Rouse’s roulette: wheels within wheels

 

 

If fledgling gaming machine group Stargames can crack US approval for its high-speed electronic roulette table, its entrepreneurial managing director John Rouse will gain a key foothold in Las Vegas, not just for himself but for Kerry Packer too.

 

Rouse’s listed outfit has developed its Rapid Roulette casino table in a 50:50 partnership with Packer’s Crown Casino- and the two are touting it as a killer product.

 

The table is operated by a dealer but punters place their bets on a screen. The technology increases the number of players per dealer – and has even been upgraded to include bill acceptors and card readers.

 

Stargames expects licensing in Nevada for Rapid Roulette within a week or two after a successful trial at the glitzy New York Hotel and Casino on the Las Vegas strip.

 

“The results in Las Vegas have been enormous,” Rouse says. He says one Rapid Roulette table pulls in $US210,000 ($372,000) in 25 days, equivalent to the cost of the entire table.

 

Melbourne’s Crown Casino already has more than 100 operating and units have been sold to casinos in the UK, South Africa and Canada.

 

Strong sales are tipped to follow Nevada approval, with Stargames now providing a little known international launch pad for the Packer’s expansion of its gaming operations.

 

Yet Rouse, who’s driving the Stargames US push, has never met UFA Packer. But he shares a passion for gambling that has driven his corporate career for decades.

 

The Stargames lobby at its Milperra factory in Sydney is adorned with a board quoting the day’s share price, saying “Tomorrow’s share price depends on you.” Yesterday, it was at $1.10, up 60 per cent this year. The sign’s quirkiness hints at a less-than-conventional corporate career.

 

Rouse spent 16 years at CSR and seven years with BHP but, while entrenched in a senior role in 1993, he suddenly decided to pursue his obsession with racing to become chief executive of the NSW-based Australian Jockey Club. “People couldn’t believe I left (BHP),” he said. “But my biggest passion outside my family has always been racing. When I was younger, to be chief executive of the AJC was something I aspired to.”

 

It lasted two years – a tenure described as brief and troubled – before he was pressured to resign by the AJC committee. “I am a businessman. I like running a business to achieve strategic business and financial objectives,” he says.

 

“Working at the AJC, which was responsible for the administration of racing in NSW, was still not the corporate business role that I was best suited to.”

 

Rouse moved to diversified group AWA’s gaming and wagering division, eventually taking over as chief executive amid mounting losses and a group-wide restructuring to focus the company on its gambling interests.

 

Rouse had grand ambitions for AWA, not least of which was a proposed acquisition of Melbourne-based poker machine maker Olympic Amusements, which ranked behind Aristocrat as the country’s second-biggest manufacturer.

 

Unfortunately, he met opposition in the form of Tim Hughes, head of game show millionaire Reg Grundy’s RG Capital, which had snapped up 20 per cent of AWA.

 

“He wanted to pay $160 million for Olympic,” says Hughes, who still does little to hide his animosity for Rouse. “We had to get rid of the board to stop it buying Olympic.”

 

 

Today, Rouse’s major shareholder is John Messara, the chairman of Hunter Valley-based Arrowfield Group, one of the top three thoroughbred studs in Australia. Messara owns 8 per cent of Stargames and chairs the group.

 

There has been word in the industry is that Messara is looking to cash in but Rouse – who owns 2.3 million shares and 1 million options – says he’s at Stargames for the long term.

 

His goal now is to make the company the No 2 gaming technology and equipment company in Australia.

 

That means knocking off some major competitors – among them Len Ainsworth’s listed start-up Ainsworth Game Technology.

 

Rouse is deferential to Ainsworth, describing him as the “father of the gaming industry”.

 

But his competitive streak compels him to have a shot.

 

“I opened the Ainsworth prospectus and asked my secretary, ‘What do you think of this management team?’ She said: ‘It looks old.’

 

“Our team looks young. I’m not a guru of gaming. In the cut and thrust of the gaming industry, I have a pretty low profile. But I would back my senior people and R&D; people against anybody.”

 

Despite telling the market that deferred orders meant Stargames would fail to post a profit in 2002 – breaking even instead – the stock has risen 60 per cent this year alone, though down from the record high of $1.87 reached in 2000.

 

Rouse says the company now is “more than comfortable with the breakeven forecast” and comfortable with forecasts it would ship 2,700 units in 2002.

 

He insists the upside in 2003 is enormous, with offshore sales and the Rapid Roulette games kicking in.