You Just Can`t! - Cuningham Group

Transcription

TOP25 PEOPLE TOWaTch
Marching
On
With even more
pressure being exerted
on the gaming
industry, these 25-plus
people will play a role
in its recovery
SandS Man
MICHAEL LEVEN
W
hile the process of recovery for the gaming industry seems
to have begun, it’s a long way from being accomplished.
In the ninth annual Global Gaming Business 25 People to
Watch, our editorial board highlights a group of individuals who will make a
difference in the gaming industry. These people are the best and the brightest.
Some will be instantly recognizable. Others may be unknown, but not for
long. As always, the 25 People are an eclectic group, covering all gaming
disciplines, jurisdictions and activities. Starting with Las Vegas Sands President
and COO Michael Leven, the choices for our advisory board were many and
varied. Maybe that’s the reason we exceeded our 25 people by a couple because
we found that there were so many influential individuals who we feel will
make a difference in 2011 and beyond that they could not be left out. So sit
back and check out who will play a role in the recovery, comeback and
turnaround of the gaming industry during the next year.
24
Global Gaming Business • January 2011
President and Chief Operating Officer,
Las Vegas Sands
hen Michael Leven accepted the offer
several years ago of his friend Sheldon
Adelson to sit on the board of directors for Las Vegas Sands, he expected to assume a
rather typical role for a board member: attend board
meetings, listen to the reports from the executives,
make some recommendations based on his long
experience in hospitality, and approve or reject recommendations from management and the chairman.
What he did not expect was a fiscal emergency
that required the full attention of the board simply
to prevent the company from imploding. And then
when Adelson dismissed the previous leadership, the
last thing he expected was to be asked to take over.
But like a true friend, Leven put his own interests aside to help Adelson revive the company, and
two years later, he has achieved that and much
more.
What made resolution of the fiscal crisis so
much more crucial was the company’s developments
in Las Vegas, Singapore and Macau, which were all
well under way and threatened by failure should the
crisis not be resolved. Leven was able to right the
ship and keep the projects on line (Palazzo in Las
W
‘
You can’t be an
entrepreneur without
stepping on a few toes.
’
You just can’t!
Vegas and Marina Bay Sands in Singapore continued, while parcels 5 and 6 in
Macau were put on hold).
Getting through the crisis, Leven concentrated his attention on completing the Singapore project, and its success has been impressive, if somewhat
unexpected. He says that by the end of the first quarter of this year, all the
aspects of the property will be completely open and ready to fulfill its expectations.
“All the restaurants are open except a few in the mall, and everything,
including the museum, will be open by that time,” says Leven.
He’s pleased by the acceptance of the product, which has become a “must
see” attraction in Singapore.
“Our MICE business is really starting to ramp up,” he explains. “Our
occupancy rate is up in the 80s for 2,500 suites, which is much larger than
anything else in Singapore.”
While the numbers being produced by the property didn’t startle him,
Leven says the VIP market has been a pleasant surprise.
“We’re setting up our own junkets, unlike in Macau where we depend on
the VIP operators,” he says. “We’re finding the players, providing them credit
and collecting the money. Our win percentage has fluctuated like it usually
does, but we think Singapore is going to be one of the great markets, and
since there are only two of us there, it’s going to be that much better.”
In Macau, Leven says they are about 18 weeks behind the projection for
finishing parcels 5 and 6 because of government controls over foreign workers
there. They were recently approved for 500 more workers, so things are starting to speed up.
“My view is that the government is going to give us just enough to keep
us going,” he says. “But they’re in no great rush. They want Galaxy to open
and ramp up before we get open. We expect it to open at the end of ’11, at
least for phase one. And it will be a long time before another one opens.”
Market share has always been an issue in Macau. Las Vegas Sands has
been in the No. 2 spot behind Stanley Ho’s SJM, but recently dropped to third
behind Wynn. Leven says the commission rates paid to junket operators is a problem,
as well as other loopholes in the regulations.
“Look, it’s always going to be a problem because someone always wants more
market share,” he says. “But we don’t measure our success on market share. We look at
EBITDA, both the percentage and the numbers. So far, they’ve both held up very
well.”
The “Singapore model” of gaming legalization has caused many other Asian countries to consider similar introductions of gaming. Leven says Las Vegas Sands is interested in those regions.
“The Singapore model has been very successful,” he says. “So countries like Japan,
South Korea, even India have to pay attention. If they want to build MICE and the
tourism industries, this model is very effective. We’ve had numerous conversations in
Japan and Korea about bringing our brands there. Korea doesn’t allow locals to gamble, except in one out-of-the-way casino, so if we can get some kind of arrangement
that would allow that, we’d love to be there.”
In the U.S., while the Venetian and Palazzo have felt the impact of the economic
downturn like all Las Vegas properties, Leven says their performance is improving.
“It’s going to get gradually better,” he says. “It’s not going to rocket forward, but
we’re very safe and comfortable where we are as long as we manage our cost and operational structure, and spend the kind of money necessary to keep the product fresh.”
Leven thinks the notion of Las Vegas as a bargain again is a bit overplayed.
“At the quality level, Las Vegas isn’t really a bargain, but it’s a very good value. You
can find bargains and decent rooms in other hotels, but at the quality level like us,
Wynn, Caesars, Bellagio and others, it’s not cheap. On the gaming side, the locals
business is suffering and we’ve lost a lot of the VIP play. Gaming in Las Vegas is a hospitality business and it’s just an amenity in the Strip casinos.”
At the end of the year, another 3,000 rooms were added to the Strip inventory,
and at the premium level occupied by LV Sands. Leven isn’t very concerned.
“The impact of the Cosmopolitan will certainly be negative, but not what I’d call
life-threatening,” he says.
He points out that CityCenter has not had a huge impact, either negative or positive on Las Vegas. He says it has not become the “must-see” attraction that MGM
Resorts had hoped it would be, unlike Marina Bay Sands. Leven says that’s not why
people come to Las Vegas anymore.
“If we duplicated Marina Bay Sands in Las Vegas,” he explains, “we’d probably get
more of the business that was already coming to Las Vegas, but I don’t think many
people would take a trip to Las Vegas simply to see it.”
And that’s what has happened at CityCenter.
“I think the architecture is interesting from a very upscale mindset but not from a
mass-market mindset,” he says. “And if we were going to build something new in
Vegas, we’d have a different price-point because I don’t think the upscale market is big
enough anymore. The missing component in Aria and CityCenter, however, is the
group sales. It’s just not big enough to carry them midweek.”
When it comes to his contract renewal and the reputed difficult working conditions with Adelson, Leven disputes that contention.
“Mr. Adelson says what he thinks,” he says. “And when you say what you think
and do big things and you’re in people’s face, they’re waiting for you to trip. And
when you trip, they hit you when you’re down. But you can’t be an entrepreneur without stepping on a few toes. You just can’t!”
Leven thinks that Adelson should get more credit for the good things he does,
because they far outweigh the hurt toes.
“They’ve given him the credit for doing monumental things,” says Leven, “but
they’ve never given him the credit for being a monumental human being. He’s created
thousands of jobs, given millions to charity, and he’s a very fascinating, interesting and
bright man.”
—Roger Gros
www.ggbmagazine.com • January 2011
25
cOST cOnTainEr
CORY MOROWITZ
President, Morowitz Gaming Advisors
n these recessionary times, relatively few businesses are in high demand, particularly in the
gaming industry. However, times like these
fuel demand for services offered by Cory Morowitz.
Morowitz runs a consultancy designed to help
gaming companies operate efficiently, reduce costs,
increase revenues, and get balance sheets in order. In
other words, the precise actions needed to ride out a
recession.
Morowitz Gaming Advisors grew out of Cory
Morowitz’s accounting firm Morowitz & Co.,
founded more than 20 years ago in a suburb of
Atlantic City. In the late 1990s, Morowitz was
asked by Capital Gaming International, a company
that managed Native American casinos in several
states, to take over as chief financial officer.
During nearly a year as the operator’s CFO,
Morowitz helped renegotiate debt from $130 million to $22 million while maintaining the company’s gaming management contracts, preserving over
$100 million of gross gaming revenue and bringing
the company out of Chapter 11 bankruptcy.
“During that time, I learned the business from
the inside, and realized there are a lot of opportunities in this industry,” Morowitz recalls. “So we
opened a separate gaming consulting firm to leverage the experience I had. Since then, it’s been an
interesting ride as the industry has grown.”
Since founding the gaming consultancy in
2000, Morowitz has presided over feasibility studies,
database analysis, impact studies and other services
for clients across the industry. He says part of what
his experience taught him is that the industry was
unprepared for the current recession, particularly on
the cost side of balance sheets.
“The gaming industry has been a victim of its
own success,” Morowitz says. “In the past, you
opened the doors, you made money. You didn’t
watch costs as much as maybe you should have. The
past couple of years have changed that. I can’t imagine there are many operators now who don’t spend
time benchmarking and going through their operations with a fine-tooth comb to keep costs at a minimum.”
While helping operators keep costs down,
Morowitz has become an expert at maximizing revenue. Morowitz Gaming recently developed a “gaming floor optimization” software tool the firm uses
to help casinos get the most out of their games, as a
joint venture with Canadian firm CMU Gaming.
“We take a gaming firm’s slot and table data,
and using our own algorithms, we analyze that
i
OuTSidE ThE BOx
THOMAS HOSKENS
Vice President, Cuningham Group
Architecture P.A.
homas Hoskens, vice president of the
Minneapolis-based international architecture firm Cuningham Group, has been
designing casinos and destination resorts for more
than 30 years. This year, he’s serving as the lead
architect on one of the largest gaming projects
under construction in the nation—the four-year,
$630 million renovation of Harrah’s Cherokee
Casino Resort in North Carolina.
Like every Cuningham project, Harrah’s
Cherokee Casino tells a story—the story of a
metaphorical walk through the Great Smoky
Mountains that will begin on the outside and
unfold as visitors stroll along. In fact, “Every building tells a story” is the Cuningham philosophy.
