START-UP SEEKS TO PUT BRAND LOGOS ON SLOTS: ATLANTIC CITY CASINOS FIRST TO OK AD USAGE OF GAMBLING MACHINES

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While media companies see lost revenue in the tobacco companies' agreement to limit marketing severely, Ed Launzel thinks it's an advertising jackpot.

Mr. Launzel is marketing director of Slot Marketing Advertising Revenue Retention Techniques, a start-up company marketing advertising positions on slot machines.

The company has been signing up advertisers-including a major tobacco marketer Mr. Laurzel wouldn't identify. Slot Marketing will replace the symbols on slots, such as the cherries and sevens, with brand logos or other symbols for marketers.

ADULT AUDIENCE

While Slot Marketing is selling its service to all categories, Mr. Launzel believes it's an especially good opportunity for big tobacco, since no one under age 21 is permitted into a casino."It's probably the only area where you get an exclusively adult audience," he said.

So far, the company has signed only two casinos-Aztar Corp.'s Tropicana and Claridge Hotel & Casino Corp.'s Claridge's-both in Atlantic City, N.J. It is negotiating with four others in Atlantic City that would give it coverage in 50% of that market.

A spokesman for the New Jersey State Casino Control Commission said there are no laws barring advertising on slot machines, and that logos for marketers such as Ford Motor Co. or Pepsi-Cola Co. wouldn't be a problem. He added, however, there "might be an issue" when it comes to tobacco advertising, although he didn't specify how.

Mr. Launzel also is targeting Las Vegas and has had talks with a Seminole casino in Florida as well as offshore gambling boats in that state. For cooperation in letting Slot Marketing retrofit their machines, the casinos get between 60% and 70% of the ad revenue.

154 MILLION PATRONS

In total, 154 million people-51% of them women-visited casinos in 1995, the last year measured, according to Harrah's Survey of Casino Entertainment 1996.

"With TV, people turn it on and off. A magazine ad, you turn the page and it's gone," said Mr. Launzel. "If [a player] pulls the bar and Marlboro, for example, comes up once, then twice, by the third time the player is screaming out `Marlboro.' "

System costs vary, but Slot Marketing is now offering two packages, based upon a buy of 10 to 1,000 machines. The ad rate for 1,000 machines is $8.4 million over a two-year period; the rate for 10 machines is $102,000 for two years.

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