The CEOs of slot manufacturers are working to recoup the cost of the tariffs that cut into their bottom lines and prompted them in some cases to temporarily move processes outside of Nevada.
The executives, who spoke at a Las Vegas gaming conference, said the tariffs imposed by the Trump administration over the past year continue to impact the industry and they hope to get relief. The Supreme Court struck down Trump’s global tariffs in February, ruling he exceeded his executive authority under the 1977 International Emergency Economic Powers Act (IEEPA), since the power to impose tariffs lies with Congress.
“Some of the uncertainty it created continues,” said Michael Comstock, acting chief executive officer with Ainsworth Game Technology. “Everyone is looking at IEEFA refunds right now and trying to determine when they’ll reach that probable stage. It’s good to hear that certain companies are starting to see a refund come in, but everyone has been a little hesitant to record those, knowing things can change on a daily or weekly basis.”
Daron Dorsey, president and CEO of the Association of Gaming Equipment Manufacturers, who moderated the discussion, said tariffs aren’t over and nobody knows when this is going to end.
David Lopez, president and CEO of AGS, said his company doesn’t pass those added costs to their customers, absorbing the expense. “We talk about getting a refund, but it’s an accounting nightmare,” Lopez said.
Tom Jingoli, COO and president of Konami, said it’s been costly to his bottom line, “a significant number we’re trying to recoup. Konami is going directly to the government to get that refund and in other cases going to the third-party vendors securing those parts for the operator.
“It takes a significant amount of time in our finance and accounting department. We haven’t seen the refunds at the level we thought we were. Obviously, it’s turning political like everything else. Maybe, we will see some movement as the election nears, but it’s been really slow on the quote unquote refunds. We haven’t seen those yet.”
When tariffs were imposed a year ago, the manufacturers had to pivot to reduce their expenses, since it’s difficult to pass on the costs to casino operators.
“Being in a highly regulated environment, a lot of the parts and hardware we have to secure are subject to regulatory approval, so it’s not like you can pivot really fast and get a new board or new monitor,” Jingoli said. “Those things all have to be tracked. We’re in a highly competitive environment where the operator’s return on investment means they aren’t going to buy the product if it’s cost prohibitive. “
Lopez said his company had to pivot after Canadian customers were told by their elected officials not to take products manufactured in the U.S. after the political fallout between the two countries. That prompted AGS to manufacture equipment at their Mexico facility and ship them to Canada. “We tried to do an end run around it, so our margins wouldn’t deteriorate even further.”
Jingoli said Konami set up shop in Canada for assembly, which “costs us a lot of money and cut into our margins, all part of the tariff blowback we’re dealing with.”
While Jingoli said they have a manufacturing facility in Australia, it was cost prohibitive to build the machines there and ship them to North America. In addition, their subsidiary in Australia wasn’t licensed in the different provinces in Canada.
As for Ainsworth, Comstock said it may not have been the best decision in hindsight, but the company in 2024 centralized its production in Las Vegas and stopped producing in Australia. When the tariffs hit in 2025, the company was all-in on Las Vegas, where 50% of what they built was re-exported.
“That was a big wake-up moment. We’re not incentivized to produce in the U.S., because of the tariff costs,” Comstock said. “Finding mechanisms that can help us mitigate some of that cost or risk is very time-consuming. A lot of us spent a lot of time working with advisors to determine the best way forward.”
Konami isn’t single sourced on any part, but that comes at a cost, Jingoli said. “If you’re going to buy one widget from a company, you’re buying a certain amount of volume to get the bigger discount. With the tariffs and supply-chain challenges, it’s almost impossible to be single sourced in anything anywhere. It hits the bottom line going out hitting different vendors and not getting the same parts from the same person over and over again.”
Lopez said they haven’t made long-term decisions, because they don’t know how the tariffs are going to shift. “We’ve been forced to be a bit shortsighted and reactive, as opposed to establishing a long-term strategy. You could move supply chains from South Korea to Taiwan, but maybe the tariffs will increase in one region versus another.”
Nevada Gaming Control Board Chair Mike Dreitzer called these challenging and dynamic times for the industry. The question from a regulatory standpoint is what the Board can do to support licensees without an approach that would somehow diminish the regulatory structure.
“I met with many of the folks on the panel who said they need to approach things in a different way, here’s what we want to do, and this is how it will affect our licensing structure,” Dreitzer said. “I think it’s important for Nevada to regulate at the speed of business, which is quite quick these days. We have to do what we can to support them without compromising integrity.”
Comstock said it’s important to have a working relationship with regulators around the world. If companies need to change a component and go back through the approval process in different markets, it becomes time consuming and costly beyond the tariffs.
No one, however, suggested moving outside from Nevada is an option in light of the tariffs.
“We can build slot machines anywhere,” Jingoli said. “We’ve chosen Nevada to be our home. All the major slot manufacturers are here in some form of manufacturing or final assembly. Nevada has been the gold standard from a regulatory standpoint and a gaming standpoint for all the years we’ve been here. It’s critical we ensure what we’re doing here meets the Nevada standards and it does have a trickle-down effect on a lot of the other jurisdictions.”
