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Paul Sculpher
Everywhere you look, everyone’s a founder these days – certainly if you spend time dredging through LinkedIn, fighting through the motivational messages, self-congratulatory waffle and posts starting with “I wouldn’t normally post this on a business forum” and proceeding to do so, in deeply irritating fashion. The number of new businesses that end up reaching the fabled “exit” stage is vanishingly small, but I travelled to Amsterdam to speak with Fintan Costello, chairman of BonusFinder, who is in the midst of its earnout having been acquired by Gambling.com Group. With a hefty price tag, it’s fair to say this is a success story in the world of affiliate marketing and, knowing how tough it is to get to this stage in a crowded field, it’s always worth a conversation to find out more.
BonusFinder is a pretty straightforward concept at heart – dissect the market for online casinos and identify bonuses worth playing for curious customers – avoiding the worst of the sector in terms of locked away funds and other dirty tricks some operators have been known to pull. A quick look at the site, however, and it’s clear that ease of use, plus some neat touches like allowing visitors to dictate their own budget, make the site all about getting best player value, not trying to facilitate bonus abuse (although there are plenty of sites for that).
I asked Costello about how the sale process – necessarily a complex one for a deal of this size – had taken shape. He told me: “The whole history of BonusFinder has been a case of teamwork, and everyone picking up tasks to which they’re best suited. For whatever reason, I have ended up as something of the public face of the company, and I peeled away from the day-to-day a little to focus primarily on the acquisition due diligence and associated work.” With a quick nod to one of the regular LinkedIn leadership meme culture staples – ‘distribute credit widely, take responsibility personally’ – Costello comes across as someone who knows the value of a productive team. As a team they’re widely spread, from London to Helsinki and plenty of other spots in between – Costello is the only employee in Amsterdam, with his family – there’s no debate over returning to the office with these guys.
That journey from idea to exit is a long, arduous one and it feels to me like the best way to learn how to navigate it is from people who’ve travelled the road (rather than from those LinkedIn memes). I asked Costello what it takes to be successful from his perspective: “It won’t give me LinkedIn guru status but any success we have is due to eight years of consistent hard work. We had our ups and downs along the way, but by showing up every day we put ourselves in a market leading position in Canada and a super fast growing business in the US.
"The second thing that is slightly more counter-intuitive is that we never had a plan to exit, the focus was always just to grow a great business that we’d all love to work for. This freed us up to make the right long-term decisions; for example when we launched in Canada, we were one of the few to focus on the market and when we entered the US market there was only New Jersey and Pennsylvania that were regulated. All of that combined in a way where it was an obvious great fit with the Gambling.com Group that meant we could turbo-charge our roadmap under their wings."
The other question I wanted to ask, coming from an offline perspective, was why do land-based casino operators seem to have, in many cases made such heavy weather of getting their online offers right? Developments in the US are of limited comparative value to the UK situation – everyone over the pond already knows the value of the online market, so there’s not the same first-mover advantage that was available 10-15 years ago here – but it does feel like there have been some misfires in the UK. What would he do differently?
“First thing is not to just slap a logo on a white-label casino and assume magic will happen, no matter what the sales rep promises you. For land-based casinos, I believe the true value unlock is really leaning into the multi-channel opportunities and joining the dots in a thoughtful way between both environments. For example: single wallets and loyalty programmes, using the casino floor for online live dealers as well as shared concierge and VIP management. An overlooked area would also be solutions that allow VIPs to play online from outside the UK.
"I also think there is a middle ground, with thoughtful use of digital within the land-based casino; food and beverage ordering, restaurant reservations, digital loyalty cards and all of it backed by hi-speed wifi. In 2023, it has never been easier to create these experiences and with a growing digital customer base it’s at the point where it needs to be considered a bare minimum. I’d see the real challenge as creating an environment where the land-based and online work as a single team.”
Costello's last point certainly resonates from my point of view – there’s no ‘political’ angle with a pure online operator, but any time you have a legacy business which in theory meshes well with a new opportunity, territoriality rears its head and things get complicated. Common goals are clear to see from the strategic angle, but don’t always look that way when you’re on the ground with a subtly different agenda.
It certainly sounds like an exciting time for the group at BonusFinder – soon to be part of the team at Gambling.com – and of course for Costello himself. What is clear is that he wants to stay in the industry and continue to use his hard-won experience. So watch this space!
