cma gaming summit - cmaa - home · 2004 – 05 2005 – 06 2006 ... 1 crt per 70 machines tab as...
TRANSCRIPT
1 111
Gaming Strategies
8 August 2017
CMA Gaming Summit
2
DWS and Club Training Australia
Terry O’Halloran Geoff Wohlsen
3
The program today
» A quick overview of what we’ve had to deal with as a collective
» Current challenges
» What we should be doing now
» What we should contemplate over the next 5 years
» 15-20 years?
4
Poker machine gaming is in decline in Aus
-
200
400
600
800
1,000
1,200
1,400
19
91–
92
19
92–
93
19
93–
94
19
94–
95
19
95–
96
19
96–
97
19
97–
98
19
98–
99
19
99–
00
20
00–
01
20
01–
02
20
02–
03
20
03–
04
20
04–
05
20
05–
06
20
06–
07
20
07–
08
20
08–
09
20
09–
10
20
10–
11
20
11–
12
20
12–
13
20
13–
14
201
4-1
5
Qld
Vic
NSW
ACT
NT
SA
TasReal annual expenditure on
machines – per adult
Smoking restrictions
5
But so is traditional gambling generally
-
200
400
600
800
1,000
1,200
1,400
1,600
0
5,000
10,000
15,000
20,000
25,0001989
-90
1990
-91
1991
-92
1992
-93
1993
-94
1994
-95
19
95
-96
1996
-97
1997
-98
1998
-99
1999
-00
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2009
-10
2010
-11
2011
-12
2012
-13
2013
-14
20
14
-15
Real Total Gambling Expenditure
Real Expenditure
Per Capita
$M
6
Qld over the last 20 years
»Hotel gaming, Casinos (Gold Coast?)
» LMOs – were 7 now 2
» Smoking
»Additional gaming taxes
» Loss of $50 and $100, back again
» Trading hours – back again but no pre-10am
» Tokenisation TITO/Cashless
»GFC, Mining, Floods
»92% cap, $5 bet
7
The challenges, the obstacles
We believe that on-line gaming at foreign casinos, card rooms, sports books, lotto land
and slot halls is attracting in the range of $4bn in Australian play (loss)
That’s ~ 20% of legal gaming in Australia
8
The truth
The truth is that clubs need to achieve 15%ebitdard on revenues, $140 per machine per day and $1.5M ebitdard per 100 machines in operation to survive
Cost are growing at 4%-5%Gaming revenues maybe 3%
9
Pubs are dominant in Qld
44%
46%
48%
50%
52%
54%D
ec-1
2
Mar
-13
Jun
-13
Sep
-13
Dec
-13
Mar
-14
Jun
-14
Sep
-14
Dec
-14
Mar
-15
Jun
-15
Sep
-15
Dec
-15
Mar
-16
Jun
-16
Sep
-16
Dec
-16
Mar
-17
Clubs 47%
Clubs 46%
Club’s market share 12-17
10
Pubs are gaining ground in NSW
30%
35%
40%
45%
50%
55%
60%
65%
70%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2012 2013 2014 2015 2016 2017
Clubs 67%Clubs 64%
Club’s market share 12-17
11
Pubs rule in Victoria but it’s stable
30%
35%
40%
45%
50%
55%
60%
65%
70%
2009 2010 2011 2012 2013 2014 2015 2016 2017
Clubs 35% Clubs 34%
12
TAB bar separation
Service to gaming
Product & environment
Service, skills & culture
Café service to
gamingCarparking
Loyalty and
rewards or TOD
Membership
4-5% growth
What a gaming strategy looks like - now
A good strategy has many aspectsAnd involves the management team and board
13
Loyalty and rewards in perspective
At ~2% it’s within the benchmark of 4%-5%
Members Rebate - 1 point for $ T/O
Rebate % on T/O
Monthly cost at 100% redeem
Monthly cost at 80% redeem
% rebate redeemed
Redeemed on metered win @ 9%
Level 1 3 $2 0.50% 2,250 1,800 0.40% 4.44%
Level 2 10 $3 0.33% 2,667 2,133 0.27% 2.96%
Level 3 50 $4 0.25% 1,875 1,500 0.20% 2.22%
Level 4 200 $5 0.20% 2,800 2,240 0.16% 1.78%
Level 5 8,070 $6 0.17% 8,632 6,906 0.13% 1.48%
Total 8,333 $4.70 0.21% 18,224 14,579 0.17% 1.89%
14
More weapons based on points
»Accelerators & points to cash at low demand
times (Qld)
» Every visit after the 10th this month, we’ll bonus
you 500 points ($5)
»A lucky losers incentive – “we hope your
favourite machines have been kind to you this
month, but if not, leave it to us, we’ll bonus you
1,000 points when you next come“
15
More weapons based on points
»Chase the winners – try to claim jackpots back
to your venue, don’t let it go to your competitors
»Create currency in points –“if you visit us another
five times this month, play machines with the
card in, you’ll advance to our silver
membership”
»Redeem points for seasonal items eg winter
bathrobes, towels, spray jackets, sunglasses,
watches
16
The cost of marketing gaming
A 200 machine club will spend $250,000/yr on points and bonusingAnd a further $200,000/yr on general gaming promosAnd a further $150,000/yr on marketing wages and systemsThat’s $600,000/yr or 0.5% of turnover
17
Drain the AEMP swamp
% total revenue
12%
2002 2017
AEMP costs as % revenue have increased from 6% to over 10% in 15 years …why?
18
Café, TAB and bar
separation
Conciergeservice
Member tailored
environment
Member tailored
service andculture
Café service to
gamingSegmentedCarparking
Rewards related to
spend
SegmentedMembership
4-5% growth
What a gaming strategy will need to look like
19
Food as the key differentiator
Great food all day
GP 70%Wages 40%
Great food on your terms
20
Value chain
What the customer sees, feels, tastes and experiences every time
there is contact with your Club
21
Where are all the good new innovators
As an industry, we don’t have enough skilled, motivated young
professionals coming through the ranks
We need to grow our own
22
The balanced venue
Two DOSAs and 2.5m2 per
machine
ATM locations
0.8 to 1.2 dining seats per machine
2+ car parks per machine - covered
1 CRT per 70 machines
TAB as small as you can make it
Café at the front for all to see
Best female toilets money can buy
Re-invest at 30% above depreciation
23
Some interesting statistics – car parking
23
- 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Car park ratio (total bays per machine) Car park ratio (marked and sealed bays per machine)
24
Entertainment and ambience using tech
The Hellenic Club Canberra
25
Access to money
What the banks thinks about the sector is important
- Ebitdard
- Growth
- Governance
- Interest cover over 2 times
26
The checklist for now and 5 years….
Capital reinvestment at 1.3 times depreciation
Ebitdard at $1.5M per 100 machines
Good governance, board & Constitution
Great data & systems
Guaranteed late night trading hours
Smoking, car parking, café offers
Loyalty and rewards at 2% or time on device
AEMP at 8% or less
A trained & developed management team
Service & Culture –value chain
Localisedpolitical relevance
Food – at the right GP & that meets customers’ needs
27
In 15-20 years
» More older tech-savvy people
» A sense of “live now, spend and to hell with saving”
» Fewer people preparing meals at home – 24 hour
entertainment on demand
» The need to entertain will be essential
» No more stand-alone technology
» Concentration of services from fewer larger provides
(eg Tatts and Tabcorp)
» Converging gaming – all-in-one solutions
28
In 15-20 years
»Process jobs in the bar and
kitchen will be roboticized
»Volume kitchens -
automated using enclosed
systems
»We’ll be paid to think and
solve problems only
»Roboticized bars
29
In 15-20 years
30 303030
31 313131
32 323232
