It’s now eight years since Global Gaming Business first published our annual 25 People to Watch. While reviewing previous honorees (and we don’t repeat selections because once you start watching, you can’t look away), the list includes many people who today run the industry. From the first year in January 2003, when our cover featured the Palms’ George Maloof, to last year’s edition, when Wynn and Encore Las Vegas President Andrew Pascal graced the first page, being included as one of the 25 makes their careers something special.
And the success of the nominees over the years makes it apparent that this choice is special. This year is no different. As we winnow down the nominees during the selection process, we talk to our editorial advisory board and other experts in and out of the industry to determine who will make the biggest impact in every area of the gaming industry in the coming year and far into the future. Starting with Francis Liu at Galaxy Entertainment, this year’s group will undoubtedly make a huge impact on where gaming is going and how it will be perceived for many years to come.
Going for the Galaxy
Deputy Chairman, Galaxy Entertainment Group
There are some giants of gaming involved in the industry in Macau. From Steve Wynn to Sheldon Adelson to the granddaddy of them all, Stanley Ho, the operators in Macau are often larger than life. The mainstream media likes to play up the rivalries while sometimes forgetting that it takes more than ego to create a successful operation anywhere in the world, even more so in Macau.
One of the most successful operations in Macau has been crafted by a company whose victory in the concession bidding process was something of a surprise: Galaxy Entertainment Group.
Francis Liu, the deputy chairman of Galaxy, says the success of the bid was no surprise to him.
“In bidding for the Macau gaming concession, our long history of construction and hospitality was valued by the government,” he explains. “Further, Galaxy committed to invest HK$8.8 billion (US$1.1 billion) into Macau upon granting of the concession. The HK$8.8 billion commitment from Galaxy was more than twice the amount of the next-highest financial commitment.”
Liu also references the company’s long history in hospitality and construction, as well as a strategy that has paid dividends.
“Our entry strategy into the market focused on partnering with some local Macau business people who converted their office buildings into hotels and VIP casinos,” says Liu. “We called this strategy City Clubs, which allowed us to build a management team, to recruit and train staff, and to develop relationships with the VIP promoters and players. The attractiveness of the City Clubs model was that it enabled Galaxy to enter the market virtually risk-free, as our partners provided the investment capital.”
Opening the City Clubs prior to jumping into development of a full-scale casino resort allowed Galaxy to understand the complicated market. By reaching deals with the all-important VIP operators and appreciating the players’ needs and desires, Galaxy was able to effectively design its first casino resort, StarWorld, located in the peninsula area of Macau.
“Galaxy’s approach is to develop unique and differentiated properties; we specifically chose not to build a replica of a Las Vegas casino,” says Liu. “Asian taste and preferences are different than Western taste and preferences. The architectural appearance and service standards of StarWorld are unique to StarWorld. StarWorld has won numerous awards throughout its short life of three years, including the Five Star Diamond Award from the American Academy of Hospitality Sciences, Best Casino Interior Design from International Gaming Awards and Top Ten New Symbolic Architecture Hotels at 2009 World Hotel Continental Diamond Award.
“StarWorld is a VIP-centric property, and for many VIP customers, StarWorld is the property of choice.”
The impressive StarWorld competes at a similar level with many of the more well-known properties, including MGM Grand Macau and Altira Macau (formerly the Crown Casino).
Galaxy also profited as one of the original three concessionaires by selling a sub-concession to Las Vegas Sands. At the same time, Galaxy asked for and received the right to purchase property in the Cotai area, which the government was reclaiming for large casino sites, now home to the Sands Cotai Strip resorts and Melco Crown’s City of Dreams. Now, the site sold to Liu and his team is home to Galaxy Macau, which should be completed late this year.
“At that time, the site did not actually exist,” Lui says of the time when the initial request was made. “Cotai was just a concept; the area where Cotai is now located was several feet under water and after a great deal of construction work, it was reclaimed from the ocean.
“At Galaxy Macau, we are building a truly Asian-centric resort,” he says. “Our hotels include our own Galaxy Hotel, Japan’s leading hotel operator, Okura, and the ultra-luxury, world-renowned Banyan Tree. Galaxy Macau will have the largest range and selection of Asian food available in Macau. The architecture of Galaxy Macau is unique and striking. Any visitor to Cotai will be automatically drawn to Galaxy Macau. Additionally, there is an oasis on the podium of the resort with multiple swimming pools including the world’s largest sky wave pool and beach, consisting of 350 tons of white sand.”
Even without the attention of the mainstream media, Galaxy has become something of a darling for gaming analysts worldwide. Lui says they have earned this acclaim by concentrating on profitable operations, not headlines in the world’s newspapers, magazines and websites.
“Our financial performance and results speak for themselves,” he says. “StarWorld just reported five consecutive quarters of revenue and EBITDA growth, and these have been achieved in a most difficult economic environment combined with swine flu and visa restrictions. Many analysts now acknowledge that Galaxy’s strategy is correct and we have the management team in place to deliver upon that strategy. Additionally, many analysts now acknowledge that Galaxy’s decision to slow the development of Galaxy Macau and to align the opening of the project with improving market conditions was the correct decision. Also, analysts recognize our prudent financial management through the debt buyback program, where we purchased $265 million of debt at approximately 50 cents on the dollar.”
Now, Galaxy has resumed construction on the Cotai Strip property. Increased gaming revenue played a part in that decision, but confidence that the Chinese government is looking out for Macau was more important, according to Liu.
“The central government in China is fully committed to supporting Macau and wants to ensure long-term managed and sustainable growth,” he says. “Resorts like Galaxy Macau are designed to grow Macau’s economy outside of traditional gaming by offering a true resort and holiday experience to all people in Asia, not just China, and to create thousands of new job opportunities.”
Galaxy has made it a corporate goal to invest in the Macau community to grow and enhance the quality of life of all Macanese, says Liu.
“One of Galaxy’s most valuable assets is our loyal workforce,” he says. “A key driver of Galaxy’s success is the exceptional service that we provide to our guests. In return, Galaxy will continue to invest in the Macau community.”
As such, Galaxy isn’t looking beyond Macau at this point.
“Galaxy operates in Macau,” says Liu, “the world’s largest and fastest-growing gaming region. We have a deep understanding of this market and we have the largest contiguous piece of land in Macau with a casino permit. Today, we are committing 100 percent of our energy, effort and resources to Macau. While we have looked at other jurisdictions, no other place in the world can equal Macau now or at any time in the future.”
Executive Vice President, North American Sales and Marketing, International Game Technology
Eric Tom’s philosophy is to apply what he does well to his new job, but only with the help of those already familiar with the task at hand.
In his new job as executive vice president for North American sales and marketing for leading slot manufacturer International Game Technology, what he does well is to apply the business models he learned in a long career in sales and marketing for technology-based companies to the task of taking IGT to the “next level” in slot sales, as the company’s new slogan goes.
Tom was brought in last summer to head up sales and marketing for IGT after the departure of longtime sales and marketing VP Ed Rogich. His background held executive-level sales and marketing positions with large IT technology companies in the U.S., Europe and Asia-most recently as vice president for Force10 Networks, a $200 million network equipment manufacturer.
Tom says his learning curve in the gaming industry was not great, because he is able to apply business models with which he already is familiar. “My background in IT systems has helped,” he says. “Having been in a business that sold Ethernet systems, that business and distribution model is very similar to that of slot machines.”
Applying these methods to slot sales involved working with those already at the company, says Tom. “You never start with a clean slate,” he says. “You always take what you’ve got, and fill in the gaps with the right strategy. (Senior Vice President of North America Sales) Ron Rivera is still here, and continues to run sales in North America. People like Ron are critical, because he’s been in the industry so long. I need people around like that, and I need to empower them to do the right thing-and to make sure I do the right thing.”
For 2010, that “right thing” will be to maximize the potential of a powerful new product library being launched, as well as new server-based applications to be gleaned from IGT’s system at CityCenter’s Aria casino.
Tom already has implemented tried and true business models to aid in that effort. To help customers with limited capital budgets buy new games, he has instituted what he calls “bundling.”
“If you can’t buy new, this allows you to buy into our new technology and get two new slot games for free,” he says. The other popular package for casinos involves participation games. “Operators can invest in a lot of new MegaJackpots games-Sex and the City, The Amazing Race-and it doesn’t cost the casino anything,” he says.
Tom also has altered the model of how IGT’s account reps interact with casino operators. “I’ve instituted a strategic account management program,” he explains. “The way the industry buys right now is at the casino level… Spending is still locally driven, so the sales force is set up locally.”
Tom’s new system is to have every account manager be responsible for IGT’s entire portfolio of games and systems. “Before, we had a MegaJackpots person, a video poker person, and so forth. Having one person responsible for the entire portfolio gives the customer a single point of contact. They don’t have to deal with several people.”
A third change in strategy is to have sales people serve as generalists, but with access to instant expert help in various product groups from others within IGT.
