Co-Founder & Chairwoman, GeoComply, and Conscious Gaming Trustee
Winnie Wong has been with Sands China for almost six years. Prior to that, she was CEO of the Guandong Group, a junket operator in Macau. At Sands China, she has been the vice president of corporate communications and vice president of operations for Sands Cotai Central. In her most recent role as chief responsible gaming officer, Wong oversees an aspect of supreme importance to the company and the government of Macau.
Wong spoke with GGB Publisher Roger Gros at the Gambling and Risk Taking Conference (the “Eadington Conference”) in May.
GGB: You were recently appointed to a new role at Sands China, as head of the responsible gaming efforts there. Why is that such an important issue for your company and the officials in Macau?
Winnie Wong: Macau sees responsible gaming as very important. The Macau government has a committee that is made up of scholars, researchers, public officials—not only regulators, but also the social welfare bureau. They have regular meetings and give the casino operators guidelines and regulations to follow. They really see responsible gaming as all stakeholders’ responsibility—not just the government, not just the patrons themselves, but everyone who has a part to play in the industry.
Are these regulators and public officials educated about responsible gaming?
Yes, they do a lot of research, primary data collection, which is done by the local government for policy design purposes. At the same time, I do see them attending international conferences from time to time.
Las Vegas Sands has always had a very robust responsible gaming program. What kind of expertise did they bring to Macau?
In 2004, when my company opened its first casino—Sands Macau—we already had our own self-exclusion program. The Macau government’s self-exclusion program didn’t start until 2012, so our exclusion program was well before that. Today, the government requires casinos to train their front-tier staff for responsible gaming-related issues, but we go beyond that. We train 100 percent of our staff, be they casino-related, non-gaming related, admin staff or operation staff. We train every one of them.
Las Vegas Sands also has developed a global training program. We call it the Responsible Gaming Ambassador’s Training Program. Every year, we rotate and train about 100 staff members in each region. And this goes beyond the training that I mentioned, which is included as part of orientation training. It is eight hours of intensive university-level training, developed by University of Nevada, Las Vegas Professor Bo Bernhard. These team members are on the floor 24 hours a day, and they are there to see if any patrons may have a gaming disorder problem. If they see that, they will help and refer these customers to seek professional help.
We don’t replace the government. We are not treatment centers. We are not counseling experts. But we are there to help, and to provide help when customers need it.
Is there a cultural difference between what is considered problem gambling between Asian gamblers and American gamblers?
From a practitioner’s perspective, I would say people in the Asian culture don’t normally reach out for help. They are quite laid-back. So we’ve used a lot of community support. And the reason why we see training as so important is because Macau has about 600,000 population, with a working population of roughly 380,000. Of that, about 110,000 work in the gaming and hotel industry. So, 30 percent of the working population works in the gaming-related industry. If we train our staff to have high awareness of problem gaming behavior, they can reach out to people, and those people could be their family, their friends or someone they believe needs help.
Part of responsible gaming education is informing players about the odds of winning—that every game has a house edge. Do Asian gamblers understand that?
We as an operator design a lot of training programs for our staff where we mention about what is a game of chance. What is probability? What is the house advantage? So we help teach people to play with a sense of having fun. It is entertainment, instead of a tool to make money. In short, we help people make informed choices.
How much research is being done in Macau to understand problem gambling in the SAR?
My job requires me to do research regularly, to keep myself abreast of responsible gaming trends. And I must admit that I find much more information on Australia and Canada and the U.K. There aren’t too many studies that focus specifically on Asian people. There are scholars from universities in Macau who are now doing lot of research which is Macau-specific. But I do see opportunities to do more.
Do you think Macau is doing a good job at making sure that people gamble responsibly?
I think we are. There is always more that can be done, but Macau has been doing a lot. And I think the government cares, and the operators care, so that makes up a very good ecosystem.
Last year, the government did research to understand people’s awareness on what is meant by responsible gaming. The percentage has increased dramatically since just a few years ago. Over the last five, six years, it went up from single-digit awareness to last year, more than 60 percent of people are aware what is meant by responsible gaming. So yes, I would say Macau is keeping up.
The saga of the Revel/Ocean property in Atlantic City took a major upturn earlier this year when Mike Donovan, a former marketing executive at the Tropicana, was hired by the new owners, Luxor Capital, to lead the Ocean marketing team. Donovan has wide experience in Atlantic City and other jurisdictions, and has delivered some tried-and-true formulas to turn around the fortunes of the struggling casino. And it seems to be working, with the property posting the highest gross gaming revenue ever in June. He spoke with GGB Publisher Roger Gros at Ocean in July.
GGB: What did you find when you first arrived at the property in terms of a marketing plan?
Donovan: Over the last 100 days, we’ve taken the property in a much different direction. When I got here at the beginning of March, the property had historically had good table games business, good non-gaming business, but it lacked slot business, which we all know is the core of every property in Atlantic City.
I saw several things that we were not doing or we were doing poorly. We weren’t communicating with the 1 million-plus people we had in the Revel database. We knew exactly who they were, we knew how much they spent the last time they were here, but we weren’t talking to them. We are now. And we’re talking to them in a very influential way. Before, they were getting weekly offers that were lower than other places in town. Now they’re getting daily offers that are better than anyplace in town.
So we’re combining a value piece with the exceptional product we have here, and people are responding.
What other things did you change?
Just from a physicality standpoint, we saw other improvements we could make. One of the complaints was that it was too big, too cavernous and you can’t find your way around. We installed simple-to-understand wayfinding signs that direct people easily. We put in a new elevator that makes it easier to get from the hotel to the casino, so you can get to the casino much faster. We built a separate promotions area that eases the burden on the main desk area, and made it easy to find. We added kiosks like most other Atlantic City casinos. So, we’ve addressed key deficiencies of the property and brought it up to a level that makes people comfortable.
Ocean has some great meeting and convention space. Is that a focus in the new regime as well?
Yes, and it’s getting easier the longer we’re open. The largest segment of your meetings book a year or two out, and with the uncertainty around the property before, they didn’t know if the place was going to be open that long. But now there’s a lot more certainty.
It’s always been a great setup for meetings with great rooms, accessibility and amenities. And now they have the understanding we’ll be here for a while.
Ocean has also been set up for great entertainment with Ovation Hall and the smaller venues.
How important is that for the property?
Incredibly important. The property is big, so you can definitely see a difference when there’s a major event going on. We’ve had entertainment in Ovation Hall pretty much every weekend since the spring and plan to continue with that for the rest of the year.
We have a great partnership with AEG Live where we’re beginning to get some big-name acts.
Food and beverage has always been an important element to this property. How have you begun to use it?
The property has always had great food and beverage—we need to tell more people about it, but it’s always been there. In some of the surveys we did, however, people complained that it was too expensive. Now we give weekly dining comps so people can come in every week, which softens that blow a little bit. And we’ve added some more casual dining options that are affordable, like a food court that will open soon. We’ve opened up Sky Café on the hotel lobby level, along with a coffee shop. We’ve got a frozen daiquiri bar on that level. So we’re starting to add components for the peak season.
Jane F. Bokunewicz has made it her mission to examine how millennials respond to gambling. An associate professor of hospitality at Stockton University in Atlantic City, Bokunewicz previously released “The Millennial Entertainment Preference Study” in 2016. In July she released a new study on the gambling prevalence of college students at Stockton. The students were asked them if they gambled and if so what kinds of games they enjoyed playing. The study was commissioned by the Council on Compulsive Gambling of New Jersey to gauge if there’s been any dramatic change in gambling behavior of students in the wake of the legalization of sports betting. Bokunewicz spoke with GGB Publisher Roger Gros at her offices at Stockton University in Atlantic City in July.
To obtain a copy of the study visit Stockton.edu/light/research.
Used to be, the only relationship between those advocating the elimination of smoking in casinos and the casino industry itself was bad. Protests and shaming were the tools of the supporters of non-smoking and were met by annoyance and avoidance from casino executives. The American Nonsmokers’ Rights Foundation has changed tactics, however. The group seeks to work with the industry to slowly remove smoking from the casino floor by designing methods to minimize the financial damage and maximize the health benefits. President and CEO Cynthia Hallet explains this strategy and how it’s working in today’s casino industry. She spoke with GGB Publisher Roger Gros from her offices earlier this year.
Joe Lupo spent 30 years with Boyd Gaming, most of it at the Borgata in Atlantic City, where he held a variety of senior positions. Lupo joined Hard Rock International in 2017 when he was appointed to lead Seminole Hard Rock Tampa, one of the most profitable casinos in the U.S. He was brought in to run Hard Rock Atlantic City in October 2018, just four months after the opening of the property, and has boosted revenues and cut costs using his extensive knowledge of the Atlantic City market. Lupo spoke with GGB Publisher Roger Gros at his offices in the Hard Rock in July.
GGB: You just celebrated the first anniversary at Hard Rock Atlantic City. You’ve had some bumps along the way, some adjustments. Are you happy with the direction that the property is headed right now?
Joe Lupo: Yes, I’m really happy with the direction. Any time you open up a property, there’s going to be bumps, and Hard Rock worked
really hard to get it up and going, especially so quickly after purchasing the property. It was a lot of hard work for the team, and you’ve got to give them a lot of credit for doing it so quickly, and the property looks beautiful. But there’s growing pains that you have, understanding the market and things like that. Obviously, we opened the same day as Ocean, and you have two properties that came into a flat market, from just a pure casino gaming revenue standpoint.
I came on board about eight months ago, late October. And so during that time, we were able to look at the business over the winter. We put some things in place, and now, a couple months ago, we became No. 2 in casino revenue. And to do that before our year anniversary is a great milestone.
You started from scratch, basically, with your database.
That’s probably the toughest thing to do for a property, especially in a high-frequency market, where all the customers have loyalties. They’ve been going to those other properties, and they know the waitresses’ first names and have accumulated points. To draw a customer away from a loyal market is really difficult. But we’re probably gaining more new customers every day than any other property. It really takes time to build that database, and while we’re getting customers in, they’re still getting offers, and they might be staying at other properties, and we’re only seeing a part of their play.
You worked at the Borgata for a lot of years. What kind of advantage did that bring you when you came to Hard Rock Atlantic City?
Well, I know the market pretty well, that’s for sure. Coming from the No. 1 property across town for so long, we worked hard over there to figure it out. One of the things that we do here is that we develop all of our own promotions and look at our reinvestment. Everything about this property is done from a couple of offices. There is no direction from a corporation that says, “Do it this way.” There’s no team from Las Vegas, that are saying, “We should do this.”
We have some great team members from other properties, from Caesars, from Golden Nugget, from Borgata, that are giving us some other ideas. So we’re just taking a very aggressive approach. We realize we have to do that with a limited database. But, again, being in town, the entertainment aspect that obviously we had at Borgata, there was a lot of entertainment here. And having the biggest room in town gives us a big advantage over everybody.
Hard Rock has a unique corporate culture. After a year, how much do your team members get the Hard Rock philosophy?
It is unique, and I think we’re jelling. I don’t think we’re there yet, to be honest with you. I think it’s good that we have a lot of different perspectives from a lot of different entities. The same thing happened at the Borgata. We need to keep working at it. I think teamwork in the end will make us click.
As you come into the shoulder season, what are you doing to maintain the momentum you’re building this summer?
We have the biggest promotion this summer; we’re giving away a $1 million to one person. And that’s coming off our car-a-day in May. Who gives away a car every single day? But we guarantee that, and we’re really trying to raise the eyebrows.
What does it mean that your chairman, Jim Allen, is a native of the Atlantic City area?
Well, it’s not only Jim, but our other partners and owners are from New Jersey—Jack Morris, and Michael and Joe Jingoli. They’re very community-driven. I think the city needs to come together a little bit, and we need to work together, and we’re starting to do that with the North Beach initiative—Ocean, Resorts, Steel Pier, the Absecon Lighthouse and us and the Tennessee Avenue folks—who are revitalizing that street.
We’re trying to highlight the excitement that you find at this part of the Boardwalk. Overall, we need to ensure that we work together, create more infrastructure, organization and safety—and a clean city I think is really important.
Encore Boston Harbor opened on June 23 in Everett, Massachusetts, across the Mystic River from Boston. Formerly contaminated with over 100 years of chemicals, the site was cleaned up and restored by Wynn Resorts in a complicated but satisfying process. Bob DeSalvio, the president of the property, explains that process and the lengthy and sometimes contentious path to opening. He describes the bumps along the way, the design and construction process and the dedication of the Encore team members. He spoke with GGB Publisher Roger Gros in his office at Encore Boston Harbor in July.
The first gaming operation of any kind was introduced in Virginia earlier this year with the opening of Rosie’s Gaming Emporium at Colonial Downs Racetrack in New Kent featuring historical horse racing devices (HHRs). Since then, two more Rosie’s have opened in other parts of Virginia.
Gaming veteran Aaron Gomes is COO of the company that owns and operates these parlors, Peninsula Pacific Entertainment, which also owns Del Lago casino in New York, Kansas Crossing in Kansas and Diamond Jacks in Bossier City, Louisiana.
Gomes spoke with GGB Publisher Roger Gros at Colonial Downs in August.
GGB: Congratulations on the opening of the Rosie’s properties in Virginia. What has the response been?
Gomes: It’s been overwhelming. All the feedback has been very positive. We put a lot of money and effort into it, and it’s great to see this kind of response.
We now have three facilities open. In addition to Colonial Downs with 600 games, we opened a location in Vinton, outside of Roanoke, with 150 games, and just last month we opened one in Richmond with 700 games and have another 700 games scheduled for Hampton in the fall, and then a location in Chesapeake with another 700 games early next year.
So that will give you close to 3,000 games? And you’ve got approvals for 10 locations.
Yes, 3,000 is the limit that is approved through the temporary regulations, but we’ll be asking them to raise that cap as the regulations progress. And we do have the right to build 10 locations as long as we hold a referendum in those communities and get their approvals. Of course, the cap on the number of games would have to be raised in that case.
For those of us who have not seen or played an HHR, what’s the experience like? And are your customers new to gaming, or have they gambled somewhere else?
It’s similar to a Class II bingo game; it’s very similar in terms of time on device, payouts, hold percentage and more. The only difference is you’re not playing against the house; you’re playing against other players in a parimutuel pool. Other than that, the experience is very much like a traditional slot machine. The themes are similar, even down to a players club for the customers.
As for our players, it’s a combination of both. We have a lot of customers who have played elsewhere and are grateful to have their entertainment hobby closer to home. Then there are other players who are new to the market or have previously been horse racing fans and have fun playing the games.
What is the tax rate on these games?
The tax rate is actually a percentage of the handle. We pay about 1.25 percent of handle, which based on the hold of each machine is roughly 15 percent to 20 percent tax. And then we supplement the purses of the horse races here at Colonial Downs, which is about 6 percent or 7 percent of the revenue. And then we have a technology fee paid to the manufacturer which is another percentage of the revenue. When you blend it all together, the effective tax rate is around 35 percent.
The Virginia legislature recently considered a bill that would legalize casinos in the state but pulled it back to conduct a study. Where does that stand now?
There’s a lot of moving parts right now, especially when you add the Pamunkey tribe that recently received federal recognition. The state has commissioned a study by The Innovation Group about introducing gaming, the risks and benefits, so we believe that much of what the state decides to do with gaming will hinge on that study.
Korbi Carrison is entering her second Global Gaming Expo (G2E) as event director. With a long history in the gaming industry, Carrison has been well received by exhibitors and attendees alike. G2E is presented by the American Gaming Association and organized by Reed Exhibitions. G2E 2019 returns to the Sands Expo Center in Las Vegas, October 14-17. Carrison spoke with GGB Publisher Roger Gros in August.
GGB: Now that you have a year under your belt, how have you been able to plan for G2E 2019 now that you’re familiar with all the exhibitors and processes?
Carrison: As you can imagine, the G2E team begins planning for the next event edition even before the current show ends. We hear feedback on-site and are always looking for ways to improve year-over-year. Following an amazing 2018 event and jackpot year for the commercial casino gaming industry, there has never been a more opportune time for G2E to keep growing and improving. G2E must continually deliver content and experiences that are relevant and exciting to our attendees. We strive to make G2E a better platform every year.
Sports betting has been front-and-center on the past two G2Es. Now that almost 20 states have legalized it, what are you planning to offer to attendees on that side of the business?
Sports betting continues to be important with many states still considering legalization, and for those that have legalized it, learning how to implement and regulate. States are deciding whether or not this opportunity is right for them and if it is, who the technology providers are that match well with for their particular jurisdictional needs. So we are looking to build on the education that we presented last year, and dig a little bit deeper into all of the different questions that the operators may have.
This will be the second G2E Sports Betting Symposium, and it has eight dedicated sessions, including a tour of several technology vendors that make products specifically designed for sports betting markets.
This must be an opportunity to attract exhibitors and attendees who have never been to G2E in the past. How are you reaching out to these people?
With the gaming industry always evolving and changing, there is always an opportunity to attract new exhibitors and attendees. A lot of international sports betting companies are bringing their technologies and programs to the U.S. market to help states implement sports betting in each area. Another growth area that is taking the gaming industry by storm is alternative payment applications. We’re focusing a lot on growing this segment with both exhibitor and attendees because those technologies are already used by consumers in their daily lives. Their casino gaming experience should be no different.
Tribal gaming has always played a large role in G2E. It looks like you’ve expanded the tribal gaming track. With Victor Rocha curating it, I’m sure it’s going to be very informative. What’s in store?
G2E will once again present a robust lineup of tribal gaming-related content for this year, including a Monday keynote speaker, D.J. Eagle Bear Vanas, the internationally acclaimed motivational storyteller, leadership speaker and member of the Odawa Nation of Michigan. Vanas, who is a celebrated author and former military officer, shows organizations how to practically apply the power of the warrior spirit to perform at their best, and stay resilient and thrive in tough, changing environments. He is a pioneer in the tribal community.
Tribal gaming education will again take place over all four days of G2E including feature sessions on sports betting, esports and tribal leadership.
It seems that technology is the byword of the year for G2E. Tell us how you’re stressing that in 2019.
We are not only stressing innovative technology, but disruptive technology. Attendees come to expect new technology across the expo hall floor, but it’s also a theme in this year’s Innovation Lab. Our theme in the Innovation Lab on Tuesday is Disruptive Technology, and Wednesday is New Uses for Existing Technology. Each day features a series of quick, 15-minute presentations and discussions that promise to really get outside the box with the thought processes related to technologies. Many of the concepts that will be discussed here are not yet ready for the expo hall floor, but we will be sure to see them there in years to come.
Speaking of technology, the G2E app is new and improved. How can you improve the attendee experience if they use the app?
The mobile app, once again sponsored by Konami, is the best resource to find all information G2E-related. It not only has the most up-to-date education sessions and exhibitor list, we’re launching new features designed to empower the attendee to personalize and maximize their experience at G2E.
This year, we’re launching direct messaging in our mobile app, where attendees will be able to reach out directly to exhibitors to set up appointments and begin conversations. We’ll also be building on the success of the G2E Recommendations Program, delivering a personalized list of exhibitors, education sessions and special events based on search activities within the app.
Attendees will also be able to look up booth-to-booth directions and have access to interactive show floor maps, or visit Ask G2E, for real-time answers to questions.
We recently did a survey on the GGB website asking our readers to tell us what trade show or conference they considered the most important in the industry. The winner was clearly G2E with nearly 60 percent of the vote. Other shows didn’t get half that much. To what do you attribute that?
The networking and business opportunities at G2E are second to none. The industry convergence on a single venue to meet up with current and former associates to conduct business and socialize is unparalleled. We continue to push the envelope, look at the current landscape and see how we can best activate G2E in a way that’s most valuable to the gaming industry.
Bill Miller became the third leader of the American Gaming Association in early 2019. A former executive of the U.S. Chamber of Commerce and other business organizations, Miller hit the ground running at the AGA—he had to, as the U.S. Department of Justice struck down a previous DOJ memo that said the Wire Act applied only to sports betting, not online casinos or lotteries.
Miller has accomplished much in a few months. In August, he sat down with GGB Publisher Roger Gros in his Washington, D.C. office for a GGB Podcast.
GGB: You weren’t an unknown quantity when you were appointed to head the AGA. As a lobbyist, you worked hand-in-hand with the AGA. But there were people that you hadn’t met on the board. How did you go about introducing yourself and explaining your agenda?
Bill Miller: One of the really exciting things is we have a diverse but reasonably limited membership. We have commercial operators, tribal operators and suppliers. We have our friends from the U.K. and Europe who have become more interested in sports betting that aren’t actual members. In total, you’re talking about 100 or so different entities.
I know how the American Gaming Association started, where it started, the importance of Las Vegas as kind of the epicenter of the gaming world. I made a couple trips to Las Vegas to meet with people both during the search process and before I started, in order to try and have them get to know a little bit about me and about my agenda.
The first two leaders of the AGA had different styles. Frank Fahrenkopf’s job was to keep an eye on Capitol Hill and make sure no bad legislation was coming out of there. Geoff Freeman was more proactive about getting the good news about gaming out into the community. What’s your philosophy?
I think I take some good from both. I know that both Geoff and Frank shared the same view, that our industry is so well-regulated at the state level, any kind of federal interference or federal regulation is something we should work to defeat. And that has continued to be the mission, whether it was Fahrenkopf, Freeman or Miller. We all share that view.
What happens on Capitol Hill matters a great deal to us (but) we’re not under constant assault. In fact, most members of Congress recognize that the gaming industry is an economically powerful driver. And we’re in 40-plus states. What I try and bring to this job every day is the ability to tell the story to the right audiences, and many of those audiences that are most important are up on Capitol Hill.
Sports betting has been the big story in the industry over the past couple of years. Are there some hurdles we have to overcome before it’s completely accepted?
Prior to the Supreme Court’s ruling, there was one state where you could bet on sports. Now there are more than 20. We’re learning from each of those.
One of the most important reasons that the AGA was involved in the sports-betting lawsuit was we recognized how much sports wagering was being done illegally. Our contention all along was if you’re able to legalize sports betting in states, you’re going to begin to destroy the illegal offshore online market that funds other criminal and illicit activities. People have always bet on sports. They’re going to continue to bet on sports. And it’s a better dynamic when they bet on sports in a legal and transparent manner. That’s a worthwhile goal for all of us, including the Department of Justice.
Geoff Freeman forged a great relationship with Ernie Stevens at the National Indian Gaming Association; I think both being from Wisconsin and Packer fans helped. Are you planning to continue that relationship with Ernie as a person and NIGA as an organization?
I spoke to Chairman Stevens on my first or second day here. I believe very strongly that that the 11 tribal operators we have as members are critically important. The story of gaming in the tribal nations is an incredibly important one.
I spoke at NIGA in San Diego. I’m planning to go speak at their mid-year conference in Connecticut. I was on a panel with Chairman Stevens at ICE in London. I’m not a Packers fan, but we’re both big boxing fans, and we’ll talk about boxing. We figured out our connections, and I have great respect for him as a leader of NIGA. And I have a personal affection for him; he’s been very kind and very welcoming to me.
The new AGA State of Play campaign not only looks at commercial gaming in each state, but includes tribal gaming also. Is that because people see gaming as one industry that, whether it be tribal or commercial, still benefits the state in various ways?
Absolutely. Most people who enjoy a regional casino property don’t necessarily care that it’s commercially operated or tribally operated. What they want is an entertaining experience, with good amenities and good restaurants, nice hotel, maybe a golf course. They want an atmosphere that’s lively and fun.
We’re proud to have Native American tribes as part of our membership, along with our commercial operators, the suppliers and manufacturers. We are one. We want the American Gaming Association to be that one source—an honest, clear and transparent source for information.
New Jersey’s Casino Reinvestment Development Authority (CRDA) was developed in the early 1980s to help redevelop Atlantic City and other parts of the state. The CRDA is funded by a 1.25 percent tax on casino revenues. Matt Doherty, a former mayor of Belmar, New Jersey, was appointed to lead the agency 18 months ago. He explains how he is doing his job at a time when the state has taken over the Atlantic City government. He spoke with GGB Publisher Roger Gros at the CRDA offices in Atlantic City in August.
GGB: The CRDA has been an important tool in the development of Atlantic City. How are you helping to direct the CRDA funds to the places where they do the most good?
Doherty: We work with the mayor, city council, along with Leutenant Governor Sheila Oliver, who is also the commissioner on the Department of Community Affairs, on what the priorities are. And those were laid out pretty broadly in the Jim Johnson report (authored by a former Treasury under-secretary and the leader of the state takeover of Atlantic City government) that was issued in 2018. We use that as a guideline for how we should appropriately allocate CRDA funds within the four corners of Atlantic City.
Over the years there have been degrees of dissatisfaction with the CRDA from the casino perspective. What have you done to shore up the agency’s relationship with the casino industry?
We have 17 members of our board of directors and two of them are casino executives appointed by the governor. They have adequate representation on the board.
I’ve had meetings with the top casino executives around town. Overall, it’s been a positive response to recent CRDA activities.
The Tourism District was established about 10 years ago. How do you work with the city in the CRDA oversight of this area?
When the CRDA was given authority over the Tourism District, I thought it was very odd. When I was mayor of Belmar, myself, the council along with the planning and zoning boards controlled land use. About 45 percent of the land is Atlantic City is controlled by the CRDA. I’m very cognizant that this is a city that has a mayor and a council, and has a planning board and a zoning board. So we take special care to inform them on what we plan to do and get their feedback on whether they think it will be a positive or negative step. If it’s not seen as a positive, we re-evaluate it.
The CRDA is also responsible for public safety in the Tourism District. How do you work with the Atlantic City Police Department in that regard?
We’re now up to $3 million in grants to the police on an annual basis. That’s for Class 2 officers, who are not full-time police officers, and for NCOs, neighborhood coordination officers. These are officers who are out of the car, who walk door-to-door, who talk to residents and businesses to address quality-of-life issues.
We also interact with land-use, planning and development, code enforcement and others. Any projects that come to us, we take it to the city and vice versa. We also have responsibility for the Special Improvement District (SID), which does a lot of public works-type of functions in the Tourism District.
Some casinos have criticized the CRDA’s efforts to bring entertainment to the city. They believe it’s the casinos’ responsibility.
Well, Hard Rock has really changed that dynamic. They’re extremely aggressive in bringing high-class entertainment to town. I don’t see CRDA’s role as competing with the private sector. Having private-sector dollars bringing in entertainment is a good thing.
Where we do run into a challenge is the operations of Boardwalk Hall. This has a capacity far exceeding any other venue in Atlantic City. Because we own and operate Boardwalk Hall, we have to generate as much money as possible to defray the costs. So there’s a delicate balance there between not interfering with the private sector and at the same time recognizing that we do need to operate Boardwalk Hall as a business to generate revenues to decrease the costs there.
Resorts Atlantic City was on the verge of closing several years ago until Morris Bailey bought the property for $30 million. After the death of Dennis Gomes, his first CEO, Bailey brought in Mohegan Gaming & Entertainment to run the property. Mohegan appointed longtime Atlantic City executive Mark Giannantonio as president and CEO.
In addition to adding meeting space, renovating hotel rooms and casino space, and introducing more F&B outlets, Giannantonio has guided the casino through the openings of two nearby casinos. He spoke with GGB Publisher Roger Gros at his offices at Resorts in July.
GGB: It’s been one year since your neighbors opened last year, Hard Rock and Ocean. What kind of impact did that have on Resorts?
Mark Giannantonio: Well, it’s an unprecedented amount of capacity to open all at one time. It’s unlike anything I’ve ever seen.
The great thing is that we’re attached to Hard Rock (via a pedestrian connection). Jim Allen and Joe Lupo are great operators. And you have the commitment from the Jingoli family and Jack Morris family. So it took that type of brand and that kind of leadership to take over that property to get it up and running so quickly. They’re doing a really good job there. So we’re happy that we’re connected to them. We try to work collectively, and we’re working as a group with Ocean as well, to try to rebrand this part of town. We think that’s very important.
You were up here on your own when those two properties at the end of the Boardwalk were closed. Does the opening of the two properties give you critical mass now?
There were pros and cons about being the only one. Clearly, when the five casinos closed, there was a lift in everybody’s boat. But at the end of the day, Atlantic City’s about bringing as many people to town as possible. So having Hard Rock connected to us, it just makes the synergy so much better.
But you just didn’t wait for the new properties to reopen. You make preparations.
When Morris (Bailey) was looking to buy something in Atlantic City, he looked at a number of different properties. He selected this property with the vision of bringing it back to life, but he needed to spend money here to bring this property back, which he’s allowed us to do. We really prepared for this day with the new casinos opening.
How do Morris Bailey and Mohegan Gaming & Entertainment work together?
After the unfortunate passing of Dennis Gomes, a dear friend of mine, Morris was about a year and a half into this, and he had to decide exactly what to do, and whether he was going to sell and get out, or double down.
He brought in Mohegan after a pretty extensive search for a management company. So, Mohegan is responsible for the management of the asset. They own 10 percent of the company. It’s like a match made in heaven. (Mohegan CEO) Mario Kontomerkos and his team do a great job. They’re doing a lot of expansion elsewhere, but this was one of the first assets that they took under management, so it’s important to them. They really have helped us and guided us about how we deploy capital.
Probably the most important thing is that we have the access to their database. They are a very good partner and with Morris, there’s no better person in the business.
The competition in Atlantic City has always been tough, and this round is no different. You’ve got these crazy tier-matching programs in all the casinos. How can you respond to that?
It really is crazy. I think it’s just everybody’s reaction to what is an extremely difficult period of time. Organically, the same store is just not growing where we’d like it to be. We’ve been bucking the trend a bit, where our tables are actually growing, and you know, we have great Asian business as well. But at the end of the day, it’s a hard market, and I don’t think it helps with all these aggressive offers. Some people think it’s a race to the bottom, and I can’t disagree.
You’ve been lucky enough to have DraftKings under your roof as one of the leading sports betting sites in New Jersey. How much has that helped bring new customers in here?
DraftKings are professionals beyond belief. Morris cut a great deal with them, and we’re excited about their success. We partnered and opened up what we think was the nicest and best sportsbook in Atlantic City back in November, and it’s immediately transformed our property. It’s a state-of-the-art sportsbook, but it’s coupled with a great sports bar, great food, and then we opened a sushi restaurant right next to it, and refined our Asian restaurant. So, that whole area has been livened up, and there’s no question, a whole new customer is coming to the property now. And that helps in so many ways. The ancillary revenues and gaming revenues are all going up. So we are thrilled about the success. And we’re certainly thrilled that DraftKings is doing so well online, too.
Two of the three founders of Duetto, Patrick Bosworth and Marco Benvenuti, have extensive experience in the gaming industry. That experience led them to develop the revenue management system that has created the Duetto success story. The company is ready to take the next step as Bosworth is elevated to chairman of the board. He was joined by the new president of Duetto, David Woolenberg, when he met with Roger Gros, the publisher of GGB, at the Duetto offices in Las Vegas in September.
GGB: What was the state of revenue management when you left Wynn Resorts to form the company nine years ago?