This article originally appeared in Gambling Insider:
www.gamblinginsider.com/trafficology/117/the-founding-affiliates
PAUL SCULPHER, co-director of Gaming Recruitment Solutions, dusts off the credibility of an antiquated payments system and asks if progress might actually signal the end of Mayfair’s world-leading exclusive casinos.
Anyone who works in the gaming industry can’t help but notice the bombardment we all get via LinkedIn and other avenues from payment processors, generally offering ever sketchier sounding solutions for online casino providers to help their clients deposit funds. However, there’s a world of trouble being caused at the very pinnacle of the market due to the imminent withdrawal of a far older payment method – cheques (checks to our American brethren).
While to most people, cheques are a distant memory – the last time I got one, I think it was a tax rebate years ago, and I had to go into an actual bank branch to deposit it, like some sort of caveman – they’re a key part of the UK high-end casino business.
Their use in casinos was ubiquitous years ago, before the 2005 Gambling Act came into force, where they were permitted by secondary legislation under strict rules. With no ATMs allowed, and before the days of debit cards, there was a period when most casino guests could use up to three cheques per day, backed by their “cheque guarantee card”, a concept from yesteryear. It was also permitted to set up a cheque cashing facility (CCF), which allowed larger cheques to be drawn by players, up to an agreed facility limit with strict rules on how that limit could be extended. It was possible to have “house cheques” which were in a blank chequebook, where the casino would fill in the account details for the player from their records, so they didn’t even need to remember their own chequebook.
The system was very effective, and indeed I remember, as a trainee dealer, the glorious pleasure of being plucked by a friendly pit boss from a tedious day shift to walk up to the bank and deposit the 20-odd cheques from the previous day’s trading. However even in those days, the cheque situation was much more fundamental to the existence of the Mayfair casinos, as it was the only practical way to access funds for gaming beyond carrying cash itself – obviously no joke when you’re into five figures and beyond.
Fast forward to the last five years, and the cheque element of the top-end casinos is critical. Mayfair and those associated high-end casinos of London are alongside the top destinations in the casino world, and with staggering sums changing hands, any friction in the flow of funds is going to be problematic, especially when dealing with people not necessarily known for their patient attitude to service issues.
The problem is that the processing of foreign cheques is already beginning to end, and, for example, RBS has closed accounts for some of the high-end casinos. Given that you, I and everyone we know outside casinos don't use cheques anymore, that kind of makes sense. However, this is going to cause an absolute disaster for the Mayfair casinos in terms of access for players to their own funds. You might well ask "So what? Every business has to adapt to the modern world." And well they should, but the anachronistic legislation does not allow it.
The implications are also wider than just the business of the people concerned. Consider that, pre-Covid, the last numbers publicly available for the “big six” top-end casinos (classified as Les Ambassadeurs, Crockfords, Aspinalls, Ritz, Maxims and the Clermont) showed their combined GGR was about a third of a billion pounds per annum, so straight away that’s well over £100m ($139m) in gaming duty per year. It’s not like the people who visit these sites only spend money in casinos too. This pinnacle of wealthy tourists tends to hang their visits around the casino option but they aren’t scared to spend money elsewhere in town during their stay, along with generally a pretty large entourage. There is also the employment these casinos offer, in a traditionally staff intensive hospitality environment of well over a thousand employees. Finally, if the perception is that these businesses are so wealthy that they can withstand any storm, bear in mind that the legendary Ritz casino is gone from Mayfair for good, closed in early Covid. No business is immune.
I spoke with David Livermore, legal and compliance director at Les Ambassadeurs Club, who told me, “The Mayfair casinos have operated for just a few days since the first lockdown in March and this sector is unlikely to open again until the summer. Even then, our high net worth customers may not return to the UK, certainly until they are confident in the travel arrangements and their ability to transact at our casinos when they arrive. It is extremely frustrating that we’ve been discussing what amounts to a minor change to the legislation with DCMS, Treasury and the Gambling Commission for over four years, and despite an agreement that it’s necessary and sensible, there has been no progress. The proposed change would allow the Gambling Commission to regulate all transaction methods, replacing the current outdated restriction that exists on the face of the Act. Without this adjustment, our customers will be unable to sensibly transact and are thus unlikely to come back to London at all. The loss of so many jobs and vital revenue for the UK, for the sake of a minor regulatory adjustment, would be irresponsible.”
It does seem that asking for a minor change in the legislation, to bring more methods of funding under the Gambling Commission purview, shouldn’t be that big a deal. While sympathy may be in short supply for these incredibly luxurious and exclusive properties, it certainly shouldn’t be for the staff who work there, and that’s before we even think about the nine-figure sum of tax raised annually by their players.
Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant.
Credit for this article goes to Gambling Insider.
Casinos are due to re-open soon, but will there be anyone available to work in them? PAUL SCULPHER, co-director of Gaming Recruitment Solutions, and a case study from SYLVIE MAZACOVA, a casino dealer at Genting Casinos UK, examine the harsh realities of getting back to business.
Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant:
The struggles of the hospitality industry have been well chronicled in the media over the last year or more, and as I write, the hallowed date of 17 May for re-opening is fast approaching and some sectors may be in a better position to get a running start than others.
Personally, I am a firm believer that there’s going to be an explosion of activity from patrons who’ve had nothing beyond the essentials on which to spend their money for a year, and tills will be ringing away up and down the land, with the offline gambling sector being no exception.
However, there is another looming potential problem in the casino sector, likely shared by others – availability of staff. The impact of Brexit combined with Ovid may deliver an impact greater than the sum of its parts on an industry that has depended in recent years on more than its fair share of European imports for staffing.
Let’s wind the clock back a decade and figure out how we got to where we are. Ten or 15 years ago, there was a significant expansion in UK casinos, in scale if not so pronounced in numbers. Many sites were relocated from smaller city-centre premises, to larger edge-of-town sites. Gaming table numbers increased, and the general feeling was that with UK casino participation rates being so low by comparison with other countries, there was an opportunity for operators to open up the industry with more newbie-friendly surroundings. Leaving aside whether this was a profitable strategy, clearly larger premises would require more staff.
This gap was filled in many cases with staff from overseas. In the UK offline casino sector, gaming staff can’t just be pulled in off the street. They generally need a six-week training period, and it takes at least that long for them to apply for and receive their Personal Functional Licence, which confirms they’re fit and proper to operate in a business that needs to stay firmly on the right side of the law. Enterprising types in Europe began running training schools for dealers, and applying for their licences directly, meaning they could offer dealers that were table ready without UK operators having to deal with the expense and delay of “growing their own”.
Many a casino punter over the last few years will have had the experience of being dealt to by friendly faces from Italy (particularly Sicily), Lithuania, Poland and a wealth of other countries, and the whole arrangement worked tremendously well for all concerned. However, there’s now a real concern that having relied on this resource to keep the lights on, Brexit and Covid in tandem could derail an industry that has come to rely on a rich seam of skilled pre-packed colleagues. contact about this looming problem. He told me in no uncertain terms that we don’t know for sure where we stand. “Many I spoke with a senior industry contact about this looming problem. He told me in no uncertain terms that we don’t know for sure where we stand. “Many of our European staff have successfully achieved settled status, but they may not be in the country, and may not be able to enter easily pending Covid regulations,” he said. That doesn’t sound ideal, and we further discussed the prevailing mindset. “The fact that the pound has lost some of its value against the Euro won’t help either, making for a reduced incentive for staff to return if their objective was to send funds home for their family or future,” he added.
The issues around Brexit and Covid are most pressing for staff based overseas, but the sector has long struggled with recruitment in the UK, too. As readers will know, UK casinos outside London are not generally a licence to print money, and with the wage bill being a very significant part of operating costs – almost no casino can open its doors without spending a £1M on wages, and most significantly more – they aren’t in a world of being able to blast 20% pay increases to boost the intake.
“One of our other issues is the minimum living wage,” my connection further commented. “As it increases, it pushes up our floor rate, and of course we still need to maintain the increments for our more senior staff, so there really isn’t much space for more increases. Tips do help, but it’s not a huge bonus in most sites. We are really competing against other base level jobs like working in retail or behind a bar.”
While that may not sound like a recipe for the pinnacle of customer service, anyone who has visited UK casinos will attest that service levels range from the wonderfully personal to the actively hostile – much like anywhere else in the world at the grind action level. UK casinos tend to end up with a hard core of staff who stick around for years, plus a revolving cast who try it out for a few months or a year, and decide it’s not for them. The hardcore are generally (although not in all cases) the ones who get to love the environment and the guests, and become a much loved part of the fabric of the club. In many ways, that’s the key to getting a team that will deliver what an operator needs – stability. There’s a lot to be said for the casino working environment for the right type of person. Sure, nights are tough but speaking as an ex-dealer, shift manager and GM, there’s a rhythm to casino life that makes it a satisfying lifestyle. Weekend nights out are overrated anyway, midweek happy hours fit the bill for a lower wage, and with rush hour an irrelevance and progression a possibility for a hard working staff member, it’s not all bad.