IGT’s showing in November at the G2E show signaled what is being considered a new era in IGT’s product manufacturing and delivery. Tom’s efforts in the coming year will bring that era to fruition.
Hand on the Controls
U.S. Senate Majority Leader
Watching the moves of the Senate majority leader is to be expected in the U.S. from every segment of the population and business community. After all, the majority leader wields power unlike almost any other in Congress, equaled perhaps only by the speaker of the House.
But for the commercial gaming industry, the ascension of Senator Harry Reid (D-Nevada) to the post was a godsend, because Reid has always supported the main industry in his home state. For tribal gaming interests and those who advocate for internet gambling, however, Reid isn’t necessarily a great friend.
And now that the Obama administration is in power, hailing from the same party as Reid, his influence has been vastly multiplied. While Reid was unable to speak about his views on gaming to Global Gaming Business because his office said he was concentrating his complete time on passage of the health-care initiative, there is reason to believe that Reid’s views on gaming will rule the day, no matter what segment of the industry is involved.
Sources close to the Obama administration told Global Gaming Business that when it comes to gaming, Reid’s views will take precedence over anyone else in Congress or the administration.
So for those favoring the relaxation of the ban on internet gaming, Reid’s position has been relatively clear. He believes internet gambling is a threat to Nevada’s casino industry, so he opposes any legalization of online wagering. But Reid’s corporate constituents are split on the measure. Harrah’s Entertainment last month opened its first online casino, open to non-U.S. players. MGM Mirage has dabbled in the online sector for years. But other casino companies either have no opinion either way or actively oppose it. Steve Wynn, chairman of Wynn Resorts, wants no part of online betting. And although Wynn opposes Reid’s health-care bill, he is still a big supporter of the majority leader.
Online wagering supporters have another hope, however. Reid is up for re-election in 2010 and polling has shown him to be trailing behind some marginal potential opponents in recent months, since conservative Nevada doesn’t always favor Reid’s liberal views.
So whatever happens in the election, Reid’s views will prevail in the online space for at least the next year. His opposition to tribal gaming has diminished, as many of his constituents are players in that market segment and court decisions make it easier to open tribal casinos in states surrounding Nevada.
Banking on the Brand
L. Carolina Navarro
President & COO, Beneficial Holdings
Latin America is one of the fastest-growing regions of the gaming industry. With legalization and normalization occurring from Mexico to Chile, casinos are a good bet to become a great investment in years to come. While some notable gaming companies are involved, sometimes a smaller, newer company can have an important impact.
Beneficial Holdings began its move into Central American gaming last July, with the appointment of L. Carolina Navarro of Managua, Nicaragua, as president and COO. Within weeks of her hiring, the company had announced its first acquisition of an existing gaming property, in Nicaragua, by wholly owned subsidiary Grupo Beneficial.
Navarro said in a press release at that time, “This is just the very beginning of our business plan. We are presently studying and pursuing additional negotiations in Central America with the ultimate goal of joining the ranks of casino companies such as Thunderbird Resorts, Princess Casinos International and Star City Casinos, which successfully operate in Managua.”
Within months, the group had launched (and ultimately abandoned) a takeover bid for Thunderbird Resorts, contracted to take over seven additional Nicaraguan facilities, and initiated the development of an online gaming brand. Today, only half a year into her role at the helm, Carolina Navarro claims to be just getting started.
“In 2009, we focused on setting up favorable financing for our future acquisitions and studying the gaming markets for new ventures,” Navarro says. “We learned that there needs to be a new approach for larger gaming operations in Central America that involve more comfortable and fun facilities where people can relax. We’ve figured out that casinos have become lackluster and boring.”
Navarro says 2010 will be a year of transition for her company.
“We intend to follow an aggressive growth strategy in Central America that involves acquiring or developing new small and medium locations and implementing more interactive and fun games,” she says. “We also hope to form joint ventures with companies in the field that are looking to expand their customer base and change their strategies to obtain a new generation of customers.”
Specifically, she foresees that by the second quarter, every customer who walks into a facility associated with Beneficial will experience a casino with a more carnival-like structure-experiences differentiated from existing market operations by their updated, modern gaming machines and high payouts, customer service, and overall atmosphere. Additionally, all gamers will walk away from their land-based experience with a CD containing Beneficial’s branded online casino software, licensed in Costa Rica.
Navarro says the timing to pursue such aggressive growth could not be more ideal.
“The general economic uncertainty and drop in tourism created risk in the gaming community; however, with new ideas and the ability to acquire locations at a less inflated cost, it is time to aggressively invest in creating a new multi-country gaming network in the developing economies,” she says.
Vice President-International, Bally Technologies
Slot and system manufacturer Bally Technologies has navigated the rough economic waters better than many suppliers, and there’s a simple reason:
The company never stopped moving.
The past two recessionary years have seen Bally create new profits through an efficient move outward to new international markets-a low-cost expansion effort that established the company with new sales in parts of Central Europe, Eastern Europe, Africa, and parts of Asia where the company had been absent for years. Additionally, the company entered new markets in South America, Mexico and other areas ripe for expansion.
John Connelly, vice president-international for Bally, calls the strategy “establishing beachheads.” “I’m a strong believer in creating beachheads, establishing your products and moving outward,” he says. “We create an infrastructure, supply chain, support, and expand in a strategic fashion.”
It may sound like the Allies moving outward from Normandy during World War II, but this invasion is a lot less costly. “It’s important you expand within your means and in relation to the market demand,” Connelly says. “It’s critical to do so in a controlled fashion while utilizing existing infrastructure. This enables us to expand in parallel into existing markets such as Central and Eastern Europe as well as into new markets such as Brazil.”
Brazil is only one of many new markets on which Connelly will focus this year. Over the next year, hot spots for Bally expansion internationally will include Italy-“a key focal point for our company,” says Connelly-and Mexico, which is currently migrating from Class II to Class III gaming.
Southeast Asia is the other new hot spot for Bally. “Macau is definitely a beachhead,” Connelly says. “Bally has had an Asia-Pacific office in Macau for more than four years, and from here progressed into Singapore and soon, to Australia.
A “local” emphasis is a fundamental reason why Bally can penetrate quickly into these new markets and maximize the opportunities.
“When the company has made a strategic decision to expand internationally, our philosophy has always been to use a lean management style,” says Connelly. “For example, in South Africa, we opened a cost-efficient office and established infrastructure during the past six months, resulting in a 20 percent ship share. In Mexico, we established the same philosophy and are seeing similar results. As we continue to expand into markets throughout the world, to truly become global, you have to be local.”
And to move forward, one beachhead at a time.
Eye of the Storm
Partner, Global/Corporate, Milbank, Tweed, Hadley & McCloy LLP
One of the big gaming stories to come out of this economy is the large, highly leveraged operator looking for ways to weather the storm. CEOs, CFOs and COOs are involved in finding the best ways to relieve debt, restructure mortgages, and avoid a fire-sale of equity in the company.
Out on the front lines of these efforts are gaming attorneys like Ken Baronsky.
Baronsky, a partner in the law firm Milbank, Tweed, Hadley & McCloy LLP, has been working for gaming operators since around 1990, when gaming was just beginning to expand into riverboat and Native American markets. Beginning in Mississippi and the Native American markets, he branched out to represent operators in mergers, acquisitions and financial matters such as debt offerings and stock deals.
Since then, his clients have included some of the top operators in the business, from Harrah’s and Las Vegas Sands in the West to Tropicana Entertainment’s Bill Yung and Trump bondholders in the East.
Baronsky represented Las Vegas Sands CEO Sheldon Adelson in the two financing deals with the Adelson family late last year that pumped $1 billion of Adelson’s money into the company in an equity purchase, and raised $1.5 billion from other sources to essentially rescue LVS’ financial position. “Since then, the company has clearly improved from a market capitalization standpoint,” Baronsky says, noting that strong results from LVS operations in Macau have been one of the company’s saviors.
Current work includes representing Harrah’s investors as that operator’s financial picture stabilizes; an evolving relationship with Greektown casino in Detroit; and perhaps the biggest, the bankruptcy negotiations of longtime client Station Casinos.
Baronsky has numbered Station among his most prominent clients for nearly 20 years. He was involved in taking the company public in 1993, during negotiations with the Fertitta brothers to take the company private in 2007, and most recently, when the company filed for Chapter 11 bankruptcy protection in late July.
“Station was uniquely hard-hit by the recession,” Baronsky says. “They had just completed the going-private transaction at the end of 2007, taking on a lot of leverage, and a year later, the economy-particularly the local economy in Las Vegas, where they operate-collapsed.” He says bankruptcy protection affords the best opportunity for future health of the company. “The advantage is that through the bankruptcy process, there are timelines and a finite path that leads to an outcome. At the end of this, we’re hoping for an outcome all constituencies feel good about.”
