A war on two fronts

by Anna Maria Rengo

rom Macau, where they resumed operations on February, the 20th, but with extremely low turnover, to Las Vegas, where Nevada Governor Steve Sisolak closed them, extending the order at least until May, the 1st, casinos all over the world are experiencing an unprecedented crisis, due to the pandemic from Covid-19. In all parts of the planet, apart from a few small exceptions, they were among the first facilities to be closed, and among the last, at least so it seems, to open again, once the emergency will moderate and we will move on to the one that in Italy is called “phase two”. With serious consequences on the economic and employment front, bearing in mind that, for example, most of the Us casinos fired almost all their employees. The Swidsh Per Jaldung, president of the European Casino Association, takes stock of the extremely serious European situation, as well as of a jungle of national rules, but united by the closing order. European Casinos, like all economic activities, are hit hard by the Covid-19 crisis. What kind of initiatives can and will the Eca take to support them? “The Eca is monitoring the situation very closely. Casino operations around the world have closed down without knowing when they will be able to re-open. We are As it is happening worldwide, European casinos are among the activities suspended for Covid-19, whose return to “normal” is longer and uncertain. Per Jaldung, president of the European Casino Association, highlights the effort that will have to be made to deal with the economic consequences for the industry, because of the forced and due closure caused by the health emergency. F

currently carrying out an ongoing survey amongst our members to find out to what extent they are impacted, what kind of measures they are implementing and how they are handling this dramatic situation. The Eca acts as a point of contact for all its members and shares updates on how to handle the crisis. We will also work with other stakeholders at EU level to call on policy makers to take action to deal with the economic consequences of the pandemic for the land-based casino sector.” In which European countries the situation is particularly severe? “Italy and Spain are among the most affected countries, but every European country is facing severe difficulties. Everybody is fighting a “two front war” at the moment, one against the virus and one for economic survival”. In your opinion, how long will it take to go back to normal? “We are living in uncertain times, and as the situation changes every day, it is very difficult to say if business will get back to normal anytime soon. Different countries are currently establishing plans to figure out how to get back to some kind of normality. We expect that casinos will be among the last businesses to reopen, following restaurants, theatres, and cinemas. However, we recommend our members to stay in touch with respective regulators and other stakeholders to share their planned measures in order to prove to them that they are ready when the time comes”. How will the Covid-19 emergency change the land-based casino business in the immediate future but also in the medium and long term? “In the short term operators are just trying to survive, duck and keep the cost to a minimum. There is no revenue coming in whatsoever. Operators are also aware that once the pandemic is over, it will be a slow start. Some customers might be hesitant to visit casinos and other entertainment facilities where lots of people gather, no matter what the governments decide In the longer term, we expect that everything will be back to a new normality, as experience confirms that casino players like the social dimension that a visit to a casino represents. However, this might take longer than we think, maybe a year or more. Unemployment will rise during the months to come and people will watch how they spend money. The casinos are an integrated part of societies and will come back together will all other businesses, not by themselves. It is important to understand that the casinos are important economic motors and starting the casinos up will help any city to revive and get the wheels turning again like hotels, taxi, flower shops, food deliveries, cleanings services, etcetera”.

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Is the online market an opportunity for land-based casinos? “It is an opportunity in some jurisdictions, and the Eca will continue its efforts to make European stakeholders and national governments understand that every licensed European casino should also be allowed to offer its products online, either on its own or together with an experienced partner in online gambling – but always under the national laws and regulations. In this regard, one of the biggest concerns for the Eca is the illegal online gaming market that is currently running out of control all over Europe. We will call on governments to establish and/or enforce restrictions like payment and IP-blocking in order to protect customers and to ensure that money spent on gambling is taxed in the country where the gambling occurs. Another concern of ours is that these illegal operators don’t adhere to the rigorous anti-money-laundering framework that applies to all licenced and regulated casino operators in the Eu”. How are land-based casinos revising their business strategies? “This situation can represent an opportunity for landbased casinos to revise their business strategies. For the time being, we do not see any major change of direction, but it is most likely that in the coming months we will see new strategies, like for example establishing an online distribution channel”. What would you feel like saying to casino operators and their employees, in this dramatic and urgent situation? “In these difficult times, we must stand together and try to limit the damage as much as possible, but also seek support from the institutions at both national and European level. The priority is undoubtedly the safety and health of employees and customers, but we would also need concrete support from the government institutions to cope with expected huge economic losses”.

