April 2015
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Editorial: Editor in Chief: Glyn Thomas Mob: +380 952 705 596 glyn@ace123.com Associate Editor Asia: Bill Healey bill@ace123.com Associate Editor North America David Mckee dmckee@ace123.com Special Assignment Correspondent: Jack Bulavsky jackbulavsky@yahoo.com N Europe - Damien Connelly dconnelly@ace123.com UK: Alan Campbell alancampbellcasinolife@gmail.com International Casino & Gaming Correspondent: JJ Woods jjsilks@eircom.net Technology Correspondent: Rebecca Green rebecca@ace123.com Slot Editor: Lucien Wijsman lwisjman@ace123.com
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Editor’s page Welcome to Casino Life...
Profit and Growth. The casino industry, like so many industries is understandably preoccupied with it – whether it’s the number of slot machines sold, the amount of new casinos in a region or just the bottom line. Sure, it’s what good business is all about, but sometimes though, that preoccupation with growth seems to be at the expense of that other pillar of business wisdom – stability. It may seem to be a dull old word but having stability such as a stable market is just as important as having one growing like topsy. The recent closer inspection by the global media of the Asian market is a case in point. Macau, that gleaming pot of gold at the end of the rainbow, is under close scrutiny at the moment – by the press, the authorities and it’s not looking too good. The spotlight now falling on the high number of Chinese officials spending money corruptly obtained from the state plus various ill-gotten gains spent by high rollers on junket trips herded in by triads – allegedly – is starting to have an effect on what many thought was a market that would never slow down. All of this unstoppable growth at the outset yielded Sheldon Adelson’s Las Vegas Sands Corporation a tidy sum – approximately $33million per day during 2013. Yes – you did read that right. Now, the morals of that “money machine” are being questioned and what looked like endless growth has been called into question. Chinese New Year results were half that of 2014 and the trend is going to continue. It grew – but now it’s stopped and it’s reversing… so if your business model is wholly based on continual growth in Macau – it’s time to chase the next wave. Meanwhile, back in Europe – that place of small growth but stability, Olympic Casinos have just put the icing on the cake and opened a new casino in Tallinn in the first Hilton hotel to be built in the Baltics. And you thought such firsts were rare. Two stable brands working together profitably. Profit is also the watchword for Victor H. Royer this month as he hammers home the message that too much time and effort is being wasted on social players when casinos should instead be putting their efforts into retaining and attracting actual gamblers – people who go to casinos to gamble – not hang out / party / watch the game. It’s all common sense so I hope it is all digested and adopted. I’ll leave you with a quote from one of our features this month on Foxwoods, from Felix Rappaport, President & CEO : ”Happy employees provide great guest service, which brings customers back, which generally provides for a successful financial model. But if you focus too much on profits you might ignore both the guest and employee.” Have a differing view on any of my ramblings? Want to be interviewed and put your venue on the map? Then please drop me a line.
Glyn Thomas Editor in Chief
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Contents 3 Guest Editor Comment, Jo Mayer Marketing Director Clarion Gaming 4 Retail Evolution Felix Rappaport, President & CEO, Foxwoods Resort Casino talks to Stephen Karoul 11 Diamond Life Glyn Thomas talks to Duncan Savage, Managing Director Rainbow Casino 15 Capital Casino Peter White talks to Madis Jääger, CEO of Olympic Entertainment Group 19 Growth & Expansion on the cards at Interblock North America John Connelly CEO & Rob Bone President, Interblock North America spoke with Jack Bulavsky, Special Assignment Correspondent 23 Lucky No7 Seven Luck Casino in Korea banks on Video technology from Dallmeier 25 Come-Back-City By Robert Ambrose 27 Social Gaming vs Casino Gambling By Victor H. Royer
Technology in Casinos 1 Guest Technology Editor Chris Moore Independent Casino Consultant 3 Guaranteed Gaming Entertainment Peter White talks to Maurilio Silva President of Ortiz Gaming 6 Mercury Rising Andrew Cammegh chats to Glyn Thomas, Casino Life 11 French Mascot for Aruze Daniel van Marissing from Mascot sfm chats with Damien Connelly 15 The next level Rebecca Green talks to Kubilay Özer, Global Sales Director of APEX gaming
Editorial Policy: The views and opinions expressed in Casino Life remain principally the views of contributors and do not necessarily reflect those of the editor or publishers. The publishers wish to avoid inaccuracies and, whilst every precaution has been taken to ensure that information contained in this publication is accurate, no liability is accepted by the editor or publishers for errors or omissions, however caused. Unless otherwise stated, articles appearing in this publication remain the copyright of the publishers and may not be reproduced in any form without the publisher’s written consent. Printed in the UK by MPC Ltd.