It’s just one in a number of firefighting duties Baronsky’s caseload represents. He says a key factor to remember in this effort is to work with regulators. “If there’s one thing you learn in this business, it’s that you want to keep the regulators happy,” he says-a principle which client Tropicana Entertainment learned the hard way in Atlantic City. (Baronsky represented Yung in his acquisition of Aztar to create Tropicana Entertainment, but did not represent the firm in its subsequent bankruptcy struggles.)
The next year will no doubt bring new fires to extinguish, and new opportunities as the industry goes through another growth spurt. “There’s so much more gaming everywhere in the country, with proliferation of Indian gaming and other states legalizing gaming for the first time,” Baronsky says. “This really is an unprecedented market, with a lot of opportunities, a lot of trouble situations like troubled Indian casinos. You now have creditors dealing with Indian tribes in an unprecedented situation: How do you work through a bankruptcy process? Do you work through a bankruptcy process? Will tribes use sovereignty as leverage? This is evolving every day.”
Short story: Baronsky will have no shortage of work this year.
Managing Principal, The Partner House
When you work for Steve Wynn for any amount of time, you gain experiences and knowledge that will often affect the rest of your career. That certainly is the case with Barry Shier.
After starting his career at New York City’s Waldorf-Astoria, Shier was tapped by Wynn to become vice president of hotel operations at the Golden Nugget in Las Vegas in 1984. He later was promoted to president of the property and then put in charge of all the company’s marketing efforts in Las Vegas. He also was involved in the design and construction of the Mirage, which opened in 1989, and was in charge of building Beau Rivage in Biloxi, Mississippi, in the late 1990s.
After leaving Mirage Resorts when it was purchased by MGM in 2000, Shier flew below the radar, working on several projects. In 2009, he re-emerged as the managing principal in the Partner House. He believes the economic decline suffered by the gaming industry over the past two years is an opportunity for his company to prosper.
“This is all about financial institutions and individual operators coming to the point where they have a better use for capital than leaving it in certain assets,” he says. “Some refer to it as a ‘perfect storm,’ but it’s a once-in-a-lifetime opportunity that we need to grab.”
Whether the opportunities are management takeovers, consulting or outright purchases, the Partner House advises the stakeholders-lenders, investors, operators or owners.
“We help them understand the strengths and weaknesses of the property,” says Shier. “Multiples are tough to peg today, and where the EBITDA will ultimately fall. It’s very complex, especially when you consider the past performance, the market conditions, the link to corporate structures, if any, and many other factors.”
Shier says the complexity of today’s casino operations combined with the uncertainty of the economic climate makes it imperative to get good advice when considering investing in or selling a property.
“There are so many relationships that must be considered when you’re taking over a property,” he says.
“The transactions all have a shared interest. In many cases, the individuals who are selling the asset are not leaving the marketplace. They remain there as your competitor. You must understand the nature of procurement, travel, loyalty clubs and whether you have database protection or not. We understand the business, so if we are going to assess and do the due diligence to create the actual number, you can be certain we’re going to protect the assets necessary to operate efficiently and effectively.”
In Las Vegas, where Shier is based and hopes to find that golden opportunity, he says the focus of growth should be the international market.
“There are 25 million people who travel to the United States from foreign countries,” he says. “They arrive at various cities in the U.S. as points of entry. Only 230,000 make Las Vegas their first stop-1 percent of our visitors. Visa restrictions and other issues have something to do with that, but we can do better here. When you count other international visitors who connect from other U.S. cities before coming to Las Vegas, our share is 8 percent. I would suggest our share should be more like 20 percent. That would give Las Vegas a more balanced market, but more importantly the opportunity to ramp up the business when the dollar is weak, and cut it back when the dollar is strong. While it’s fine having a larger presence internationally, we need to figure out how to pick off some of the 25 million who are traveling to the U.S. for one reason or another.”
For the Partner House, Shier says his experience, along with that of his partners, Don Kuhl and Steve Jarvis, allows clients to trust the results they will get.
“We provide complete accountability,” he says. “We make sure the EBITDAs we supply aren’t just used to value, but also crucial to the budget process. We not only can project, we can deliver future operating performance.”
Right Woman, Right Time
Chairwoman, Mohegan Tribe
As recently elected chairwoman of the Mohegan Tribe of Connecticut-the first woman in tribal history to hold the post-Lynn Malerba will be called upon to steer the nation through rocky shoals. And the responsibilities that rest on her shoulders will resound far into the future.
“We are 13 generations from Chief Uncas (1635-83), and we believe we are responsible for the next 13 generations,” says Malerba, who describes herself as “proud and humble” to be elevated from council vice chairman to the top post, which is essentially CEO of the tribe.
“I’m gratified our membership feels they’re ready for a female leader,” says Malerba. “I give all honor to the women who preceded me.”
Among them: her mother Loretta Roberge, who was instrumental in helping the tribe achieve federal recognition in 1994; her great-aunt Loretta Schultz, a prominent tribal councilor; medicine women Gladys Tantaquidgeon and Emma Baker; and Fidelia Fielding, also known as Flying Bird, the last native speaker and preserver of the Mohegan Pequot language.
Malerba’s challenges will be vastly different from those faced by her forebears. In the mid-1980s, Mohegan women had to pool their limited funds to pay the bill for the tribe’s first phone, which was kept locked in a closet at their church. Today, Malerba leads the government of a tribe with a multibillion-dollar gaming empire employing some 8,000 people at Connecticut’s Mohegan Sun resort alone.
Adding to the pressure, that empire, once seemingly inviolate, has been hard-hit by the recession. In fourth-quarter 2009, the Mohegan Tribal Gaming Authority reported revenue declines of 12 percent compared to 2008 (declines in Connecticut were balanced by rising numbers at Mohegan Sun at Pocono Downs in Pennsylvania).
Malerba is unfazed.
“During our tribal history, we have watched our burial grounds dug up and the headstones made into foundations for homes,” she says. “We saw 20,000 acres of territory reduced to a half-acre. While this is a challenge, we have faced far worse, and every time we took it as an opportunity to assess where we are and decide how we are going forward.”
In her new role, the former hospital manager and executive director of the tribe’s health and human services department will wear “three hats:” administrating tribal programs and services; interacting with local, state and federal governments as head of a sovereign nation; and helping to oversee operations for Mohegan casinos in Connecticut, Pennsylvania and elsewhere.
“It’s common knowledge that we have a land option in western Pennsylvania and selected a site in Palmer, Massachusetts,” Malerba says. “We are hopeful that if gaming legislation is passed in Massachusetts, that state will look on us favorably and see us as a good business partner, which we’ve been in Connecticut.”
And when it comes to the tribe’s growth, she prefers to see the recession as a speed bump, not a stop sign.
“We are still an economic engine in Connecticut,” she says. “Our thousands of employees are still shopping and stimulating their own local economies. We support 2,000 other businesses through the goods and services we purchase as a tribe. We have been responsible to our stakeholders, our employees, and the local and state economy as well as our bondholders. And we will be responsible to the next generation, and the generation after that, over 13 generations.”
Executive Vice President, Potawatomi Business Development Corporation
Kip Ritchie’s résumé is an impressive one, a litany of high-powered positions fueled by ambition and a commitment to his community. Ritchie, executive vice president of the Wisconsin-based Potawatomi Business Development Corporation, is a member of the Forest County Potawatomi Tribe and has been with the PBDC since its inception in 2002. Throughout his time with the tribal development company, first as a board member and then as senior vice president, Ritchie has aided his tribe in its efforts to expand its gaming business as well as diversify its economic base.
The Potawatomi Bingo Casino in Milwaukee, Wisconsin, is the central focus of the Potawatomi Business Development Corporation, and Ritchie has been instrumental in its success. Before joining the PBDC, he served as director of marketing at the tribe’s casino from 1997 to 2004, and then rose through the ranks to become the property’s assistant general manager.
When Ritchie began his tenure at the Potawatomi Bingo Casino, the property was a mere 40,000 square feet with a 2,500-seat bingo hall. Today, the casino is 750,000 square feet of wall-to-wall entertainment, with 3,100 slot machines, 88 table games, off-track betting, four restaurants and an award-winning theater. The casino now draws more than 4.5 million visitors annually.
Like the rest of the American gaming industry, the Potawatomi Bingo Casino has been affected by the recession. But Ritchie says the economic downturn has strengthened both the casino and the tribe as a whole.
“The recession forced us to buckle down to reflect the economy and to take a good, hard look at our costs, both at the casino and the PBDC,” Ritchie says. “We managed to streamline and focus our operation, and in doing so, made changes that are reflecting a 35 percent cost reduction. That is having a major impact on both our organization and the tribe.”
The PBDC has stepped up its efforts to diversify the tribe’s economy beyond gaming, which Ritchie acknowledges may not always be the thriving industry it has been in the past.