If there is a reduction in available staff, particularly on the dealing side, casino operators have some difficult decisions to make. It’s not like staffing levels haven’t been cut down as far as possible from a cost perspective in past years, so there isn’t a simple solution. The only alternative course of actual in the face of true staff shortage, if table yielding has been maximised under a larger staff complement, is to drive up the cost of playing. A good operator will already have games running at maximum speed, so price of play is the only other option. These days (as opposed to the old 1968 Gaming Act), we can amend rules to be a little tougher – double zero blackjack and harsher blackjack rules would increase the edge – but in a market mostly depending on local customers like the UK, that’s going to raise eyebrows. Raising price of play is thus the route operators may take, and here is where there may still be some juice.
From vague memories of when casinos were open, you would still see £3 blackjack games provincially in some places, but if staff is short, these types of games must surely disappear. Roulette, the mainstay of UK casinos, is more complex, since if you increase the minimum chip cost, people just play fewer chips, so enforcing a minimum spread per spin may be the next move.
My contact also made the point that ancillary spend might be the next target, and given the nature of most newer UK casinos, with ample bar and food provision, that makes sense. The problem is there’s a big gap between gaming spend and F&B– typical averages outside London in the UK might be £20 to £25 per head and £3 to £5 per head respectively – so that’s a lot of work to do to fill the hole. There’s also the issue that serious punters and social visitors primarily there for a few drinks and to watch the gamers don’t always mix that well, so the F&B route out of the problem may not be straightforward.
Other ideas have been floating around for years, like some kind of hybrid offer with bar, food, cash gaming and other types of social games (shuffleboard, pool and so on), or a few very international scale sites (torpedoed by the change in legislative policy), or my preferred route of smaller sites focused on pure gamers with miniature wage bills to match. Whatever happens, offline play levels aren’t increasing, wage bills are marching northward and the precious resource of competent gaming staff is likely about to take a nosedive.
Silvie Mazacova, Veteran casino dealer at Genting Casinos UK:
Casinos should definitely worry about more than just whether their patrons will return or not. Staff levels should absolutely be top of their agenda as well.
While some casino groups kept nearly the same level of staff as before Covid and made use of the incredibly generous furlough scheme, some casinos went for it and decided to make as much as 60% of their staff redundant.
However, casino businesses have seen a massive plunge in staff levels over the past decade. I experienced a 50% decrease in staff numbers over the past five years. From 40 people on a night shift to 20 in one club, and from 15 people on a day shift to 8 in another. Low levels of staff may also mean dealers will spend longer periods on the tables between breaks - hardly a recipe for exceptional customer service (or enhanced security).
The wage for new croupiers just joining the business hasn’t been particularly encouraging either. Some high-end casinos in London are offering amounts of around £22k. Yes, tips in London are better than in provincial casinos, but, as we have found out this year, they are of no help if something unpredictable happens, like a global pandemic. Looking at possibilities for changing career paths, remote working is an enticing possibility, and in other sectors, a new working week looks something like three days in the office and two days at home. Why am I mentioning this? The commuting cost, of course.
Another facet that’s challenging for casino staff is the chance to progress and earn a pay-rise since not everyone got hit by Covid as hard as casinos, as other companies still offer progression. My view is it's not a secret that progression in a casino means that you are doing more tasks for the same amount of money. Senior croupiers run the floor and dealers inspect. It's not unusual to earn 22k a year and supervise a game with tens of thousands of pounds at stake. I am afraid that many people will not want extra responsibility for no extra reward. So who would want to commute to the centre of town five times a week and spend all night and weekends at work, with limited chance of meaningful progression, if they can get a job that's partly remote?
I suspect casinos may realise that they’ve made a huge mistake by getting rid of many of their staff with a plan to hire more when the pandemic is over. Many casino workers have used the one-year-long lockdown to up skill and, so that they can pursue a new career; they may not find the idea of working five nights a week with no chance of promotion and a pay rise for years to come very appealing. I, for example, have gone through writing courses, started a side-hustle as a copywriter to open new opportunities and set up a blog about fitness. Others started crafting beautiful items to sell on Etsy, which can easily turn into a full-time business in the future. This makes me believe that from the already reduced team, many of them will not return to their old job at all.