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Guest Editor Comment As the dust settles on what was by any measure an incredibly successful edition of ICE Totally Gaming, the brand’s Marketing Director, Jo Mayer, reflects on why, in this business, it’s a case of survival of the fastest “When I joined the gaming industry just 18 months ago, I was soon told about the fast moving pace of the sector that I was entering – insight that, to be honest, I probably took with a pinch of salt. After all, every sector likes to think that it’s dynamic and exciting and you rarely hear exponents acknowledging that they work in a dull and boring industry do you? Within a matter of days I recognised that my cynicism was, on this occasion, way off the mark. Gaming is driven by technology and powered by an entrepreneurial zeal and energy, the like of which I have never previously experienced. What this means for people like me, whose job it is to help facillitate business opportunities for gaming entrepreneurs, is that we have to always be on our toes and always respond with utmost haste to the needs of our customers, (whether they be exhibitors, delegates or visitors). ICE 2015 welcomed 25,497 gaming professionals from 133 countries, an amazing, record-breaking outcome which really saw the brand come of age. Clearly, getting so many business people from throughout the world to London in February doesn’t just happen by accident. The exhibitions graveyard is full of events which are no longer with us because the people in charge stood still and failed to engage with their customers – our business philosophy simply wouldn’t allow this to happen. We work with the sectors we serve to ensure that we remain relevant. 26 international gaming business associations were at ICE in February, including the National Casino Forum, the European Casino Association and the Bingo Association (in partnership with Casino Life’s sister title, Bingo Life). Working with them and establishing how our events can address the topics of the day is part of the process of staying relevant. Our strategy is to always challenge conventional wisdom in order to see if there’s a different or alternative route that we can explore for the betterment of our stakeholders. That’s why our advertising is more b2c than b2b in its style and credentials, why we continually invest in our social media presence and why we seek out opportunities to collaborate with like-minded organisations such as the gambling-specialist crowdfunding and crowdsourcing platform GamCrowd, which will be helping to assist fledgling businesses courtesy of the Start-Up LaunchPad competitions, at ICE, EiG and GiGse. When you ask exactly how an exhibition is able to bring nearly 25,500 visitors to London from 133 countries including Suriname, Somalia, Swaziland, the Marshall Islands and Gabon – it’s difficult to provide a definitive answer, but one thing is for sure – it would never happen if we stood still!” Jo Mayer, Marketing Director, Clarion Gaming
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Retail Evolution
Felix Rappaport, President & CEO, Foxwoods Resort Casino talks to Stephen Karoul Felix, you have been involved in the casino industry for a long time and have an interesting background as well as having worked at some interesting properties. Please tell us a little bit about yourself and some of the places that you have worked at. I have more than 35 years of hospitality, gaming and entertainment experience at major resort gaming operations throughout the country. I’ve worked for many of the world’s largest and most well known names in the hospitality industry, including Station Casinos, Hershey Entertainment and Resort Company, and Steve Wynn’s Mirage and Treasure Island. I also served as President/COO of New York-New York, Luxor, Excalibur, Mirage, all part of MGM Resorts International. Foxwoods is an incredible casino resort. What was your first impression of it when you initially arrived in Connecticut and what is your current impression of it? Foxwoods has had a strong entertainment footprint for more than two decades, hosting more of the world’s hottest stars than any other property. From the legendary crooner Frank Sinatra opening our Fox Theater in 1993 to the world-renowned Luciano Pavarotti performing in our Bingo Hall in 1996, Foxwoods has brought the best and brightest to the Northeast. As the largest resort casino in North America, I was impressed by the overall scope of offerings from luxurious accommodations to exciting nightlife and entertainment to delightful food and retail amenities, as well as the authentic Native American heritage and
culture that abounds throughout the property. It’s truly an amazing place to be and be seen. We’re the perfect place for both recreation and business with the most modern and versatile convention and meeting space to infuse new life into any meeting or event. While on property, guests can avail themselves of some of our stars of the culinary world like Michael Schlow’s Alta Strada, Cedars Restaurant or Al Dente, not to mention Junior’s Deli or Red Lantern Sushi. We have more than 30 restaurants, so we know guests won’t go home hungry. But what has truly impressed me, is our valued Team Members, who are at the core of our success. We achieve much on a daily basis thanks to their hard work, dedication and devotion. I applaud their efforts to deliver outstanding guest service, which keeps our loyal guests coming back. Hundreds, if not thousands, of guests have been here since we opened our doors more than 23 years ago, and thanks to the outstanding customer service of valued Team Members we have made guests for life. In fact, it’s their outstanding attention to detail that has made many of our new guests repeat guests, and helped to make our loyalty program an incredible success story in the industry; one that’s envied by our competition from the Northeast to Las Vegas. What are some of the key differentiators at Foxwoods? We have continued to evolve our products and service offerings here at Foxwoods in order to differentiate ourselves from the competition.
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We believe that we are poised to meet the challenges ahead by offering a more dynamic and engaging destination resort casino experience through our talented and experienced team members, as well as outstanding guest service. The new Tanger Outlets at Foxwoods opening on May 21, 2015, as well as the new retail concourse that opened in 2013, are just two recent examples of how we are positioning ourselves for future growth and success in the marketplace. We continue to create a more exciting and dynamic gaming experience for our guests. The new Tanger Outlets is just one example of how we will provide a more robust experience for guests in the future through additional non-gaming amenities and more spectacular reasons to shop, stay and play at Foxwoods. Foxwoods is building a large Outlet Shopping Mall attached to the casino. What impact do you think that will have on business and why? When Foxwoods opened in 1992, it became one of the most famous brands in all of gaming, resorts, and entertainment. The property currently sees 9 million
visitors each year, with an anticipated additional 4 to 5 million visitors with the opening of the Tanger Outlets. This new fully-enclosed, climate-controlled fashion outlet center will augment our already impressive reputation as an upscale shopping destination. It will transform Connecticut’s retail landscape. The economic impact will be widespread as we bring 1,000 new jobs to southeastern Connecticut and create new employment opportunities for all of Connecticut and neighboring Rhode Island residents. We anticipate the destination will create an estimated $10.4 million in annual sales tax. The outlet center will connect the Fox Tower Hotel to the Grand Pequot Tower Hotel and feature over 80 fashion outlet stores including American Eagle, H&M, Banana Republic Factory Store, Calvin Klein, Fossil, LOFT, Nike Factory Store, Steve Madden, Tommy Hilfiger and many more. It’s expected to draw shoppers from all over the world. Most people are aware that gaming revenues have decreased in Connecticut over the past few years due to increased competition from casinos in surrounding
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states causing loss of market-share. However, the casino industry recently read about an innovative new idea to ask the State to allow Foxwoods and Mohegan Sun to work together under the existing compact to develop and co-manage three new smaller casinos along the State borders to help stop the exit of gamblers from CT to other States. These new casinos would also attract some players to cross over the State line in reverse to play in CT thereby generating both tax revenues and jobs for the State of CT. What are your thoughts about this clever idea? It’s a very unique opportunity and we applaud the Governor and State Legislature in working with us and the Mashantucket Pequot Tribal Nation led by Tribal Council Chairman Rodney Butler and The Mohegan Tribe led by Tribal Council Chairman Kevin Brown to save thousands of jobs for Connecticut. The proposed legislation is so vital to our collective economic health in the state. It’s about saving thousands of Connecticut jobs. Our proposal is simple: Give guests more reasons to stay and play in Connecticut. Our efforts extend beyond just the two casinos with broad implications for all 169 towns in Connecticut. At Foxwoods, we currently employ team members from 134 of the 169 municipalities in the state, and our buying capacity for local goods and services touches 650 local merchants in the area. In fact, we buy more