“We know that gaming is cyclical, and to assume it should be our only source of revenue would be foolish,” he says. “Years ago, the tribe recognized the need to diversify our investments, and we are committed to that expansion. In fact, I firmly believe it is the next chapter in Indian Country growth, development, self-sufficiency and self-reliance.”
As a leader in the Potawatomi Business Development Corporation, Ritchie will surely play a big role in the tribe’s next chapter. In 2010, Ritchie will continue to oversee the PBDC’s investment opportunities and joint ventures, as well as marketing, public relations, sales and networking efforts.
“We are excited about the future of PBDC and will continue to pursue our long-term goal of providing wealth and prosperity for the Forest County Potawatomi Tribe,” Ritchie says. “One way we hope to do this is through a more serious and aggressive investment in federal government contracting. And as always, we will continue to look for possible acquisition targets that can benefit from tribal ownership and inter-tribal partnerships.”
Man of Leisure
Axion Leisure Development
There are several multi-use, multi-faceted projects being considered and planned in Europe at the present time. Whether it’s in Spain, Ireland, Slovenia or Hungary, the projects may or may not come to fruition, and their success usually depends upon the respect and accomplishments of their backers.
“The manageability of a project is determined by the accuracy of the analysis performed during the initial definition phase,” says George Barbulescu. “That is when all the influencing factors must be determined. Otherwise, it will prove impossible to deliver a completed project within the agreed-upon time and budget constraints. Just as crucial is the motivation and the commitment of all parties involved.”
Barbulescu, founder and head of Axion Project Bureau and Axion Leisure Development, has come to these opinions in the course of managing large-scale construction and design projects, such as the renovation and expansion of Departure Lounge 1 at Amsterdam’s Schiphol Airport and works at various Dutch railway stations. His expertise is in assembling the best people for the tasks at hand and motivating and managing them to achieve the goals of a given project.
That same attention to pre-planning is now being exercised on Leisure Dome, Barbulescu’s biggest undertaking to date. This “uni-city” will hold an 8,000-square-meter casino, real-snow ski slope and ice rink, sub-tropical swim paradise, golf course, spa, hotel, convention and meeting space, retail shops, restaurants and bars and a variety of entertainment facilities, all under a single roof or within several interconnected structures. Total area including 150,000 square meters of outdoor parking: 400,000 square meters, about 4.3 million square feet.
Born in Romania but living and working in the Netherlands, Barbulescu returns to his roots with his Leisure Dome project.
“We have found very good, strong Romanian partners,” says Barbulescu. “An executive at one of the largest international banks in Romania said to me, ‘Wow, finally we’re going to have a destination, some place to go to have fun.'”
Barbulescu believes Leisure Dome and its sports-and-entertainment mix will be able to attract and handle between 6 million and 22 million visitors a year. He points to Disneyland Paris, which he says handled 16 million visitors last year.
And then there is the casino.
“In Eastern Europe, for sure in Romania, people like to spend money, to have fun and to gamble,” he says.“The casino is there to satisfy a demand.”
While others may be stuck in recession mode, Barbulescu is confident in the future-and in Leisure Dome, which he expects to be in use for 50 years.
“In the course of 50 years,” says Barbulescu, “we are going to experience two or three crises like the one we have now. But we have to think long-term. As human beings, we work hard and we need leisure to decompress, to have fun-in good conditions and for a good price.”
Executive Vice President, Gaming, Marina Bay Sands
Andrew MacDonald was chosen as one of Global Gaming Business’ People to Watch because of his work as an investment banker with Australia’s Macquarie Capital Advisors in New York, which is building an investment banking division. MacDonald headed up the bank’s gaming division.
But in the short time between the announcement and the interview, MacDonald was named the executive vice president of gaming for Marina Bay Sands, the Singapore integrated resort being developed by Las Vegas Sands.
“I’m really sad to be leaving Macquarie because we’ve had some great success and are just about ready to make some big moves to compete with the Goldmans and the UBSs of the world,” he says. “But I’m leaving the business in capable hands to take advantage of a once-in-a-lifetime opportunity.”
MacDonald knows about pouncing on opportunities. His talents have taken him in 30 years from a dealer at Hobart, Australia’s Wrest Point casino, to leadership positions at organizations such as Crown Casino, SkyCity Casinos, the Queensland Casino Control Division and Genting in Malaysia.
During his time moving about Australia, he founded an educational website called Urbino.net, one of the first sites to provide literate information on the gaming industry.
“When I became a gaming analyst at the Adelaide casino in 1990, I found there was a real dearth of information on gaming,” he explains. “I was looking for information on dead-chip programs, incentive programs, and even such simple things as the mathematics that makes all this work. There wasn’t much out there. And most of it was written for players, not management. The list of people who have contributed over time and the information they provided has been exceptional. It’s a true resource designed to help people understand how casinos work.”
MacDonald is eager to move to Singapore to get started. He admires the way the government has gone about setting up a gaming industry.
“In the four or five years since the process started,” he says, “the Singaporeans have gone about it in a very methodical, very orderly way. They’ve come up with a model for integrated resorts which is now the benchmark for other countries to copy.”
At Marina Bay Sands, MacDonald will put his experience in gaming operations to work, along with colleagues Steve Karoul and Ken Davie.
“Working with a quality operating team like Steve, Ken and others will make it a lot easier to make the transition,” he says. “I’m looking forward to sitting down with them and talking through all the issues.”
One of the major issues facing MacDonald will be how the Singapore government sets the VIP model. The two options are the U.S. model, where the casino pays a junket operator a set fee and a possible percentage of the players’ losses, or the Macau model, where the casino pays the junket operator a percentage of the players’ buy-in. While the final decision had not been made at press time, MacDonald expects a more U.S.-style model.
“The government did a thorough study of the VIP market, and it is likely that their decision will be based on the best outcomes for the Singapore market,” he says. “It would be unlikely that we’ll be working with the traditional Macau model, so I prefer that we would deal directly with high-net-worth individuals, providing the regulatory system allows appropriate levels of credit or check-cashing facilities.”
In the end, MacDonald is pleased to be back in the market he knows so well.
“Asia is the place to be right now,” he says. “The potential is enormous and anyone who wants to be in the center of the action, wants to be here.”
Endowed Chair, Sycuan Gaming Institute, San Diego State University
If a little bit of education goes a long way, Kate Spilde is going to the moon and back-multiple times. After graduating from the University of California Santa Cruz with a Ph.D in anthropology (after previous degrees at the University of Hawaii and George Washington University), Spilde immediately joined the National Gambling Impact Study Commission, which was just ramping up in Washington, D.C.
“It really was being in the right place at the right time,” she says. “I had just done my thesis on tribal government gaming and they were looking for someone to lead their research into tribal gaming.”
The groundbreaking federal study looked at gaming in a way it had never been studied before, and Spilde was charged with reviewing the true mystery, tribal gaming.
“The tribes themselves needed to be in control of the story,” she says. “They knew how the dynamics were changing and how poverty and the lack of access to education or infrastructure was impacting them. When the gaming was brought in, all the power dynamics among the non-Indian and Indian communities changed. The outcomes were very confusing. Most of them were beneficial, but it was very difficult to quantify what those benefits were and how they were delivered. And of course, it was different for every tribe and every state.”
And though it was a completely new field, Spilde knew she was doing important work.
“I believe that I tried to help the tribes by making it clear about the hurdles they encounter in Indian Country when you consider tribal governments and their relationship with the federal, state and local governments,” Spilde says, “and how the policies and the programs of the federal government impact the tribes at all levels. I believe it made companies that wanted to do business with tribes-banks, lenders, operators, management companies, etc.-understand how complicated it was to work with tribes, and it wasn’t always the tribes’ fault!”
After a favorable report by the NGISC, Spilde moved on to research for the National Indian GamingAssociation and then for the Harvard Project on American Indian Economic Development, where she produced an important study on the first 10 years (1990-2000) of Indian gaming economic development.
After a stint at the University of California Riverside, where she headed up an organization studying the impact of tribal gaming in California, she got her dream job. Funded by the Sycuan tribe, San Diego State University was setting up a degree program for tribal gaming, the first-and still the only one-of its kind.
Spilde says the tribe and the university were very forward-thinking in establishing the institute.
“While the market isn’t huge for something like this,” she says, “it’s important that at least one university recognizes the needs of this community.”
She says the institute will shed some light on the difference between tribal governments and civil governments.
“Tribes are families, too,” she says. “That sometimes is the thing that confuses outsiders the most. When we think about our own families, we can understand why they are not always rational, but when you think about tribes as governments, you need to bring the family component into it as well.”
Spilde is looking forward to issuing a follow-up to the Harvard report that will give a clear picture of the economic impact of the first 20 years of tribal gaming. But she must wait for U.S. government action first.
“We rely on the U.S. Census, so we’re very eager for the next one to come out,” she explains. “While we all acknowledge it is imperfect, it still is very thorough down to small track levels. This is a federal policy we are evaluating, and nobody wants to pay for it, so we’re excited to have an institute that will fund and evaluate the first 20 years of tribal gaming.”
