DigiDeal Corp., a Spokane Valley manufacturer of digital gaming tables, quietly has grown from an idea shared by a few businesspeople to a fast-growing company that has clients from Vietnam to Ireland. It now claims to have garnered the largest share of whats called the automated live table-game market, both in the U.S. and abroad.


Although it has achieved that in just five years, its top executives arent satisfied.


Were actually a little bit behind schedule in our minds, but were way ahead of schedule in other peoples minds, says Mike Kuhn, DigiDeals president and CEO. Theyre impressed.


DigiDeal is poised for even more growth, he says. It expects to announce in January an agreement with a Nevada distributor, making its games available to casinos in that state in the future. None of its products are licensed there yet, says Kuhn, who declines to disclose further details about the deal. DigiDeal had a distribution agreement there previously, but terminated it.


The company produces four different digital gaming tables, holds 19 patents, makes other products, and has been landing large contracts at a rate of about one a month this year, Kuhn says. In the last two weeks, the company has landed yet another order and signed another agreement with a company that distributes games in California card rooms and casinos. Kuhn declines to disclose DigiDeals annual revenues, but says theyre expected to triple in 2004 over projections for this year.


DigiDeals table games include Digital 21, a blackjack game; Bonanza Blackjack, a blackjack game with an optional jackpot buy in; Baccarito, a version of baccarat; and Trips, a five-card stud poker game with a rollover pot. The companys products, which are unique among casino and card-room gaming tables because they use digital video technology as well as a live dealer, are generating a lot of interest wherever theyre introduced, Kuhn claims.


We appeal to a wide variety of people, he says. From the younger Nintendo crowd to the older crowd that loves us because they dont have to do all the counting that they must when playing games with cards. He adds that DigiDeals products also are popular with women, who sometimes feel intimidated by card games like poker and blackjack, and that the younger generations, which could care less about the cards, are replacing the older generations.


With Trips, DigiDeals newest game, Were taking poker out of the smoky back rooms and bringing it out front where you cant cheat, Kuhn says.


In fact, cheating through DigiDeals games is virtually impossible, he asserts. Gambling regulatory commissions must approve the technology behind the machines, which shuffles the virtual cards and deals them at the touch of a button, before it can be used in the casinos and card rooms of each commissions jurisdiction. The games must prove to be totally random and the rules and playing methods must be understood easily.


So far, DigiDeal has earned approval to sell one or more of its games in 12 states and 20 countries, Kuhn says. Its products are in use in every jurisdiction in which theyre legally allowed to operate, he says.


Not everyone, though, embraces digital table games yet, Kuhn says.


Were a little ahead of the curve, he says. Theres a certain aura about having paper cards, and theres still a certain segment of players that prefers paper cards.


Casinos and card rooms follow rules about when conventional decks of cards must be removed from play. If one card is found to be marked, for example, the deck must be shredded. Since DigiDeals tables are cardless, they eliminate that problem, Kuhn says.


DigiDeals most recent contracts include a two-part agreement with Ixtapa Gaming LLC, a Las Vegas, Nev.-based distributor, and a $640,000 order from a Malaysia-based distributor, with which DigiDeal already has an exclusive-distribution contract. The Ixtapa agreement says that Ixtapa will sell DigiDeal products exclusively in California card rooms and nonexclusively in that states Indian-run casinos. DigiDeal estimates that it will lease out 400 tables through the Ixtapa agreement, resulting in $15 million to $20 million in annual lease revenues once the deal is full blown, Kuhn says.


How the games work


The digital gaming tables look similar to conventional gaming tables, but the dealer-directed steps of the game, such as shuffling, take less time because theyre automated. When players want to place a bet, they place real chips on sensors above small playing screens. Each table has six screens, or six places for people to sit and play. The dealer pushes a button to deal the cards, and in the game of Digital 21, for example, the screens illuminate in front of the players showing them the two cards drawn to them. The machine also displays the sum of the values of their cards, reducing the chance of player error when strategizing what to do with a hand or dealer error when determining who won and lost a hand.


