Where does the casino industry go from here ?

By Paul Sculpher

This article was first published in CDC Gaming reports

Reading the annual results of some betting and gaming operators, you’d think the picture was quite rosy, with a whole world still out there waiting to be conquered, with virgin territory aplenty, and no clouds on the horizon. In reality the challenges outnumber the opportunities. With new options thinning out, the looming spectre of tougher responsible gaming regulation (as highlighted by the recent Panorama and Ross Kemp TV shows in the UK), and the AML landscape only getting harder, who’d want to be a development director in a betting / gaming company today?

There’s a nagging question facing European betting and gaming executives, both online and offline, which doesn’t get talked about too much but is starting to rumble louder and louder in the background – what’s next?

With shareholder expectations based on continuous growth, fueled by the gigantic strides made over the last few years, particularly online, everyone is looking for a way to grow the top line, but the opportunities so to do are increasingly difficult to identify. So I’ve looked, below, at a four areas where development teams might be trying to squeeze some growth out of their business – geographical diversification, innovation, niche operation and legislative change.

Geographical diversification has always seemed like an easy way to generate growth, but this isn’t exactly a secret, and the list of genuine greenfield opportunities is dwindling very rapidly. The investment in marketing necessary to become established in a new country is considerable. In many regions the law relating to online and retail betting is fluid, to say the least, with more than one nascent operation being strangled at birth as a slightly grey set of laws regulates the operation into either non-existence, a tax money pit, or a competitive situation very much in favour of home-grown operators.

There’s hardly a betting operator anywhere who isn’t at least privately wondering how the opportunities in the US will take shape. With state-by-state legislative decisions, there are at least bite-sized territories to take on. Still, plenty of bigger operators will be dreaming of a national brand to dominate all markets, but trying to achieve that and failing would be financially catastrophic. There’s also a cultural piece to consider, with the US market having had a wildly different history from all European markets; coming into that from outside will be a considerable challenge.

The primary alternative to geographical diversification is innovation. Looking at the European market, it’s tough to identify much in the way of really significant change in the last few years. The best global example would probably be the growth in Daily Fantasy Sports, although terrifying marketing budgets are required to really underline the appeal to the consumer. There’s also a distinctly poker-like feel to the real chances of sustained player success (sharks get paid, fish get eaten). That means that it’s an open question as to the long-term longevity of what is admittedly a fun activity, given that most players are facing such a negative expected return on their money.

Alternative innovation options are bound to appear in due course, although in a marketplace as competitive as the current one, the speed of me-too adoption is dizzying. Consider the advent in the UK of bet request services. I can’t remember who was first to offer bets built by the customer, primarily because every other major bookie saw a new shiny option and put their own in place in what seemed like a few days. The next major innovation will surely be in differentiated marketing techniques as opposed to the betting offer itself – and if I knew a few workable options I’d not be telling you here!

Niche operation is an interesting area, in the sense that right now the bigger operators are thinking strategically, with whole countries in their sights and medium to long term opportunities on their minds. As newer markets settle down – or in some cases as the dust settles after new entrants launch into older markets – one imagines there will be opportunities for smaller operators to make a living from distinct sectors, whether they be VIP services, a specialist marketing opportunity, or something more obscure.

Legislative change is listed here as a possible growth opportunity, but few people in the industry are likely to see it as one. Yes, there will be territories (besides the US) where the law will open up to allow serious money to be made by new market entrants, but they’re few and far between. Far more likely are changes that will hamstring territories one by one – a rise in tax rates, Responsible Gambling (RG) initiatives, and of course the ever-present money laundering concerns.

The biggest factor of all, longer term, is likely to be responsible gambling rules. The longevity of the industry in any particular location depends on striking the right balance between making money and keeping losses affordable to players, so there are difficult decisions to make. That’s if the regulatory change isn’t so severe as to make the discussion moot. The future is only going to drive all businesses down the more responsible route.

