People often ask, in one way or another how is it possible to increase profits even in times like we’ve been going through over the past few years. My answer is that sustainability is the way to go. By paying attention to the Triple Bottom Line (environmental, social and financial) your organization will have opportunities to become more efficient, saving money during these times by implementing sustainable solutions.
Sustainable solutions cover a wide array of opportunities, including everything from lighting retrofits to renewable energy sources. A typical lighting job will save about 20 percent, and when you add an HVAC overhaul, you can add another 10 percent or so to that number. Think about what your property energy costs are and what you could do with that extra 30 percent going right to your bottom line.
I mentioned a renewable energy source/installation. Here we are talking about an ROI of between five to10 years. This is a big reason why lots of folks have looked to outside funding sources to provide them with a Power Purchase Agreement. This is basically a long-term lease where you let someone put solar panels on your roof/garage/parking lot, and in return they tell you that your energy costs will go down by about 10 percent over your old payments. Free solar panels AND a 10 percent reduction in energy costs.
The other side of that equation is that historically the funding source will design, build, own, operate and manage the installation and will reap the benefits. These could include an accelerated write-down period, incentives and rebates as well as getting to sell the renewable energy credits on the open market. Power purchase agreements are changing, and what could once be written off as an operational expense now is a capital expense.This may start a shift toward a model of casinos paying for their own renewable energy sources to possibly reap benefits and new revenue streams.
These types of projects require an executive team to look 10 years down the line to see how worth it this sustainable solution is for them. This presents another problem, according to Tom Sykes, principal, SOSH Architects, the average life span of a property president is less than two years. How can we expect for this to work out, and for any executive team to take the plunge? The answer is pretty simple, but one you need to look for.
I read recently that Coca-Cola just named its first chief sustainability officer, and it is just following the trend that Fortune companies have been hiring chief sustainability officers for the past few years with amazing operational success stories. If GE was able to open up new business units and increase market share for their Eco-Imagination line of products, all while cutting back on inefficiencies in energy, why is our industry having such a difficult time with these theories? When I asked Tom about this, his answer was simply, “They may not be aware of these things.” I think it’s about time that industry leaders start to move this up on their corporate radars. The ability to save 20 to 30 percent or more even before installing a renewable energy source to feed your properties’ power needs. After that, the possibilities are endless and will require lots of creativity and the ability to navigate through the myriad of sustainability consultants to find a good fit. The rewards are abundant for those who figure out how the new sustainable economy works.
If this seems daunting, that is why you and your organization need to get involved in the Sustainable Gaming Standard’s open comment period.. Give your input on how supply chains can be tightened, and sustainability metrics can be measured effectively. We need your help deciding how important recycling should be in the standard, and what the benchmarks should be to achieve maximum points.
The teams that learn how this standard will affect their own organization as well as other organizations that are interconnected the fastest will reap the greatest monetary rewards by staying one step ahead of everyone else. This standard will allow properties to purchase/lease machines, knowing that the same machines they and their players love, based on time at machine, player satisfaction and revenue earned/day, also will use 50 percent less energy than their predecessors. Operators will be able to do this with minimal or no increase in cost as a low-hanging fruit opportunity to lower casino gaming floor energy use by 10 percent or more.
I look forward to hearing your thoughts on sustainability within our industry. Please contact me at firstname.lastname@example.org I look forward to hearing your thoughts. SM
Eric Hansel is president of EGM Green, the manufacturer of the world’s first eco-friendly casino tables. Hansel is also leading a team that is coming up with a slot machine sustainability standard. This standard will pull 25 percent of the energy used to power slot machines out in the first year. EGM Green also does lighting retrofits, energy audits, and custom carbon off-set calculation and implementation. The company also offers expertise in alternative energy from solar to wind and geothermal. For more information, contact Hansel at email@example.com or (201) 927-3526.