Brexit will also make the “foreign import” harder. If the new system of having to earn at least 25k a year gets the green light, casinos will lose a source of qualified and licensed staff from the rest of Europe. If the points system based on Australia becomes a thing, casinos may not be able to get a foreign workforce at all. It’s safe to assume that croupiers will rarely be considered as important for the economy and society as doctors or engineers. But maybe that drives casino wages up – or staff numbers further down – but something will have to change.
Credit for this article goes to Gambling Insider.
Paul Sculpher, co-director of Gaming Recruitment Solutions, explains the rapidly evolving landscape of recruitment in the gaming industry now that working from home is gaining ground.
This article originally appeared in the July/August edition of Gambling Insider magazine.
Working from home – WFH – is obviously a concept with which a whole lot of people have become far more familiar in the various lockdown situations across the world. The nature of the offline gaming industry has meant it’s been unable, at an operational level, to take advantage of the opportunity to work from home, however, and has been devastated. Online betting and gaming operators, on the other hand, have in some sectors seen significant gains, which will be boosted now that there’s a lot more sport to bet on. We are taking baby steps towards lifting the current movement restrictions, and while casinos are finally being allowed to reopen with strict new guidelines in place, the mindset seems to have shifted from fear of the unknown to buckling up and getting ready for resumption of trading, and the bumpy ride that’s likely to ensue.
The end of the office?
Every element of the supply chain has been affected by the changes, whether by lack of demand or personal struggles with social distancing. Recruitment is no different. GRS Recruitment is an agency that covers not just the UK, but all over the world too, and for us the concept of a central office has never been particularly relevant. We had already moved towards a working model that was pretty decentralised, with my co-director Steven Jackson and I primarily working from our homes, with our finance and admin function also remote, and our accountancy requirements covered by our partners a good 300 miles away.
The future of the “commute to office” model has been uncertain for a while now, and the sudden onset of the virus crisis has meant many companies have had to run what amounts to a live test of the process. The upsides of the WFH culture are obvious to all, starting with money, time and stress saved by not having to commute. Once the concept really beds in, however, it offers so much more. One clear example is that the talent pool is opened up, internationally in some cases, by not restricting team members to those who live within an hour or so of the office, and you won’t find too many people who will complain about saving the cost of a season ticket and a couple of hours a day in cramped public transport.
The virus has also pretty much forced us all to learn the basics of online working and meetings. Anyone who has run a quiz (or participated in one) will be familiar with how to work Zoom or Microsoft Teams, for example, and progressed to figuring out etiquette for things like muting their microphone when not speaking.
There are downsides of course. Training needs a different approach, and the benefit gained from team members at all levels interacting casually in the office is lost, along with some of the team spirit. Companies can no longer rely on their shiny office with refrigerators, beanbags and a ping pong table to tip the recruitment balance in their favour, for example, but speaking for myself, any part of that which is appealing is never far away, and certainly doesn’t involve an hour’s journey.
Recruitment in a WFH world
The gaming industry has historically been something like 60% offline work and 40% online, and we’d be lying if we said the offline element in particular hasn’t taken a hit from the virus situation.
Operational roles have largely been taken off the table until operators understand what the business looks like post-virus – indeed, at least one of our placements that was in progress as the lockdown commenced has ended up not leaving their previous employer – possibly temporarily – so they don’t fall through the cracks of the furlough programme.
It’s fair to say, however, that some elements even of the offline industry have kept ticking along. Compliance – one of our core areas – are still grinding away in some companies, taking the downtime as a valuable opportunity to refine strategies at the senior end, and work through the backlog of customers requiring EDD or KYC verification at the more functional end of the business. It feels like there are new guidelines coming out every week at the moment too – currently focussed on online gambling – so the wheels of interpretation and adjustment of procedures never stop turning.
The online element of our business on the other hand is ploughing on as before, as one might imagine. The gradual consolidation of the online industry doesn’t stop companies needing to refresh their teams, and the dynamic nature of the industry means there are always plenty of firms who need specialist help to find the perfect candidate to take their business to the next level.
There are also upsides to the shift to working from home from a pure recruitment point of view. We can get a candidate list to a client more quickly at the moment. Part of that is due to the general availability of candidates to us, given they’re not stuck in an office where these conversations are difficult if not impossible. Also, while meeting candidates isn’t something we do in all cases, everyone’s growing familiarity with the online communication process is making life easier all round.
