Aristocrat Technologies manages small and large slot operators

LAS VEGAS, Nevada -- Sago's Baja Tavern and Lounge won't be confused with M Resort or The Palms Casino Resort.

The two off-Strip hotel-casinos each house more than 1,500 slot machines.

Sago's, a bar and restaurant at 4790 S. Fort Apache Road, holds a restricted gaming license and operates 15 bar-top slot machines.

But the games in all three locations operate in a similar fashion.

Sago's owner Jason Godfrey recently ended the tavern's deal with a slot machine route operator and took on the games' operation himself. He added a slot machine management system developed by Australian slot machine maker Aristocrat Technologies to manage the games.

The same Oasis 360 system -- similar but more complex -- operates the slot machines at the casinos.

"It handles all the marketing and management issues for the bar owner," said Aristocrat Vice President for Systems Sales Kelly Shaw. "We can tailor the system so it can handle 1,500 or 5,000 slot machines, as well as for a bar with 15 games."

Aristocrat is Australia's largest slot machine manufacturer. The company set up headquarters in the U.S. in the last decade to break into the American market. Aristocrat has placed the slot machine management system in roughly 265 casinos in North America.

With its U.S. headquarters in Las Vegas, Aristocrat saw an opening in the tavern business, where the slot machines in most bars and restaurants are managed by a route operator.

Shaw said some tavern operators decided to manage their own slot machines as a way to cut costs.

"We just began knocking on doors to see what was out there," Shaw said.

The tavern industry was hit in the past five years by a voter enacted smoking ban that outlawed smoking where food was served. The recession, high unemployment and the area's housing crisis, zapped the tavern industry's customer base.

In June, state lawmakers took back parts of the smoking ban and the area's economy has show signs of recovery.

Aristocrat continued to look for opportunities to break into the tavern business.

"We were seeking alternate models and revenues streams," Shaw said. "We thought the system would give bar operators the tools they needed so they didn't have to rely on route operators."

Sago's is Aristocrat's first tavern location. Shaw said Aristocrat is not interested in becoming a route operator, but wants find other locations for the system.

Godfrey opened Sago's five years ago, just in time for the smoking ban to take effect. He said he worked with the Clark County Health Department to separate the restaurant from the bar, where the slot machines are located.

When his contract with a route operator expired, he took over the machines.

"It made more sense for us to do it this way," Godfrey said. "We were new to the bar business five years ago. The system gives us more options and allows us to own our own assets and manage the games. We don't have to share the revenues any more."