than $120 million in products, goods and services from Connecticut vendors alone. As such, we need to protect this economic stability and vitality for our local communities throughout the state and region. After nearly two decades in business, we know our guests. While there is certainly appeal to the new and different, brand loyalty matters, and in large numbers they want the quality they know. Satellite gaming facilities would provide a product that guests want and continue to provide thousands of jobs. One of the biggest secrets at Foxwoods is their two golf courses. What can you tell us about the two Rees Jones designed golf courses at the Lake of Isles? Located across the street from Foxwoods Resort Casino, Lake of Isles is a Rees Jones designed 36-hole golf club that features two courses winding their way through 900 acres of beautiful wooded Connecticut countryside and around a 90-acre lake. Managed by Troon, the worldwide leader in upscale golf course management, development and marketing, Lake of Isles offers the ultimate golf experience. In addition to superior service and impeccable course conditions, amenities include a 50,000 sq. ft. clubhouse, and a state-of-the-art indoor and outdoor practice facility. The North Course is a par-72 layout that stretches
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more than 7,300 yards from the championship tees. The course features rolling fairways, island tees and greens and extraordinary views, which blend nicely with the incredible natural landscape. The North Course is open to guests of Foxwoods Resort Casino and daily-fee golfers. The exclusive South Course is private to members and accompanied guests. It also is a par-72 and reaches over 7300 from the championship tees. Golf Digest in its “Best In State Rankings” recently ranked the North and South Courses among the top courses. And the North Course was just voted No. 1 in Connecticut on Golfweek’s 2015 state-by-state list of “Best Courses You Can Play.” This is the North Course’s ninth consecutive appearance as No. 1 in the state. Connecticut is known for outstanding public and private courses. We are fortunate enough to have both our private and public course ranked regionally and also nationally. We take great pride in providing our guests with the ultimate experience from pristine course conditions, five-star service and amenities that are found only at Lake of Isles and Foxwoods. Final question. If you were to serve as a mentor to a younger person interested in a career today in the casino industry, what would your advice to them be? The resort casino industry is part of the hospitality industry. And to succeed in this industry, you have
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to enjoy working with people and to be of service to people. This industry is about being of service – not servitude. Happy employees provide great guest service, which brings customers back, which generally provides for a successful financial model. But if you focus too much on profits you might ignore both the guest and employee. As gaming continues to expand, we must be vigilant in looking for greater opportunities to touch a more captive audience and better meet the discerning taste of our burgeoning population of loyal baby boomers, as well as a maturing millennial population. Steve Karoul is a recognized casino consultant with over 36 years of hands-on experience with the best casinos both within the United States and internationally. He is also an authority on all aspects of casino marketing. Steve has lived in numerous countries and has conducted casino marketing activities in well over 100 countries around the world. He also monitors Poker, online Poker and online Gaming around the world. He is an author, a lecturer and an educator who often injects his own hands on experiences and openly shares his ideas and thoughts with fellow industry executives. Telephone + (1-860) 536-1828 or skaroul@comcast.net or see www. euroasiacasino.com
Diamond Life Glyn Thomas talks to Duncan Savage Managing Director Rainbow Casino
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It’s now getting on for a year since the completion of much of the refurbishing and rebranding of the Casinos purchased from Gala: How is business? Business has been very good particularly since October when we saw a significant increase in trading levels. The re-branding is now complete but in terms of refurbishment, we have a long way to go. We purchased the freehold in Aberdeen and completed a full refurbishment of the gaming and bar areas which has proved to be very popular with the customers and we have seen an increase in business levels, with players visiting us when we have not been seen for a long time. Our next refurbishment project is in Cardiff with plans being finalised. We hope to start work in the summer when we will more than double the size of the current operation. Since the acquisition in 2013 of the former Gala Casinos how has the rebrand to Rainbow Casino Aberdeen, Bristol Cardiff & Teeside been received by the Casinos regulars and has the fresh look assisted with gaining more patrons to the respective Casino operations? Feedback from players on the whole has been very positive; we have seen significant increases in numbers attending which has been reflected in drop. We are steadily improving our product which was very outdated when we took over and have now converted all the sites to TITO with much more up to date slot product and are always looking for new ways to market to both our existing players and attract new patrons. We also hope to go live with our new loyalty programme later this year. What has been the groups approach in developing the appeal of the food and beverages to the regional Casinos? It is important to cater for a local market and whilst our core menus are the same throughout the group, each property is able offer more local dishes and beverages to suit demands of the area. There will always be a demand for core products like good quality steak but in Teesside for example we offer a dish called a Parmo which is peculiar to that area but would not sell anywhere else. You have to take a flexible approach and not try to force products on customers just because it has a good GP (gross profit) or because someone at Head Office likes it. That said it is important that your product offering is constantly reviewed.
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Entertainment is also a factor in broadening Casinos appeal especially outside of major Cities. What has been the approach to involving cabaret along with singers? This depends on the venue, we offer regular live entertainment at Teesside and Bristol but we tried it in Birmingham and the players simply didn’t like it. As with Food and Beverage, it is horses for courses. Given the success Double Diamond achieved with the re-launch of the Rainbow Casino Birmingham have many of the Table games and Slots from that Casino been incorporated into the new Casinos? Rainbow Birmingham has been tremendously successful. When we took it over it was old and tired and losing money. It is now a successful casino and makes a significant contribution to the group. Does that mean that we should copy everything we do in Birmingham in the other venues? Not at all. You have to look at each venue individually and find out what works in that location. There are hundreds of new games on the market and I am all for trying new things but generally new games do not generate new money but simply move the money around the venue. For a new table game to work it has to capture the player’s imagination, offer perceived value and not be too complicated and just as importantly have the buy-in from the management. FreeBet Blackjack is now offered in most of our casinos as an alternative to regular Blackjack and has been received very well. We have introduced Punto Banco to Birmingham and Bristol; both casinos have seen a steady increase in demand. Do the Casinos televise major Sports events such as the England & Wales Premiership FA Cup and Scottish Premiership FA Cup finals? Yes we televise all the major sporting events, some create a lot of interest, and others go virtually unwatched. During the last World Cup for example was one of our quietest periods but the upcoming fight between Mayweather and Pacquiao I think will generate a lot of attendance. Again it depends on the location; rugby in Cardiff generates a lot more interest than football etc. Sporting events generally tend to attract more of the leisure spend which does help with bar takings etc and can be used as an effective marketing tool to attract new visitors and whilst the seasoned casino visitor might not be so interested it is something which you have to offer.