“Each building is individual and embodies the
client,” Hoskens explains. “If you do it right, it has
a soul that can live only in that particular place.”
For example, he notes, Native American casinos frequently draw on a tribe’s culture, from sacred
places to basket patterns.
“For a project we worked on in Las Vegas, we
pulled from the desert, the rock, the history of the
area,” Hoskens says. “I can create metaphors from
anywhere. That’s the exciting and fun part of telling
the story.”
Hoskens’ own story involves growing up on a
farm near Green Bay, Wisconsin, where he excelled
in woodworking and illustration in high school.
That led to degrees in architecture and construction
technology from the Universities of Minnesota and
Wisconsin, respectively. Early in his career he
worked on retail spaces, which “draw people in and
through, quite similar to the concept of how you
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design the inner workings of a casino, creating a
very exciting path and changing the theme along
the way,” he says.
In addition to Harrah’s Cherokee Casino and
casino resort development worldwide, Hoskens is
working on several Mississippi Gulf Coast projects.
“We had been working there 20 years and
then Hurricane Katrina came along,” he says.
“Our client Palace Casino in Biloxi was the first
to return with 70,000 square feet of new construction and a 40,000-square-foot renovation.
It’s fun to be part of something coming back.”
Talk about fun—Cuningham Group’s design
for the breathtaking Isleta Casino & Resort Hotel
in Albuquerque is a great example of the provocative and playful designs the company enjoys.
“What can I say? We have a great team of
designers, 150 people in five locations in the U.S.
and Asia,” Hoskens says. “I truly have to compliment them. They come up with great stuff.”
Looking ahead, Hoskens is “very bullish” on
the casino industry.
“Right now we’re looking at the best construction values we’ve seen in 10 years,” he notes.
“The smart developers and owners are starting to
get their plans together. I think 2012 will be huge
to get new casino projects going.”
And many of those projects are certain to
encompass “a complete resort experience,”
Hoskens says. “It’s not just slot machines and a
good restaurant anymore. Like theme parks, casino resorts today have to offer attraction after
attraction to keep the excitement level up, to create the wows, to offer something unique and special to get people there and keep them there, and
give them a special break from reality.”
—Pam Jones
My gEnEraTiOn
ALEXANDRA EPSTEIN
Executive Manager, El Cortez Casino Hotel, Las Vegas
alking through the executive offices at the El Cortez in Downtown Las Vegas, Alex
Epstein is at once right at home and out of place. Epstein grew up in the gaming
business, so this place, at 70 years likely the oldest casino in Las Vegas, is like her
second home. But her youth and demeanor might be more at home further south on the Las
Vegas Strip. It’s a trip Epstein refuses to take.
The daughter of longtime Las Vegas casino executive and owner Kenny Epstein, who himself
is a protégé of the legendary Jackie Gaughan—who, at 90 years old, still lives at the El Cortez—
Alex Epstein has immense pride in what has been accomplished at the property over the past few
years. And to paraphrase an infamous saying, “it’s not your father’s El Cortez anymore.”
But her career path was not one taken by a traditional Las Vegas casino executive. After graduating high school in Las Vegas, Epstein embarked for the big city, attending Columbia University
in New York and majoring in art history and French (with some business courses at NYU). While
she would return to Las Vegas during the summer, it wasn’t until she graduated that she thought
of a career at the El Cortez. She began graduate courses in all the hotel’s departments.
“I really liked working in housekeeping, as much as I wouldn’t have expected that,” she says.
“But I’m detailed-oriented, so I wanted to make sure all the beds were made correctly, and I love
the people in that department.”
As executive manager, Epstein’s scope is wide and varied.
“I’m in charge of all the marketing at the property from new media to print advertising,” she
says. “I’m also responsible for all the special projects, from the Cabana Suites to community
involvement.”
One of her first major projects was the conversion of a nearby hotel into the Cabana Suites, a
64-room boutique hotel.
“From 103 rooms, we completely gutted the property and redesigned it,” she says. “From
wider hallways to luxury bathrooms, it is an entirely new facility that is very popular with our regular customers.”
And Epstein is very conscious of the longtime customers.
“We designed a new logo with a stylized ‘E-C’ and showed it to our regulars,” she says. “But
they said we never called it that, and they didn’t like it, so we scrapped it.”
It’s her community responsibilities that really strike a chord with Epstein, especially with her
New York City experience.
“What’s so exciting about Las Vegas is that we’re still shaping it,” she explains. “New York City
is fully built out and people are enjoying the fruits of their labors. Here, we’re just getting started
and I love playing a part in that.”
Only 10 years ago, the El Cortez was in a part of Downtown Las Vegas that had deteriorated
and was surrounded by seedy motels, hookers and vagrants. But through the efforts of local businesses and Mayor Oscar Goodman, the Fremont East part of Downtown now hosts trendy restaurants, nightclubs and even galleries. And the El Cortez is the glue that holds it all together.
“It’s been one of the most rewarding experiences I have had working here,” she says. “We’ve
gone from empty storefronts to a vibrant community.”
—Roger Gros
W
data,” Morowitz explains. “We give operators a
database showing how their games are operating
under a number of different metrics.”
For slots, that means actual and theoretical
earning numbers, analysis of utilization, win per
unit and other metrics, all presented to the operator
in an easy-to-understand report identifying games
with names like “Dog” or “Star Performer.”
Reports like these will become more important
as the economy emerges from the recession, which
Morowitz predicts will occur sooner in some markets than others.
“Some markets haven’t really been impacted
that badly,” he says. “For example, in Missouri and
some other Midwest jurisdictions, unemployment
isn’t that bad. The locals markets have the ability to
recover most quickly. Destination markets like
Atlantic City and Las Vegas have been hurt the
most. In any place where there is a ‘ground-zero’ of
the housing crisis, it’s going to be harder to bounce
back. The consumer is driven by economics.”
In those tough markets, operators are going to
be relying on people like Morowitz more heavily for
some time to come.
—Frank Legato
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hELPing hand
STANLEY CROOKS
Chairman, Shakopee Mdewakanton Sioux
(Dakota) Community
innesota was one of the first states to
recognize the impact of tribal government gaming. State tribes launched
bingo halls in the early 1980s, and after the passage
of the Indian Gaming Regulatory Act in ’88, casinos with video slot
machines and blackjack were launched.
The Shakopee Mdewakanton Sioux Community was a tribe with a small
reservation close to the Minneapolis-St. Paul metropolitan area. After having
success with a bingo hall, the tribe launched the Little Six Casino in 1989.
The tremendous success of that casino allowed the tribe to build and open
the Mystic Lake Casino Resort, now the premier gaming resort in the Twin
Cities area.
“We had a small loan to help us build it faster,” says Stanley Crooks, who
has been chairman of the SMSC since ’92. “But most of it was revenue we
had earned at Little Six.”
Because of its proximity to the major population center in the state, the
Shakopees became the most successful tribe in the state. But since the tribe
had known hard times, says Crooks, they were anxious to give back to the
community.
“We recognized groups that had helped us before gaming and we wanted
to support them,” Crooks explains. “We started modestly, sharing our extra
revenues with them. I think in the first year, it was something like $3 million.
Now our charitable donations reach more than $21 million a year.”
M
LEading ThE chargE
AMY LIPTON
Vice President, Marketing, WMS Gaming
ight place, right time, right skills. Sometimes everything
comes together.
The timing could not have been better for Amy
Lipton to assume her current role as vice president of marketing
for red-hot slot manufacturer WMS Gaming. During her 24
years at IBM, Lipton was involved in the marketing for IBM’s
digital media and entertainment divisions. WMS, meanwhile,
has been leading the charge of slot manufacturers into the digital world.
“I ran marketing for IBM’s media and entertainment vertical, and was global
director of IBM’s digital media emerging business opportunity,” Lipton says.
“This, as well as marketing for IBM’s wireless business, put me in position to be a
leader for WMS in marketing. Today’s gaming market is about entertainment, and
the creation of digital entertainment devices. WMS is at the vanguard of the gaming industry’s move into the world of networked gaming and interoperability.”
WMS has been moving toward the networked gaming floor with a parade of
new products, from the “Immersive Gaming” platform that creates a virtual-reality
style of play to “Adaptive Gaming,” which links games to a network which players
can enter through log-ons to pick up games in progress, cashing in on bonuses
earned on a prior visit.
The latest breakthrough is “Player’s Life,” a website that allows players to earn
credits online at home that will unlock new bonuses on a game upon return to a
r
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After paying off all debts, taking care of infrastructure issues and supporting community organizations—from health care organizations and conservation to public broadcasting and boys and girls
clubs—SMSC turned its attention to tribes that
have been less fortunate in location and sometimes
even business sense.
“We had money for investment, but instead of
buying stocks and bonds, we decided to reach out to
tribes,” says Crooks. “We did that two ways: in the
form of grants and donations or loans.”
Crooks says the effort has been rewarding to both parties.
“Our philosophy was that we wanted to help tribes get through difficult
times or raise money to start or expand businesses,” he says. “We didn’t want to
do some joint venture and share in their profits, but we wanted to make it easier for them to get the money they needed to do what they thought was right
for their tribe, whether it’s economic development projects or job creation.”
Crooks explains that SMSC doesn’t just hand out loans; the tribes apply for
them and produce a proposal and a business plan.
“We have a law firm that does due diligence for us and evaluates the plan
before we go ahead and make the loan,” he says. “If we determine that it’s a
solid plan with a good chance for success, then we offer a reasonable interest
rate and repayment terms.”
Crooks says the tribe wants to help other tribes diversify their economies.
“Gaming was always supposed to be a supplemental income,” he says.
“Tribes that don’t have a big land base or a favorable location must look to
diversification, because gaming will sustain them for a period of time, but it
might drop off at any time due to political whims or other issues.”
—Roger Gros
casino—an incentive not only to return to a particular game, but to
a particular casino. Casinos are already on board with links to the
Player’s Life website on an increasing number of property websites.
