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The Director of the Value-added Customization Division of IEI, Chen Chun-Hong, pointed out that gambling machines are often produced in various types but in small quantities. Even for application driven industrial computer products, this feature is more prominent than for other types of applications. He stated that the shipments of a single type of gambling machine are small; however, because there are many different varieties, the total amount of machines is considerably large.
Taking Macau as an example, there could be around twenty-thousand slot machines in one of Macau’s casinos, which include hundreds of different types of machines. This characteristic makes it difficult for Taiwanese manufacturers to adjust to because they usually produce few product types in great quantities.
Currently, Taiwanese manufacturers that are investing in gambling machines, mostly manufacturers of SBC (single board computer) or system sub-modules, usually ship the components or modules to clients’ locations, and let the local manufacturers do the machines final configuration assembly. The main factors driven doing this is that Casino want very short lead-time and the low minimum order quantity of a single type of gambling machine and machine’s huge size and weight may lead to high transportation costs.
In order to obtain the economic benefits of bulk shipping, the manufacturers design the SBC and system sub-modules which can be used in most of the gambling machines, and ship them directly. This way of dividing up the labor is most efficient and is more flexible for the requirements of small quantities of units.
Unlike other manufacturers that focus on producing game equipment for casinos, IEI has very excellent track record on designing and developing lottery machines. IEI has shipped average 50K units each year during the past seven years, and these account for approximately 20%-30% of IEI’s total revenue.
Chen pointed out that the exterior of lottery machines look similar to the POS machines used in regular retail shops; however their functionalities are actually different, and so are their designs. Multiple types of security mechanisms are required. Lottery ticket recognition must have a high level of accuracy, and the time between transactions must be short and quick.
In normal shopping retail store case, if the POS machine in a retail shop crashes, cash transactions can still be made by the cashiers. However, if lottery terminal stop working, then the lottery ticket shops will be forced to stop operations, and this is a huge influence on the overall revenue.
From the perspective of the need for stability, finding ways to make the operation of lottery ticket machines stable and have good reliability is a key point in the design of this type of machine, and this may even involve dealing with power down situation, when exceptions occur, the data saving, data security and rapid recovery are definitely needed. IEI’ adopts modularization design on developing their lottery machines for different functionalities, which allowing each function’s module can be easily swapping. So that the efficiency of the maintenance and repair during regular system operations can be increased.
In addition to the special modularization design and good operation system, the good manufacture planning to have short product lead time is also high threshold to enter the lottery business domain. The lottery in most countries is guided by the government and then subcontracted to private sector operations. The delivery time of this kind of order is relatively short. After the operations company is determined, the lottery ticket machine provider must ship the machines within two months and then get all of the machines installed and ready for on-line operations within the following month.
Under this pressure, the company which obtains the orders must deliver a huge number of lottery machines in a short time. There also need a good installation SOP for getting all of the machines online. Educational training must be conducted to enable the operations company and the lottery retailers to start running quickly
Chen indicated that each operating contract is approximately seven to ten years in the lottery domain, and unlike casinos, their operations are not influenced by the state of the economy. As we know, the spending in a single lottery ticket is not high, so it is not a heavy burden for most of people. In addition, during times of economic downturn, the hefty amount of total prize money always draws people’s attention and makes the lottery continue to grow.
Lottery and gambling machine supply chains are hard to enter, but IEI already have an excellent track record in lottery domain and gambling machines supply chain, these let IEI have good stand point to engage more gambling business opportunity. Chen indicated that IEI already have shipped many lottery ticket machines all over the world. In USA, over forty state's lottery operation are using IEI machines and about 60% of the market share in Europe. For the casino gambling machine business, IEI has also successfully entered the supply chain for several major gambling machine manufacturers in recent years.
In the future, IEI will continue to invest in resources for research and development in order to maintain their leading position in the technology and their deep-rooted presence in this field.