At the same time, she plans to continue her focus on problem gambling in Indian Country.
“We look at the science and the research and translate it into responsible practices for tribal casinos,” she says. “And of course, we depend a lot on the incredible work the commercial casino industry has done with NCRG. But the tribes want to make this happen. There’s a little different dynamic here. Most tribal casinos are located smack in the middle of Indian land. They are really locals casinos, so the customers are neighbors, friends, family members. We want to make sure we don’t damage those relationships through gambling and provide the right kind of support to those troubled by gambling disorders.”
Managing Director, GLI Europe
In the past two years, Gaming Laboratories International has put added emphasis on the “International” part of its name. The effort has been helped along in no small measure by GLI Europe Managing Director Phillip Barow.
Barow joined GLI in 2007 after a two-year stint with the Los Angeles office of L.E.K. Consulting. At L.E.K., Barow learned to use in-depth data analysis to get to know a company and understand how to make crucial business decisions. The experience would come in handy at GLI, where Barow became involved with identifying industry trends that could be of interest to the company.
“I took the same data-driven analysis that I’d learned at L.E.K. and looked at the gaming industry from the GLI perspective, which is regulation, testing and technical consulting to regulators and manufacturers,” says Barow. “Aside from the trends that GLI would capture naturally-technology, communication, server-based gaming-the three main trends we saw all revolved around international markets.”
The team studying the situation saw that U.S. manufacturers were looking to get involved generally with expanding opportunities abroad. Australian manufacturers were looking at Macau and South America. And in Asia and Europe a lot of new manufacturers were also looking at South America, and in the case of European companies, Asia itself was looking interesting. The question became: Was GLI prepared to profit from its knowledge of these trends?
“Once we had identified those key trends, we realized that we have command of the technology, we know systems architecture and we have great relationships based in the U.S., but we didn’t have a global organization,” says Barow. “We had offices in Europe, Australia and South Africa, but they were regionally based operations without a lot of communication between them, and they didn’t utilize to the fullest extent the resources of GLI North America. So we had to rethink how we did our business in order to position ourselves for the growth trends we were anticipating.”
The solution was to develop a “customer-centric” organization, says Barow. GLI’s regionally based experts would be able to serve as liaisons between local regulators and GLI engineers and manufacturers around the world. In practice, that meant building a very international team.
“It didn’t happen overnight,” says Barow. “We focused on people who are multilingual, who had cultural sensitivities, people who are diverse. In our office in the Netherlands, out of 50 employees, almost 25 different nationalities are represented.”
Barow is the first to admit that GLI already had a lot in place internationally when he arrived on the scene. But his feel for what it takes to succeed on the international stage is atypical for most American businessmen.
“I think in terms of a customer-centric organization, and then making connections with people globally. Because I have a long working relationship with most of the people in the U.S., I can hear something from somebody who is saying ‘I’m having a problem with this.’ And it’s very easy for me to say, ‘Oh, you need to reach out to…'”
Working on Island Time
Prime Minister of Jamaica
Jamaican Prime Minister Bruce Golding is pro-casino gaming-but with a sizable catch.
Golding told potential investors back in June 2009, “Before you can get a license, you have to give us a bankable, guaranteed commitment that you are going to build new hotels, with not less than 2,000 rooms and an investment of not less than $1.5 billion.”
He said, “We want hotel rooms, we want employment, we want to be sure that when you get a license you are going to use that license to bring in thousands more visitors to Jamaica.”
The Jamaica Labor Party leader’s ascension to prime minister in 2007 marked the end of a series of government heads strongly opposed to the establishment of modern casino gaming on the island.
Casinos were rejected in the 1980s by then-Prime Minister Edward Seaga. That policy was continued through the 1990s and up to 2006 by Jamaican People’s National Party leader Percival Noel James “P.J.” Patterson, the nation’s longest-serving prime minister to date. According to a 2007 editorial in the Jamaica Gleaner, Patterson’s opposition to casinos supposedly was based on a pledge he had made to his mother. Succeeding Patterson was the next PNP leader, Portia Simpson Miller, whose close relationship with Jamaica’s evangelical movement spoke for itself.
Not that the country was devoid of gaming all during that period. Jamaicans reportedly gambled over $500 million annually in 2007, with some $180 million being accounted for by so-called “gaming lounges”-in effect, slot casinos-and the rest primarily by lotteries, with about 12 percent going to horse racing.
But Golding seems to appreciate the potential economic benefits of large casino resorts. He has a degree in economics from University of the West Indies and served as minister of construction for most of the 1980s. He was opposition spokesman on finance in the first half of the 1990s and simultaneously chaired the public accounts committee. In 2002 he was spokesman on foreign affairs and foreign trade. And he has served on the board of directors of the National Lotteries Commission.
Despite Golding’s enthusiasm for a casino gaming bill, and the interest of two companies to build multibillion-dollar resorts, progress on legislation has been hampered by delays. A version of the bill that was to be introduced in October ended up being withdrawn at the last minute.
In December, a 12-member parliamentary committee created to study a new bill finally met for the first time. The bill would implement government policy legalizing casino gaming and establish a casino commission with the authority to grant licenses. The committee has until January 26 to provide its final report to Parliament.
But Golding is dedicated to bringing gaming to Jamaica, realizing that not only does it bring taxes, jobs, infrastructure and other economic benefits, but it helps his country compete against the neighboring islands, many of which offer full-scale casino gaming. Golding doesn’t want Jamaica to be left behind.
Taking the Trop
President & CEO, Tropicana Las Vegas
When he was running MGM Grand, Alex Yemenidjian helped to build one of the premier brands in the gaming and entertainment industries. As Kirk Kerkorian’s right-hand man, Yemenidjian directed the development of his boss’ investment in the gaming industry.
As he rejoined the casino industry as a partner in the Tropicana Las Vegas, Yemenidjian recalled some advice that Kerkorian had given him.
“Something I learned from him that I applied immediately was something he told me early on: ‘Put your property close to the best-run property in town.’ And that’s what I’ve done here at the Tropicana,” says Yemenidjian.
Being across from several successful properties at one of the most recognized corners in Las Vegas can be a blessing and a curse. Previous owners of the Tropicana had taken cost-cutting to deadly levels-axing important employees, failing to keep the property up and allowing the image of the Tropicana to decay.
Those were just some of the challenges that Yemenidjian faced when he joined with the Canadian investment firm Onex Corporation to win the Trop in a bankruptcy deal. After looking at various deals for years, they finally pulled the trigger with the Tropicana.
“Clearly, location and price were the two moving parts in this transaction,” says Yemenidjian. “And in addition to a superb location, the 34-acre Tropicana property is a perfect rectangle that has streets on three of the four sides. It’s a developer’s dream.”
Yemenidjian has quickly transformed the property by changing the logo, bringing in Las Vegas icon Wayne Newton to perform what Newton describes as his finale, pumping $100 million into the Trop for a quick facelift, and hiring Tom McCartney, last of Planet Hollywood and Luxor, to run it.
But it’s going to be a long process to revive a property that has suffered from many years of neglect.
“First, we have to totally redefine the value proposition to our customers,” says Yemenidjian. “And the value proposition has to have many dimensions, including a customer service dimension, an entertainment dimension and a physical dimension. And second, we have to successfully inform our current and future customers of this new value proposition. We have to brainstorm our image. Image creates desire.”
He recognizes that the employees are one of the key elements of the property’s renewal.
“We inherited many team members at the Tropicana who are stars, and they are critical to the operational and financial transformation of this property,” Yemenidjian says. “So we have built a new team-member lounge and dining room; we are refurbishing the back-of-the-house facilities before we do anything else. Then we are instituting a new service-excellence training program.”
But for Yemenidjian and Onex, the Tropicana is just the start.
“We are interested in building a diversified gaming company,” he says. “Since December 2007, we have looked at many acquisition opportunities in Las Vegas, elsewhere in the United States and internationally, and we will continue to do so. The Tropicana acquisition is the foundation of the gaming platform that we would like to build. If the Tropicana were the beginning and end of the road, we would not be here.”
Vice President of Corporate Diversity & Community Affairs, MGM Mirage
Ten years ago, MGM Mirage announced its commitment to increasing diversity in the workplace. In 2005, the company wooed diversity expert Debra Nelson to lead MGM’s efforts. Nelson’s appointment solidified MGM Mirage’s reputation as a corporation concerned about diversity.
Nelson did not set out to become one of the country’s leading diversity professionals. The Alabama native began her career as a journalist before discovering her passion for diversity awareness. She rose through the diversity management ranks in the automobile industry, working for brands like DaimlerChrysler and Mercedes-Benz USA and becoming a founding a member of Cornell University’s Chief Diversity Officers’ Roundtable before joining the team at MGM Mirage.
As the vice president of corporate diversity and community affairs, Nelson has worked tirelessly to increase diversity awareness within MGM Mirage, educating employees in the best practices of diversity execution and implementing an annual diversity meeting. Nelson has also elevated MGM Mirage’s external diversity profile through advertising efforts, with the national “Diversity Has a Mascot” campaign, and through the company’s partnerships with outside organizations.
“I am pleased to have forged partnerships with individuals and organizations throughout the U.S. to help expand understanding of the business relevance for diversity at MGM Mirage,” Nelson says. “This work has been broad and varied-from helping our teams recruit potential employees, to meeting with diverse groups and organizations in an effort to secure convention and meeting business, to helping our purchasing teams develop a diverse portfolio of suppliers and contractors, and to providing service to non-profit groups and organizations to help improve the quality of life in the locations where MGM Mirage has operations.”
Nelson’s laundry list of achievements also includes her success in encouraging diversity in Las Vegas as a whole. Upon moving to Southern Nevada in 2005, Nelson promptly established the Diversity Professionals Network and the Women of Color Conference, both of which serve to connect entrepreneurs in the community. Nelson says she expects the conference to boost the profiles of both MGM Mirage and Southern Nevada.
“I am privileged to work with a company that inspires entrepreneurialism to serve the greater community,” Nelson says. “In a way, the Women of Color Conference is the perfect example of that. As an idea, it represented a historic collaboration of Las Vegas’ ethnic chambers of commerce and private industry, and was a platform to support the personal and professional leadership development of women. Since its inception, it has been marketed and reported throughout the U.S. and has the potential to truly grow into a national conference, thereby enhancing tourism and generating revenue for our company and Southern Nevada.”
In the new year, Nelson says she plans to continue her work to increase diversity awareness within MGM Mirage, throughout Las Vegas and on a national scale, and making diversity a central tenet to a successful business’ practices.
“I’m optimistic that diversity will evolve into a sustainable profession,” she says. “I’ve seen it grow from a response to political pressure and legal mandates to a competitive business asset. However, it is incumbent upon those of us who are serious about the work, and who have the opportunity to influence what it will be, to dialogue with each other to revolutionize the work. As diversity practitioners, I believe we are evolved enough to define the future of diversity.”
Tops in Tables
President & CEO, Gaming Partners International
Gaming Partners International is a company formed from three legendary organizations in the gaming industry: the French gaming supplier Bourgogne et Grasset; and the Bud Jones Company and Paul-Son Gaming Supplies, both American companies. The commonality among the three partners was that they supplied items for casino pits-the tables, the chips, the furniture and some other equipment.
When the companies joined together in 2002, Bourgogne et Grasset was the operator, but company headquarters was located in Las Vegas. Late last year, longtime president and CEO Gerard Charlier retired, leaving the company in the capable hands of Greg Gronau, who had experience with several gaming suppliers, including WMS and Shuffle Master Gaming.
A well-crafted plan allowed the terms of Charlier, who will continue to serve on the board of directors, and Gronau to overlap by a year, giving the two a unique ability to shape the company’s future.
“We’ve been expanding our product lines over the last 18 months,” says Gronau. “That was an advantage to having both of us on staff at the same time.”
Although the three divisions of the company sell similar items, Gronau says he spent the last year evaluating the products and services in each division.
“They don’t overlap as much as you might think,” he says. “They each have their own markets and they complement each other. It allows us to leverage each product line to the advantage of our customer. It gives us a lot of great bandwidth to appeal to many customers.
One of the challenges of joining the three companies was developing a corporate culture that links the far-flung offices. In addition to Las Vegas and France, the company has a manufacturing plant in Mexico, adding to the equation.
“With the diversity that we have, we have an advantage,” says Gronau. “We’ve done a good job with the U.S. and Mexico and we’re concentrating now on France. We expect it will be very valuable once we work it out.”
GPI is a “one-stop shop” for equipment that belongs in the casino pit, including the “currency” of a casino-chips, cards, dice, plaques and jetons-pit furniture, from a basic table to custom-built items, and table-game layouts.
“We have four types of layouts,” explains Gronau, “felt, screen printed, full graphic layouts and now digital, which is three to four times more durable than the graphic layouts. And the clarity on the digital is just amazing.”
While GPI has many competitors in the vendor arena, Gronau says the turn-key approach is just one of the advantages that gives the company an edge.
“There are a lot of things that give us an advantage over some of the smaller suppliers,” he says. “We can combine all the different design aspects of the casino and make it flow into the pit. Whether it’s the chips, the layouts or the furniture itself, we can match the design of the larger overall space. When you look at GPI, we really stress the ‘partner’ part of the name and become a true resource to the casino we’re working with. And every casino has a different idea of what they want, whether it’s the design or the quality of the product. We can help them out with those choices.”
While it might seem that GPI was in the right place at the right time in Macau, where tables are the name of the game, Gronau says the time came to the right place.
“We’ve really benefited from the growth in the Asian market,” he says, “but we’ve been providing tables for more than 40 years to the Macau market and have very strong relationships with the operators there.”
But it’s the financial strength of the company that is the main reason for GPI’s success.
“We have one of the stronger balance sheets in this segment of the market. We have less than $2 million in debt. That gives the customer some confidence and peace of mind that GPI will be around for a long time. It also gives us a lot of opportunities in how we can expand for our customers’ benefit.”
Chairman, Quapaw Tribe of Oklahoma
In mid-2007, amid the first rumblings of recession, the Quapaw tribe of Oklahoma announced that it would build a casino, its second, in Ottawa County, home of 10 other gaming halls.
Less than a year later, with the recession a reality and some jurisdictions posting increasingly dismal revenues, the Quapaw’s Downstream Casino Resort opened to raves, robust patronage, and a level of success that would be exceptional even in a good economy.
In 11 months, Downstream pumped more than $100 million into the local economy. And thanks in large measure to the new $300 million Vegas-style casino, year-over-year gross revenues from Indian gaming in the state grew 23 percent (10 times the national figure).
How did they do it?
“I think it’s pretty easy,” says Quapaw Chairman John Berrey. “We have a beautiful design, a wide choice of games, great, friendly customer service and fortunately, the support of the communities of Joplin, Southeast Kansas and Northeast Oklahoma”-support, he says, that also extends to Springfield, Missouri and Northwest Arkansas.
Obviously, location was vital to the casino’s success. As the Arkansas Democrat-Gazette noted, “The property entrance is in Missouri, parking is in Kansas and the front doors are in Oklahoma, but the casino floor is pure Las Vegas.”
The tribe was careful not to overreach, scaling the project to the market.
“We’ve always been very conservative in our money management,” says Berrey. “We’ve maintained a 40-plus margin, which is unheard-of in most tribes. All of that together makes for great success that has exceeded our expectations and changed the dynamic for our people.”
It also enlivens the regional economy. Through May 2009, just 35 percent of Downstream’s visitors were from the immediate tri-state vicinity. People are driving in, boosting tourism in the plains area.
Perhaps most importantly, Quapaw business enterprises mean a better quality of life for 3,000 tribal members.
“We see it as a way to help our people through better education, social services and health care,” says Berrey, who adds that the tribe offers employees “great benefits and a 401K, a dining room that’s as nice as any restaurant and a day care center. As a result, we have a very low turnover.”
Though the tribe has no apparent plans for a third casino, like all tribes, they are monitoring the issue of off-reservation casinos, now on the desk of Interior Secretary Ken Salazar.
“What’s going on is amazing; the change in the relationship between federal agencies and tribes is really palpable,” Berrey says. “We can feel our message and issues are being heard by the Department of Agriculture and the Department of Interior. When (former DOI Secretary Dirk) Kempthorne headed Interior, they were ultra-conservative and didn’t want to make any decisions about the jurisdictions of tribes. We’re very hopeful Salazar will continue the cooperation and collaboration.”
The chairman is also heartened by a recent chat with President Barack Obama, in which he pointed out the tribe’s concern about its reservation, which includes the Tar Creek Superfund site, rendered toxic by a century of lead and zinc mining.
“It is a horrible scar on the land,” says Berrey. “We’ve drawn the attention of President Obama and Secretary Salazar to the issue, and there has been some traction from that discussion. We hope things will keep moving.”
Chairman, The Cordish Companies
David Cordish made his name reinvigorating depressed urban areas. From his home-town Baltimore’s Inner Harbor, Cordish moved on to work with other cities such as Louisville, Kansas City, Houston, Tampa, Orlando and more to revitalize neighborhoods, shopping areas and waterfronts. The Cordish Companies have been instrumental in some of the nation’s most compelling success stories in urban redevelopment.
“We often come in to difficult environments, and often there’s been a previous history of failures by other developers,” he says. “I can’t say that’s a criterion for us taking a project; actually, we like to get them easy, just like everybody else, but for some reason or another, our history is often in turnaround situations. The bad news is that it requires a lot more work. The good news is that when you’ve done it and you’ve been part of a massive turnaround, you feel good.”
Cordish dipped his toe in the casino industry when he was involved in the Seminole Hard Rock Casino in Hollywood, Florida, and then hit the jackpot when the company proposed, developed and opened a major outlet shopping center in downtown Atlantic City called The Walk. While The Walk is not directly connected to any specific casino in Atlantic City, its drawing power-even during the economic downturn-has gained the attention of other similarly situated cities, including Downtown Las Vegas.
“If you’ve looked at our projects in Florida, in Indiana, in Atlantic City, what makes a successful retail project is to put it next to a 24-hour, seven-day, 365-day-a-year casino situation,” says Cordish. “Conversely, if you want to increase gaming, you provide amenities for people, because nobody can gamble all day and night.”
Cordish signed a deal with Las Vegas in November that charges the company with developing an entertainment district that would conceivably contain a large arena, something lacking today in Las Vegas. The deal gives Cordish exclusive two-year negotiating rights for 20 acres pegged for a development that might include a casino hotel and a “Live” district with restaurants, bars, lounges and retail.
And the company is now directly involved with casino operations, running the Indiana Live! Casino at Hoosier Park, south of Indianapolis.
The company won the bid to build a casino resort at Kansas Speedway, just west of Kansas City, as one of four licenses approved for the state. After the economy crashed, the bid was withdrawn. During the re-bid process Cordish won yet again, but recently sold its interest in the project to Penn National Gaming.
But Cordish is most hopeful about casino development in Maryland. Ironically, Cordish decided to bypass the license specified for Baltimore and bid on one slated for Ann Arundel County. While Laurel Racetrack was the obvious site, the bankruptcy of Magna Entertainment complicated that deal, so Cordish submitted a bid for a casino at Arundel Mills Mall, a popular shopping center. The bid was accepted and is currently awaiting zoning approval by the Anne Arundel County Council. Ironically, the Magna bankruptcy is forcing a sale of Laurel (as well as the legendary Pimlico racetrack in Baltimore), and Cordish is one of several bidders for the track. But the company has no desire to drop its plans for Arundel Mills, since it gives the state, county and Cordish the highest return on investment.
The concept of the “mixed-use” project is not in vogue these days, but if anyone can develop a multi-dimensional casino development, Cordish is the one.
Two For One
Acting Chairman, National Indian Gaming Commission and Deputy
Assistant Secretary for Indian Affairs, Interior Department
It was a test to see whose patience would last longer: National Indian Gaming Commission Chairman Phil Hogen, or the tribes that opposed most of his proposals at every turn over the past six years.
It turned out to be Hogen, who retired in October after waiting nearly a year for his replacement to be named by President Barack Obama. Named as a temporary replacement for Hogen is George Skibine, a career employee at the Interior Department and a member of the Osage Nation of Oklahoma.
At the NIGC, Skibine says he’s just a placeholder that will set the table for a permanent chairman.
“I think the problem that I have is that I’m there for seven months-max-which is very, very short, and I’ll probably be there less than that because the White House is actively looking very hard to have a name to submit for confirmation-and I think that will happened quickly,” he told a seminar at the Global Gaming Expo in November.
Prior to his departure, Hogen backed off his attempt to draw a “bright line” between Class II and Class III slot machines, leaving the regulations as he found them.
“We’re not going to have any changes to regulations during the time I’m there,” Skibine said.
He also questioned Hogen’s assertion that the NIGC is an independent agency, not subject to the oversight of the Interior Department.
“It may be quasi-independent because some of the decisions made by the chairman aren’t reviewable by anyone, but there’s doubt because of other cases,” said Skibine, particularly citing the Colorado River Indian Tribe case, where the District of Columbia Circuit Court of Appeals in 2006 upheld a lower court decision that NIGC has limited authority under the Indian Gaming Regulatory Act to issue regulations related to Class III gaming.
As for his BIA role, Skibine said the department was focusing on drawing up regulatory fixes for the Carcieri Supreme Court decision that cast doubts about whether tribes would be eligible for putting land into trust if they weren’t federally recognized before 1934. In addition, Skibine told the Senate Indian Affairs Committee that Larry EchoHawk, the assistant secretary for Indian Affairs at Interior, has asked him to review the entire process.
“He has asked me to be the chief architect of trying to fix what is broken, and as a result, I have committed to him that this is going to be one of the priorities of his administration and we are going to get that done before he leaves office, for sure,” says Skibine.
He says that the appointment to lead the NIGC, and continue his role at the BIA, has been the most rewarding time of his 30-year career in government. But he says he’s not going to hang around too long.
“I’m eligible to retire right now,” he laughs.
Managing Director, The Fine Point Group
For Randall A. Fine and his groundbreaking consulting organization, the Fine Point Group, a recession is an opportunity.
When many companies are laying off executives and employees but still require the services of those executives, the time is right for the Fine Point Group.
Randy Fine is an expert in customer rewards. He developed some of the most groundbreaking rewards programs in the supermarket industry, but it wasn’t until he came to Harrah’s Entertainment and helped develop the industry-standard Total Rewards program that he was truly recognized.
A graduate of Harvard, Fine left Harrah’s in 2002 to work for Carl Icahn’s Stratosphere and other hotels owned by the Wall Street billionaire. He helped position those properties for a sale that netted Icahn a huge profit.
When he founded the Fine Point Group in 2005, Fine concentrated on areas he knows best, the customer rewards programs, but has since expanded his firm, adding expertise in all management disciplines. As a result of that expertise, the group was awarded a management contract for Greektown Casino Hotel in Detroit as it entered a process leading up to a bankruptcy sale. During the time the Fine Point Group operated the property, revenues increased at a time when other Detroit casinos saw declines, and market share was boosted. Using its proven data mining strategies and targeting specific market segments, the Fine Point Group has turned around the fortunes of what had been the least successful casino in the metropolitan Detroit market.
“We can’t do anything about the economy,” he says. “But what we can do is compete as efficiently and effectively as possible to offer the best gaming value to our customers. We bring an unrelenting drive to succeed to our clients.”
For 2010, Fine has lofty goals. He mentions a 14-year-old tribal casino in the state of Washington, where a Fine Point Group-designed players club resulted in two of the best days the casino had ever done on a Tuesday and Wednesday in November. But there’s more.
“We’re doing a players club for a major gaming operator,” says Fine, continuing the firm’s practice of respecting the client’s privacy. “We’ve designed the first players club that will be based on actual outcomes-not coin-in, not theoreticals, but actual outcomes. I think this is going to take the notion of loyal marketing to a new level.”
Also in 2010, the Fine Point Group is waiting on final regulatory approvals to get involved with the management of Resorts Atlantic City, where Fine hopes to apply many of the lessons learned at Greektown to the Boardwalk.
“One thing that was important to us was that we didn’t make any layoffs at Greektown,” he explains. “We might have been overstaffed when we took it over, but I was confident that we’d be able to grow into the staff, and that’s exactly what happened. So while we’ll certainly cut costs, we want to avoid staff cuts.”
Fine says the group is getting many inquiries about management.
“We come in with a strategy that doesn’t include ‘build me some new stuff,'” he says. “So hopefully, over time we’ll have several of these contracts in place and be able to prove that you don’t have to do that to continue to grow the product.”
When Less is More
Head of Electronic Gaming, Rank Group Plc
It was good news and bad news for Simon Beacham when in 2007 he was named head of electronic gaming at Rank Group Plc. The good news was that after some 30 years at Rank, Beacham was now responsible for all electronic gaming devices at the company’s Grosvenor casinos. The bad news was that it was 2007.
“The business had taken a big hit from the tax increases in early 2007,” says Beacham. “We were looking down the barrel of a gun at the approaching smoking ban, which was clearly going to do further damage. The challenge was to return the electronic gaming income to an upward trajectory.”
Faced with these and other problems due to implementation that year of the 2005 Gaming Act, it was time to think outside the established framework.
Grosvenor, like most casino operators in the U.K. at the time, obtained its slot machines through a distributor. To change things up, the company decided to approach four major slot manufacturers directly. The result of that decision is that today all Grosvenor properties-including the new G Casino brand-get their slots from just three manufacturers, namely IGT, Novomatic and WMS.
According to Beacham, electronic gaming revenue is “now tracking above our 2007 numbers quite substantially.”
“I’m a real believer in establishing a collaborative arrangement with good manufacturers,” says Beacham. “It’s a lot of money to spend, whether it’s an IGT slot or a Novomatic Unity II system, and as an operator you can beat them up and moan like hell about the prices they charge or you can get around the table with them and go, all right, what do we have to do to make this earn more money for us?”
Dealing direct with solid, international manufacturers has enabled Beacham to develop strong, collaborative relationships and an ongoing dialogue, which has led to getting the best products for the players.
Says Beacham, “That’s been a mantra of mine, that we should engage with the manufacturers rather than pick on them.”