I’ve seen commentators talk about the initial rumblings of an RG backlash in a territory like the US within two or three years, with serious action only four or five years behind that. If there really is a limited window to make serious money before the hammer falls and some measure of play based on affordability sets maximum losses at an unfamiliarly low level, then there are going to be a lot of burnt fingers. I expect that there’ll be European territories where what today feels like a little over-restriction by the authorities will seem like a pain-free nirvana in five years’ time. As for the US, I’m sure we can all think of political forces so powerful in the US that they can perpetuate a patently ludicrous situation, flying in the face of all logic ….

With all the above in mind, it’s instructive to look at my particular area of speciality, UK offline casinos. There was a time 15-20 years ago when there was unbridled optimism, from the Budd report through to the 2005 Gambling Act, when everyone in the business expected the sector to open up and start generating revenues on a par (per head) with other countries at the same stage of development. While this may never have been realistic, given the number of other gambling options available to the average Brit, it’s fair to say that the UK offline casino sector is now in some trouble. There may be a small bounce in slot and ER business in reaction to the recent restriction in the prize levels for FOBT machines, but few believe the sector has a long-term positive prognosis. The perfect storm of AML legislation, Responsible Gambling restrictions, competition from other sectors, and Brexit uncertainty has hammered the sector. As for growth – well, not too many casino execs are forecasting that. If expected development is anything to go by, then while over the next year a couple of brave, independent operators plan to open new sites, and a long overdue additional casino will arrive in a major city centre, I’d still back long odds-on that more casinos will close in the next three years than will open.

To recap: many an annual report will be talking about the potential for growth across the betting and gaming sector, but with most European markets now fairly fully exploited and legislation and public concern only getting tighter, looking further afield has less impact because everyone’s doing it. So where will that growth be coming from?

Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant

Table Gaming in the UK

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

Choppy waters for global offline casino industry

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

The changing face of Las Vegas

By Paul Sculpher

Life in Las Vegas has never stood still for long, and while the last few years have been an exception to that rule for the most part, the next round of major deck shuffling is imminent.

It’s hard to remember a quieter period in terms of new openings, implosions and takeovers than the last few years, with the not-entirely-successful opening of the Lucky Dragon and conversion of Sahara to SLS being the only projects of note visible to the average Vegas goer – and they’re not exactly on the City Center scale.

However, hold onto your hats, because the next round of development is well under way.

Genting’s Resorts World is taking shape nicely on the Strip just south of Circus Circus and opposite perennial brunch favourite, the Peppermill. A mildly comedic lawsuit notwithstanding (partly due to the colour of the glass on the outside of the building being similar to that used on the Wynn nearby), the site is due to open in late 2020, and the plan will involve partnerships with Genting’s other businesses around the globe. The senior management will no doubt be slightly unsettled by the fate of the Lucky Dragon, which was nearby, similarly squarely aimed at the Asian market and failed pretty dismally, but Genting have a far bigger database, far more experience and a much bigger site, perhaps big enough to draw people to the north of the Strip just for a nose around.

Also coming down the chute (for late 2020) is Circa, the first major property to open in downtown Las Vegas in forty years. Developed by the same guys who own the D downtown, this is around 800 rooms and looks to be an attempt to go upscale in a big way – 6 pools, rooftop amphitheatre etc.  It’s hard to argue with the concept, with downtown so far immune to the incredible price gouging present on the top end locations on the Strip. Many Vegas visitors will have one night downtown per trip for a change of scenery – and beers that might be less than $5 – but the idea of having an upscale resort in the area seems like a solid way to attract large numbers of mid-level spenders who have a respectable bankroll, but want their money to last a little longer, while having  Strip quality surroundings.

There are also the usual rumours of takeovers and changes of ownership.  Caesars Entertainment’s situation is fluid, with talk of them being for sale as this article is typed, and Carl Icahn acquiring shares at a rapid rate. It seems unlikely that any sale would make a dramatic difference to the Vegas offering at least - the power of the Caesars Rewards database (rebranded from Total Rewards) is huge across eight Las Vegas properties – but who knows which territories would be considered non-core and sold off. Regulatory risk might be the key consideration.

