and if you don’t like them, you just pay to redraw. You get two new cards. It’s going to fundamentally change the way the game’s played.”
He said the redraw option appeals to players and operators alike. Players like the chance to dump a bad starting hand, while operators relish a faster pace of play and better hold. That approach meshes with Hirsch’s definition of success as a “win-win-win” scenario.
“To me, success is that we’re putting products out that people enjoy playing, our partner operators do well, and I want us to do well,” he said.
“We’ve got a big vision for PGT,” he added. “There’s going to be a lift involved. With the right amount of capital and the right industry behind us, we think we’ve got multiple shots on goal. If we just hit one goal, it’s going to be great. If we hit multiple goals, life’s going to be a lot more fun.”