Bosworth: Revenue management has been around since the mid-1980s. It’s just that they haven’t been used to their full potential, partially because, particularly in gaming, the systems didn’t reflect the way casinos actually run their business. You were using technology like Excel, which had a hard time handling all the data, and you had to ignore most of the recommendations. It was one of the reasons we decided to start the company. So we built the company using the tools for the purposes that were intended. You’d use most of the recommendations suggested by the tool instead of overriding them. And frankly, our timing was good. It was a time when gaming and the overall hospitality industry was looking toward automation and using analytics to a greater extent. That tailwind has helped us.
How much has changed since those days?
Unfortunately, many of the big companies still use Excel spreadsheets. Employees spend the entire day hand-keying in overrides and doing things manually when intuitively you know there should be a better way.
So what are you doing differently than other companies were doing at that time? How did you fix what was broken?
You pull together as much relevant data as you can. You configure the system to match the strategy of the casino resort. And then you develop algorithms to help automate, first the most routine decisions, because the vast majority of your day looks like other days. There’s a lot of commonality between certain days of the week at certain times of the year. Then you have to empower the people at the properties to take a hard look and understand more deeply the exceptional days.
You still need to have a prediction about the future, but you’re arming your people in your revenue meetings with the information they need to exercise their own judgement to interpret the more exceptional things they see.
Duetto was recognized in the hospitality business early on, but you had some great experience on the casino side, too. Why did it take longer to get noticed in gaming?
The short answer is that casinos are the most complicated part of the hospitality business because of their size and complexity. It took us some time to build the products necessary to take into account all of the variances in gaming.
For example, casinos had a very inflexible system where you were either a comp customer or casino rate or cash customer. That was costing the casinos a lot of money, and providing a worse customer experience.
Say you’re a borderline casino rate customer who the casinos would love to comp on certain days. Under the old system, that wouldn’t have been allowed. With our system, you can show your borderline customers that they are valued and offer them comps on days when it makes sense, but other days they might have to pay the going rate. That way, you’re sure you have the right players in the building at any given time.
How important is real-time data to your products and services?
It’s crucial. The goal is always to get as close as we possibly can to real-time data that’s wider and deeper than any external analyst has sent before. We have to make sure it’s always accurate. We’re constantly running data checks to assure data quality. That becomes the key to establishing trust from our customers. The data has to be accurate, as do our predictions for the future.
One year ago, the GGB Podcast sat down with Charles Cohen and heard him talk about the potential for the IGT PlayDigital sports betting platform. This year, we hear about the successes that IGT has had across the U.S. Cohen talks about how players have taken to the IGT platform and why more and more sports books are selecting IGT as a partner. He details the lessons learned over the last year and gets down in the weeds a bit about how sports betting is actually conducted in the U.S. He spoke with GGB Publisher Roger Gros at G2E in Las Vegas in October 2019.
Tom Hoskens has seen it all in the casino business. An architect with the Cuningham Group since 1991, Hoskens and his company have participated in almost all aspects of design in gaming. A long-standing relationship with the Cherokees in North Carolina has yielded impressive facilities and experiences. Hoskens talks about sports betting venues, tribal gaming renovations, and trends in the casino design business. He spoke with GGB Publisher Roger Gros at G2E in October.
Connecticut’s Mohegan Sun is one of the great casino resorts in the U.S. In fact, it was recently named the top casino in the USAToday poll. Ray Pineault has been running the property since 2015 and before that was chief operating officer for three years. Pineault talked about recent development phases at the hotel, which has added rooms, meetings and convention space, restaurants and retail attractions. He spoke with GGB Publisher Roger Gros at the G2E trade show, held in Las Vegas in October.
GGB: What are some new developments at the property within the last couple of years?
Ray Pineault: In our market we’ve had over $2.5 billion in investment by competitors coming in. So we’ve been working on things and solidifying the property and solidifying our player loyalty. Two years ago, we added 400 hotel rooms. We added the largest expo center in Connecticut, which has been a tremendous success. Our hotel is still running at over 97 percent occupancy. In addition to that, we’ve been working on non-gaming amenities, like the new Roadhouse comedy club and a new lounge. So we’re looking to continue to enhance and grow our non-gaming amenities and give people more reasons to visit the property.
MGM opened last year in Springfield and Wynn opened Encore Boston Harbor. What’s been the impact of those openings?
We’re talking about $2.5 billion in investment in Massachusetts, and both of those markets were feeder markets for Mohegan Sun. But when we look at our top-line revenues, we’ve been pleasantly surprised with the loyalty our guests have shown to Mohegan Sun. Obviously, they’re going to try those places, but many are coming back to visit us. They may not visit as often, but they’re still coming to Mohegan Sun because of the offerings we have.
Entertainment has always been a big part of the Mohegan Sun experience. How important is the arena?
This is a huge driver for us. Every time we run a show, we have the opportunity to bring 8,000 to 10,000 people to the property. And while a few may not be gamers, they may stop and spend $20, $30 eating or drinking. We know they’re using the hotel. They’re certainly using the spa and shopping at our retail, so we’re getting additional spend from them.
And of course we’re very proud of our WNBA team (the Connecticut Sun). Unfortunately, they lost the championship, but they battled really hard. They had a tremendous season and we look forward to bringing them back next year and hopefully finishing it off.
We saw a change in the tribal leadership earlier this year. Is there still a big commitment from the tribe to the success of the entire gaming enterprise?
I can’t be prouder or happier to work with the tribal council that we have. But we have an election for our tribal leadership every two years. So there’s always some transition, whether it’s through retirement or people coming up through the ranks, like any politics.
The tribe has always been committed to Mohegan Sun. It’s their property, it’s their homeland, and they are exceptionally committed to the growth and overall well-being of the company.
What about sports betting in Connecticut?
From my perspective as the operator, we need to come to the realization that we now have Rhode Island and New York doing sports betting. And it’s not that sports wagering is the economic panacea that people were dreaming about, but it’s a competitive disadvantage for us. So if a guest has a spouse or family members who want to go enjoy a facility, but they want to lay a wager down on any particular game or sporting event, we could lose that guest, at least for that trip. So when you don’t have the full complement of product it’s a lost opportunity.
During the early days of gaming expansion, The Innovation Group was one of the major consulting companies that casinos turned to for feasibility studies and marketing analysis. Michael Soll spent several years with the company in those days, and returned five years ago after stints with Caesars Entertainment and Hard Rock.
Now, as president of the company, Soll is navigating a new world of market saturation and limited expansion to provide tribal, commercial and international casino companies with a path forward to organic growth. Soll spoke with GGB Publisher Roger Gros.
GGB: The Innovation Group has had an exciting year, with lots of success and accomplishments. What stands out for you?
Michael Soll: We really solidified our fourth partner and our Las Vegas presence through Brian Wyman. His joining us as a partner is symbolic of the major shifts we’ve had under way for the last four or five years, moving into data analytics and marketing analytics, which has become our window into most new technologies and gaming platforms, whether it’s online, sports betting or traditional operations.
We also were honored to be selected by Virginia’s Joint Legislative Audit and Review Commission to provide, with our partners at RMC Legal, much of the background research they relied on for their “Gaming in the Commonwealth” report. Market analysis and feasibility has long been the bread and butter of this company, and it was fulfilling to bring that expertise to a new category of client.
And, of course, through our relationship with GGB, we’ve had a stellar response to this year’s Emerging Leaders program. These young leaders are really starting to interact with one another through get-togethers and meetups at different conferences all over the world. It’s very organic.
The class this year was really special. The fact that we had to choose from 200 nominees was pretty amazing, and the level of people who were nominated, or even nominated themselves, was really high. I’m really happy with the way it turned out this year.
You mentioned Brian Wyman. Who are your other partners?
Interestingly, we have a partner per office. Brian is in Las Vegas. Tom Zitt, a longtime partner with the company, still works out of our original office in New Orleans. He drives the majority of our domestic business. He’s in tune with about half of the tribes we work with, particularly in the Eastern U.S. In Denver, the office is led by Michael Zhu, our partner who handles most of our business in Asia.
I’m still based in Orlando, handling both Latin America and Europe from there. So, we have a geographic approach to handling the industry’s global needs.
What major challenges will operators, manufacturers and governments face in the near future?
Starting from the government side, which affects everything else, and a lack of new greenfield markets—places like Virginia, Japan and maybe one day Brazil—you’ve got governments that are looking at their gaming product and asking how much they can squeeze in. This is what we saw in Illinois and Pennsylvania last year. The key questions they’re asking are reciprocal to what the industry is asking: How much capital can we invest? Where can we invest it? And how much additional exposure in a market is an advantage to us, as either a defensive strategy or an offensive strategy? Governments are asking: How much can we absorb, and what types of gaming should we be offering, even if it’s just layering in sports betting?
How about players? Can you expand the pool of players from any one group?
I don’t find the characterization of the new group of players as millennials useful anymore. It’s almost become a term that’s too vague to explain the challenges the industry faces. We’ve done some survey work on this recently, about what amenities are valued now, outside of gaming. How popular are they among guests? Who are the drivers? Also, we included all kinds of questions about skill games and esports.
Our view is: Be flexible, have enough floor space to try things that are hitting the market, and don’t assume that every potential future player is the same as every other potential future player.
How can a company like The Innovation Group help established casino companies and manufacturers understand these challenges and develop solutions, particularly if they don’t have those kinds of experts in-house?
There are several routes. The tools we use are relatively similar, although they’ve evolved in terms of how we deal with data, database analysis and loyalty programs. But as far as answering these questions, it’s about research, in the sense of survey research and taking temperatures and benchmarking.
It’s also about qualitative research—sitting in rooms with people from different demographics and player groups in different countries, and seeing what they believe a gaming property should offer. What do they believe the online experience is like, compared to the bricks-and-mortar experience? And where do they draw lines around a social experience versus a personal experience?
The research we do builds a database of research around these areas. So, as we did with our early feasibility work and tracking penetration, we’re building a history and benchmarks around these attitudes and trends. When we start to segment them by age group, by nationality, by jurisdiction, by ethnicity within the market, we start to have trends that we can watch.
Konami Gaming is a division of the Japanese video game giant that focuses on casino gaming in the U.S. and beyond. Konami has some of the most original games and content in slots but has fallen behind some of the larger companies in the era of consolidation and acquisitions. Tom Jingoli, the senior vice president and chief commercial officer for the company, explains how a new strategy deployed by CEO Steve Sutherland has brought fresh blood into Konami’s leadership and has the company poised to compete in sectors it had not previously emphasized. He spoke with GGB Publisher Roger Gros at the Konami offices in Las Vegas soon after the November cover story on the company was published.