Our old friend the Hard Rock Hotel and Casino will also be changing, to become the Virgin hotel.  The synergies are obvious, with Virgin Atlantic and Virgin Holidays being under the same ownership umbrella, so it’s easy to see incremental trade being driven to the slightly off strip location occupied currently by the Hard Rock site. It’s always had a great feel about the place, so it will be fascinating to see how the transformation develops away from rock memorabilia (often from bands you’ve never heard of ) to a more contemporary scheme. Virgin are also trialling their Hyperloop nearby –  the fabled sub one-hour rocket speed journey from Los Angeles may not be imminent, but you can bet it’ll happen eventually.

There’s plenty more going ion in and around Las Vegas, so the city with more image makeovers than Madonna isn’t done yet.

Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant

GRS Recruitment - Helping operators remain compliant

The amount of legislation operators in the betting and gaming sector have to deal with is, as everyone knows, staggering – which is of course entirely reasonable given the nature of the product.  We’ve met many operators, and almost without exception they’re 100% committed to protection of the customer and compliance with the various rules far ahead of the commercial imperative.

However, delivering a compliant business does require a team of professionals to attend to the detail.   With AML issues being at the forefront of any compliance person’s mind at present, especially given the parade of fines and other sanctions being currently being launched at operators, it makes sense to dedicate significant resource to ensuring all bases are covered in all areas of compliance and social responsibility to safeguard both the customer and the business.

There was a period relatively recently where the market hadn’t quite caught up with the demand for experienced compliance specialist at all levels, meaning it was difficult to recruit people directly into roles from AML Assistant to Compliance Director, but more recently the market has reacted, and there is an increasingly large pool of qualified candidates, with track records of quality performance, for operators to look at.

At GRS, we have been able to help operators in this tricky area at all levels over the last four years or so, and we feel it’s becoming something of a speciality. Our operational background helps us to understand the detail of operator requirements, and of course it’s not an area to leave to chance when hiring.  As the regulatory framework continues to evolve, compliance teams must evolve with it and while developing from within has obvious benefits, sometimes it’s necessary to move more quickly.  We’ve seen a number of instances where operators have decided to add a whole additional stratum of compliance into the equation – in fact we’re recruiting for one such additional layer, in terms of a £100-£150K Compliance and Regulatory Officer – right now.

Compliance in betting and gaming will always remain a dynamic environment, as befits a product which constantly evolves through technology and player preferences, and keeping your team up to date via timely gathering of information is critical. At least now that there’s a real market for Compliance professionals, there exists the possibility of buying in additional knowledge at relatively short notice.

GRS Recruitment have been helping talent meet opportunity for over four years in the betting and gaming sector, and are available via email on steven@grs-recruit.com

Raising the Rampart

Is there a more reliable person to count on in the industry when it comes to security and compliance than a former Met head honcho?

Paul Sculpher meets Extrayard Security Managing Director Roy Ramm to find out

There’s a new provider offering compliance and security consultancy services to gaming operators. The man behind the firm, Extrayard, is Roy Ramm, a familiar name to many in the industry and a man aiming to address the very real concerns apparent at present. Anyone who knows Ramm will have heard one of the colourful stories from his past, which are always incredibly entertaining and insightful in equal measure, as they shine a light on a vast array of professional experiences from a varied, glittering career.

Ramm was previously a senior Metropolitan Police Detective, leading some of Scotland Yard’s most iconic and demanding departments. By the end of his career in London’s Metropolitan Police he had commanded the Serious and Organised Crimes Branch, The Fraud Squad, the Undercover Policing Unit, the world famous Flying Squad, led hostage rescue operations in six countries and run serious crime investigations in London.

Roy Ramm. Photo taken from the original published Gambling Insider article written by Paul Sculpher

Next came decades with casinos operator London Clubs (later Caesars Entertainment UK) as governance and public affairs director, looking after security, compliance and regulatory relations for the group’s casino operations in the UK, Africa and the Middle East. Now, with Extrayard, Ramm is aiming to lean on that experience to deliver a unique support package to the wider gambling sector. Extrayard’s mission is to help operators in any sector and of any size proactively formulate policies and procedures to protect their businesses, to give them continuing confidence that they are safe and compliant, and to help minimising harm when things do go wrong. “It’s about starting it right, keeping it right and putting it right,” Ramm explains.

