Table game inventor/distributor deals

Many members here have experiences...

I heard when a table game inventor signs up a deal with a distributor, the typical offers include:

(1) royalty 10-20%. Is 25% possible?

(2) $0 sign up bonus. Is any $ amount of bonus possible?

(3) IP included/excluded with the right prices

(4) guaranteed Z installs in X years

What other terms should be included/offered?

I may discuss this on my Live Stream today. For a game with zero existing placements, here is the deal you will likely be offered.

1. Around 10%
2. A signing bonus is unlikely. There is a game many on the forum are familiar with that is a rare exception. I'm not sure if I'm at liberty to name it.
3. Game owner keeps IP.
4. The game owner should ask for a clause like 20 installs within three years. The details may be negotiable, but the distributor will probably agree to something. Otherwise, the distributor could shelve it forever and the game owner could do nothing about it.

My strong advice is to try to get a few placements going yourself, which will significantly increase your bargaining position.

Thank U, Wizard. Where to see your Live Stream?

Quote: UCivan

Thank U, Wizard. Where to see your Live Stream?

You're welcome.

Wizard of Odds LiveStream -- 3:00 Pacific time

Quote: UCivan

Many members here have experiences...

I heard when a table game inventor signs up a deal with a distributor, the typical offers include:

(1) royalty 10-20%. Is 25% possible?

(2) $0 sign up bonus. Is any $ amount of bonus possible?

(3) IP included/excluded with the right prices

(4) guaranteed Z installs in X years

What other terms should be included/offered?

1. 25% is possible.

2. Sign-up bonus is possible.

3. IP included/excluded can be done either way, or something in-between (zones or territories for each). Big price difference.

4. Can be in the contract.

5. Negotiations can include how often the distributor reports to you, your audit rights, your rights to buy back the game and/or them to stop distribution and return your distribution rights of it, who will pay for the patent process, who will defend the patent if infringed, who will pay for licensing the game and/or you in each gaming jurisdiction, who will do in-house training for new casino placements, who will pay for printing and Manu of felt or other proprietary equipment, signage, table cards, minimum royalty you will accept, probably some other things.

Forgot one key item: if a game has not been approved by the States, who bears the cost to get it approved for sale? Say in Nevada, a new game has to get a field trial; in WA, no field trial, but it cost $1000 or so to get approved. What's typical?

All of this is based on the novelty and the playability of the game you have to offer.

If it is something very similar to what is out there, the distributors will probably not be interested. If it is a new idea and can meet a few key metrics, you may have something of value.

Can the game be explained to a player in 15 seconds?
Is it easy to deal?
Will the dealers support the game?
Are the hands per hour reasonable?
Is the house advantage in the sweet spot (not too high, not too low)?
Will the game earn more than whatever was in that spot (or an average BJ game)?
Is the lease fee reasonable?
Does the game require special cards or dice (This can be a complete deal killer)?

For every 100 games invented, only a couple will meet enough of these criteria to even get a chance at a placement. For every 1000 games, you may find one "Three Card Poker" or "Ultimate Texas Hold'em"

Good luck. My best advice is that you listen to whatever feedback you can get from players, operators, distributors, or anyone else with insider knowledge. If you think your game cannot be improved, you are mistaken.

Quote: UCivan

Forgot one key item: if a game has not been approved by the States, who bears the cost to get it approved for sale? Say in Nevada, a new game has to get a field trial; in WA, no field trial, but it cost $1000 or so to get approved. What's typical?

A point of negotiation, as I said above. Can be worked in whatever manner you agree to do it.

If the distributor buys the IP, the licensing will almost certainly fall under their umbrella, and they will pay the game evaluation fees.

If you reserve certain territories, you become the distributor for those, and it's likely you will pay those costs, as well as the cost of your personal and/or corporate licensing in each jurisdiction.

Very clear, Thank you.. There is no "typical", then.

I have never done a table game agreement, but for slots I tell everyone to put in a clause that returns the game to you if it doesn't meet a performance goal. In the slot machine world non-refundable royalty advances are not unusual as opposed to signup bonuses.