The personal approach
The fundamentals of our recruitment business have been affected, but not totally turned upside down. In a relatively small field like betting and gaming, we always like to think there’s never more than one degree of separation between Steven and me, and any candidate in the industry. Put another way, in pretty much all cases, we will either know the candidate we’re putting forward or we’ll know someone who has worked with them, so we’re very rarely in the dark about their strengths and weaknesses. We feel this is a key part of what we offer as a recruitment partner. That hasn’t changed with the lockdown and working from home situation. What has changed, of course, is the chance to get out there in the operations, meet new people and network. Previously on our travels, we’d be forever meeting new people in the industry, which aside from the general enjoyment of that, it was valuable in terms both of finding potential new clients and candidates.
Naturally the interview process is changing in this period of social distancing as well, with video calling via Skype, Zoom or equivalent. Most employers would prefer to meet a candidate face to face, of course, but when forced, a good proportion is finding that a video call is a perfectly good substitute. Whether this approach will outlive the pandemic is anyone’s guess, but there could certainly be a huge amount of inconvenience avoided by running at least the first part of a selection process remotely.
The process
It’s worth a very brief word to remind everyone of the basics of online interviewing. As noted above, we’re all getting better at it, but there are obvious pitfalls to avoid. An obvious one is how one dresses. Businesslike is always best for candidates of course, and while we’ve all had Zoom calls with, shall we say, the top half of our clothing not matching the bottom half, bear in mind what happens if during your interview the doorbell rings. It’s unavoidable, employers understand we’re supposed to be staying at home and can’t control deliveries, so if you’ve gone for the cooling relief of an underwear-based clothing solution below the waist, you’re in a mess.
Following on from the entirely tedious “controversy” about books found on the bookcases of some political interviewees (in the background of their video interviews at home), I’ve seen a couple of comments from candidates who were mortified about what reading material might be visible to interviewers. Our standard response to this would be that if the interviewer was paying that much attention to the bookcase contents, the interview probably wasn't going that well in any case – or more simply, just blur the background.
Finally, there are always technical hiccups to avoid, and we all have connection problems from time to time. A degree of understanding will generally be the case. Again, we don’t always have the option to run the interview in a super high bandwidth location, but use some common sense and if your connection is flaky, try and avoid two kids watching Netflix and another streaming a new video game at the same time.
Offline to online
I’ve written elsewhere about the prospect of offline managers migrating to online, but we believe it will be an increasingly common phenomenon. We’ve certainly seen a massive increase in the number of offline managers known to us looking for a way to move into a sector with better prospects, and many of them are of exceptionally high quality. Consultation processes are underway in several of the larger offline casino operators, with a view to a very different structure post virus, at least at first. It’s tough times out there, but there are plenty of exceptional people who will fall victim to circumstance, and we’re all in prime position to help prospective employers pick the best of them.
Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant
By Paul Sculpher
This article was first published in CDC Gaming reports
In the UK, while slots and electronic versions of table games are an ever-increasing revenue stream, the casino industry has always been reliant on revenues from table gaming. The history of the table game offer in the UK is a curious one however – from as tightly controlled a selection as anywhere in the world to, arguably, now the easiest environment in which to try out a new game.
The piece of legislation that defined casinos last century was the 1968 Gaming Act. This Act and its related regulations were exceptionally restrictive, allowing a very small number of “Banker’s Games”. The regs even mandated many of the details of the games – it was illegal, for example, to have a player dealt their card, on a Blackjack double, face down, because the regulations insisted all cards should be face up. The order of numbers on the (single zero) roulette wheel was listed, although curiously nowhere in the regulations did it say you actually had to spin the ball!
Some new games were allowed along the way, including Caribbean Stud Poker, and eventually Three Card Poker, which of course took off as quickly as everywhere else in the world. Still, trying to crack the UK market was a pointless exercise for a game developer – the only way would be to drive popularity elsewhere in the world, and hope the authorities recognized the potential and put your game into an incredibly slow pipeline.
Things have changed dramatically since then, with the inception of the 2005 Gambling Act. The situation now is pretty much a complete free-for-all. All that is required to have a new game available for licensing and play is to submit the game to the relevant body; then you’re pretty much good to go. Operators need to supply simple how-to-play guides – hardly a problem; then as long as the house edge isn’t rapacious, you’ll be able to get your game in front of the public, assuming you can get a friendly operator on side.
The challenge of course, especially in an environment like the UK where wage costs are a very significant proportion of revenues, is convincing operators to forego opening a roulette table, and instead to trial a new game with unknown results. Unless a new game outperforms that reliable roulette table (roulette is by far the dominant game in the UK), there’s no value in an operator changing their tried-and-tested mix.