“Player’s Life Web Services are an innovation that will drive
value for our casino customers, and which brings new entertainment
experiences to players to drive them back to the casino,” Lipton
says. “Whether reaching new players or existing players, online is
going to be the place to do it. Players will be able to continue to
have the gaming experience after they’ve left the casino, so they
become more valuable to the casino when they return. That’s the
strategy we’re following.”
That strategy—demonstrated on 44 different titles at this year’s
Global Gaming Expo—is only the beginning for WMS. “There are a number of
new initiatives we’re working on, based on our rich history of innovation, worldclass market research, and paying close attention to the player as well as our casino
customers,” says Lipton. “This company has a long history of player-driven innovation, so we have a strong platform on which to build.”
Coming from a world-class technology background like that at IBM, Lipton
will be well-equipped as the casino industry moves into the digital age. “As the connected player experience is moving forward, one of our core marketing pillars is to
give our customers what they need to engage their players,” she says.
“The player is changing across the board. The new player is going to have a
different profile, because the world has changed. The world of entertainment has
changed—the world of social media, the channels and platforms, all have changed
quite a bit. We have to evolve with them.”
—Frank Legato
TruMP card
ROBERT F. GRIFFIN
Chief Executive Officer,
Trump Entertainment Resorts, Inc.
urning the fortunes around for any business
usually involves good and bad news for the
people who work there. Bob Griffin got the
bad news out of the way as soon as he took charge as
the new chief executive of Trump Entertainment
Resorts in November, cutting 50 top executives from
the payroll his first day, and within a month,
announcing 250 layoffs across the board. Left in
place, however, were more than 8,000 employees at
three properties.
The force reduction, as painful as it was, was necessary to start what Griffin hopes will be the good—a
revitalization of the Trump casino brand and the three
Atlantic City resorts which bear the name of Donald
Trump, now owner of only a comparatively tiny portion of the overall corporation.
This is the third stint with the Trump organization for Griffin, who held executive positions at
Trump Marina in the 1980s and 1990s before moving
on to Isle of Capri Casinos, where he served four years
as senior vice president of operations. For the past two
years, he was CEO of MTR Gaming Group, operator
of racinos and racetracks in West Virginia,
Pennsylvania and Ohio.
Griffin returned to Trump as part of a management shakeup by the company’s new owners, bondholders who acquired the company for $225 million
in a bankruptcy sale last summer. He inherits a company which—even though just emerged from its third
bankruptcy—was already on the upswing. He credits
former CEO Mark Juliano for complete renovations
at two of the three Trump casino resorts, the Trump
Taj Mahal and Trump Plaza, and for expansion with
the new Chairman’s Tower at the Taj.
Griffin says he is addressing what led to the third
bankruptcy—a lack of available cash to service suffocating debt—before moving forward to maximize the
potential of the freshly refurbished assets.
“I’m very focused on how we operate,” he says,
noting two areas of primary importance: cutting marketing costs, and working with other properties and
local authorities to project the image that Atlantic
City is a safe, clean place to visit.
Griffin says the problem with marketing is simple:
Too many giveaways.
“Quite frankly, our reinvestment into our customer has been too rich,” he says. “We have these different silos set up in marketing, each doing its own
thing, and they’ve really layered marketing events
upon marketing events.
“Even if we look at how we market to our highend play, the discounts we give are too high,” he says,
T
noting that one goal is to get the “right reinvestment matrix” in place.
The “Trump” name on the buildings won’t be
an empty name, says Griffin. He met with Donald
Trump soon after joining the company and says the
Donald and daughter Ivanka couldn’t have been any
nicer.
“They are very supportive of the changes we’ve
put in place and what we’re trying to do,” says
Griffin. “Several times, Donald said that he’d come
down and help us out, whether that means bringing
The Apprentice down there or personal appearances.
And he said he wouldn’t charge us anything! That’s
how committed he is.”
Efforts to improve the image of Atlantic City
are being undertaken with other properties, and in
concert with efforts by Governor Chris Christie and
state lawmakers to create a new tourism district. On
the property level, Griffin says efforts will continue
to sell Trump Marina (“When we look at how
much capital we have to invest, the Marina is probably better suited to be in other hands,” he says)
and to build upon the improvements at the Taj and
Plaza that were initiated under Juliano.
“We have to not only demonstrate that we can
make our interest payments and put some money
back into our products, but we have to generate
more free cash flow,” Griffin says.
As for Atlantic City, Griffin says he is bullish
long-term, as long as operators are honest with
themselves about competition coming soon from
New York, about cleaning up the Boardwalk, and
about the challenge of marketing Atlantic City as a
destination.
“We can’t bury our heads in the sand,” he says.
“We’ve got to address the problems. But what the
state and city are working on will make this a better,
family-friendly environment, and a clean, safe place
to come and have fun. It’s still a great city.”
—Frank Legato
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29
TaBLE guru
ROBERT SAUCIER
President & CEO, Galaxy Gaming
or the man who helped to legalize
non-tribal casinos in Washington
state, table games were more of an
avocation than a vocation. A Reno native,
Robert Saucier believes that his time on the
other side of the table has prepared him well
for his role as one of the premier table-game
suppliers in the industry.
“I remember when Bill Harrah allowed Bill Cosby to get behind a game and
deal to the other players,” he said. “Cosby may have cost Harrah a few hundred
dollars, but everyone who was at that table probably remembers it to this day.”
And that’s what Saucier says the table-game experience is all about: entertainment. He describes what he saw when the Hard Rock Hotel first opened in Las
Vegas and it became the first casino to actually remove slot machines to make
room for more table games.
“Everyone thought the younger crowd targeted by Hard
Rock would want to play slot machines since they grew up
with video games,” he says, “but that was not the case.
They didn’t want an ordinary, everyday experience of
playing a video game. They wanted the tactile feel of the
cards and the chips, along with the human interaction
F
TEch TiME
KATRINA LANE
Chief Technology Officer,
Caesars Entertainment
veryone knows the Caesars
Entertainment loyalty program, Total
Rewards, is the industry standard for
customer relationships. With a nationwide network of casinos that give players credit in any
facility for points earned in another, the program has a natural appeal to traveling gamblers.
But Katrina Lane, Caesars’ chief technology officer, isn’t willing to rest on the
company’s laurels. She’s ready to take Total Rewards to the next level, and her background in marketing is crucial to the company’s success in this endeavor.
“All the departments within a casino company—or any company, for that matter—have to work hand-in-hand to make sure that the things marketing is trying to
accomplish are achieved,” Lane says. “We all start with what experience we are trying
to build; how it will impact the customer; what message we are trying to convey.”
The growth of Total Rewards is only a part of what Caesars is trying to achieve.
Using the millions of names that Caesars has gathered over the years, the database
mining is extensive and far-reaching.
“We pay a lot of attention to what our customers want to hear about,” says Lane.
“When we send them offers, we want to make sure they are offers that are of value to
them. We want to make sure that our customers can take advantage of the entire
footprint.”
In addition to Caesars, the company has a variety of brands, including Harrah’s,
Horseshoe, Caesars, Bally’s, Rio, Showboat and more. Lane says she is sensitive to the
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that you get with table games.”
Saucier says he got into the table game business almost by mistake.
“When I was running our small casino in Washington state,” he explains,
“we invented a side bet to create more excitement at the blackjack table. It was
called the ‘horseshoe’ bet because we rewarded the player for getting 20—close
to 21—which we rewarded like getting close in horseshoes.”
The name didn’t really work—today it’s called Lucky Ladies—but the concept did, and Saucier was captivated. Galaxy Gaming was born when other casino owners wanted to use the side bet and pay a royalty. Today, Galaxy Gaming is
the second-largest supplier—after Shuffle Master Gaming—of new table games
and side bets in the industry.
Even so, Saucier says it’s difficult to convince casino owners to step outside
the traditional table game arena and pay for a similar game with a side bet.
“We have to prove that they’ll make more money even after paying us and
attract more customers by taking our games,” he says. “But once they see the
excitement and entertainment values of our games, it’s usually an easy sale.”
In addition to Lucky Ladies, just some of the games that Saucier says have
been popular with casinos have been Texas Shootout and Empress Challenge Pai
Gow Poker. But he’s most excited about the new Bonus Jackpot System, which
has recently been approved by the Nevada Gaming Control Board. The system
permits casinos to offer substantial jackpots and creative bonusing schemes for
their table game customers.
But Saucier says the key to any table game is a low house edge.
“I think the casinos are making a big mistake by offering 6/5 blackjack,” he
says. “Players need to perceive a chance to win, and if that disappears, so will the
customers.”
—Roger Gros
customers’ desires.
“We definitely have customers who prefer one or another of our brands,”
she explains. “They all appeal to certain groups of customers, but we do have
crossovers who visit one brand in one market and a different brand in another.
And these are different brands with different experiences.”
Social networking is probably the hottest buzzword in casino marketing
today, and the translation into technology initiatives goes hand in hand.
Caesars is just in the learning stage, according to Lane.
“We decided the most valuable thing we could do for our customers in
this regard is the Total Rewards integration,” she says. “So when you download an iPhone or smart phone app, you can play games, upload a picture of
you at the slot machine and other cool things, but you can access your
account in real time and know how many award credits you have instantly.”
Lane says some casino companies have unrealistic expectations of what
can be achieved by these apps and programs like Facebook and Twitter.
“How often do customers visit your website or ‘like’ your Facebook page?”
she asks. “And then, how deep are those relationships? You’ve got to really
know your customers and what you’re trying to achieve through those channels. Otherwise, you’re just chasing the numbers.”
Even if the social networking sites succeed in bringing more customers to
the casinos, Lane says the work has only just begun.
“It makes all of us raise our game,” she explains. “The ability of customers
to directly do research, to talk to friends, and the level of transparency is much
higher than it’s ever been. And then we need to staff up to respond to these
instant requests for information. Twitter users want a response within 10 minutes, while emailers expect to hear within 24 hours. These are areas that need
our attention, sooner rather than later.”