The operational imperative is to build a successful business, offering customers great experiences. However, sometimes businesses can become so absorbed in commercial challenges that other issues like regulatory compliance and asset protection suffer. From a regulatory and compliance perspective, Ramm believes there are only two things that really matter to regulators right now: money laundering and social responsibility. Recent events with Paddy Power, Rank and other operators would tend to underline that this is where the regulatory focus lies. “Operators who don’t acknowledge the measures necessary to be compliant from both an AML and from a responsible gambling perspective are putting their licences and their businesses in jeopardy. You only have to look at the public statements the UK regulator has demanded from UK licensed operators to see the regulator’s direction of travel. There is an increasingly strict AML requirement to know who we are doing business with and where their funds come from. This will be extended by the 4th EU Directive”.  Ramm is also aware of the responsible gambling onus operators are under. “However customers fund their gambling, operators are now expected to monitor how customers are behaving to minimise the risks associated with gambling excessively. This puts enormous pressure on operators, large and small, both in the real world and online,” he explains.

Adapting to this modern age of new compliance is where Ramm believesExtrayard has a role in the industry. For smaller operators who can’t support in-house service, Extrayard offers bespoke compliance plans and support. For larger companies with in-house compliance functions, Extrayard offers probing and exacting audits that challenge the procedures mirroring the way a regulator might investigate such a business.

According to Ramm, there’s a real risk in larger operations, with their own in-house teams, that familiarity can lead to some softening of the rigour required to ensure compliance, and the commercial imperative can challenge any department’s commitment to focus on non-revenue earning matters. An independent third party engaged in a one-off or ongoing audit process can “reset” the mindset of organisations in this context. The other speciality where an outside agency can help operators is in revenue protection, because as gambling operations become more complicated, there are more and more ways for dishonest individuals to prosper. Ramm leans on his time in the police force when facing these issues. “Loyalty schemes, on a big enough scale, become opportunities for theft of significant amounts of value. The take-up of the scheme in one operation we investigated seemed almost too good to be true, and it was.” An enquiry revealed that a trusted and respected member of staff was discovered by management to have loaded a player’s reward account with points unjustified by the level of play. At the time the discrepancy was accepted as an “honest mistake”, and that might have been the end of it, except that years of policing experience and a detailed knowledge of the industry led Ramm and his team to look deeper, revealing that a systemic failure had been exploited by a corrupt network involving trusted staff and several friends and family members posing as customers,  all of whom were benefitting from the criminal misappropriation of valuable points. The enquiry led to criminal convictions, asset recovery and revised procedures. It is clear that an in-house team may not always be enough to protect operators from the serious challenges presented by theft, responsible gambling matters and, latterly,  the new AML regulations.

A fresh pair of eyes with a vast amount of experience could give operators some comfort that their in-house teams will not drop their guard in an environment where inattention can lead to action by the regulator and material loss of assets.
 

GGV Leeds casino recruitment drive

Staffing a Casino from Scratch - Paul Sculpher

It was back in February 2013 that GGV – Tony Wollenberg, Andrew Herd and I – submitted our second and final bid for the 2005 Gaming Act Large Casino License in Leeds. That seems an age ago, and at the time the prospect of actually opening the site seemed preposterously far away. However, now, as I type, our fitout contractors are on site carrying out preliminary works, and the opening is flying towards us at dizzying speed.

Among the vast array of tasks that need to be carried out before we open the doors in mid-November, the most pressing at the moment is recruiting the senior team, eventually followed by up to 200 staff members. As a new operator in the business, we’re aware that we look like something of an unknown quantity, but we all have individual track records and the casino is already a pretty big story in the area so word’s getting out there.

