Gaming recruitment: Are we seeing the end of the office?

Paul Sculpher, co-director of Gaming Recruitment Solutions, explains the rapidly evolving landscape of recruitment in the gaming industry now that working from home is gaining ground.

This article originally appeared in the July/August edition of Gambling Insider magazine.

Working from home – WFH – is obviously a concept with which a whole lot of people have become far more familiar in the various lockdown situations across the world. The nature of the offline gaming industry has meant it’s been unable, at an operational level, to take advantage of the opportunity to work from home, however, and has been devastated. Online betting and gaming operators, on the other hand, have in some sectors seen significant gains, which will be boosted now that there’s a lot more sport to bet on. We are taking baby steps towards lifting the current movement restrictions, and while casinos are finally being allowed to reopen with strict new guidelines in place, the mindset seems to have shifted from fear of the unknown to buckling up and getting ready for resumption of trading, and the bumpy ride that’s likely to ensue.

The end of the office?

Every element of the supply chain has been affected by the changes, whether by lack of demand or personal struggles with social distancing. Recruitment is no different. GRS Recruitment is an agency that covers not just the UK, but all over the world too, and for us the concept of a central office has never been particularly relevant. We had already moved towards a working model that was pretty decentralised, with my co-director Steven Jackson and I primarily working from our homes, with our finance and admin function also remote, and our accountancy requirements covered by our partners a good 300 miles away.

The future of the “commute to office” model has been uncertain for a while now, and the sudden onset of the virus crisis has meant many companies have had to run what amounts to a live test of the process. The upsides of the WFH culture are obvious to all, starting with money, time and stress saved by not having to commute. Once the concept really beds in, however, it offers so much more. One clear example is that the talent pool is opened up, internationally in some cases, by not restricting team members to those who live within an hour or so of the office, and you won’t find too many people who will complain about saving the cost of a season ticket and a couple of hours a day in cramped public transport.

The virus has also pretty much forced us all to learn the basics of online working and meetings. Anyone who has run a quiz (or participated in one) will be familiar with how to work Zoom or Microsoft Teams, for example, and progressed to figuring out etiquette for things like muting their microphone when not speaking.

There are downsides of course. Training needs a different approach, and the benefit gained from team members at all levels interacting casually in the office is lost, along with some of the team spirit. Companies can no longer rely on their shiny office with refrigerators, beanbags and a ping pong table to tip the recruitment balance in their favour, for example, but speaking for myself, any part of that which is appealing is never far away, and certainly doesn’t involve an hour’s journey.

Recruitment in a WFH world

The gaming industry has historically been something like 60% offline work and 40% online, and we’d be lying if we said the offline element in particular hasn’t taken a hit from the virus situation.

Operational roles have largely been taken off the table until operators understand what the business looks like post-virus – indeed, at least one of our placements that was in progress as the lockdown commenced has ended up not leaving their previous employer – possibly temporarily – so they don’t fall through the cracks of the furlough programme.

It’s fair to say, however, that some elements even of the offline industry have kept ticking along. Compliance – one of our core areas – are still grinding away in some companies, taking the downtime as a valuable opportunity to refine strategies at the senior end, and work through the backlog of customers requiring EDD or KYC verification at the more functional end of the business. It feels like there are new guidelines coming out every week at the moment too – currently focussed on online gambling – so the wheels of interpretation and adjustment of procedures never stop turning.

The online element of our business on the other hand is ploughing on as before, as one might imagine. The gradual consolidation of the online industry doesn’t stop companies needing to refresh their teams, and the dynamic nature of the industry means there are always plenty of firms who need specialist help to find the perfect candidate to take their business to the next level.

There are also upsides to the shift to working from home from a pure recruitment point of view. We can get a candidate list to a client more quickly at the moment. Part of that is due to the general availability of candidates to us, given they’re not stuck in an office where these conversations are difficult if not impossible. Also, while meeting candidates isn’t something we do in all cases, everyone’s growing familiarity with the online communication process is making life easier all round.

The personal approach

The fundamentals of our recruitment business have been affected, but not totally turned upside down. In a relatively small field like betting and gaming, we always like to think there’s never more than one degree of separation between Steven and me, and any candidate in the industry. Put another way, in pretty much all cases, we will either know the candidate we’re putting forward or we’ll know someone who has worked with them, so we’re very rarely in the dark about their strengths and weaknesses. We feel this is a key part of what we offer as a recruitment partner. That hasn’t changed with the lockdown and working from home situation. What has changed, of course, is the chance to get out there in the operations, meet new people and network. Previously on our travels, we’d be forever meeting new people in the industry, which aside from the general enjoyment of that, it was valuable in terms both of finding potential new clients and candidates.