—Roger Gros
Track rEcOrd
FaMiLy VaLuES
LAURIE ITKIN
JAMIE P. STUCK
Vice President of Government
Affairs, Betfair TVG
Tribal Council Vice Chairman,
Nottawaseppi Huron Band of the
Potawatomi/FireKeepers Development
Authority
s it now stands, it looks like
either California or New
Jersey will be first state in the
U.S. to offer legal exchange wagering on
horse races.
California will roll out the system in May 2012. New Jersey is poised
to do the same, but may actually offer the bets first. In a third scenario,
internet gaming could be legalized at the federal level, overthrowing the
2006 Unlawful Internet Gambling Enforcement Act (UIGEA).
No one is watching this race more closely than Laurie Itkin, vice president of government affairs for Betfair TVG, the country’s second-largest
legal internet wagering operator.
For Itkin, exchange wagering and other forms of legal online gambling
are a matter of simple horse sense. Governments desperately need revenue.
The horse industry, teetering on the edge of obsolescence, desperately
needs revenue and patronage. By bringing legal exchange betting on realtime races to tech-savvy players, then regulating and taxing it, everybody
wins.
“Horse racing cannot survive without wagering, as a significant portion of every dollar wagered goes back to tracks, horse owners, breeders,
and state and local governments,” says Itkin. “Betfair and TVG believe
that if we can introduce exchange wagering on horse racing in the United
States, we can use that technology to attract younger bettors.”
Betfair has already performed that miracle in the U.K. Founded in
2000, the betting exchange now processes more than 5 million transactions a day, primarily to younger, tech-savvy bettors. In 2009, the company acquired TVG, one of the largest legal online wagering businesses in the
United States. When exchange wagering finally comes to the U.S., Itkin
believes the company’s experience, infrastructure and “white hat” reputation could make it first out of the gate as a provider.
According to government data, legal internet gambling could yield as
much as $42 billion in tax revenue in the first decade.
“If I put myself in the shoes of state legislators,” says Itkin, “I’d see this
as low-hanging fruit to solve state budget deficits.”
Not everyone is sold, however, and that’s Itkin’s job—to educate lawmakers about the industry’s potential, and reassure them that safeguards
are already in place to keep the games secure. She knows the resistance will
not evaporate overnight.
“There’s still a fear by some policymakers about internet gaming,” she
says, “that although we have a huge industry of brick-and-mortar casinos,
we should be afraid of the internet.”
In the meantime, the U.S. offshore internet gambling market climbed
to about $5.7 billion in 2010. And as legislators at the federal and state
levels debate the issue, the numbers will continue to grow and the dollars
lost to offshore operators will as well.
“The message to lawmakers is that a very large black market exists and
continues to grow,” says Itkin. “Americans will continue to gamble online.
By legalizing, regulating and taxing it, lawmakers can ensure that consumers have more protection than they do today, and state and federal
governments can obtain needed revenue to help reduce budget deficits.”
—Marjorie Preston
a
hen Jamie Stuck graduated
from Central Michigan
University with a B.S. in health
and fitness, he could probably hardly imagine
that a decade later he would be overseeing the
2009 opening of FireKeepers, a new $300
million casino in Michigan, during an economic firestorm. But his interest in his
tribe has catapulted him to leadership roles in the community and in the gaming
industry—so much so that he recently made the prestigious list of the National
Center for American Indian Enterprise Development Board of Directors’ “Native
American 40 Under 40.”
Stuck credits his mother and grandfather with instilling a strong work ethic in him
at an early age. He remembers his mother telling him, “I don’t care if you push a
broom or are the president. Be the best at it.” He recalls his grandfather working four
jobs in lieu of accepting a handout.
Following in his grandfather’s tradition, Stuck wears many hats as well. While juggling tribal council duties, Stuck also serves on the FireKeepers Development
Authority, the Marshall Area Chamber of Commerce Board of Directors, the
Potawatomi Resource Conservation and Development Council and the FireKeepers
Local Revenue Sharing Board. Stuck admits his job is tough. But he tries to learn
more about his culture every day. “If you don’t have a higher power, and good family
support, you aren’t getting through,” he says.
Stuck takes the idea of family support to the community level in operating
FireKeepers.
“I’m proud that we are providing nearly 1,500 jobs and are using local vendors
and suppliers as much as possible,” he says.
Although the old ways are important to the tribe, Stuck feels that his company
must “take advantage of emerging opportunities and technologies.” He also feels
technology should be “flexible and scalable to meet today’s needs.”
Stuck takes pride in many new projects that have come to fruition during his
tenure.
“In the past four years, we have succeeded in the acquisition of land in trust for
the Pine Creek Reservation and for FireKeepers Casino. We have watched our infrastructure grow on Pine Creek with the addition of HUD Tribal Homes, our community center, the Health Department building, and the road and parking structures to
support these developments.”
The NHBP is in the process of obtaining more land to grow the community and
make services and programs more available. But tribal gaming is facing one big problem on the horizon.
“Off-reservation gaming,” he says. “Our tribe is working with a coalition of other
federally recognized tribes in Michigan to oppose the approval of off-reservation
gaming.”
When it comes to looking to the future, Stuck finds inspiration in his own tribe.
“I look to 2011 with confidence because we are a people of action and hope,”
Stuck says. “As the tribe becomes more self-sufficient and makes lasting economic
progress, we will do so only with great respect for our culture and traditions. We
carry with honor and pride in our hearts a legacy that was the vision and great gift of
our ancestors.”
—Michelle Tomko
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rEguLaTiOn
WiThOuT BOrdErS
BIRGITTE SAND
Director, Danish Gambling Authority
ove it or hate it, online gaming has had a profound effect on previously immovable positions held by European Union Member States.
National approaches to gambling were deemed
untouchable 20 years ago in the first E.U. report. Now,
as governments are forced to evolve by citizens flocking to the borderless internet, tiny
Denmark appears willing to lead the way to a workable future.
“I don’t want to be difficult just to be difficult,” says Birgitte Sand, director of the
Danish Gaming Authority. “It is much better for the future if we can have a dialogue
with operators, to get to know each other’s business, rather than finding fault with
each other.”
Sand took the helm of the gaming board in January 2008 and has overseen the
development of a common-sense approach to all gaming. In June 2010, the fruits of
labor were realized when the Danish Parliament unanimously approved a new legal
framework for regulating land-based and online gaming. Besides the gaming authority,
the comprehensive law involves three government ministries—taxation, finance and
culture—and sets the rules for collection and dispersal of revenue.
Sand’s approach to online gaming recognizes that Danes are already heavily
engaged in the activity. An official study published in 2006 revealed that more than
half of all players had gambled on the internet, and that 91 percent of Danes between
the ages of 18 and 74 had at some point in their lives gambled in one form or anoth-
L
cOMMiSSiOn chiEF
PAXTON MYERS
Chief of Staff, National Indian
Gaming Commission
he newly formed National Indian
Gaming Commission is much younger
than its previous incarnation under the
Bush administration. And that youth movement
even extends beyond the commission members.
The new chief of staff is youthful and energetic,
but still packs a lot of tribal gaming experience into his career.
Paxton Myers is a member of the Eastern Band of Cherokee Indians of North
Carolina, and began his gaming career in the Harrah’s casino owned by the tribe.
He later became the chief of staff for tribal Chairman Mitchell Hicks and then
moved to Washington, D.C., where he worked as the Native American coordinator
on the staff of Congressman Dale Kildee (D-Michigan).
Myers says it’s not only his gaming experience but that of other commissioners
that will contribute to a better understanding of the regulatory process.
“It brings a new perspective to the commission,” he says, “because we know
how things run from the inside. We understand why regulations are implemented
and what the results of the regulations are on the casino itself. So that experience is
a plus and it gives us a real balance.”
As chief of staff, Myers has to understand the issues in Indian Country and the
federal government before they may come to the commission. He says his contacts
in Congress, in the other federal departments and in the field help him do his job.
“I try to stay in touch with these folks on a daily basis so I can become aware of
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er—53 percent of them in the month prior.
“We could no longer have a situation where the Danish players
were playing online at sites that had no permit from Denmark,” says
Sand. “We weren’t able to protect them in the way we wanted. We
couldn’t prosecute the operators, who were abroad, so we needed
legislation that would be able to handle that. People want to play
online, so why not make legislation where we can actually protect
them from the bad guys and support the good operators?”
Denmark is not the first E.U. Member State to open its market
to commercial gaming sites. But Sand agrees with many of the positive initiatives aimed at changing governments’ attitudes toward the industry.
Within the framework of the Gaming Regulators European Forum, Sand is
working with her counterparts from other liberalized markets to develop common standards.
“We have met with many operators, and it is my impression that most of
them are serious about working within a regulated market,” says Sand. “Let’s
make an effort to have the same institutions as are already in use in other countries, to cut down on the time expended, so an operator doesn’t have to reinvent the system each time.”
Sand is enjoying her role in the development of the online gaming industry
and its legislation.
“Taking part in some of the many initiatives to cooperate and finding new
ways forward is a great challenge,” says Sand. “At the same time, we have to
keep the focus on protecting minors, preventing money laundering and supporting fairness and compliance.”
—Rich Geller
what’s happening and can advise the commissioners,” he says.
Myers is also charged with making sure that relations with tribes are cordial
and professional, and less adversarial than the previous administration.
“We’re trying to build and foster relationships with the tribes,” he says.
“We have a job to do and the tribes know that. But if you can deliver the information while working in consultation with the tribe, it helps them understand
the reasons behind it. They may not agree, but if it’s done with respect, I think
we can work more closely in the future.”
While Myers says the large gaming tribes are important to the commission,
outreach to the smaller tribes is also key to the commission’s success.
“We have 565 federally recognized tribes in this country, but only 232 are
gaming tribes,” he explains. “Those range from Las Vegas-style facilities to
smaller Sprung structures. So there’s a wide diversity of casinos; there’s the same
goal of communicating to all the tribes. Sometimes it’s even more important to
the smaller tribes who may depend upon their business even more than the
larger tribes.”
Myers’ time in Congress gives him a unique perspective as well.
“We don’t lobby Congress or submit legislation,” he says. “We try to work
with members of the committees that have oversight over our agency. I’m in
touch with their staff members, and try to leverage relationships that I have
already established in the past.”
Like the commissioners, Myers stresses the importance of working with the
six regional offices of the NIGC. Part of his duties is to stay involved with those
offices.
“Any decision they make or enforcement action that is to be taken must be
reported to us,” he says. “So I’m very involved in staying in touch and current
with all those offices.”
—Roger Gros
nOrThErn ExPOSurE
LORENZO CREIGHTON
CEO, Gateway Casinos & Entertainment Limited
hen two private investment funds decided to swap
a billion dollars of debt for equity and assume
control of Vancouver-based Gateway Casinos,
they turned to industry veteran Lorenzo Creighton to fill the
CEO role. For Creighton, heading up Canada’s second-largest
casino operator is just the latest move in a career that he came
to almost by accident.
“I never really planned on being in the business,” says
Creighton. “I was doing some labor work for the state of Iowa
and saw an advertisement for a deputy director of their racing
and gaming commission in 1989. I applied for the job and got it, and being the
law-trained person on the team put me in position to write the regulations.”
After Iowa, Creighton was recruited by Mississippi as executive director of
its gaming commission. In the early 1990s, he entered the private sector, taking
a series of executive positions with operators in the South and Midwest and
eventually Las Vegas, where at New York-New York he became the first AfricanAmerican president of a Las Vegas Strip property.
In 2008, Creighton was named president and COO of the MGM Grand
Detroit Hotel and Casino. Despite the tough economy of the past two years, he
succeeded in growing revenue and profit in a market with three competing casinos.
The offer to leave Detroit for Vancouver came with a sweetener. Along with
majority stakeholder Catalyst Capital Group and minority owner Tennenbaum
Capital Partners, Creighton has his own small piece of the company. His chal-
W
lenge now is to generate cash to pay down more debt.
“Our story right now is a deleveraging story,” says
Creighton. “We’re five-times leveraged and we want to
get it down to about three-and-a-half-times leveraged,
and then launch an IPO. Our plans are conservative, for
only a 3.6 percent growth versus the extreme growth projections you might hear from some other companies.”
The two private investment firms already reduced
company debt to $500 million when they took control.
During a recent road show, they managed to revamp the
remaining debt at a better interest rate.
Still, debt reduction remains job No. 1. Gateway has
nine casinos: three in the Vancouver area, four elsewhere
in British Columbia and two in Edmonton, Alberta. It is
a crowded environment, but Creighton is optimistic.
“The economy and GDP growth continues to look very good in Alberta and in
British Columbia,” he says. “Population continues to grow, and both Alberta and
British Columbia have a very strong natural resources industry.”
Creighton sees Vancouver as the most promising market.
“Forty percent of the population in Vancouver is Asian,” says Creighton. “We
have a huge Chinese population. The city has direct flights to Macau. All of the big
gaming companies have branch offices in Vancouver, which tells you something
about the potential of the market.”
Turning potential into results is the trick. Creighton’s formula:
“You go in and look for efficiencies and you look for things that work in the
neighborhoods. You make sure you rationalize the business. Absolutely there is
opportunity in improving the top line and in getting expenses under control.”
—Rich Geller
SySTEM FuTurES
RAMESH SRINIVASAN
Executive Vice President, Bally Systems,
Bally Technologies, Inc.
amesh Srinivasan enjoyed a successful 21year career, 18 of it in information technology, before Bally Technologies CEO
Richard Haddrill, his former boss at supply-chain
software company Manhattan Associates, tapped
him to become executive vice president of the slotmaker’s Bally Systems division.
But it has been at Bally that Srinivasan has
made a name as a groundbreaker, helping to make
the company’s “Networked Floor of the Future” a
reality.
The Bally Systems vision is a dynamic effort
designed to bring the benefits of digital technology
to the slot floor. Bally, the industry leader in systems, has been laying the groundwork for serverbased gaming through an effort to provide a seamless transition to its current system customers.
“The Networked Floor of the Future will feature a combination of a lot of crucial products
working well together,” Srinivasan says. “We are laying the groundwork for the long term without compromising the short-term needs of our customers.
We have never lost sight of the fact that all customers, including those currently using older versions of our products, need and deserve upgrades
and world-class service and support.”
Srinivasan has overseen many system product
introductions at Bally, from the iVIEW and iVIEW
Display Manager (DM) player-communication network to the Elite Bonusing Suite, which enables the
easy and systematic creation of multiple, floor-wide
bonusing and promotion events.
The newest showcase for iVIEW, the Elite
Bonusing Suite and Bally’s CoolSign media-management solution is a floor-wide virtual racing event
that has created excitement and increased play at
San Diego’s Barona Resort & Casino. Srinivasan
notes that these kinds of events require many elements of multiple products working together.
Apart from a floor network that is solid,
Srinivasan believes that such revenue-generating and
entertaining innovations will require stable and
open slot and player-tracking systems and a configurable and open bonusing suite of products that
integrate easily with the core and other third-party
systems.
One thing the Barona system proves:
“Marketing promotions need to run floor-wide to
be successful,” says Srinivasan, “and that means the
r
kEnO king
ERIC THOMASSIAN,
Founder and President, XpertX
ometimes being in the right place at the
right time requires a bit of entrepreneurship to make it right.
Eric Thomassian had taken a job as a programmer for a Reno-based supplier of casino
equipment when the company went out of business underneath him. After some research,
Thomassian realized that there were no other
companies providing keno equipment to the
industry.
Together with his partner, a hardware expert,
they began to work on a keno system and came
up with a winner.
“We decided we would do this on our own
rather than trying to get any outside capital
because in the past, my partner says someone else
owned it by the time it was done,” laughs
Thomassian. “We decided we’d finance it and
control it ourselves. In January 1992, we put out
our first keno system at Boomtown in Reno and
kept building from there.”
Today, XpertX is the dominant company in
the keno business. Developing the MegaKeno
jackpot system has also brought many more
clients to the company. And that’s something that
has continued to grow, as well.
“There are many casinos that would like to
have keno but don’t know how to go about it,”
says Thomassian. “Since very few casino managers
come up through the keno department, there’s not
a very knowledgeable group out there.”
Keno is usually regarded as an ancillary game,
a niche game. Thomassian says there is tremendous potential for the game.
“It’s a numbers game, which are historically
the biggest games in the world,” he insists. “Look
at the lottery! Keno used to be the biggest game
on the casino floor because you could win
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34
$50,000 for $1. This was before the random
number generator was invented for slot machines
and the most you could win on slots would be a
couple of hundred dollars.”
For keno, it’s location, location, location.
“Keno should not be in a corner,” says
Thomassian about its usual space on the casino
floor. “It will do much better with a smaller area
where there’s more foot traffic.”
And Thomassian says the internet has helped
to grow the game as well.
“You can’t buy your tickets on the internet
yet,” he says, “but you can see if tickets you
bought to play in a certain number of games are
winners. That has become a lot more popular
than we expected.”
XpertX operates the system, and each casino
gets its own display to put up on its website.
“Casinos that have taken an active interest
and market their casino games are doing quite
well,” he says.
Thomassian says it’s a myth that keno is
dead.
“I have two theories about that,” he explains.
“The first one is that the game isn’t doing well in
their casinos, and the boss just agrees that the
game is dying, when it’s not. The other theory is
some casinos are doing so well that they want to
propogate that myth and keep their own players
at home.”
Keno doesn’t generate a lot of play compared
to other casino games these days, but holds the
most, around 30 percent. And while some gaming experts think that’s a bad thing for players,
Thomassian says it’s often counterintuitive.
“If you walk into a casino with $20 and sit at
a nickel slot machine, it will be gone in five minutes,” explains Thomassian. “But if you use that
same $20 to play 20 games of keno at $1 each,
your money will last three or four hours. The
enjoyment is much longer.”
—Roger Gros
naTiVE nuancE
JANA McKEAG
President, Lowry Strategies
rom a young age, Jana McKeag, a
member of the Cherokee Nation of
Oklahoma, witnessed the struggles
of Native Americans forced to rely for their
subsistence on the federal government. She
took inspiration—and a calling—from her
grandmother.
“She was a full-blooded Cherokee who
became deaf after very poor treatment from
the Indian Health Service,” McKeag recalls.
“She told me, ‘You’ve got to help Indians.’”
McKeag has spent a lifetime doing precisely that. The Harvard graduate, who
earned her master’s degree in public administration from the Kennedy School of
Government, has worked with the
National Congress of American Indians,
the American Indian Policy Commission,
the Bureau of Indian Affairs and the
Department of Agriculture, where she was director of Native American programs.
In 1991, McKeag got a call that changed the trajectory of her career, and her advocacy. She was
recruited by then-Secretary of the Interior Manuel Lujan to join the fledgling National Indian Gaming
Commission.
“Back then, it was about bingo and Class II,” says McKeag. “No one ever dreamed tribal gaming
would undergo such an incredible expansion.”
Today, as president of Lowry Strategies, McKeag continues to work on behalf of tribes across the
country, both in and out of gaming. The government affairs consulting firm, which she co-founded with
her husband, Tom Foley, another former NIGC commissioner, takes a bipartisan approach that is vital in
fiercely partisan times.
“I’ve always encouraged tribes to work on both sides of the aisle, to strengthen their footprint on
Capitol Hill,” McKeag says.
She calls gaming “the backbone of many tribal economies,” but adds that the growth of the industry
has created as many problems as it’s solved—among them, revenue-sharing compacts with states that go
far beyond the cost of infrastructure; the perception that all land-to-trust appeals are precursors to casinos;
and the misconception that all Indians have been made rich through gaming, and require no further
accommodation from Washington.
“Now we see the Carcieri decision,” says McKeag of the 2009 Supreme Court ruling that limits the
land-into-trust process to tribes under federal jurisdiction in 1934.
She calls it “a huge, harmful decision” that may leave restored tribes and landless tribes without the
legal ability to claim their own ancestral lands.
“Carcieri will need to be fixed legislatively,” McKeag says.
As for Indian gaming, “It’s at a crossroads,” she says. “As Senator John McCain has said, tribal gaming
is a double-edged sword, because it presents challenges in preserving tribal sovereignty, and I don’t think
these challenges will diminish.”
Going forward, McKeag’s goal is to help tribes make “smart business decisions” that diversify their
economies and allow them to prevail, prosper and grow, no matter the state of gaming. For tribes with
gaming investments, she sees fresh opportunity in internet gaming to help “expand their market, visibility,
branding and demographic.”
“It’s been an honor to work on behalf of tribes for over 35 years, addressing their challenges, but also playing a role in attaining their victories,” she says. “I hope that I’m able to continue to have that privilege.”
—Marjorie Preston
F
technology needs to be backward-compatible to
work on legacy machines as well as the machines
you bought last week.”
The coming year will see the capabilities of networked operations increase as properties like Barona
upgrade to the iVIEW Display Manager. The
iVIEW DM system moves the promotional messages, self-service features and floor-wide bonus
events from the ancillary iVIEW screen to the entire
game screen, or any portion of that screen.
Other innovations to come from Bally Systems
in 2011 include a service-tracking module that
automates all guest service requests on the casino
floor, an on-demand tournament application for
iVIEW DM, and a new system for table-game player tracking that automates gaming chip recognition
through the use of optical technology.
Also coming soon is “Bally TV,” a system that
facilitates direct communication between operator
and player through the television while guests are in
their hotel rooms, and lets customers access player’s
club accounts from their rooms.
Aside from new product introductions,
Srinivasan says one of his challenges for the coming
year is to better educate operators on the benefits of
networked gaming, and, as always, to add new talent to the systems division.
“We’ve clearly put Bally Systems in a leadership
position in the marketplace,” he says, “and when
you’re the leader, it’s always challenging to stay
there.”
—Frank Legato
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OnLinE
OuTLOOk
LESLIE LOHSE
Chairwoman, California Tribal
Business Alliance Board of Directors
eslie Lohse has served as Tribal
Council treasurer of the Paskenta
Band of Nomlaki Indians since
1998. She participated in the purchase of
over 2,000 acres of the tribe’s aboriginal territory in Tehama County. She then helped get the land federal government
trust status to open the 70,000-square-foot Rolling Hills Casino. She sits on
the California Native American Heritage Commission, and the California
International Relations Foundation. But challenges to her tribe these days are
somewhere out in the ether as, in her words, “internet gaming is coming.”
The Internet Gambling Regulation, Consumer Protection and
Enforcement Act, introduced by U.S. Rep. Barney Frank of Massachusetts,
may serve as a galvanizing issue for the 107 different tribes in the Golden State.
“We’re trying to come together with the one thing that we do have in common, which is protecting our gaming industry as well as our sovereignty,” she
says.
This is easier said than done.
“One size does not fit all,” Lohse insists. “You have to key in on certain
issues. Then we can take into consideration smaller, non-gaming tribes and
issues like revenue sharing.”
Lohse wants tribes to have a “hands-on approach” to combating the new
legislation.
“By having a seat at the table we were able to add some language that protects Indian gaming and our compacts,” she explains.
Lohse also operates with a clear plan in mind.
“Our goal is education and outreach,” she says. “We’ve got to diversify.”
Does she see tribal gaming getting involved in internet business?
“Sure,” she says. “We’d be foolish not to seek an opportunity that’s generating billions of dollars throughout the world. Are we going to be an operator?
Maybe we have the ability to service someone’s website—or team with someone using our databases. Tribes are interested in participating. That’s why we
are paying close attention to the legislation. I want to educate our new legislature about the tribes.”
Lohse has a full plate. But that does not stop her from being a role model
to the people in her community and tribe. She is a founding board member of
the national non-profit organization Girls Inc. in Tehama County.
“Today’s women are faced with many decisions that our moms did not, or
were not encouraged to deal with from a position of strength,” says Lohse.
“Therefore, it is imperative to show our young girls and women that it’s OK to
speak up from a position of knowledge and strength.”
Lohse learned this lessen on her own based on her family dynamic growing
up. Being the 12th of 14 children and having six older brothers, she learned at
an early age how to hold her own.
“I knew it was important for them to understand there wasn’t always one
way,” she laughs. “I may not have been as physically strong as they were, but I
definitely could compete and do well, even win sometimes due to my ability to
think outside the box.”
The smart money is on her.
—Michelle Tomko
L
36
GAME ON
CHRIS SATCHELL
Chief Technology Officer, International Game Technology
f the slot manufacturing sector has learned anything over the past decade,
it’s that alumni of the home video game business make great slot machine
designers.
That’s why it was a good bet when slotmaker International Game Technology
brought Chris Satchell in as chief technology
officer. Satchell came from Microsoft, where
he was the CTO of the division in charge of
the venerable Xbox gaming system.
Interestingly, Satchell is the third Xbox
alum now making slot machines—rivals
Aristocrat and WMS each have one. He is the
second video game veteran in IGT’s upper
design echelon, game development VP Joe
Kaminkow having developed his chops at Sega.
Satchell’s arrival at IGT brought him full circle to a profession in which he
obviously always belonged. “I started programming when I was 8 years old,” he
says. “I loved computer games, and I liked programming them more than playing
them. All the way through high school, I was a nerd, in a very energetic way—I’d
get in some programming before school, and a couple of hours after!”
Aside from hobbies of marital arts and weightlifting—to offset the nerdiness,
he says—Satchell took his love of programming right through college, earning a
theoretical computer science degree from Loughborough University in the U.K.,
followed by graduate work in distributed artificial intelligence systems and safetycritical engineering on a railway signaling system before he returned to his first
love, building video games. By the time he got to Microsoft, he had served as a
lead programmer, had built graphic engines, and in general, had become an
expert game-maker.
Satchell brought all of that to a slot market that is evolving, in many ways, in
the direction of the home video genre. “Video games are where this industry is
heading,” he says. “We went through an incredible arms race from 1997 until
today, improving the quality of content in slot machines, the richness of content,
and production values. We became very good at how we bring masses of content
together, and we’re going to need all of that in this industry, because our patrons
are demanding more of us.”
Satchell says the line between games and systems has become increasingly
blurred as server-based gaming applications have arisen. “Everybody is adding
online features and online interactivity,” he says. “In 2011, you’ll start to see an
uptick. You will see operators investing in Ethernet. You’ll see an increase in interoperability around GSA standards. We saw the start of it at G2E.”
The other thing the industry saw at G2E was game play that takes slot
machines closer to their home-video cousins. For IGT, that meant the introduction of “Reel Edge,” a series of slot machines that employ a joystick in a skillbased, arcade-like bonus round. He says this mindset is only the beginning, and
that the industry will see many more slots in which the main activity has nothing
to do with reels, but still has gambling content.
“We have the chance to reach out to different demographics,” says Satchell,
“with a product that is gambling, but is packaged in a way that appeals to those
who grew up with video games.”
People like Satchell.
—Frank Legato
i
STEPPing uP
BingO and BEyOnd
STEVE SUTHERLAND
CARL LEAVER
CEO, Gala Coral Group
Chief Operating Officer/Executive Vice
President, Konami Gaming, Inc.
ala Coral Group has a
new CEO to go along
with its new structure.
In November, the U.K.
betting/casino/bingo concern
announced the appointment of outsider Carl Leaver as CEO.
For the 42-year-old Leaver it is a return to the leisure industry, although
this will be his first experience with gaming. Exactly why Europe’s largest
gaming operator has decided to put its future in the hands of someone new
to the scene makes for interesting speculation.
Leaver, who has a degree in law and started out holding various positions at Mars, Forte and Nomura, began his career in leisure as director of
sales for Whitbread, today the U.K.’s largest operator of budget hotels and
restaurants. He gained individual property experience as general manager of
the 380-room Slough/Windsor Marriott at Heathrow Airport before moving on to become operations director for Whitbread’s Marriott Hotel and
Country Clubs.
In 2000, Whitbread appointed Leaver managing director of its rapidly
growing budget hotel chain, Premier Travel Inn. Under Leaver, the operator
added 5,000 rooms to become the U.K.’s largest hotel brand. Sales increased
by an average of 5 percent per year and operating profit grew 33 percent.
In August 2003, Leaver, at 35, became CEO of hotel and leisure operator De Vere Group. His strategy was to further develop existing brands,
improve operational performance, get better returns at De Vere Hotels and
speed up the establishment of the new Village Hotel brand. By the end of
2004 the company’s operations comprised 21 De Vere hotels of four and
five stars, 137 five-star timeshare lodges, 14 Village Hotels and Leisure
Clubs and 15 Greens Health and Fitness gyms. Leaver left De Vere in
October 2006, following the company’s sale to Alternative Hotel Group for
£1.1 billion.
In May 2007, he took a big step away from domestic leisure and into
the world of global retail, joining Marks & Spencer as director of international business. Hired to develop the international side of things, within 15
months he assumed the lead of the online business and home wares as well.
Rumors in the media pointed to Leaver as a likely candidate to succeed
M&S Executive Chairman Sir Stuart Rose.
However, the following spring, Leaver suddenly quit the firm, following
the reassignment of the online and home wares departments that left him
again with international only.
In an article in the Telegraph, an unnamed source said of Leaver, “He is
one of the few guys at M&S who will tackle Rose. Their relationship has
been challenging at times but when Carl turned round and said he was
going, Rose was taken aback.”
That was May 2009. Leaver appears to have taken his time to decide on
his next move, much as he did in between the De Vere and M&S positions.
