VGT specializes in making Class II gaming machines which are more like electronic bingo than traditional Class III slot machines. Credit: Hyun Lee via Flickr
A Franklin businessman stands to make more than a billion dollars by selling his company that designs and builds slot machines. Video Gaming Technologies, headquartered in Cool Springs, has quietly become one of the biggest players in tribal casinos.
VGT makes the slot machines at its factory in Tulsa, Okla., and the machines are primarily leased across the state — mostly to Indian casinos. The company takes a cut of the money pumped into the roughly 20,000 slots it owns.
“It’s a percentage of the revenue,” founder and owner Jon Yarbrough told WPLN. “And to honor customer confidentiality agreements, I probably can’t say how much.”
But as part of the company’s $1.3 billion sale to Aristocrat Leisure of Sydney, Australia, VGT did disclose its overall revenue for 2013, which came to $236 million.
VGT controls roughly 50 percent of the type of gaming machines that fall under fewer state regulation (known as Class II machines among industry people). VGT is known for games it created such as “Mr. Money Bags” and “Lucky Ducky,” which are all based on a form of electronic bingo.
“People love to play these games,” Yarbrough said. “They’re very popular. And I guess the numbers add up.”
Gambling has been a mixed bag in recent years, with established casinos in Atlantic City closing as new casinos open in states like Pennsylvania where gambling is newly legal.
Under the current industry conditions, Dave Schwartz at the University of Nevada Las Vegas’ Center for Gaming Research said manufacturers like VGT may be poised to profit.
“If you are the person that supplies the machines people use to gamble, you may be in a better position than the people who own the actual casino, which you can’t pick up and move because the next state over legalized it,” Schwartz said.
Aristocrat plans to continue operating the business as it exists. VGT has 610 employees, including an operation in Mexico. Around 200 people work at the Franklin headquarters, and Yarbrough says the new owner might expand that number
As for Yarbrough, he says he plans to stay around until the sale of his company closes. After that, the says he may take his billion dollars into other industries outside of gaming, such as local real estate.
Yarbrough Bio
- Attended Nashville’s McGavock High School
- Received bachelor’s degree in industrial engineering from Tennessee Technological University in Cookeville
- Started Video Gaming Technologies in 1991
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