Naturally the interview process is changing in this period of social distancing as well, with video calling via Skype, Zoom or equivalent. Most employers would prefer to meet a candidate face to face, of course, but when forced, a good proportion is finding that a video call is a perfectly good substitute. Whether this approach will outlive the pandemic is anyone’s guess, but there could certainly be a huge amount of inconvenience avoided by running at least the first part of a selection process remotely.

The process

It’s worth a very brief word to remind everyone of the basics of online interviewing. As noted above, we’re all getting better at it, but there are obvious pitfalls to avoid. An obvious one is how one dresses. Businesslike is always best for candidates of course, and while we’ve all had Zoom calls with, shall we say, the top half of our clothing not matching the bottom half, bear in mind what happens if during your interview the doorbell rings. It’s unavoidable, employers understand we’re supposed to be staying at home and can’t control deliveries, so if you’ve gone for the cooling relief of an underwear-based clothing solution below the waist, you’re in a mess.

Following on from the entirely tedious “controversy” about books found on the bookcases of some political interviewees (in the background of their video interviews at home), I’ve seen a couple of comments from candidates who were mortified about what reading material might be visible to interviewers. Our standard response to this would be that if the interviewer was paying that much attention to the bookcase contents, the interview probably wasn't going that well in any case – or more simply, just blur the background.

Finally, there are always technical hiccups to avoid, and we all have connection problems from time to time. A degree of understanding will generally be the case. Again, we don’t always have the option to run the interview in a super high bandwidth location, but use some common sense and if your connection is flaky, try and avoid two kids watching Netflix and another streaming a new video game at the same time.

Offline to online 

I’ve written elsewhere about the prospect of offline managers migrating to online, but we believe it will be an increasingly common phenomenon. We’ve certainly seen a massive increase in the number of offline managers known to us looking for a way to move into a sector with better prospects, and many of them are of exceptionally high quality. Consultation processes are underway in several of the larger offline casino operators, with a view to a very different structure post virus, at least at first. It’s tough times out there, but there are plenty of exceptional people who will fall victim to circumstance, and we’re all in prime position to help prospective employers pick the best of them.

Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant

Moving jobs from offline casinos to the online world

With the move from brick-and-mortar to digital gaming accelerated by the coronavirus pandemic, Paul Sculpher, director of GRS, describes the process of a transferring staff and skills – from one channel to the next:

www.igamingtimes.com/2020/05/22/gaming-recruitment-paul-sculpher/

Is the Las Vegas Strip finally showing cracks in their pricing policy?

By Paul Sculpher, Special to CDC Gaming Reports

The cost of a trip to Las Vegas has been increasing almost exponentially for many years, with both highly visible changes (new resort fees, new parking charges) and more subtle increments (lower slot payout percentages, higher drink prices) contributing to the savage attack on the Strip visitor’s wallet.

It’s also fair to say that it would be difficult to point to areas where service levels have increased apace. While the resort experience is still a very high-quality one, overall, the queues for check in and general impossibility to find a waitress on most megaresort gaming floors make clear that cost cutting is at the heart of most business plans.

Anecdotal comment in online forums and social media suggest that service-level teams are having to do more with less – not exactly encouraging for the imminent Las Vegas visitor. Only last month, MGM announced 254 jobs were to be cut, largely at management level and above, and there’s another round coming soon, including staff-level roles.

This salami slicing of dollar value has been going on for a while – I wrote a piece about it more than three years ago – https://www.gamblinginsider.com/in-depth/1928/las-vegas-risks-pricing-itself-out-of-the-market – and things have unquestionably become noticeably more expensive since then. I’ve spent at least 30 days in Vegas since that article was written, and one incident encapsulates perfectly how rapacious the processing of customer money has become. Last year I was playing slots at a major top-end Strip property. After a half hour fruitlessly waiting for a floor valet to take a drinks order, we got fed up and headed for the sports bar. Sitting down to play video poker, it came as no surprise that drinks weren’t comped. What did come as a shock was that the bill for two beers was $28!

From the casino executive’s point of view, it can be tough to make major changes. If the culture has been about cost control for years, with some strategic innovation mixed in (for example, the growth of the lucrative nightclub culture), then in a short-termist world, who wants to be the person who stands up and says “nope, we’ll forego some easy income because it’ll be good for us in the longer term”? People get fired for reduced short-term profits. Turkeys generally aren’t in the habit of voting for Christmas (or Thanksgiving).