Today, Beacham has charge of over 650 slot machines in the U.K. and another 250 in Rank’s two Belgian casinos. The number of electronic roulette terminals in Rank’s 35 U.K. casinos has grown to about 1,000. With some 25 percent of the casinos in the U.K., Rank’s market share is inching up to 30 percent.
“We’ve got people queuing up weekends to play slot machines,” says Beacham. “We could readily double or triple the numbers that we have in our sites and we’d be happy to pay the relevant tax on it. And I think the government would welcome us paying that tax. All they’ve got to do is sort the legislation out
a bit to allow it to happen.”
With a general election scheduled for 2010 and a budget deficit that needs funding, anything is possible.
Chief Operating Officer, Rush Street Gaming
When billionaire Neil Bluhm entered the casino industry with the purchase of a small Mississippi casino, few people paid notice. They simply assumed the Chicago-based mogul saw a good investment and made the buy.
But when he applied for and won one of the major casino licenses in Pennsylvania-one of the two Philadelphia locations-people began to realize that he might be for real. And then when he stepped in to take over the Pittsburgh casino when the winning bidder-Don Barden and Majestic Star-couldn’t raise construction financing, Barden was off and running. And once the company received the star-crossed 10th license in Illinois, it’s clear Bluhm and his company, Rush Street Gaming, is on the verge of becoming a major industry player.
But Rush Street CEO Greg Carlin needed someone to operate the soon-to-be four casinos, so he brought in a Harrah’s veteran, David Patent, who brings his wide range of experience at gaming’s largest company to the position that suits him best.
“I spent seven years with Harrah’s,” he says. “When I left, I told my wife I would love to be chief operating officer of a small company where we could build it from the ground up. So I feel very fortunate to be working in that position and with the people who are involved with that company.”
Patent believes the most important thing to do when building a company is assembling the right team.
“You’re only as good as the people you work with,” he says. “So making sure you have the right people who understand how to work together toward a common goal is crucial. If you don’t have that, it’s very hard to operate effectively.”
Patent’s first challenge will be to increase operating efficiency at the company’s Pittsburgh property, the Rivers Casino on the city’s Ohio River waterfront. With the retirement of Ed Fasulo, the casino president hired by Barden, Patent will take over while a search is conducted for a permanent replacement.
“Anyone who can read numbers understands that the revenue being produced is not up to what was projected,” he says of Rivers. “New markets take some time to ramp up, especially when you’re in a competitive market like Pittsburgh, but we have to do better.”
In Philadelphia, SugarHouse Casino broke ground in October and is slated to be completed by the end of this year. Patent is excited about that facility.
“It’s a great location,” he says. “We decided to start out small with 1,600 or 1,700 slots and a small number of table games. So it’s going to be busy all the time.”
In Illinois, the casino will be built in DesPlaines and will be one of the closest casinos to Chicago, and location again plays a big role.
“It’s 15 miles closer to Chicago than any other casino,” he says. “And it will be the first new box to be built in 15 years, and the design process is truly unique.”
Operating in Illinois is always risky, given the state’s proclivity for “flexible” tax rates. Patent doesn’t believe that will be a problem.
“I think everyone learned their lesson in 2004, when the tax rate was raised and players fled to Indiana,” he explains. “As a business owner, you have to be able to make a return on your investment, so we’re hopeful that the situation will remain stable.”
Jill of All Trades
Senior Vice President and General Counsel, Wynn Resorts
For Kim Sinatra, joining Wynn Resorts relatively early in its development has been an opportunity she never regrets. She has been involved in the company’s amazing growth, from a single Las Vegas property to an international player on the gaming stage.
“It was a time of uncertainty, actually,” Sinatra explains of her early days with the company. “Wynn Las Vegas was under construction. It was at least 18 months before the first property opened, so you never could have guessed that it would turn into this multi-jurisdictional, international company.”
Her experience prior to joining Wynn prepared her for the job. Sinatra had been senior vice president and general counsel for Bally Entertainment in Atlantic City, involved in mergers and acquisitions, expansion into new jurisdictions and potential tribal gaming ventures. But it was also a time of turmoil in that company, as well.
“Over the course of several years at Park Place,” she explains, “Arthur Goldberg died, Tom Gallagher came and left and Wally Barr was appointed new CEO. So it was a hectic ride.”
But Sinatra’s career is the epitome of hectic. She came into the gaming industry through the side door when the law firm where she was doing real estate law got in the middle of a dispute between Merv Griffin and Donald Trump.
“So it was kind of an accidental intro into gaming business,” she laughs.
But it’s a business she loves, and it goes far beyond gaming law.
“I have served in the gaming business as more than just a regulatory lawyer,” she says, “so the complex nature of our corporations is incredibly attractive to me. In addition to being a gaming lawyer, I’m also a securities and real estate lawyer, and I organize all of our lobbying efforts, so I love the breadth of my portfolio.”
But it’s the growth of Wynn Resorts that has kept her happy and contented over the last few years.
“The growth has been exciting because we’ve done it with an incredibly small number of people,” she says. “As a person who has only been around this company for six years or so, I’m kind of late to the party. These are a group of people who have been together for a long time and have created value in these public entities, so it’s been fun and I’ve learned a lot.”
The entry into Macau was a huge learning experience, as well.
“Chinese culture and doing business in China is different,” Sinatra explains. “The political, economic and regulatory systems are different, but it is something that we all have enjoyed doing. When we took our Macau subsidiary public (in October), we became the first U.S. company to have a subsidiary traded on the Hong Kong exchange.”
Like Wynn, Sinatra enjoys proving the naysayers wrong.
“Many people thought we would not be able to replicate the kind of customer experience or the kind of economic delivery that we do in the United States, but Macau has turned out to be a huge part of our company,” she points out.
Next up for Wynn-following the opening of Encore Macau next year-will be planning for the company’s Cotai project, something right up Sinatra’s alley.
“It will be a new set of challenges,” she says. “It will consist of finalizing our arrangements on the land, understanding how we’re going to get it financed and built, and making arrangements with our contractors.”
But other opportunities continually come over the transom, especially during the economic downturn.
“We continue to evaluate more development and M&A opportunities now. We’ve continued to strengthen our balance sheet and, in addition to our Macau offering, we did a bond offering earlier last year too.”
Chief Operating Officer, Seminole Gaming
All the news about the gaming operations of the Seminole Tribe of Florida has lately centered on its state compact, and whether or not state lawmakers will ratify the deal, signed in late 1987 with Governor Charlie Crist.
What sometimes gets lost in the news, though, is that the Seminoles already are operating under what leaders feel is a valid compact-it was approved by the federal Department of the Interior, after all. Most observers feel the tribe will keep its current compact, or at least the gaming associated with it.
What has been the other side of the Seminole story-the rapid expansion of the tribe into table game operations and newly expanded Class III slot floors under the compact signed with Crist-is often overlooked. The fact is the Seminole tribe has spent the past two years in an expansion mode, with the goal of transforming its seven properties into full-blown casinos.
Properties which only a few years ago were Class II facilities offering a specialized brand of electronic bingo are now casinos that offer all of the card games one would find in Las Vegas, including blackjack and banked specialty poker games.
When the need arose to name a new chief operating officer for Seminole Gaming last summer, the tribe had to look no further than the executive who, as senior VP of table games, had already been guiding much of the expansion of gaming operations. Howard Dreitzer was in charge of table games because of an intimate knowledge of that side of the business, but he was a natural choice as the new COO much more because of his wide-ranging experience heading up gaming operations.
Before he took on the table-game position at Seminole, Dreitzer was senior VP and general manager of the Conrad Jupiters Gold Coast casino resort in Queensland, Australia. Before that, his experience in the U.S. included stints as COO of Harrah’s New Orleans, executive vice president of gaming at the Showboat in Atlantic City, senior VP of casino operations at Trump Plaza and several senior management positions at Sands Atlantic City and his original property, Steve Wynn’s Golden Nugget Atlantic City.
Since coming to Seminole Gaming in March 2008, Dreitzer has directed the expansion of the tribe’s gaming operations into one of the powerhouses of the industry.
The first table operation was at the Seminole Hard Rock Hollywood resort. “(Seminole Gaming CEO) Jim Allen’s philosophy was to open up with people who had experience and who had opened casinos in other markets,” Dreitzer explains. “So, at least in the start-up phases, we recruited people from all over the country, and retrained them in our methods. Dealer training only took a week and we had a flawless opening. Business was tremendous, and has remained tremendous.”
As 2010 begins, three of the seven Seminole casinos-in Tampa, Hollywood and Immokalee-operate a total of more than 200 table games along with Class III slots. “We’re on a pause button waiting for the compact to be approved by the legislature,” Dreitzer says.
Whether or not that happens, the expansion of Seminole Gaming is bound to continue. “Whatever happens, we can adapt,” Dreitzer says. “We’re competitors, and in the last five years, we’ve built up a huge clientele. I think we can compete in any market.”