Along with the rebrand in the Casinos there has also been the launch of the new website www.rainbowcasino.co.uk which has an unconventional layout, that is a fresh approach and visually provides a stylish impact as well as very effective in providing information on each of the Casinos. Was the development of the designs one that has been created by the agency or was it a cumulative approach between your organisation and the agency? Our website is still very much a work in progress, we needed to get a website up and running quickly and it is visited by a huge amount of people. We used an external agency for the original development of the website but have recently employed another external company to look at how we use Social Media and they are also looking at the website to see how it can be improved to be more affective and link with Facebook, Twitter etc. We are still a young company with limited resources so the use of external companies for specialised areas is important. Finding the right partner is not always easy and we have had a couple of false starts but those companies we are working with at the moment are working out well. Did the Consortium behind Double Diamond consider bidding for some of the 2005 licences
and of those that have been awarded to various ventures would Double Diamond consider investing in a new Casino from one of the winning bidders, or is the policy to look for opportunity with for example underperforming operations that perhaps would provide Rainbow Casinos brand better potential? We have not considered getting involved in the bidding process for the 2005 licences. Since our takeover of the Gala clubs we have been concentrating on the existing estate and bringing that up to the standards that we require from our operations. When Double Diamond was formed the long term plan was and still is, to grow by acquisition. We are prepared to look at any of the options you have mentioned. We have our benchmarks that we want to achieve from each operation and providing that they can be achieved then hopefully we will see Double Diamond grow as a company. Do you think there is any scope for Double Diamond to move into Leisure Parks, Betting shops or Bingo or is the organisation firmly based in Casinos? I never say never; but our strengths are in casinos. We have developed our niche in the market and compete very well against other casino
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companies and that is where I see our growth coming from. It could be worth the organisation chartering a Cruise Ship for its patrons and host baccarat and Poker Tournaments, as other than Birmingham it could sail from each Cities port from Bath right round to Teeside? That’s not something I had thought of. We are always looking for new and innovative ideas. Is there any further news on the possibility of their being a Rainbow Casino Dundee? We are currently carrying out a feasibility study on Dundee; I will let you know how we progress. In our previous interview you mentioned in your replay to my wish list question with regards to the UK gaming legislation - ‘I would like to see a more level playing field in that the facilities that can be offered by the holders of the small and large 2005 licences should be available in any casino.’ That is a very reasonable expectation and one that could be considered by the Gambling Commission?
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All our current sites operate under the ’68 Act and if you take Bristol, which has attendances of over 5000 per week, to offer 20 slot machines just doesn’t make sense and does not cater for the demand in terms of both number of machines and mix of product. Whilst the newspapers have been full of negative stories particularly concerning LBO’s and FOBT’s, there is clearly a demand for more slot product in certain locations and we have to be allowed to grow our businesses. Casinos operators in the UK take very seriously their responsibilities especially when it comes to social responsibility and have an excellent track record. I can see no reason especially from a compliance and socially responsible point of view why this cannot happen. However, this is probably not top of anyone’s list at the moment and change is notoriously slow in coming. Politically it is not popular, especially with the General Election looming; a change to gaming legislation doesn’t win votes. We may have to wait quite a long time, but perhaps the very recent appointment of Grayling to promote the industry in a positive light and to work with The NCF and the industry for legislative change will help.
Capital Casino Peter White talks to Madis Jääger, CEO of Olympic Entertainment Group
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Hilton Tallinn Park is an impressive building. Can you outline some of the world-class features? This will be the first Hilton hotel in the Baltic countries. The hotel will also offer top-notch conference facilities, fitness centre, spa with an indoor swimming pool, outdoor sun terrace and an all-day restaurant. The ground floor of the hotel will also feature Estonia’s flagship Olympic Casino. How many and what type of rooms does the hotel have? The hotel will have 202 rooms and suites, also overlooking the medieval Tallinn Old Town and the sea. The top three floors will be executive floors where rooms have French balconies. The top floor of the hotel will be holding an executive lounge. What can patrons expect to see on 1600-squaremetre casino? This will be the largest casino in Estonia and will feature separate areas for slot machines, casino tables, sports betting and poker. There will be a special area for VIP players, spacious casino bar with stage area and a comfortable lounge. Our mission is to ensure our guests a highly enjoyable environment with the finest design and craftsmanship. We
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trust that the new, highly modern casino has high potential to become a benchmark for quality casino entertainment in the whole region. Will there be enough staff for the new Casino or is training underway for additional croupiers, pit bosses, etc As the casino in Hilton Tallinn Park will be larger than our previous Estonian flagship casino we will definitely need more staff. We take pride in our high service standards and that is why we are already in the middle of recruiting and training new employees to get them perfectly ready for the grand opening next spring. As the casino in Hilton Tallinn Park itself will be spectacular and inherently more prestigious, we have many candidates contacting us from their own initiative hoping to become a part of the team of the best casino in the region. This might also be supported by the fact that Olympic Casino has won the title of the most competitive service enterprise in Estonia for the past two years in a row. Is the building work complete, is it now at the fitout stage, or are there further stages to be built? We recently held the topping out ceremony of this fantastic 13-storey building so the hotel has reached
its final height. Although the superstructure is ready, there is still a lot of work to be done before Hilton Tallinn Park and Estonia’s finest Olympic Casino may open their doors in a year from now. I am really excited because on paper everything is ready but in reality it will take just a little more time. Entertainment is an important part of the whole experience; what are the facilities at the new Casino? Offering quality entertainment and service excellence has always been the main priority of Olympic Casino. The new casino will have an excellent bar featuring highly valued barmaids, also our three-time bartending world champion. For local and foreign poker enthusiasts, the new casino will continue to host daily poker tournaments and cash games as well as the region’s largest poker festivals. The casino will of course have a dedicated stage for regular performers, exciting shows and great parties with amazing additional winning opportunities. What percentage of your patrons will be local vs tourists? All of our flagship casinos are in leading hotels of
capital cities. That means that the percentage of tourists is also quite high making up more than a third of all visitors. We expect similar numbers also in our new flagship Olympic Casino at Hilton Tallinn Park. What is your view on the gaming industry and innovation? Olympic has always been known for its innovative solutions. Connecting land-based casino operations with our online platform OlyBet has clearly been a strategic choice. I believe that synergy between land-based and online operations will continue to increase in the gaming industry more and more. What impresses you most about this new World Class Casino? It would definitely be the fact that the new hotel will be a small casino resort in its very nature, something that is unprecedented in the whole Baltic and Scandinavian region. Owned by Olympic Entertainment Group and operated by Hilton Worldwide, this will be an equally great venue for locals, and people travelling to Tallinn for either business or holiday.
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Interblock Welcomes New Executives to Grow and Expand Company Interblock’s gaming portfolio allows growth in new and traditional markets
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nterblock, known for its luxury gaming products and multiplayer gaming machines, recently named John Connelly as Chief Executive Officer in January. Two months later, Rob Bone came on board as President, North America. They were together in Las Vegas and spoke with Jack Bulavsky, Special Assignment Correspondent for Casino Life. What brought you to Interblock? Connelly: With the consolidation of the Gaming Industry, I saw a tremendous opportunity to take a mid-size company and grow it over the coming years. There were very few licensed companies that were still private, had a market leading position, a reputation for innovation, and had positive financial trends across the board. Interblock was that company. It is the market leader for Electronic Table Games (ETG), which has been a strong growth area over the past several years. Casinos are generating incremental revenue, while attracting a new type of player to their venues. These factors and others provide an incredible foundation for me to help construct shareholder value into the future. So I guess you will be travelling quite a bit during the coming months? Connelly: Interblock is a global company with our manufacturing and research development centers in Europe. I have made a commitment to be there monthly and help maximize the production capabilities. And later, as we expand into Latin America, Australia and other countries around the world, it will be necessary to have a hands-on approach to open these markets. Building the right team and
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John Connelly, Chief Executive Office
Rob Bone. President North America
infrastructure will be just two of the initial objectives during my travels. I’m a proponent of being with our customers face-to-face, no matter where they are located. Sitting behind a desk in Las Vegas brings a certain amount of value, but it must be combined with local knowledge which can only come with being on the ground in those markets. How do you see the current economy and how does it relate to the industry? Connelly: It would be foolish to ignore the fact we have recently gone through a global economic recession which started around 2008. This became one of the main catalysts for casinos to begin reducing the amount of capital that they were spending. This subsequently impacted the replacement cycle and the number of new openings and expansions. With this said, there does appear to be indications that the gaming sector is turning around with some operators and suppliers posting stronger earnings than years past. I would say this can be attributed to not only the economic conditions but increased investments into R&D and greater Capital Expenditure within casino venues. Investing in our sector has historically helped maintain our competitive advantage against other forms of entertainment, which has proven to drive positive financial results. At Interblock we are a firm believer in this methodology and continue to invest heavily into R&D. Using data driven analytics, we target our investments into key strategic growth areas within the casino sector. We feel our product portfolio is conducive to the next generation of players needed to sustain our customer’s growth and profitability.
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Our recent results are substantiating that we are heading in the right direction. How is Interblock perceived in North America? Bone: I’m confident that the industry is aware of Interblock, but not sure how well they understand the company and our full suite of product offerings. As we enter new markets and expand our footprint in existing markets, I’m confident that the perceptions of Interblock will continue to become more and more positive. From an end-user perspective, it’s quite difficult and quite expensive to establish a brand with players. Players typically know a certain game and like it because of a specific feature or theme - not by the manufacturer that makes it. There is possibly one company that has achieved this type of brand equity with one or two specific products, but casinos are more focused on occupancy and visitation versus players’ specific brand preferences. They value games that appeal to the players’ gaming motivations and desires. Brand name is important, but ultimately, players play games with appealing features and compelling design, and that’s what we focus on here at Interblock. Since my responsibilities include all commercial sales, marketing, customer service, and product strategy decisions, I’ll be looking at new jurisdictions where we can penetrate and optimize our product presence. In time, and with a lot of focus, Interblock will have a much greater presence in North America. All companies have research. What information does Interblock have about its players? Bone: While we have yet to conduct any formal player segmentation research, I would suspect that the demographic profile of slot players and electronic table game players are somewhat similar, possibly skewing a little younger. That’s our main focus and we feel our products easily attract both traditional slot and table game players for various reasons. The younger “Millennial” segment represents a big targeting opportunity given their advanced technological knowledge, increasing disposable income, and desires for more communal and perceived skill-based gaming experiences. This Millennial group is a growing market segment but it’s not growing fast enough to replace the aging Boomer and Mature segments. I would contend that Interblock’s products speak to the younger crowd because the games are more social in
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nature with everyone rooting for the same outcome. At the end of the day, Interblock products offer a long term strategy to help casinos keep existing players, while also attracting new players. Connelly: We are known as a market leader within the Electronic Table Game business, with the ability to attract a different type of clientele. The product’s ability to appeal to such a wide demographic comes from the unique design and nature of the technology. As an example, the rate in which the game performs is faster than traditional live table games. There is more instant gratification for younger players and the games are less threatening to new players wanting to experience table games for the first time. If I look at the casino of the future, let’s say over the next two decades, I believe that many of the traditional live games of today will become a thing of the past. The next generation of players will search for greater automation and new forms of technology. Interblock is well positioned to bring the casino industry and its players such an offering. How do you stay competitive? Bone: There is an old saying: “you have two ears and one mouth for a reason” and that reason is to listen. We listen to our customers, our players, our sales force, and read all available research within the industry. That allows us to move forward with strategies based on facts rather than just intuition. Innovation for innovation sake rarely translates into success. We need to know what voids exist in the players’ preferred gaming experiences and listening is paramount to Interblock identifying and filling those voids. Purposeful design is a core element of the company’s philosophy and one that should differentiate us going forward. Where is Interblock’s future? Connelly: When you consider Interblock is licensed in approximately 132 jurisdictions worldwide, while many other gaming companies have licenses in over 340 jurisdictions; you quickly realize the expansion opportunity is significant. In addition, the company’s portfolio of products, which is the largest of any ETG supplier in the world, provides us the components necessary to grow organically within existing markets, while providing the tools to enter new markets. The trend of the industry towards more automated gaming places Interblock in a unique position to achieve a longterm growth rate in the years to come.
Lucky No7
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Seven Luck Casino in Korea banks on Video technology from Dallmeier
ox, fixed dome and PTZ cameras from Dallmeier have a sharp eye on the Seven Luck Casino in Seoul. After an exhaustive selection procedure, in which they put emphasis on reliability, image quality but also on temperature and humidity characteristics, the operating company Grand Korea Leisure decided to choose Dallmeier products. The Seven Luck Casino is located in the centre of the Gangnam district of the Seoul metropolitan district, in South Korea. Over 70 gaming tables and more than 100 slot machines accommodated in more than 6,000 m2 offer a wide variety of gambling entertainment in an oriental ambience, 24 hours a day, 365 days a year. When the casino’s operating company, Grand Korea Leisure (GKL for short), decided to replace its existing analogue video system with ultramodern,
HD IP equipment, the first thing the security managers did was institute an exhaustive selection procedure. The products of many highly respected manufacturers were tested thoroughly. They were evaluated not only with regard to reliability and picture quality, but the programme also included for example temperature and moisture testing of the cameras. Finally, the managers chose a solution from Dallmeier that was developed jointly by the company’s office in Korea and its headquarters in Regensburg, Bavaria. “The Dallmeier solution is considered to be one of the most reliable casino security systems on the market, and the technology also lived up to its reputation in our tests”, says the IT manager at GKL. Now, more than 510 HD cameras keep a watchful eye over proceedings in the foyer, at the gaming tables and the slot machine areas, the VIP room,
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the cash centre, and even the casino car park. Box cameras, dome cameras or PTZ cameras from Dallmeier are installed according to requirements. “The Dallmeier High Definition surveillance cameras have been developed specifically for security applications and are characterised by the highest image quality, a high dynamic range and an outstanding control mode. They offer the highest colour fidelity and richness of detail, while the bit rate still remains low – these are undeniably major advances for the use in a security system”, says EP Smit, Sales Manager at Dallmeier. Images are recorded in real time at a rate of 30 fps on high-performance Dallmeier appliances and blade recorders, each with an integrated storage system. To guarantee the highest possible degree of availability, Dallmeier devised a remarkable solution for the Seven Luck Casino: besides the use of Linux-based appliances, the pictures are also stored redundantly on Windows-based PCs with the aid of the Smavia Recording Server Software, and from there they are sent to a single MASS storage. Jeon Yongwan, General Manager, Dallmeier Korea, explains: “This way, we can guarantee the highest possible levels of both data security and availability at the same time.”
Intuitive management The video installation is controlled by the SeMSy® management software, which provides users with a rapid overview of the cameras. SeMSy® III is a high-
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performance and future-proof video management system with optimum user friendliness. It offers a comprehensive range of functions, including the display of live images, various search options within the footage, the control of PTZ cameras and an easy archiving of relevant sequences. “The entire system is operated via a professional and highly efficient management system. Operating procedures and complex controls can be stored in the system, so that personnel can conveniently and intuitively operate the system. The graphic user interface provides every user a quick overview of cameras and their corresponding monitors via a graphic display”, says EP Smit. The SeMSy® system can be expanded and thus remains flexible at any time. For instance, additional cameras or more monitors can be integrated into the network at a later date. Control is made even more convenient for the Seven Luck Casino by the addition of VMC-1, a video management system that combines a joystick, keyboard, monitor and jogshuttle functions. “It allows for an efficient control of the entire video management system including the intuitive control of PTZ dome cameras as well as the detailed evaluation of saved video sequences. The individual modules of the VMC-1 are, therefore, equally well-suited for both left- and right-handed operators and can be used as stand-alone devices. Due to their high-value appearance and sophisticated ergonomics all modules allow for an efficient and easy operation”, says EP Smit.