I’ve dealt with an awful lot of proud game developers, all trying to get the blend right to design the new Three Card Poker. The blindness I’ve seen is genuinely amazing. My rule of thumb, as far as complexity goes, is that you have to be able to explain the main bet to me in thirty seconds, or the game’s too complicated. Some of the games I’ve had shown to me have been more complicated than Monopoly. But when you factor in that your playing audience is likely not an experienced gaming person, doesn’t have a huge attention span, and may well have already tucked into a couple of adult beverages, complexity is not your friend. On the flip side, there’s a reason why Casino War and Money Wheel haven’t dominated the casino scene globally: lack of complexity and depth (and chunky house edges). The right blend of complexity is key; a game with a simple-to-explain bet, plus another type of bet with a bit more depth, is ideal. Personally, I always prefer a game with multiple moments of tension – so in Blackjack, for example, the player gets their own cards, then the tension of the dealer completing their hand gives you double value for your stake.
The other pitch I hear all too often is “I’ve got a new game, it’s a blend of x and y”. Just stop!
The alternative for the new game developer is of course the side bet. In theory this barely slows the game down, doesn’t require the operator to forego their reliable earning table, and gives the player something else to keep them interested. Getting the mix right here is also important, however. We can all run the calculation of expected win (EV) per side bet, and compare it to expected win for the base bet. Blackjack is the best example, where you can have a £5 game with an expected value of maybe 5p per hand, and a £1 side bet with double the value to the operator. But it’s never that simple from the operator’s perspective. Number of hands per hour will decrease, particularly, as in the above example, where the side-betting unit is a different chip (£1 ) than the base bet (£5), meaning players will forever be needing change.
You can also destroy the essence of the game if side bets start dominating matters. I’ve seen a BJ game with three side bet options at £1, plus the progressive, and while the EV equation stacks up even at a slower hand rate, it becomes an unbearable experience for the player who just wants to play Blackjack. Instead of a lively game with a liquid dealer blasting out hands and constant decisions to be made by the players, they’re watching interminable cases of picking up losers, paying out winners, and making change. If your better players don’t want to play where there are side bets, give them an option without, or at least jack up the side bet minimums so your compromised game pace makes proper money.
There’s an argument that table games aren’t really part of the future, and it seems in the long run that’ll be true, but with slot regulations pretty tight in the UK – 20 machines allowed per standard casino licence – that revenue has to come from somewhere. The costs associated with running table games are of course huge, but they’ve traditionally been the heart and soul of casino gaming, and while that won’t last forever, it’s critically important to get the offer right in a tough marketplace that’s getting tougher.
Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant
By Paul Sculpher
Hindsight is 20/20, so they say, and while in the UK offline casino industry in the late 1990’s all the talk was about the incredible opportunities offered by deregulation and opening up the industry to new players, in truth that was the golden age right then, and things have become progressively tougher ever since.
There have been a number of casino closures in the UK of late, and unless something changes significantly, there’ll be plenty more. A tough combination of anti money laundering regulations, competition from new quarters, wage inflation and problem gambling awareness have squeezed top lines and inflated cost lines, such that generating a profit after gaming duty is increasingly challenging.
Much of this won’t apply to the top end casinos in Mayfair – effectively they operate in their own microclimate – but for provincial and grind action casinos, times are tough. Let’s take a look at each element in turn.
The various elements of money laundering regulations are, first and foremost, clearly a very good thing. In terms of keeping criminals out of UK casinos, it’s always been part of the deal, but my view is that while blind eyes may not have been turned, a couple of decades ago there weren’t many searching questions being asked either. Back in my dealing days 25-odd years ago, I clearly remember, in a casino I’ll elect not to name, both of our two best Blackjack players disappeared almost simultaneously – it transpired one was banged up for eight years for fraud, the other shot dead in a drug related dispute.
With the rules we have now, these guys wouldn’t have stood a chance of gambling to any degree, and that’s clearly a good thing. However, the problem for offline operators isn’t the criminals they lose as players (although I’m sure you’d get a mildly wistful look from one or two casino owners) but the collateral damage to completely legit players has had an effect on trade bordering on the catastrophic.
Having to see proof of funds and proof of income sounds simple enough, but when you’ve had to ask a lovely old lady to produce written evidence of her husband’s death to show her inheritance as a source of funds, it’s not a huge mental leap to realise that sometimes, that old lady’s going to say “get stuffed” – or similar – and her spend will be lost to the industry forever. Similarly, there are a large number of wealthy people who just don’t want to discuss, or provide evidence of their finances. Sometimes this is just for privacy reasons, and no doubt sometimes their fear of unwelcome attention from the taxman, but the net effect is damage to the business.