Given all that, the recent announcement that Wynn are cutting mandatory self-parking charges was a very interesting one. This may be a simple marketing exercise, but it also may be the beginning of the backlash that many believe is long overdue. Summary statistics are of course available for Nevada and Las Vegas visitation, but naturally operators have access to numbers in real time, and if this is the beginning of a readjustment to falling visitor numbers, perhaps there’ll be more to follow.

There is an interesting parallel in the UK, although in retail banking. For decades now, if you banked with one of the big names, your high street experience has been getting steadily less and less personal, and worse and worse overall. You want to speak with someone? Make an appointment. You want something that isn’t absolutely standard? Nah, too much trouble. You want your mum’s local branch to be available, since she’s not so internet savvy? Tough luck, we’re closing it since it costs too much.

In the UK, the rise of Metro Bank has been fascinating. They’re taken a completely different approach from the prevailing one, with the view that the customer does in fact care about service. They’re open evenings and weekends, and they have people on staff who can make decisions. I went in recently to open a new business banking account, and the reception team member had to repeat herself – my mind simply couldn’t process that there’d be someone onsite who could handle that process for me in ten minutes, no need to book for next week.

The Metro Bank route may have challenges, but having all your competitors go the cost-slicing route, eroding service and relying on automation at the expense of personal service wherever possible, might be opening a gap for you to exploit.

The casino world is an even more service-orientated business than banking. Yes, there’s a huge amount of brand loyalty in Las Vegas, but you only need to look through any related Facebook group to see the level of dissatisfaction with being treated like a walking wallet by your favourite casino. Is there an opportunity for an operator to move to the other end of the pendulum swing and offer an experience that people will switch operators to sample?

Enhanced service costs money – a lot of money in the labour-intensive world of casinos. But bank staff also aren’t cheap, and the above example suggests that people may indeed care enough to switch to get the experience they want.

The key for casinos is REVPAR – revenue per available room. It’s no use increasing your levels of service if the customers don’t spend a suitable amount, either on the room itself or, if we’re trying to avoid horrific pricing policies on food and beverage (F&B) and other ancillaries, on gaming. It’s more challenging when you add in the gaming element. Exactly how you manage REVPAR typically depends on the type of customer.

Looking at the very top tier in Vegas – Cosmopolitan, for example, or Wynn – the opulence of the resort is part of the key to attracting the bigger-spending players. However, at the top of the tree, business development is ruled by loss rebate offers, private flights, and the reputation and cachet of the casino itself. It’s the medium spender who’s been shut out by Las Vegas of late. While the average gambling spend for Vegas is around $500 per person per trip, the most disillusioned element are perhaps the spenders in the $3,000 – $25,000 range. Their comps have been whittled away, their bankroll gets eaten at a frightening rate by ancillary costs, and they just aren’t getting treated the way they expect their spend would merit. This group is the one that may most matter to the savvy operator. We’ll see, over the next couple of years, if anyone wants to make significant changes to seriously up their proportion of this cohort by treating them more like a human being and less like an ADT (Average Daily Theoretical) statistic.

By the way, kudos to the Cosmopolitan for getting the message of sympathy out there to the unfortunate people made redundant in the recent MGM layoff round, and that they have jobs available. Obviously there’ll be some self interest – good people are hard to find – but it looks like they’ve recognized that it can happen to all of us, and just putting the message out there that someone empathises may help in some small way.

This report first published in CDC Gaming Reports:

https://www.cdcgamingreports.com/commentaries/is-the-las-vegas-strip-finally-showing-cracks-in-their-pricing-policy/

Where does the casino industry go from here ?

By Paul Sculpher

This article was first published in CDC Gaming reports

Reading the annual results of some betting and gaming operators, you’d think the picture was quite rosy, with a whole world still out there waiting to be conquered, with virgin territory aplenty, and no clouds on the horizon. In reality the challenges outnumber the opportunities. With new options thinning out, the looming spectre of tougher responsible gaming regulation (as highlighted by the recent Panorama and Ross Kemp TV shows in the UK), and the AML landscape only getting harder, who’d want to be a development director in a betting / gaming company today?

There’s a nagging question facing European betting and gaming executives, both online and offline, which doesn’t get talked about too much but is starting to rumble louder and louder in the background – what’s next?

With shareholder expectations based on continuous growth, fueled by the gigantic strides made over the last few years, particularly online, everyone is looking for a way to grow the top line, but the opportunities so to do are increasingly difficult to identify. So I’ve looked, below, at a four areas where development teams might be trying to squeeze some growth out of their business – geographical diversification, innovation, niche operation and legislative change.

Geographical diversification has always seemed like an easy way to generate growth, but this isn’t exactly a secret, and the list of genuine greenfield opportunities is dwindling very rapidly. The investment in marketing necessary to become established in a new country is considerable. In many regions the law relating to online and retail betting is fluid, to say the least, with more than one nascent operation being strangled at birth as a slightly grey set of laws regulates the operation into either non-existence, a tax money pit, or a competitive situation very much in favour of home-grown operators.

There’s hardly a betting operator anywhere who isn’t at least privately wondering how the opportunities in the US will take shape. With state-by-state legislative decisions, there are at least bite-sized territories to take on. Still, plenty of bigger operators will be dreaming of a national brand to dominate all markets, but trying to achieve that and failing would be financially catastrophic. There’s also a cultural piece to consider, with the US market having had a wildly different history from all European markets; coming into that from outside will be a considerable challenge.

The primary alternative to geographical diversification is innovation. Looking at the European market, it’s tough to identify much in the way of really significant change in the last few years. The best global example would probably be the growth in Daily Fantasy Sports, although terrifying marketing budgets are required to really underline the appeal to the consumer. There’s also a distinctly poker-like feel to the real chances of sustained player success (sharks get paid, fish get eaten). That means that it’s an open question as to the long-term longevity of what is admittedly a fun activity, given that most players are facing such a negative expected return on their money.

Alternative innovation options are bound to appear in due course, although in a marketplace as competitive as the current one, the speed of me-too adoption is dizzying. Consider the advent in the UK of bet request services. I can’t remember who was first to offer bets built by the customer, primarily because every other major bookie saw a new shiny option and put their own in place in what seemed like a few days. The next major innovation will surely be in differentiated marketing techniques as opposed to the betting offer itself – and if I knew a few workable options I’d not be telling you here!

Niche operation is an interesting area, in the sense that right now the bigger operators are thinking strategically, with whole countries in their sights and medium to long term opportunities on their minds. As newer markets settle down – or in some cases as the dust settles after new entrants launch into older markets – one imagines there will be opportunities for smaller operators to make a living from distinct sectors, whether they be VIP services, a specialist marketing opportunity, or something more obscure.

Legislative change is listed here as a possible growth opportunity, but few people in the industry are likely to see it as one. Yes, there will be territories (besides the US) where the law will open up to allow serious money to be made by new market entrants, but they’re few and far between. Far more likely are changes that will hamstring territories one by one – a rise in tax rates, Responsible Gambling (RG) initiatives, and of course the ever-present money laundering concerns.

The biggest factor of all, longer term, is likely to be responsible gambling rules. The longevity of the industry in any particular location depends on striking the right balance between making money and keeping losses affordable to players, so there are difficult decisions to make. That’s if the regulatory change isn’t so severe as to make the discussion moot. The future is only going to drive all businesses down the more responsible route.

I’ve seen commentators talk about the initial rumblings of an RG backlash in a territory like the US within two or three years, with serious action only four or five years behind that. If there really is a limited window to make serious money before the hammer falls and some measure of play based on affordability sets maximum losses at an unfamiliarly low level, then there are going to be a lot of burnt fingers. I expect that there’ll be European territories where what today feels like a little over-restriction by the authorities will seem like a pain-free nirvana in five years’ time. As for the US, I’m sure we can all think of political forces so powerful in the US that they can perpetuate a patently ludicrous situation, flying in the face of all logic ….

With all the above in mind, it’s instructive to look at my particular area of speciality, UK offline casinos. There was a time 15-20 years ago when there was unbridled optimism, from the Budd report through to the 2005 Gambling Act, when everyone in the business expected the sector to open up and start generating revenues on a par (per head) with other countries at the same stage of development. While this may never have been realistic, given the number of other gambling options available to the average Brit, it’s fair to say that the UK offline casino sector is now in some trouble. There may be a small bounce in slot and ER business in reaction to the recent restriction in the prize levels for FOBT machines, but few believe the sector has a long-term positive prognosis. The perfect storm of AML legislation, Responsible Gambling restrictions, competition from other sectors, and Brexit uncertainty has hammered the sector. As for growth – well, not too many casino execs are forecasting that. If expected development is anything to go by, then while over the next year a couple of brave, independent operators plan to open new sites, and a long overdue additional casino will arrive in a major city centre, I’d still back long odds-on that more casinos will close in the next three years than will open.

To recap: many an annual report will be talking about the potential for growth across the betting and gaming sector, but with most European markets now fairly fully exploited and legislation and public concern only getting tighter, looking further afield has less impact because everyone’s doing it. So where will that growth be coming from?

Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant

Table Gaming in the UK

By Paul Sculpher

This article was first published in CDC Gaming reports

In the UK, while slots and electronic versions of table games are an ever-increasing revenue stream, the casino industry has always been reliant on revenues from table gaming.  The history of the table game offer in the UK is a curious one however – from as tightly controlled a selection as anywhere in the world to, arguably, now the easiest environment in which to try out a new game.

The piece of legislation that defined casinos last century was the 1968 Gaming Act. This Act and its related regulations were exceptionally restrictive, allowing a very small number of “Banker’s Games”.  The regs even mandated many of the details of the games – it was illegal, for example, to have a player dealt their card, on a Blackjack double, face down, because the regulations insisted all cards should be face up.  The order of numbers on the (single zero) roulette wheel was listed, although curiously nowhere in the regulations did it say you actually had to spin the ball!

Some new games were allowed along the way, including Caribbean Stud Poker, and eventually Three Card Poker, which of course took off as quickly as everywhere else in the world. Still, trying to crack the UK market was a pointless exercise for a game developer – the only way would be to drive popularity elsewhere in the world, and hope the authorities recognized the potential and put your game into an incredibly slow pipeline.

Things have changed dramatically since then, with the inception of the 2005 Gambling Act.  The situation now is pretty much a complete free-for-all. All that is required to have a new game available for licensing and play is to submit the game to the relevant body; then you’re pretty much good to go.   Operators need to supply simple how-to-play guides – hardly a problem; then as long as the house edge isn’t rapacious, you’ll be able to get your game in front of the public, assuming you can get a friendly operator on side.

The challenge of course, especially in an environment like the UK where wage costs are a very significant proportion of revenues, is convincing operators to forego opening a roulette table, and instead to trial a new game with unknown results. Unless a new game outperforms that reliable roulette table (roulette is by far the dominant game in the UK), there’s no value in an operator changing their tried-and-tested mix.

I’ve dealt with an awful lot of proud game developers, all trying to get the blend right to design the new Three Card Poker. The blindness I’ve seen is genuinely amazing. My rule of thumb, as far as complexity goes, is that you have to be able to explain the main bet to me in thirty seconds, or the game’s too complicated. Some of the games I’ve had shown to me have been more complicated than Monopoly. But when you factor in that your playing audience is likely not an experienced gaming person, doesn’t have a huge attention span, and may well have already tucked into a couple of adult beverages, complexity is not your friend. On the flip side, there’s a reason why Casino War and Money Wheel haven’t dominated the casino scene globally: lack of complexity and depth (and chunky house edges).  The right blend of complexity is key; a game with a simple-to-explain bet, plus another type of bet with a bit more depth, is ideal. Personally, I always prefer a game with multiple moments of tension – so in Blackjack, for example, the player gets their own cards, then the tension of the dealer completing their hand gives you double value for your stake.

The other pitch I hear all too often is “I’ve got a new game, it’s a blend of x and y”.  Just stop!

The alternative for the new game developer is of course the side bet. In theory this barely slows the game down, doesn’t require the operator to forego their reliable earning table, and gives the player something else to keep them interested. Getting the mix right here is also important, however. We can all run the calculation of expected win (EV) per side bet, and compare it to expected win for the base bet. Blackjack is the best example, where you can have a £5 game with an expected value of maybe 5p per hand, and a £1 side bet with double the value to the operator. But it’s never that simple from the operator’s perspective. Number of hands per hour will decrease, particularly, as in the above example, where the side-betting unit is a different chip (£1 ) than the base bet (£5), meaning players will forever be needing change.

You can also destroy the essence of the game if side bets start dominating matters. I’ve seen a BJ game with three side bet options at £1, plus the progressive, and while the EV equation stacks up even at a slower hand rate, it becomes an unbearable experience for the player who just wants to play Blackjack. Instead of a lively game with a liquid dealer blasting out hands and constant decisions to be made by the players, they’re watching interminable cases of picking up losers, paying out winners, and making change. If your better players don’t want to play where there are side bets, give them an option without, or at least jack up the side bet minimums so your compromised game pace makes proper money.

There’s an argument that table games aren’t really part of the future, and it seems in the long run that’ll be true, but with slot regulations pretty tight in the UK – 20 machines allowed per standard casino licence – that revenue has to come from somewhere.  The costs associated with running table games are of course huge, but they’ve traditionally been the heart and soul of casino gaming, and while that won’t last forever, it’s critically important to get the offer right in a tough marketplace that’s getting tougher.

Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant