Q: Why was the decision made to restructure IGT (Australia)'s business?

A: We have had to adapt the company to the right-size based on the 1998 acquisition of Olympic.
I am very disappointed with the performance of IGT in terms of the way the acquisition and assimilation of Olympic was handled. We didn't do a good job in bringing the two businesses togther, and failed to nurture some of the entrepreneurial abilities of Olympic.
In a nutshell, the management of IGT Australia did not grow the business and weren't able to capitalise on the product lines and grow them.
Over the course of the past year we realised that it wasn't working and faced up to the music in terms of what we had to do.

Q: What has happed in the restructure?

A: Financially we recognised a US$92 million write-down on the good will of the assets that we'd purchased from Olympic. There are a lot of valuable assets that have come out of the Olympic investment. We have some very talented people and good products that have been developed. I wish we had the opportunity to assimilate the company more effectively, but at least we'
re now moving forward and the company will be stronger.
On a managerial level, five senior executives are no longer with the company, and some positions will not be replaced.
In terms of other staff, many employees were no longer required in the operations side of our business, because we are moving IGT Australia's manufacturing to Reno, even though sub-assembly will still be completed here. We now have around 350 staff and I don't believe that number will substantially change.

Q: Will the customer notice any difference?

A: Nothing we have done will have a negative impact on the customer. In fact, I'd like to think it will have a positive effect on the customer.
We are emphasising the creative side of our business far more than in the past. We will retain our two games development houses in Sydney and Melbourne and will focus on streamlining our product range. In addition, we will occasionally use games that have worked very well in the US and similarly we will send games to other markets that work well in Australia.
In terms of offices, we'll stay in Sydney and Melbourne, although the two showrooms in Sydney, two in Brisbane and two in Adelaide will all be brought together as one primary showroom at the Rosebery Avenue location.

Q: How many machines per year do you think it will take to achieve a break-even point in terms of IGT Australia?

A: Last year we sold around 7,000 machines and I think we can now break even at that number.

Q: Do you see continuing growth in the Australian gaming machine industry, and where do you see the greatest potential growth?

A: I don't know what markets will offer the greatest potential growth. The market could grow. From IGT's perspective, we can certainly grow because our market share is lower than it was three or so years ago. So we can take more of the market
if we do a good enough job with the product.
Sure, they haven't been well received or performed very well over the past few years as compared to Aristocrat, but we have some exciting things happening at the moment that will turn that around. Our customers have responded very favourably to the new machine we released at the Sydney AGE show and we could certainly pick up a share of the market with that product.

Q: Do you see Government involvement and concern over gambling developing to the point where it will impact the business of gaming machine manufacturers?

A: We've seen enquiries and studies along the lines of the Productivity Commission report in the US. We're already a highly regulated industry and need to be concerned and address such issues as problem gambling. For instance the American Gaming Association takes an active interest to work with politicians and administration people to identify problem gambling
issues and how to deal with such aspects as rehabilitation and gaming signage on behalf its members. If we're pro-active as an industry I don't think there's a big need for the Government to become involved.