During that time his name was tied to several companies as a possible CEO
candidate, including Gala Coral competitor Ladbrokes.
The press release announcing his appointment to Gala Coral gave no
real hint as to the direction Leaver plans to take the company. But given his
past experience, he is certainly someone to watch.
—Rich Geller
early three years ago, Konami Gaming
COO Steve Sutherland announced to the
world that the slot manufacturer—the
U.S. subsidiary of video game giant Konami of
Japan—was ready to “step to the podium.”
The phrase was meant to set a goal for
Sutherland’s team at Konami to become one of the
top three slot manufacturers in the industry, conjuring up images of the podium at the Olympic
Games on which the gold, silver and bronze medalists in a given event stand.
Since then, the word “podium” has become a culture at Konami, and in fact, is
the name of the manufacturer’s latest series of slot machines. And this year, it looks
like the slot-maker could finally step up to that podium as one of the top three slot
manufacturers.
“With our competitiveness in the marketplace, we’re probably sitting very
strongly in the No. 4 position already,” Sutherland said in early December. “We still
want to achieve that podium, and we’re doing that through organic growth.”
That “organic” growth—meaning true internal growth that did not occur
through mergers or acquisitions—has manifested itself in product development in
the Podium platform, which launched its new generation at G2E in November,
replacing the K2V video format with the new KP3 platform.
“We’ve focused on achieving high levels of product quality,” Sutherland says.
“It’s been a laser-like focus on product development, with our video platform driving significant sales. The Podium platform continues to perform extremely well, so
we’ve ratcheted that up, and we’ve introduced a stepper platform that will benefit
the company significantly. We’ve also introduced two new participation products—
the Top Track community-style game and the IP-based Rock Around the Clock.”
The new stepper platform, called Advantage 3, is the three-reel version of the
format that first launched Konami into the stepper business, the much-copied
Advantage 5. Like the five-reel version, Advantage 3 features oversized, back-lit reels
that change color according to game events, and a cantilevered top cabinet that uses
mirrors to give the illusion of depth.
Top Track, launched at California’s Valley View Casino in October, is the Grand
Prix racing version of the 3D community horse-race game, Beat the Field, which
catapulted the manufacturer to success in the community-style genre. Rock Around
the Clock, available in both the Advantage 3 and radical Advantage Revolution formats, is an interactive game that was launched at all 10 Station Casinos properties
at the end of November. It is an interactive slot game built around the 1950s hit of
the same name by Bill Haley and His Comets (familiar to later generations as the
theme from the TV show Happy Days).
In addition to more new games, the next technology on Konami’s radar
includes mobile applications for Konami games for the Android smart-phone, and
eventually for Blackberry and iPhone.
“In calendar 2008, the company was very focused on growing ship share,”
Sutherland says. “It was 9 percent in ’08, and we set a target of 11 percent for ’09.
We achieved that. For 2010, we set a target of 15 percent, which we are definitely
going to achieve.”
And for 2011? Sutherland hopes to step up to that podium. “Even if it doesn’t
happen next year, we’re very patient and strategic,” he said in December. “This is
not a sprint; it’s a marathon.”
—Frank Legato
g
n
37
changE aT ThE TOP
CRISTINO (BONG) NAGUIAT
Chairman, PAGCOR
or nine years, the leadership of the Philippine
Amusement and Gaming Corp. (PAGCOR) was
stable and competent. But with the election of a
new Philippine president, Benigno Simeon Aquino III, the
old regime was ousted and a new one installed.
Cristino (Bong) Naguiat, an old friend of the new president, was named chairman and he immediately began to
investigate the alleged abuses of the former administration,
headed by Efraim Genuino. When several examples were
uncovered—like a $60 million condo purchase for PAGCOR employees, who never moved in—Naguiat began to
dig deeper. While the investigation isn’t over yet, he’s con-
F
centrating on other priorities.
“There are so many,” he laughs. “For example, we are trying to fix all the casinos by
improving all the casino facilities, equipment and software. We’re also looking at Entertainment
City and how we will manage that, as well as other places in the Philippines for the growth of
the casino industry.”
Entertainment City, a patch of land reclaimed from Manila Bay, was designated under the
Genuino administration for development of integrated resorts, with the goal of increasing
tourism to Manila by building four $1 billion-plus facilities with non-gaming amenities, along
with large casinos.
“Before I took office,” he explains, “four contracts were given for four billion-dollar casinos. We’re doing our due diligence because everything about the contracts was open-ended. I
want to bring in a couple of other partners, a Chinese group and a Korean company to help us
operate.”
Naguiat says the former Clark Air Force Base, about an hour from Manila, and the city of
Cebu are being considered for gaming expansion.
Some provinces and cities are objecting to expanded gaming in their regions. Naguiat says
PAGCOR would never bring in gaming or even more gaming where it is not welcomed.
“We will always be sensitive to the opinions of a community,” he says. “But in most cases,
the opposition doesn’t represent the majority. We still want to work with everyone, and we
understand their points.”
Internet gaming came to PAGCOR a few years ago, and Naguiat says he is reviewing the
terms of the contract.
“It can be a major source of revenue for the government, so we’re looking into many proposals that would include taking bets from any country where internet gambling is legal,” he
says.
Early in his term, Naguiat suggested that perhaps the PAGCOR casinos could be sold to a
private operator and PAGCOR would remain as only a regulator. He says this comment has
brought a lot of reaction, but it was just a suggestion.
“Everybody’s expecting me to come up with a plan after just three months in office. We’re
rushing everything, but the plans for PAGCOR depend on the suggestions of all other industry
partners.”
Some see a conflict between PAGCOR’s operating function and its regulatory role. A sale
would simplify that conflict, but Naguiat says the transparency promised by President Aquino
has already made a difference in business relationships.
“We’re having a lot of talks with casino investors,” he says. “They are very hopeful that
the message delivered by the president will include the Philippine gaming industry and the
playing field will be level for everyone.”
—Roger Gros
38
ThE gLOBaL ViEW
DONI TAUBE
Senior Vice President, Global Gaming
Marketing Strategy, MGM Resorts
International
t didn’t take long for Doni Taube to get a
global outlook on gaming when he first
came aboard with Mirage Resorts in 1996
straight out of UNLV.
“I became a regulatory compliance officer
and was tasked with putting together procedures
when it came to marketing, collections and
front money in the international arena,” he
explains. “We had expanded into more than 60
countries worldwide, so we needed some rules
to go along with the opportunities.”
Later, Taube was able to operate the international marketing department at Mandalay Bay,
and moved to Aria at the end of last year. Early
in 2010, Taube was named to head global gaming marketing strategies under the chief marketing officer for MGM Resorts, Bill Hornbuckle.
The job was created for Taube, and entails
exploring international marketing opportunities,
creating brand awareness and aligning the
MGM brand with like-minded companies in
the hospitality industry and beyond.
“The idea is to be focused on brand marketing outside the day-to-day operations of our
casinos,” he says. “Our hosts are very busy try-
i
ing to maintain market share in our business, and
our job is to bring other avenues of revenue to the
table to explore. It has allowed us to focus on
emerging markets and places where we haven’t penetrated.”
Taube has been developing partnerships and
alliances with other brands that have something to
gain by aligning with MGM Resorts. It’s not just
gaming; it’s hotels, cruise lines, credit card companies, retailers… anything that is complementary to
the MGM experience.
“Truly, it’s unique,” he says. “The idea is to
encourage customer loyalty. When you have a
shared experience and you refer customers to your
partner, their loyalty to you will increase via more
visits or increased spend.”
When developing customers who visit Las
Vegas, Taube says the purpose of the trip and the
style of the visit needs to be known so MGM can
design an experience that works.
“We need to provide customers with the flexibility to decide what they want,” he says. “For us to
achieve what we want—an unforgettable guest
experience—we need to listen very closely to their
needs and desires and place them in one of our
brands that matches them most closely, something
that is very specific and unique.”
The economic struggles of Vegas are beneficial
because they make people think outside the box,
says Taube.
“We’re trying new things that have never been
attempted before,” he says.
Some of the new marketing tools MGM is
using include the social media, the instant gratification that today’s customers expect.
“When you sign up for one of these programs,”
he explains, “we know that we’re already appealing
to someone whose tastes and desires coincide with
our brands. So you’ll get the information necessary
very quickly.”
The high-end brands of the company—MGM
Grand in many locations, Bellagio, Mirage,
Mandalay Bay—appeal to the high-rolling VIP
market, and Taube says the addition of Aria has
only increased that reach.
“It’s already established itself as one of the great
hotels of Las Vegas,” he says. “Our clientele recognizes the great experience there—both gaming and
non-gaming. As time goes on, we’ll be saying the
same thing we’re saying today about Bellagio: Aria
will be a game-changer on the Strip.”
—Roger Gros
cOTai caSh
ROBERT DRAKE
Chief Financial Officer, Galaxy Entertainment
alaxy Entertainment is ramping up for the early 2011 debut of its flagship casino resort,
Galaxy Macau. The property is located in the Cotai section of the SAR, and includes all the
non-gaming amenities enjoyed by its neighbors, the Venetian/Four Seasons Macao and City
of Dreams. What it hopes to attain as well is an increase in market share and EBIDTA, according to
Galaxy CFO Bob Drake.
“We think we are well positioned in the world’s fastest-growing market,” he says. “We’ve had a
great run so far, but all the operators have done well here. A rising tide lifts all boats. We remain very
positive about the market and are confident that the best is yet to come.”
For Drake, the challenging job started almost three years ago when he left his position as vice president of finance for Harrah’s Entertainment Western Division. From watching over the finances at the
Las Vegas properties for the company, Drake jumped into a world where growth was contagious and
Galaxy was driving to become a major operator in Macau. It had just opened its StarWorld Casino
Resort, which contained a collection of VIP rooms along with hotel rooms and a mass-market casino.
As a Chinese company, both the corporate culture and the economic conditions were different for
Drake. He has been immersed in the subject since then, and recognizes the opportunities for Galaxy.