Job number one is to find the perfect General Manager. We are very aware that the nature of the Leeds operation is going to be pretty different to the majority of British casinos – it’s a very large city centre site with all the opportunities and challenges that brings. We’re looking for a GM with a wide range of experience, and we’re very conscious that as an independent operator, there’s no manual for a lot of the decisions that will need to be made. With a flat structure, there is no “they” to make decisions -there’ll be only three people senior to the GM in the company, so open mindedness and independent thinking is required.

We’re looking for a best of breed casino GM to take the business forward – we haven’t ruled out someone from outside the industry, but there’s a pretty steep learning curve to ascend, and with the scale of business we are developing, it would take a very special person to attack both tasks simultaneously. We’ll be using a recruitment agency for the majority of the senior positions – with plenty of other workstreams to crack on with, it makes sense to bring in a specialist.

Copy of the original published article in Gambling Insider, written by: Paul Sculpher

Once the GM is hired, we’ll have them help with the senior team – the Head of Gaming, Chief Marketing Officer, Head of F&B and other roles, as well as the critically important shift managers. Having recently had a dip back into operations myself, it’s easy to forget just how critical the right set of shifties is – the moment interaction with customers goes beyond the routine, it’s the shift managers who determine whether the interaction ends on a positive note, whether or not it started that way.

The staff recruitment will be even more of a challenge. We are in the lucky position that our casino launch is part of the launch of a very large retail and leisure development, Victoria Gate.  This includes a huge John Lewis, and 20-odd retail units as well as half a dozen F&B outlets. With a scheme of this scope, it’s already big news in Leeds and that can only help us gather momentum towards the big day. Critically, Leeds council have already been enormously helpful in getting us and other operators set for the recruitment drive – over 1,000 staff are required in all for the whole complex – and their resources and total knowledge of the area will be vital.

We’ve already had discussions with the council about recruitment roadshows – getting out there in the community and giving the potential team members a face to associate with the project, and someone to talk to.  There are obviously some preconceptions involved in working in a casino, and the last thing we want is to miss out on promising candidates because they’re not sure what the job is all about.

The collaborative approach with the council is a key part of our recruitment strategy, however the element they’re less likely to be able to help with is experienced gaming staff. Getting the right team together can be the making of a casino operation – for all the fact that we’re running a multi-faceted, integrated leisure destination we’re not confused as to where we will make the money we need to thrive – and finding a team big enough to operate what we have in mind won’t be easy. We won’t be wanting to go too close to 50% of our gaming team being trainees, although as we will be using the Blackpool Academy we can have confidence that they will, with our management team’s input along the way, by pretty much oven ready, or as ready as trainees can be when they first meet the public. It can be pretty intimidating trying to demonstrate your new found skills in a pressure situation, and we’ll be with them along the way to make it as easy as possible.

Finding those experienced staff will be the biggest recruitment challenge we face. No doubt every member of the management team will bring a handful with them, some will appear as if out of nowhere in Leeds, and we will, like any other casino, be ready and willing to employ staff from the rest of Europe, assuming they have the right skill level and correct licence (a “Personal Functional Licence” for gaming staff).  It’s likely, too, that some staff from the other casinos in Leeds and the surrounding areas will apply for roles. As long as we are selective in the ones we bring on board then we’ve a chance of getting the mix right. From experience of dropping into the local casinos, though, there are some fantastic team members who we will be delighted to welcome into the fold if they approach us to be involved in what has to be the most exciting new casino project in the North of England for many a long year.

The project has been in the works for four years or more, and now with the late 2016 launch rapidly approaching, there’s a huge amount of hard work ahead.  Securing the right team can only make that a little easier, and we’re looking forward to the challenge.

Staffing your company well is just about the most important thing you need in order to be successful...

Recruitment Agencies in the Betting and Gaming Sector

Staffing your company well is just about the most important thing you need in order to be successful.

The classic question asked of us when we present ourselves as a recruitment agency is …. “Why?”  Pretty much everyone at a senior level has done their share of recruitment, from placing some sort of advertising through interviewing, another round of interviewing, and finally offer, negotiation and hopefully acceptance.  Easy!

Well, as you’ll all know, it’s never quite as simple as that.  It’s vastly time consuming to simply set up all of the above and while delegation is all very well, sometimes it takes longer to talk through how to get the job done than it does to do it yourself, especially for smaller companies. It can save an awful lot of time and hassle to use a specialist recruitment company – and we believe that the best way to do that is to turn to a specialist recruitment company that is focused purely on one market sector.

Copy of the original published article header in Gambling Insider, written by: Steven Jackson

At GRS that’s exclusively what we do – help betting, gaming and casino companies source talent for management positions. The key is really all about experience in the field - you wouldn’t hire someone who’s never worked in casino gaming to be a surveillance manager for example, and similarly our experience in the betting and gaming sector, and recruitment within that sector, is unparalleled.  I’ve been recruiting for this sector for the last 13 years, and my partner has worked in operations for 20 years in various areas of the field – so between us whatever job you’re trying to fill, we’ve either recruited for it or actually carried out the role before, sometimes both.

The process is designed to keep things as simple as possible from your end.  Firstly we’ll review your job spec, to get an idea of what the role entails – there aren’t many that are new to us, but of course different employers want slightly different things from an employee, and the job spec is just the start of our trying to understand exactly what it is that the employer is really trying to achieve. It will sometimes take a series of meetings, calls and / or questions to get full understanding of the best approach to take to fill the gap.

Once we have a firm grip of what the client wants, we’ll go out to market to find candidates. This is where industry knowledge and experience comes in – there’s pretty much no one who works in the gaming industry that isn’t either known to us directly, or within one degree of separation (we know someone who knows them).  Hunting through the market to find the perfect fit can be a lot of hard work, or it can be a question of knowing who’s looking to move on, and might be up for any given role. 

From here we’ll generally present a shortlist, and have the client determine who they’d like to interview, whether it be in person or over Skype or similar to begin with. Once we have some workable dates for the client, we take care of everything, letting the candidates know the time and place and ensuring they’re ready for the big day.

That’s not the end of the story, mind, as after the first interview we’ll take care of organizing the next round and letting unsuccessful candidates know that they won’t be progressed, ideally with feedback from the client to help them in future.  From there on we will also deal with the successful candidate in terms of package, with of course the client’s interests, first and foremost, at heart.

The key element in all of this for us as an agency is making sure the client is happy and well informed throughout the process – recruitment is a repeat business for us, and a one shot commission doesn’t go very far in an industry like gaming. We’re delighted with our feedback so far, with repeat business from most of our clients who need multiple positions filled – for example we’ve just placed our 7th person within one of the UK’s major casino operators, and that’s just in the last 18 months.  We’re also taking on the recruitment of the senior team for the new GGV Large casino in Leeds too, a really exciting project, about which you can read more elsewhere in this issue.

Simply put, anyone can have a stab at recruitment for their own company, and pretty much anyone can take a shot at running a recruitment company in some form.  We are proud of our track record and would point to an ever growing client list to back up our claim that going to an experienced, laser-focused industry specialist is the way to get the best possible result.

Steven can be reached at steven@grs-recruit.com

Finding the Magic Formula

Side bets and proprietary games

In the UK casino market, historically there wasn’t much interest in alternatives to the basic casino table games for a long while, with the options strictly limited by law to the basic games of Roulette, Blackjack, forms of Baccarat, Dice and not much else. The regulations were particularly prescriptive – even the order of the numbers on the roulette wheel was laid down in secondary legislation (although, bizarrely, not the need to actually spin the ball).

More recently, however, all of a sudden the UK has become a hotbed of trials and innovations, with almost imperceptible amounts of regulation – these days, there’s just a theoretical list of games that cannot be offered, meaning that for those companies with games to trial (as well as individuals with new games they’d like to put in front on the public) the UK is one of the least restricted territories in the world.