Come-Back-City Atlantic City the “Come-Back-City” Attempts to Redefine Itself in 2015 “Atlantic City-It will be every idea you had about winning and losing.” (From the movie, Atlantic City, Louis Malle 1980.) By Robert Ambrose
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great deal about With a consistent lack of air Atlantic City’s and rail service from outside history is a tug of the region the city always war between the had a struggle when it came “old and new,” to bringing in the destination and the marketing models visitors. vs. customer perceptions. The casino landscape was In the 1980-90’s I was dated having been laid out there along with countless along the boardwalk by the others employed in this first mid-90’s using the existing experimental gaming model older styled architecture of outside of Las Vegas. many of the properties. A In control were various resort built to modern design corporate power players and specifications in the marina politicians full of visionary district did not develop until dreams. Their idealism was the Borgata in 2003 and it fed by the excitement of still remains one of the most being at the beginning of a popular properties in the city. new industry in the city, their Hindsight being 20/20 ego and a daily unrealistic we can also conclude (and infusion of cash. This daily flow A contrast in time from a late September day 2014 I haven’t heard much said) as an operating casino hotel to early March 2015; of funds from the casino floor where the shadow of its former brand is reflected that a lack of competition sometimes blurred the lines of above a “closed” notice was narrowed in this gaming business realities. Added to this market by single ownership or a somewhat controlled chaos with an endless supply “managed branding” of multiple casino properties. In of “political buffoonery” that prevailed for decades. a field of only 12 operating properties at the time, this certainly impacted creativity and growth. Where was The AC model was never prepared for the onslaught the challenge? of border state gambling and the recession of 2008. • Caesars Entertainment- Harrah’s, Caesars, Bally, Claridge, Showboat As predicted border state gaming initiatives became • Trump Entertainment- The Plaza, Marina and Taj. reality with Connecticut, Delaware and Pennsylvania Also at one point the Trump World’s Fair (Former slowly appearing on the scene. The ground swell was Atlantis.) in motion and the golden goose year of 2006 and 5 It may have been easier to list the companies that billion plus in casino revenue for Atlantic City would only owned one casino. be its last. The recession of 2008 had an impact on Also from 1995-2000, was the Trump Resort vs. capital markets and funding began to dry up along Mirage Resorts and their famous “CEO’s “ at war over with the casino customers. Why drive to New Jersey what was known as the “tunnel project.” A project when you could experience the same regional to divert traffic from the expressway directly to the gambling experience and products in your own state? casinos located in the marina district, essentially
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never entering Atlantic City proper. (War at the Shore by Bronson, 2010) Another distraction for a city in need of a strict development focus. Today, as much as the Atlantic City stakeholders hold on to the dream of a “could have been” destination location; we are now looking at the reality of an extra-large regional city with a beach that now must continue to reinvent itself. In the publics’ mind are images of a city on the “brink” with failed casinos and a confusing message.
a “multi-integrated” set of experiences. Non-gaming elements generally bring a consistency to a property brand that adds interest and curiosity offering a seamless customer experience and a great benefit to the corporate bottom line. Appealing to mass and niche markets must be a blend of idea and reality. It is ok to challenge the market place (Revel) but understand that the foundation of the ideas must be realistic and centric; secured in a solid foundation for sustainable growth. Louis Malle’s view in the 1980 movie Atlantic City Can the new Atlantic City produce positive regional was about a city in transition. The fictional characters appeal and destination possibilities? played by Burt Lancaster (Lou) and Susan Sarandon Some very positive plans (Sally) represented the old and are in motion despite the new guard. disastrous year of casino Atlantic City has always hotel closings in been a tale of two models 2014. Some highlights playing against each other. In include: the 70’s it was about its aging • Harrah’s will open layered history of the decaying its Harrah’s Waterfront destination experience Conference Center. reluctantly making way for the • The Tropicana has already new and improved version of begun a huge, long overdue hospitality and gambling. facelift. Again we see a historical • The Pier at Caesars will see transition taking the decades its vacant stores fronts under old model of casino gaming and new ownership and a new hospitality to a different level. model. The central focus is not the • Hard Rock continues casinos as they are only part of to show an interest in an the experience. It is a return to Atlantic City footprint;-but the non-gaming experiences it’s all about timing. that made this resort town a Like any city in transition, marketable city in the 1900’s. learning from the success The beach, the boardwalk, and failure of past outcomes A survivor! Resorts Casino Hotel was the first casino to lavish hotels, dining, retail and open in 1978. It has survived a cast-of- owners including can help the great entertainment. Donald Trump; a variety of property themes and both city guide itself to a more The Atlantic City model is natural and financial storms. Today this Margaretville themed property has become a prize jewel among some a new beginning-driven by stable future. rough diamonds along the boardwalk. It truly represents elements of dreams backed by the definition of “a comeback property.” Moving forward we will see a realistic thinking. reduced casino footprint and blending of community Perhaps this tag line from the 1980 movie trailer among all sums it up best: “Atlantic City-For everyone who’s ever segments of hospitality. needed one more chance. It will be a different model from its former single casino driver. Today’s casino floor has been reinvented Bob Ambrose with major design changes to include a smaller Instructor Gaming & Hospitality footprint. New technology has assisted with this Center for Hospitality & Sport Management re-design but also the market place has called for the Drexel University change. Gaming floor sightlines now include cafes and Rja73@drexel.edu restaurants as well as more space to allow for social Twitter@bobambrose gatherings. The next generation of customers desires http://www.drexel.edu/hsm/
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Social Gaming vs Casino Gambling Why “social” isn’t the same as “casino”. By: Victor H. Royer
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he latest buzz-words in corporate boardrooms seem to be “Social Gaming”. At the same time, executives from all areas of the casino industry appear to be using the words “social” and “casino” as if they were synonymous. Or at least interchangeable. Recent corporate excitement on this topic has reached new heights, as the “social gaming” market topped $2.7 billion in annual revenue. OK, great. Nice. Ummm … but aren’t we forgetting something? Global casino gambling still makes over $160 billion annually. That’s a lot more than this “social” something. So why this sudden euphoric excitement over “social gaming”? Well, you see, casino execs – in an ever-escalating frenzy to satisfy fickle investors, lenders, banks, hedgefunds, M & A regulatory processes, and (in some cases) Bankruptcy Courts – have seized upon this concept as somewhat of a “Golden Fleece”, a mythical “savior” of the apparent attrition of traditional casino revenue. This is all well, and good. Adding another profit center to a company’s portfolio of successes is hardly a problem, and is – indeed – a justifiable entry into the positive revenue source column in the company’s income spreadsheet. So, why am I arguing this point? Well, no – not this point. My bone of contention, so to speak, is with the apparent co-mergence of what are essentially two entirely different, and separate, concepts. The “social” and “gaming” idea, versus the “casino” and “gambling” mantra. The two are not the same. They are not interchangeable. Or transferable, as is now becoming clearly apparent even to those who first saw “social gaming” as the “next big thing” in corporate casino profitability. The issue here is the misunderstanding of the actual product, and the business model. What is “social” is not what is “casino”. What is “gaming” is not what is “gambling.” And that’s the problem. Corporations that own and operate casinos are not
in the business of “gaming”. They are in the business of “gambling.” These same corporate operators are likewise not in the business of “social” – they are in the business of “casino.” Gaming equipment manufacturers, and slot makers in particular, are also not in the business of “social gaming” – they are in the business of making “gambling machines” and “gambling games” for “casinos”, and not for children’s arcades. Their product is not “social gaming games”, but “gambling machines for adults”. This disconnect between what actually IS the business in which we are, and what “looks like” something that “might be” gambling, but is not, is the problem that is misdirecting marketing, research, development, funding, construction, operations, and overall business models in all aspects of today’s corporate-owned and multi-merged industry. The “Business of Gambling” has become the “concept of social gaming”. That’s not where the money is, so to speak (ending with a preposition notwithstanding). Take IGT as an example. Not because IGT is somehow the cause of any of this, but because – as the biggest fish in the global gambling pond – they are the most visible example which can illustrate the point. For the purpose of disclosure, let me also tell you that I have had a 30+ year relationship with this company, have loved them a lot, and have written four books about their games. But, I also wrote books
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for Aristocrat, and lately for Bally, WMS, Konami, and GTECH as well. So, to make sure there’s no misunderstanding, I am NOT intending to lambaste anyone, or play favorites in this article. OK, so back to the point – IGT has had great success with Double Down Casino. At any moment, there are over 2 million active players on this site, playing a variety of games, including social media versions of many of IGT’s iconic and beloved games. That’s wonderful. As a result, IGT Interactive is also a growing asset in the company’s combined portfolio, now enhanced even further with the merger with GTECH, and the newly re-branded company as a combined IGT, with IGT North America, and IGT International. So far so good. But let’s look at the very latest data, and facts. From the current Eilers-Fantiny Slot Survey (4th Quarter 2014), IGT has yet again lost ground in shipshare, down by the greatest margin yet versus the other Big 5, as well as the smaller fish in this barrel. The full report can be obtained by contacting Todd Eilers at: teilers@eilersresearch.com This is not surprising, though, because IGT has been steadily loosing market share for a very long time. From being the 800 lb Gorilla in the world of slot makers, it’s now down to just one of the monkeys. Yes, it’s still a bigger and better monkey than most – but it had almost run out of food, needing to be rescued by GTECH. OK, so back to the point – Of the 2 million or so active players on Double Down Casino, the social gaming platform – all being exposed to IGT’s brand and iconic casino games – how many translate into actual casino gamblers? Well, you see – that’s also the point! None. Yup. None. Or, if you want to nickel-and-dime-it, maybe a trickle. And while my example here is illustrative, the fact remains that the “social gaming” phenomenon is far from being the “Golden Fleece” that will “save” corporate profitability, and make the world of “social gaming” exceed the world of “casino gambling.” And that too, IS the point. What is “social gaming” is NOT, and will never be, “casino gambling.” You see, people who do “social gaming” on “social gaming platforms” are NOT the same people who play “casino gambling games” … and they do NOT play for the same reasons. Those who play Double Down Casino on Facebook do it for fun. For entertainment. Most of them do it at work, or on their phones or tablets while stuck in traffic, or long commutes to and from work. And, sometimes
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in competition with each other over long days and nights, or weekends, when the average person is bored and can’t find anything to do. These are not casino gamblers, and very few of them, if any, will ever become such players. That’s why the transference ratio, and profitability equations applied to social gamers versus casino players, just don’t work, or come out as predicted. Casino gamblers do NOT come to the casino to “socialize.” They come to GAMBLE. Pure and simple. A hard fact. Nothing fancy. Nothing mysterious. But these very same customers, who collectively account for over 80% of all revenue for casino operators and slot manufacturers, are still being totally ignored, particularly in this mad rush to all things “social gaming” and “all things Facebook, Twitter, Instagram”, and whatnot. Yes, promotion is great – BUT, if not targeted correctly – and at the right audience with the right message – no amount of “social gaming” can, or will, translate into actual casino gamblers who will come to YOUR casino, and put their money into YOUR slot products, or table games. It is this disconnect between the “myth” of “social gaming” and the “facts of casino gambling” that’s the issue, and the one that’s causing reduction in overall casino play, slot machine drop, casino and supplier profitability and – most of all – the apparent total disregard for the bread-and-butter of the casino business: The Casino Gambler. Yet the solution is simple – Don’t forget the Gamblers! Put MORE staff on your casino floor, not less. Make response times to player’s needs FAST, and not slow, as it is now. Make slot machines that are great GAMBLING games, with the thrill of victory versus the odds of defeat – that age-old challenge that still resonates in all humans everywhere. Realize that your most profitable customers are CASINO GAMBLERS. Treat them well. Cater to them and their needs. Make the casino friendly for them – and this does NOT mean more nightclubs, restaurants, or noise (or any “social” nonsense). Casino gamblers want solitude, and good service. That’s it. Give it to them, and you’ll be making more money from just these few than from all the millennials you are now trying to attract with social gaming. It won’t work that way. But give them a good gamble, and teach them the thrill of victory and the money that comes with it, and they will be yours for life! And so will the profits. And THAT’S the point. Cash it in – it’s worth your while.
The Fastest Growing Systems Company
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35,000
500
COUNTRIES
SITES
SLOTS
finland
macedonia
RomAnia IRELAND
Germany georgia
slovenia
Luxembourg
LAOS MACAO
Switserland
DOM. REP.
ST. martin
SERBIA
curacao
Bulgaria
HONGARY
Philippines
Sri Lanka
MALTA
Italy
Cambodia
GIBRALTAR
suriname
seychelles
TANZANIA MALAWI GHANA
SINGAPORE
malaysia
NIGERIA
URUGUAY
Namibia
ZAMBIA
2011: 8,000 machines • 2015: over 35,000 machines 30000 25000 20000 15000 10000 5000 0
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DRGT Europe • Sales@drgt.com • www.drgt.com
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The magazine for the owners and management of international casinos