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Jon Dehler, the owner of Fleetwood Gaming Inc., said he has laid off seven of his Billings employees while he is finalizing a contract with an Australian company to expand his business.

The company now has 18 Montana workers, a dozen of them in Billings at 200 Regal St.

Dehler said he decided to outsource the jobs of three programmers and four engineers who design software for casino games.

“It was a business move,” he said. “I slashed about 45 percent of my payroll (costs) just with those seven employees, but I’m coming back stronger than ever.”

A plan he calls “outsourcing 101” involves hiring other American workers to design Fleetwood’s casino software games. Dehler set up a separate company for these designers but declined to provide more details, saying he fears they would be hired away in the intensely competitive gaming industry.

“We’re going to get things done quicker and more efficiently in the U.S.,” he said.

In about a month, Ainsworth Game Technology Lt., based in Newington, Australia, is shipping seven of Fleetwood’s keno games used in 36 gaming machines, Dehler said. He expects Ainsworth to buy five more games by the end of the year.

“Ainsworth is our vehicle to get into South Africa, the Caribbean, Russia, and Europe, anywhere they are,” he said.

When the recession hit in 2008, people were stressed, so they gambled more, Dehler said, and casinos he worked with saw revenues increase more than 30 percent.

But after Montana banned smoking in restaurants and casinos in October 2009, revenues dropped about 23 percent, according to the Gambling Control Division.

Tax revenues still lag 11 percent behind the high mark set in 2008, according to the Montana Tavern Association.

Last quarter, Montanans spent nearly $14.5 million playing video gambling games.

Montana video-gaming revenues have increased for eight straight quarters, according to preliminary figures released by the Gambling Control Division.

Six years ago, Dehler sold most of his assets, about 1,400 video-gaming machines, to Century Gaming with plans to branch out into the light-emitting diode or LED lighting market.

Fleetwood’s sales dropped from more than $12 million per year to about $5 million, he said, but with the Australian business he hopes to return to the $12 million revenue mark by the end of this year.

The businessman, who donated $1 million for the rights to name the city’s ballpark for the next 20 years, said he will make the next payment on time on July 1.

He fell behind on payments to the city of Billings but got current again last July.

In 2007, Dehler paid $400,000 down for the rights to name the stadium on North 27th Street after his father, Bill Dehler. The contract calls for him to pay $100,000 on July 1 for the next five years.

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Business editor for the Billings Gazette.