“After Galaxy Macau opens in 2011 and the LV Sands sites 5 and 6 late this year or early in 2012,
that’s it for quite a while,” he says. “The government is very conscious about how it wants to control
the growth of the market, and is doing a good job so far.”
Like the Macau government, the Chinese government is also trying to control its explosive economic growth.
“They are looking to provide sustainable growth,” says Drake. “When they try to regulate the
growth of loans by increasing interest rates, they want to moderate growth in a controlled fashion so
they don’t create bubbles and actually grow gradually over time.”
And growth is exactly what is happening for Galaxy Entertainment. After the debut of Galaxy
Macau, Drake says it’s still not over.
“We have a growth pipeline,” he says. “We have 15 million more square feet to develop in this
city. The transition for me from a mature company with Harrah’s to a growth company with Galaxy
has been very exciting, and the future is very bright.”
While the market in Macau is currently pure gaming, the government has encouraged operators
there to develop non-gaming amentities to attract more tourism and visitors who are interested in
things other than gaming. As an integrated resort, Galaxy Macau joins its neighbors in that quest.
“We think we positioned the property so it will grow the market,” he says. “It’s different from the
other facilities. It’s very Asian-centric from the architecture to the entertainment to food and beverage.
It is positioned differently than the other resorts in Cotai. Our podium features the world’s largest
wave pool, so we think Galaxy Macau will help grow the mass segment of the market. Along with the
other two properties, we have now created a critical mass that will encourage visitors to come to
Macau for more than just gaming.”
—Roger Gros
g
39
ThE PEnn
PLayEr
SOaring ahEad
JAMIE ODELL
TIM WILMOTT
Chief Executive Officer/Managing
Director, Aristocrat Leisure Limited
President and Chief Operating Officer,
Penn National Gaming
ome of the very best games coming
out of the slot manufacturing sector
these days are coming from the legendary Australian slot-maker Aristocrat
Leisure Limited. The biggest reason? Jamie
Odell.
Odell took over as CEO of Aristocrat in
February 2009, and in two years has completely rejuvenated the company. Shortly
after taking over, Odell vowed to concentrate
on game design for the North American market. At the recent Global Gaming Expo, it
was obvious this effort was a success, as Aristocrat showcased a remarkable collection of
new product in its largest G2E display ever.
“We put a lot of work into our new products and innovations, and we wanted G2E
to be our coming-out party,” says Odell, “and I’ve been told by people who have been
in my company a lot longer than me that this was the best show we’ve ever had at G2E.
The response from customers and the buzz on the stand were just phenomenal.”
The products generating that buzz were mind-boggling in their numbers, but
according to Odell, the standouts were “Mission: Impossible,” based on the Tom Cruise
films and borrowing concepts from the famous 1960s TV spy series; and “Tarzan: Lord
of the Jungle,” themed along the lines of the Tarzan novel of the same name by Edgar
Rice Burrows.
Both games are extremely feature-rich, but the Mission: Impossible game has one
other feature that Odell says gained a lot of attention—Aristocrat’s new “Dynamic
LCD Button Technology.”
The changeable images on the game buttons are “like a prism,” says Odell, “and
underneath that prism you can project any image you like.” On the “Mission” game,
clips from the Cruise films actually run on the buttons.
“The operator has 100 percent flexibility on what to project underneath the buttons,” Odell says. “It gives the game that extra bit of polish and finish.”
The main reason Aristocrat’s games are such a hit this year is a central part of
Odell’s strategy—research. During the game development process, customers are
brought into the process, “from web browsers to bringing them into our offices and
asking them direct questions, to doing test banks of our games with operators,” Odell
says. “We’ve tried to accelerate our knowledge so we can provide better game performance when we release the product.”
It’s all very close to research in more traditional consumer-product markets, says
Odell, who headed up the Fosters beer company before coming to Aristocrat.
“I certainly drew on the experience in terms of getting close to customers,” he says.
“We’re becoming better business partners in the area of customer service, and that
means understanding what our customers are trying to achieve. The industry I came
from does a far better job at that than the gaming industry has done in the past. You
start by understanding your customer’s strategy, and add value to that.”
The other credo Odell brings from the consumer product industry is in “recognizing the player experience,” he says. “Consumer goods come much closer to that: Why
do you drink this coffee? Why don’t you drink that coffee? Gaming has been far more
of a production-led industry: Make a game and they’ll come. These days, we’re trying to
ascertain the reason they’re going to come, based on factual knowledge.”
Clearly, Aristocrat’s designers are understanding why people come back to slot
machines.
—Frank Legato
S
40
hen Tim Wilmott became
president and COO of Penn
National Gaming in early
2008 after a career with Harrah’s Entertainment, it was clear that Penn
Chairman Peter M. Carlino had a goal in mind.
With Wilmott, Carlino said, the company “will be strongly positioned
to extend our success with our current property portfolio, planned expansion projects and recent acquisitions.”
And that certainly has occurred. Since Wilmott came aboard, Penn has
gone through a remarkable expansion in different jurisdictions making it
the third-largest gaming company in the U.S. In addition, Wilmott has
directed a branding campaign to make Penn’s Hollywood casinos among
the most recognizable of casino names.
Penn National now owns and/or operates 23 facilities in 16 jurisdictions. The company last year won a referendum that allows it to build two
casinos in Ohio, in Toledo and Columbus. Ground has already been broken
for the Toledo facility and the Columbus casino will get started this year.
Penn opened Maryland’s first casino in Perryville last year, and is building a
casino in a joint venture at Kansas Speedway outside of Kansas City.
The company recently purchased the debt on the M Resort in Las
Vegas, the company’s first Nevada property. Wilmott says the deal the company got could not be passed up.
“Long term, it’s going to be a very good transaction for our shareholders,” he says. “We recognize that it’s a ‘locals’ property which is struggling
in the current marketplace, but we’re going to use our 12 million-name
database from our other properties and try to give them reasons to come
stay at the M. This should improve the quality of customer in the hotel
rooms.”
With a relatively young company, Wilmott has tried to build a corporate culture and an operating platform that is unique to Penn.
“We want this to be consistent across all of our businesses,” he
explains, “so we can help our operators learn from our other properties and
give them tools from the corporate center to help them compete more
effectively. That’s what I’ve tried to spend the bulk of my two and a half
years at Penn doing. What I don’t want to do is get too heavy at the center
of the company. We’ve been very rigorous in making sure we stay lean. We
think we have a platform that can support up to 35 properties.”
The Hollywood brand is growing in importance as well. The properties
in Lawrenceburg, Indiana; Charlestown, West Virgina; and Joliet, Illinois
have recently been rebranded as Hollywood casinos.
“It’s a very strong, recognizable brand and, by the end of next year, 13
of our 21 properties will be branded as Hollywood,” he says.
Wilmott has built and reshaped his management team so that the
strategies and goals of the company are consistent.
“The team works very well together,” he says. “It’s a high-functioning,
high-quality group of people, but it’s relatively small. We only have about
120 people in our corporate headquarters in Pennsylvania. For a company
with $2.5 billion in sales and 17 properties, not to mention being the
largest parimutuel operator in the United States, that’s not too bad.”
—Roger Gros
W
cLEVELand rOckS
MATTHEW P. CULLEN
President and COO, Rock Gaming
an Gilbert was front and center in the
national media last spring, when as
owner of the NBA Cleveland
Cavaliers, he was a focal point when superstar
Lebron James decided to move his show to
Miami. Gilbert was understandably upset, but
he’s got a few other things in the fire to keep
him busy.
The founder of Quicken Loans, one of the nation’s leading home mortgage
companies, Gilbert was a partner with Penn National Gaming in 2009 in a referendum to approve gaming in Ohio. When it passed—after years of failed ballot
questions—Gilbert was granted the authority to develop casinos in Cleveland and
Cincinnati (two other casinos in Toledo and Columbus will be owned and operated by Penn National).
Heading up this effort, called Rock Gaming, is Matt Cullen, who had spent
29 years in Detroit as general manager of economic development and enterprise
services for General Motors. Cullen’s expertise in dealing with government and
business will serve him well as he navigates the shifting sands of urban casino
development.
Rock Gaming chose Caesars Entertainment to be its operating partner, a
choice that Cullen calls fortuitous.
“We felt that Caesars gave us the best breadth relative to brands, capacity,
infrastructure, the Total Rewards program and other things,” he says.
d
The goal of the casinos, however, is urban revitalization. In Cincinnati, the
city is building a light rail system that will connect to the casino and draw people to its downtown location. In Cleveland, the Quicken Loans Arena where the
Cavaliers and a minor league hockey team play is the magnet, and the casino
will increase the critical mass of attractions there.
“The focus of the referendum was urban redevelopment and the sense that
the urban core had to be a key part of a strong region,” says Cullen. “In
Cleveland, we looked at the city and saw a city that had great bones, but not
enough people, not enough action, so we thought about what we could do
there.”
Cullen and Gilbert looked to the experience of gaming in Detroit, where
three urban casinos have helped to bring people back downtown.
“One of the major drivers of the 24/7 action in Detroit is the gaming operations,” says Cullen. “So when we considered how that would impact
Cleveland, we realized the casino business would benefit the city by creating the
most jobs and tax revenue.”
It was the fifth referendum to be held in Ohio on gaming in the past 20
years, and the only successful one. Cullen says it was the benefits gaming would
bring to the state that convinced the voters.
“The previous referendum, just two years prior to our success, would have
put a single casino out in a cornfield somewhere between Dayton and
Cincinnati,” he explains. “I don’t think people got it. They didn’t see the benefits. We’re using the business to leverage an urban redevelopment strategy that
clearly was going to be important for the regions. Secondly, we went out and
polled a lot of people about what they thought would be the right number of
casinos. The size, the operating hours, the locations… They were all contained
in the referendum itself so there would be no surprises.”
—Roger Gros

You Just Can`t! - Cuningham Group

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