Players make the same hand motions to indicate whether they want to stand or take another card that they would in a conventional game of blackjack, and the dealer pushes a button to give them additional cards if they so desire. The screens show if a player has won the hand, tied with the dealer, or busted by going over 21. Dealers then collect and pay out chips to the losers and winners, just as they would when playing the game with cards.


The machines use a patented platform called Digital Card System (DCS), which allows casinos to retrieve statistical game history. The tables also can be linked to one another digitally for tournament play, Kuhn says. Because the platform leads players through the games step by step, its easier for players to understand sometimes-complicated rules, he says. It also means less training time for dealers.


DigiDeals products are advantageous to dealers, as well as to casinos and players, Kuhn says. Because dealers using DigiDeals products dont handle playing cards, theres less stress on their wrists and hands, making them less prone to carpal tunnel syndrome, a big problem in the industry, he says.


The tables are covered in another patented product of DigiDeals called SofTop, which is a material that feels and looks similar to that used in desktop computers mouse pads. SofTop is fire retardant, stain resistant, and more durable than felt, which is used on conventional gaming tables, Kuhn says. With regular use, SofTops last six months while felt tops usually must be replaced once a month, costing casinos more in time, labor, and money, he contends.


DigiDeal assembles the gaming tables at its 7,500-square-foot facility at 5207 E. Third in Spokane Valley. In addition to manufacturing space, the building includes a showroom where its four table games sit ready to be played, and officesincluding Kuhns, which has a panoramic photo of the Las Vegas strip stretching the length of one wall.


We get to play games at work, says Larry Martin, vice president of government affairs and product support. We actually require employees to play them, so they know exactly how they work.


Kuhn says DigiDeal employs 11 people now, but expects to hire about nine more in its sales and technical departments within the next three months. Our goal is to not get really big peoplewise, he says, adding that the company contracts out some of its manufacturing work to keep employment down. The company also works closely with Visiontec Inc., of Spokane Valley, which makes its computer boards, and Infinetix Corp., of Spokane, which codes its software. Those, and other components of the gaming tables such as the metal and woodwork, are manufactured elsewhere, Kuhn says.


The company plans to expand its building by 3,300 square feet by early next year, he says. The addition will include warehouse and manufacturing space. It also has a one-person satellite office in Houston, where DigiDeals vice president of international operations is located to be closer to the companys Latin American clients, Kuhn says.


DigiDeals beginnings


DigiDeal was started when inventor Randy Sines, the companys chairman and vice president of product development now, approached Kuhn six years ago with some of his ideas for gaming products. Kuhn and Martin owned Dakotah Direct Inc., a Spokane-based telemarketing company, at the time, and Sines was a client. After Kuhn and Martin sold Dakotah Direct in 1997, they became involved with Sines, who at that time had invented a card shuffler that reduced the lag time between dealt hands. Sines and Kuhn discussed the potential of developing another card shuffler, but through those conversations changed their focus.


We came to the conclusion that it made more sense to eliminate cards altogether, Kuhn says. We did some patent studies and didnt find anything like what we had in mind. Now, we have a whole family of patents on our technology.


DigiDeal also has a family of investors. About 30 people, more than half of whom are from the Spokane area, have given financial support to DigiDeal, Kuhn says.


DigiDeals largest installation of gaming tables to date is at a Harrahs Entertainment Inc. casino on an Indian reservation in North Carolina, which has 29 Digital 21s and three Baccaritos, Kuhn says. International interest in its machines is picking up, though, and the company increasingly is receiving orders from casinos in Southeast Asia and Latin America, as well as inquiries from South Africa, Slovakia, Jamaica, and elsewhere.


DigiDeals other products include SlotJack and Fishin Buddies, which combine components of slot machines and table games on the DCS platform. Its developing other products, such as a slot-style game called Pachinko that involves dropping a ball down a pegged board, and is waiting for approval of the games it already has in more jurisdictions. DigiDeal is exploring the possibility of negotiating with other gaming companies to put their games on the DCS platform, too, Kuhn says.


In the meantime, DigiDeal also sells the gaming tables to individuals for personal use.


For $50,000, it can be yours, Kuhn says.