The forerunner of the current legislation was the introduction of a few new games in the 90s, with Three Card Poker, Casino Stud Poker and the ill-fated Sic Bo among them. Varying degrees of success were seen – Three Card Poker is of course a global phenomenon, while the only side bet allowed under this tranche of law, the over / under 11 side bet on Blackjack, more or less sank without trace.

There is a fortune to be made out of these games however, and companies like Galaxy Gaming have stepped into the space to become a leading supplier. When the right offer meets the right environment, table game revenues can skyrocket, although it’s not quite a “one size fits all” situation. Dean Barnett, of Galaxy, told us “we try to tailor our solutions to the casino, market and legal jurisdiction we’re dealing with.  Our library of games is wide enough to contribute something in most areas”.

Copy of the original published article in Gambling Insider, written by: Paul Sculpher

As far as the UK is concerned, it can be confusing to determine what’s the best option, and there’s a balance to be struck. While it can seem a straightforward proposition to simply whack as many side bets as possible on, for example, a Blackjack table (and Galaxy, for one, are working on a deal where their entire library is available for fixed fee so there’s no incremental cost implication) it’s not quite so straightforward.

The maths, in terms of expected win, clearly favour pushing as much stake money as possible onto side bets with edges of 3-11%, or better still, progressive side bets with an edge of up to 30% - clearly that’s a better result than having money on the base bet with an edge of 0.5% upwards depending on player skill. However, there are two linked negatives to having sidebets plastered across the layout. Firstly, in terms of pure game speed, side bets can slow the game down by as much as 50%, diluting the advantage of having higher effective edge. It’s not just the time taken to place and settle bets, a significant part of the issue is making change for side bet stakes every hand or two.

The other impact of too many sidebets, beyond the simple slowing down of the game, is the impact this slowdown has on the player, particularly the regular Blackjack player. The UK is relatively unusual in that a very high proportion of the table play is from extremely regular players - when you have 140+ casinos in a relatively small country and no “resort” casinos as such, it’s inevitable that the casino becomes more of a socialising spot for regular players, rather than a destination night out in itself. Such “3 times per week” players, who love the base Blackjack game and have worked through the side bets long enough to recognize the bankroll drain they represent, don’t particularly want the slower hand rates and general messing about caused by too many side bets in play. Anything that upsets these players – who are the core of the business in the UK – is unlikely to be worth doing just to squeeze a few more pounds out of transient weekend players.

The solution is of course keeping the minimums right on the side bets. To take it to extremes, as a number of sites do, keeping the minimums the same as the base bets minimums will keep the number of side bets low, while keeping the total stake respectable (assuming players accept this). Obviously the local competitive situation will be a factor, but certainly having a £5 table, for example, with a £1 side bet is likely to be counterproductive.

As always in these types of situation, analysis is key. While in years gone by there was a fair amount of estimation and occasionally laborious CCTV analysis used to determine sidebet participation, these days things are much more sophisticated.  Any progressive sidebet by its nature will be trackable, but now standard side bets can be tracked with simple sensors, leading to a much more comprehensive dataset which can be used to adjust what sidebets are most profitable on which tables. This is something that Galaxy have developed for their clients, and Barnett told us “we are finding that clients really value the ability to track each individual sidebet on each table. This is helping them mix and match bets to the gaming areas in which they’ll be most effective”.

Completely new games are, however, a different matter altogether. We are all familiar with the very limited number of huge success stories in the industry – Three Card Poker is the rock star in this regard, although nothing else has had quite the impact. Blackjack Switch, Crazy Four Poker and newcomer High Card Flush are notable growers, but the ratio of success stories to failures is extraordinarily low.

Anyone who’s been in the industry a while has been approached by a colleague with “the best game idea for a century” and frankly in my experience they tend to be a bit underwhelming. Any successful game has, in my opinion, to have a combination of three things:

1)      The casual player has to be able to understand at least one of the bets within 1 minute – and as casino people, that translates to 20 seconds in our cases (with more experience and focus on learning).

2)      Beyond that, the game has to have some intrigue and depth, to keep a player interested after half an hour of playing.

3)      Ideally the game needs more than one “reveal”.  Three Card Poker has two – seeing your own hand and that of the dealer.  Blackjack has multiple – initial deal and every card thereafter. Even Roulette has the fun of watching the ball bounce around.

The truth is for all the games that are invented by passionate entrepreneurs from inside andd outside the gaming industry, while nobody wants to cede control of their baby to a distributor, the costs of protecting the game and convincing someone to trial it in a friendly legal environment mean many games die before they ever make it to the public. Passing it along to a specialist and giving up a good percentage of the future earnings is often the only way to have a realistic chance to have the game see the light of day.

Having said that, find me a game that ticks all of those three criteria, with a snappy name (and please, please not “it’s a cross between x and y” – I’ve heard that a million times) and you’ve a chance to make it work.

US clobbers UK with kindness

Customer service levels in British casinos pale in comparison with the “have a nice day” dealers over the pond, argues Paul Sculpher

A common cliché states that the standard of customer service in Vegas is streets ahead of what you’ll experience in the average UK casino. Perhaps truism is a better word than cliché. Having just returned from Sin City, along with hundreds of other European casino people visiting the G2E casino exhibition, I’ve seen nothing that would change my view on this subject – they’re generally excellent.

The question is, of course, why? There are a number of reasons. It’s definitely fair to say that service levels all over the US in all sectors of the leisure industry tend to be better, but that certainly doesn’t explain the discrepancy in the casino experience between the UK and the US.

The central difference is simply the raw material. It is becoming harder and harder for UK operators to recruit the right type of staff. This is not the place to discuss macro-economic factors such as the overall unemployment rate and immigration, but there’s no doubt that advertising for trainee dealers doesn’t usually lead to a bunch of keen, polite, suitable youngsters popping up on the appointed day to learn how to deal.

Rewards are certainly part of it, and the tipping culture in the US makes a job as a dealer potentially the beginning of a financially workable career. Dealer salaries in the UK tend to hover fairly close to minimum wage, plus in most cases a pretty token supplement from tips, so there can be limited appeal.

Copy of the original published article in Gambling Insider, written by: Paul Sculpher

There are other hurdles that prevent youngsters in the UK joining us in the casino sector. Few people willingly launch themselves into a night shift based job that appears to severely curtail their social life – although the reality is that one of the best parts of the casino lifestyle is the social life, where your social circle tends to be pinned to the people with the same days off that you have, and many a midweek happy hour suddenly becomes accessible with no work the following morning.

It could be argued that progression is difficult within casinos – not a view I can sympathise too much with, having progressed from dealer to GM myself – but it is certainly true that there is a bottleneck between supervisor and shift manager, and with many companies looking to bring people in from outside the industry to work as senior managers, this is not simply a perception issue. I’m sure many of us have worked with talented people who simply leave to progress in other roles or sectors, tired of waiting for opportunities, in an environment where promotion is limited by budgeted wage bills, and only when a spot in the level above becomes open can someone move on up.

Obviously one solution, which has been very successful for the major operators in particular, has been to run training schools in less prosperous countries, so that the salary package looks a lot more attractive. As long as these staff can adapt to the culture and identify with the customers, this would appear to be one of the better options for operators. From a service perspective it’s also worth noting that the nature of UK casinos is completely different to a Vegas operation – in the UK we are all about developing relationships with players. A relentless “have a nice day” style service isn’t always what a twice-aweek player wants – recognition and remembering their name probably goes a lot further in fostering loyalty.

In summary, for all the value placed on customer service training and maintaining a consistent brand, both between casinos within a multi-site operation and within a single site, it’s only ever as good as the people hired by a casino operation. It’s certainly not getting any easier to find keen and courteous employees, and since the Gambling Act 2005 missed the opportunity to genuinely bring casinos into the mainstream and help with the employee perception challenge, there hasn’t been much help from a legislative perspective. Operators are fighting, from a rewards and opportunities standpoint, some pretty low level employers and only through hard work and excellent local management – along with compelling corporate communication – will we be able to aim at a better standard in the future.