The long term situation is still unclear. Regulators continue to fine operators who don’t play by the rules – offline and online – and certainly there’ll eventually be some sort of acceptance from some unwilling players that there’ll simply be nowhere to play that doesn’t ask questions, so they’ll have to stump up the paperwork sooner or later and return to the market. However, some perfectly legitimate players with funds or incomes appropriate to their level of play are gone for good.
The casino sector also faces stiffer competition from unexpected directions. In the UK, the big political hot potato is FOBTs, or Fixed Odds Betting Terminals. This isn’t the place to go into the details of how they came about or the drama over their legislation and stake reduction, but it’s certainly fair to say that they’re an incredibly hard form of gambling, with stakes up to £100 every 20 seconds. My view is that the hardest form of gambling should only be located in the most heavily regulated environment – casinos. The commercial impact (leaving aside for the purposes of this article the public health impact) of essentially deflecting this play from the casino industry to become a gigantic windfall for the bookmaking industry has hurt casinos, no doubt.
Obviously there are other competitors in play in the market, with the leisure industry being as dynamic as any other. Online gambling will have taken out a chunk of the UK offline market, and while the larger operators have their own online offer in the main, smaller operators haven’t filled the same gap.
It’s also sobering to consider the gambling market with a wider viewpoint. In the US there’s a lot of talk about the falling proclivity of younger people to play slots, with their being used to far more sophisticated and interactive entertainment via video games. Identifying the problem is the easy part, however, and there’s no simple solution in sight. The skill-based gaming terminals have popped up in Las Vegas, for instance, but their impact hasn’t moved the needle to any great degree. This might not be the same problem in the UK that is in the US – our slot spend is way lower, due to the availability of ambient slots gaming in pubs, bookies, arcades etc – but there has to be a worry that live casino gaming may be negatively affected by demographic shifts. Is going to the casino perceived as only for old people? Nearly every new casino opening tries to tap into the “cool” market by way of décor, but if we do have a serious problem with attitudinal shift, we’ll only know when it’s too late to reverse it.
Wage inflation is a simpler concept – in the UK the National Living Wage keeps on rising, as do employers’ mandated pension contributions. Its no secret that the casino business is a labour intensive one, and while the introduction of electronic roulette has been very successful – other electronic table game less so – payroll still represents a significant slice out of top line income for all casinos.
Doing anything about this is a genuine minefield for operators. Stripping out all but the most necessary staff is one approach, but no matter how widely you want to cast your casino’s appeal, a good proportion of your visitors expect a premium offer, and a skeleton crew will find that difficult – nobody likes having to wait at the bar for ten minutes, or fight through a crowd to access table gaming at a realistic minimum. With table gaming staff generally being the lion’s share of casino costs, one approach is to jack up minimums to achieve the required win faster, but in a competitive market, that brings the danger of people just going elsewhere.
Problem gambling awareness is a ticklish subject to talk about, since any analysis of the problem inevitably leads to questions of conflicts of interest. The truth is that the casino industry has to have lost a lot of business with the increased focus on problem gambling, and clearly that’s a good thing. We shouldn’t be making money out of people who have difficulties controlling their gambling, and it’s heartening to see the number of interactions taking place with customers at the sites I’m involved in.
Having said that, it’s important to have perspective, and to recognise that there’s an industry out there in the problem gambling sphere which may not always have the players’ interests as their number one priority. Tools that ostensibly identify problem gambling behaviour – as opposed to direct interaction with management or staff – may generate lots of false positives, and there has to be a ratio at which point the industry, and the players, are done more harm than good.
It’s also surely fair to say the amount of responsible and problem gambling awareness collateral out there - Responsible Gambling Week for example in the UK – has brought the issue to mind, and the recent furore over FOBTs stake reduction timing also helps to highlight the issue to gamblers and people entering the gambling market. That is the most effective tool of all, to make sure customers are informed, and if casinos had to make money from problem gamblers to survive, then they shouldn’t exist.
There are plenty of headwinds for the UK casino market, and it’s difficult to see how things will improve in the short or medium terms. Maybe the legislative regime will change, maybe technology will come to the rescue (again) or maybe the demographics or tastes of the population will mysteriously change to make casinos more mainstream. Everything is dynamic, of course, but right now it’s a tough business.
Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant