Charles Hiten is chief executive, Merkur Gaming Americas, a position he has held since 2015. The South African-born Hiten was educated in Australia and his gaming career has taken him from Sun International’s home base to Europe, South America and now south Florida, where he oversees the Gauselmann Group’s North and Latin America business.
Casino Journal’s Executive Editor Charles Anderer recently spoke with Hiten, focusing on Merkur’s current and future strategy for the U.S., where their first, home-developed games are hitting the market this year. Below are some excerpts from this conversation.
Your background is fascinating and eclectic, both personally and professionally. Could you give us some perspective about how your experience informs you in your current role?
HITEN: The real benefit is the awareness that it brings. Just because people speak the same language doesn’t mean they are the same. I’m someone who doesn’t really believe in the idea of homogeneous markets; I tend to focus on the idea of player types when we’re talking about game styles, and there is tremendous global overlap. Every country has different culture, language and sentiment, and there is a wide range of diversity among player types, but they’re not different in every country.
In terms of my industry experience, I started on the non-gaming side and focused on operations and I have tried to maintain an operational perspective. My first real exposure to the casino side of things was at Sun City as a food-and-beverage systems specialist. Getting exposure to casino operations and systems early on has helped me. The things I did with audio engineering gave me an understanding of the tremendous role that sound can play in the game experience. The time I spent writing UNIX code makes me understand the core of the technology that the developers work with so we can have coherent conversations.
If I come to where we are today as a slot provider, we have two objectives that roll into one. A customer is not the user; the operator is our customer and the player is the user. So you have to find a balance between two different sets of demands that you have to meet. It’s threading the needle and you can’t do one without the other. That’s the fun part for me and where that diverse experience comes into play.
Merkur is owned by Gauselmann Group, which made a pretty big splash in the U.S. with Atronic a number of years ago. How has Gauselmann’s history in the U.S. market impacted Merkur Americas?
HITEN: It’s a really important part of our history. Merkur Gaming obviously doesn’t exist without them. The power of the Gauselmann Group gives people the knowledge that we will be around tomorrow. We have a luxury that is afforded to us by the vision of the owner, Paul Gauselmann, and by the success of the group, to approach the U.S. as a start-up with the strength behind us to guarantee our long-term viability. This is a family-owned, entrepreneurial company that is very well-known in Europe as both an operator of small and large casinos and a manufacturer. It started, grew up and is still today in what you might describe as small-town Germany. They didn’t go to the big city once they made it, and they’re not in the box-dropping business.
As for the Atronic portion of their history, which was the international part of the group back in the 1990s, Atronic remains to this day the most successful European entrant into the U.S. market. You couldn’t walk into a casino anywhere in America without seeing two or three of their big-name, themed-jackpot installations. They were really on the leading edge of taking jackpot progressive product from a product line and making it the majority of the business. It’s our intention to replicate that success.
Today, Merkur Gaming in the U.S. represents a fresh start, and while there is a proud reference to Atronic’s history, it recognizes today’s market, which is both more globalized and has a need for a more local approach.
One of the things we hear a lot from slot manufacturers these days is the need to localize game content and get away from a one-size-fits-all approach when addressing global markets. Early on, Merkur addressed that point with the establishment of Sunshine Games, your game development studio in Las Vegas. What can you tell us about their track record and their ability to leverage the parent company’s global strengths thus far?
HITEN: We started this process with Merkur Gaming by saying we are not merely going to localize product, we’re going to locally make product, as the first step rather than as a secondary longer-term step. This takes more time, but we’re doing it because we know how hard it is to localize product. We’re not going to try and merely localize European product for the U.S.; we’re going to make product for the U.S. in the U.S., made by people with experience of doing that.
With Sunshine Games, we have been able to create a new center of innovation. By disconnecting the game development process from what we had before it created the freedom for a different approach, which was the intention. The Sunshine team have managed to deliver at a much faster rate than what I had originally expected. My expectation is that we will have a number of games coming to market over the next two quarters and the pipeline that is behind that is fantastic in terms of its depth. Their diversity of thinking and the depth of talent that we have found has been great. It has reaffirmed for us that Las Vegas was the right choice to locate Sunshine.
In the U.S., you have a steep hill to climb competitively speaking, but the American market has shown itself to be supportive of new entrants even if floor space is hard to come by. What has been your reception here?
HITEN: We have had such a great reception. There is the obvious getting-to-know-you process, but the response to our story and our strategy has been phenomenal. People are asking how they can help us and give us the feedback we need because they find it so refreshing that we aren’t here to tell them what they need, we’re here to ask them what they think their players would like. The response has been gratifying; the operators are our partners and they want us to succeed because we have the same goal: satisfy the player.
American slot managers are pretty well-known for living by the win-per-unit per-day metric which can make market share hard to come by for new manufacturers. When you look at Merkur’s cabinets and game mix, what are some examples you would point to as assets that will help you thrive in this market?
HITEN: The cashbox is king; it is the ultimate arbiter of what we do. That’s how we know if the players like our games. As an operator ourselves, we understand the business side of casinos. They live and survive based on great player experiences. The objective isn’t how many machines do we have on the floor and for how long, it’s how well those machines do. Also, building relationships and trust will hopefully extend our opportunities for when we do get it wrong. Not every game will be successful, that’s just a simple fact of life.
One of our first games is Taco Tuesday, and there has been such a great response around the U.S. to that game title. As a foreigner trying to become local, I’m only beginning to understand how ubiquitous Taco Tuesday is here in the U.S.; what a great title for the guys to come up with. But the important thing, both for me and for operators, is to know that there is a depth to this line-up and that development is going to keep on coming.
On the cabinet side, cabinet design and player session length is hugely important in terms of generating revenue. One of the big differences between Europe and the U.S. is upright cabinets are much more in demand here than slant tops. Slant tops have longer player sessions, but uprights require less space. So we have increased our slant top cabinet design side to make sure we can meet future demand for uprights. Our EvoStar cabinet combines those elements. It’s a new cabinet in our range and is just now being rolled out internationally. It’s still in the certification process in the U.S., which will be done by the end of March. We’ve had great responses to the way our cabinets look and we have to build on that as we understand how the players feel about them.
As a slot market, America is segmented along tribal and commercial lines and it also has a growing VLT segment. What are your strategic priorities here in terms of market emphasis?
HITEN: We’re starting in South Florida with Class III product only. The Seminole Tribe is here with several locations and there are also a fair number of pari-mutuel casinos here, so we’re targeting tribal and commercial markets. We want to find success locally and close to home here in Florida, and then we will grow from there.
What can the U.S. expect to see from your division this year and next?
HITEN: We will be at the NIGA show in Las Vegas. We hope to give people there a peek into what we’ve been doing at Sunshine and get real feedback from the people who count. They will get a great view at some of the new games that are coming down the pike. Longer term, once we’ve launched in South Florida, we already have some requests from specific casinos in California to go there next, based on what they have seen from us so far, so that will be very big on our radar screen.
That said, we will be careful not to get ahead of ourselves just because we’ve been taking the right steps. I want market confirmation rather than the arrogance of fore-knowledge. We have plans in place that will allow us to expand very rapidly, but this first phase is critical for us.