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During these unprecedented times, the ability to communicate effectively is paramount. Establishing clarity and security for your employees and business partners is absolutely key when the situation and the available information are constantly changing. Some confusion has been generated because of the lack of information and the countless media reports offering different perspectives and advice. Several gaming organisations have been overwhelmed with the quantity of communications required and sometimes their approach is driven by the need to push out specific tactical updates, rather than following a planned, strategic and comprehensive communications strategy that deploys regular touchpoints on relevant topics at the right time to targeted audiences, whether internal or external. All in all, the three areas which are emerging as main focus for many gaming corporations these days are: 1) employee well-being, 2) business continuity, 3) cost management and fiscal/financial assistance. Maintaining the care and safety of employees has been by far the primary concern since the beginning of the crisis. Physical and psychological well-being of employees is a critical focus, aimed at shoring up an individual’s resiliency and personal ability to manage pressure and tension during the lockdown. Deficits in this area has generated a great deal of stress in response to an uncertain future economically and beyond. Gaming organisations are taking advantage of Government-sponsored employee assistance programs with the objective of supporting their staff members, whose regular job functions have been disrupted by COVID-19. There is a desperate need for reassurance among employees and some of these measures can effectively mitigate mounting levels of anxiety and mental health. Since the beginning, the pandemic has impacted the way organizations have been able to operate and guarantee business continuity in a moment of unparalleled crisis. The gaming industry, as any other sector of the economy, had to review organisational processes to quickly adapt existing process and re-allocate available resources to meet new challenges. Some gaming companies have reacted promptly by rapidly redeploying resources towards digital channels allowing their organisations to avert the disruption of revenue streams while satisfying changing consumer’s needs and behaviours that continue to evolve swiftly. The quarantine and lockdowns have accelerated the shift from retail to digital channels while regulators in several jurisdictions have cautioned licensed gaming operators to tighten their responsible gaming, cybersecurity and sports integrity provisions to increase consumer confidence in digital gaming transactions. As during the 2008 financial crisis, gaming companies have also reacted quickly to optimize their costs to align to a new and completely unexpected market realities. Significant cost optimisation programs have, in fact, been launched to safeguard profitability and cash flow levels, including review of salary levels. In addition to that, gaming organizations are constantly assessing their eligibility for business tax relief programs offered by various governments. Tax relief can come in the form of changes to tax rates or deferring tax payments to later dates. These types of offers benefit companies since there is a need to manage cash payments and potentially reduce their tax liabilities carrying over into the recovery phase. Direct financial support from various governments in the form of loans or grants is also another area companies are closely looking at, analyzing their degree of eligibility. As we move into the careful phase-in of economy recovery, organizations will need to maintain open, clear, and transparent communications that nurture reconnected working relationships internally with staff, and externally with customers, stakeholders and government parnters.

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In the pursuit of effective actions against the crisis Ludovico Calvi • President of Global Lottery Monitoring

System Executive Committee • Member of the American Gaming

Association Sport Betting Task Force (Aga) • Member of the World Lottery Association (Wla) Sports Betting Integrity Committee

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These days, kiddie rides are a far cry from the hackneyed old image of a tired, long outdated machine being wheeled out of a supermarket in the morning, plugged in and then wheeled back in at night. Similarly, rides have traditionally lasted for years at the front of a seaside arcade, positioned to encourage small children to pull their parents inside - to stay awhile. Those conditions still prevail in many cases, but the equipment used today is vastly different - or should be, if the potential of the cash box is to be properly realised. The kiddie ride has moved on. The genre has evolved on from what was a reluctant to-and-fro movement accompanied by tinny music. What the industry describes as a “low boredom threshold” among younger children, even at the ages of three or four, is a vital factor. A simple to-and-fro rocking movement is not longer acceptable if the cashbox is to be maximised. In recent years, fourway movement has become the norm; in-built video games, upgraded sound effects, hooters and whistles and above all, licensed products, have revolutionised the industry. A squeezing of margins and the absence of major league licensing opportunities has resulted in fewer big names taking their place alongside old licensed favourites like Bob the Builder, Postman Pat, Peppa Pig and Scooby Doo. An ever-inventive industry has turned instead back to upgrading generic rides, improving payment systems and even spreading a little into associated areas that may now be considered “kiddie rides”. An example of that, says David Robinson at World of Rides, is a range of parent-and-child Battle Bumper Cars, Bumper Boats, Outlander Adventures and Jurassic and Safari Adventures, all of which can take their place alongside, in WoR’s case, the long-popular threehorse Gallopers. “We got Brexit out of the way and expected a great stay-at-home summer as a result, but coronavirus got in the way,” said Robinson. “But it will still happen and we have found that the kiddie rides industry is ready and willing to upgrade and prepare for it all.” Paolo Sidoli at SB Machines in Wales, agrees. This long-standing industry Italian-Welsh family maintains its connections and distributes famous Italian ride marques such as Memopark, Cogan, Lidea and Italresina. “We are working with single site operators, piers, amusement parks, FECs, zoos and farm parks, shopping malls, supermarkets and holiday parks, and they are prepared to invest if the product is right,” Sidoli said. Six to four rides a year come from SB, from a range of single rider models to multi-seaters, medium-sized and larger units and experiences that can command £2 a ride. Immediately, they have the Kangaroo carousel, the Hot Air Balloon with video and Unicorn carousel. This widening the range of kiddie ride products is a common theme. At JNC, sales and marketing manager Sam Coleman has his Happy Bus, Go Go Pony and Krazy Kars still selling well for the company, but in addition to the importance of licensing, he sees video has a vital component. “Interactivity can add appeal, reflecting modern-day learning Ian Donegan examines how “kiddie ride” have kept pace with changing times

and behavioural patterns and for the parents it can help keep their children mentally stimulated for longer,” he said. Flexibility is also important. Virtually everyone these days can offer the options of coin-operation, bill operation or free play; the electro-mechanical coin mechanism or even radio control or magnetic swipe cards, reports World of Rides. So now the industry is compelled to add a greater levels of interactivity and further “bells and whistles”. That’s because the player, though short in years and stature, has become more demanding. But it has also added more reliability for the operator, be it through battery or mains operation, remote control and better payment systems. Suppliers have expanded their range into more imaginative areas, such as bumper cars and boats. The price of play is clearly edging towards €2, £2, or even multiples of US$0.25cents in the US per play. To justify that, developers have to provide the operators with something that one of the leisure sector’s most demanding of customer profiles is going to be satisfied with. That is certainly no mean undertaking.