It’s show time, just a couple of weeks after the big election, and change is in the air. Or maybe not so much.
The American gaming industry, like its host country, isn’t at the beginning of anything so much as it is in the midst of an attitudinal sea change that it is only just coming to grips with.
At least some folks are coming to grips with it.
One is Jim Allen, the CEO of Seminole Gaming. Speaking at his flagship property in Hollywood, Fla., at last month’s Florida Gaming Summit, which we co-produced with our partners Spectrum Gaming Group, Allen noted the folly of those who would invest too much hope in present political outcomes.
“I think we have a lot more serious problems than people realize,” said Allen. “Before we take shots at our leaders we need to take a look at our own spending habits and the need for more discipline.”
Allen noted that the U.S. consumer economy has benefited enormously from two basic factors that have played themselves out: the growth of two-income households in the ’80s and ’90s, and the real estate bonanza of the ’90s and the past decade, ending in 2008. Both of these trends helped substantially restock household discretionary spending budgets. But prices (think housing, health care, college education for the kids, retirement) have caught up with maturing two-income families. And the refinancing boom, which masked the reality of falling real household incomes, is also over.
Hence, the need for more discipline, and not just for the middle class. As an anecdotal but illustrative example, Bernie Madoff’s Palm Beach house, which was purchased for more than $10 million, recently sold for just $5.4 million when the government thought it would fetch more than $8 million. “This is Palm Beach,” said Allen. “I thought rich people had money.”
The mood elsewhere is different, said Allen, just back from a tour of Hard Rock’s Asian properties. “The U.S. has lost a lot more ground than we’re willing to admit in terms of service,” he said. “In Singapore they are kicking ass and taking names. The work ethic and the general feeling of commitment there would be great to get into our workers here.”
The service theme was picked up immediately after Allen’s speech by Walt Hawkins, who spent many years working for International Game Technology and now runs his own firm, Probe Strategic Solutions. “The corporatization of our industry,” he said, “has not been helpful in terms of the level of service provided.” A lovely sentence which really refers to what happens when the owners are more preoccupied with financial engineering than minding the store and creating actual value for customers. How to inject enthusiasm and commitment when the bosses themselves do nothing more than kick the employee and customer satisfaction can down the road while they’re lining up an exit strategy?
Which reminds me, talk to people from Vegas and the one property that repeatedly comes up as “getting it” during this tough period is South Point and its accomplished owner, Michael Gaughan, who is visible to his employees and customers alike, even manning a sports book window on Sundays. “I place my bets there, just because I know I’ll see him,” one gaming supplier told me last month. The tactile attitude translates to the house, and the vibe is as friendly and intimate as you’ll find in a property that size.
I always liked it when Mickey Brown referred to the outsized Foxwoods as a “joint”. Casinos, after all, are an elaborate and (when they work best) enjoyable seduction, making the process of losing your hard-earned cash seem almost worthwhile. Without some genuine intimacy between the players and the played …
Service as a differentiator in often-oversupplied gaming markets makes all the sense in the world, but the motivation for it has to come from somewhere. I lived in Asia as a high schooler (yeah, many years ago), and Westerners have been raving about the service culture there forever. In the United States, land of good-hearted individuals trying to negotiate all that freedom without getting lost, service is necessarily more organizational. My friend Troy Simpson of Barona embarrassed me a couple of years ago when he said during his keynote speech at the Casino Marketing Conference, “Somewhere along the line we got this crazy idea in our heads that businesses exist for their shareholders. No, they exist for their customers.” Embarrassing, because I applauded, and I was the only one in the room who did. Which was far more reflective of my lifelong battle against occasionally ill-timed public displays than it was of my neighbors’ failure to comprehend. But how nice it was to hear the truth from someone whose company actually fully lives out the terms of the customer-centric credo.
I’ll be on the lookout for more of the truth at G2E this month, as, I’m sure, will you. Let’s compare notes sometime.