ops5 building-a-new-entertainment-brand
TRANSCRIPT
Building a New Entertainment Brand: The Story of Community Gaming Centres
Canadian Gaming Summit - 20 April 2011
Building a New Entertainment Brand
BC’s Model
Flashback
Envisioning a New Future
– Four Cornerstones
20/20 Hindsight
– Issues
– Successes
– Regrets
– Results
BC’s Model
Gov’t Gaming Policy & Enforcement Branch is the regulator for all gambling in BC (commercial, charitable, horse racing)
BCLC is a provincial crown corporation with responsibility to conduct and manage commercial gambling:
– Lottery (1985)
– Casino (1997)
– Bingo (2001)
– CGCs (2004)
– Internet (2004)
BCLC has long-term contracts with private sector companies for Casino/CGC/Bingo operational services and facilities
BCLC: Net Win Growth
$6.40
$7.10
$8.00
$9.00
$10.00
$11.00
$12.20 $12.80
$13.40 $13.40
$14.10 $14.70 $14.80
$15.20 $15.40 $15.00
$0.38 $0.38 $0.41 $0.46
$0.75
$0.89 $0.94
$1.03
$1.14
$1.25
$1.40
$1.61
$1.78
$1.91 $1.95 $1.94
$2.03
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
CANADA BC
BCLC: 2011 Net Win Projections
$464.9
$16.0
$166.9
$39.3
$1,339.3
Lottery
eGaming
Community Gaming (slots)
Bingo
Casino
Building a New Entertainment Brand
Flashback
State of the Industry: 2001
Industry initiative to turn around dying business and protect charities; BCLC manage & conduct
32 Bingo Halls around the province
22 Service Providers (many were charities)
3-4 Bingo Halls on the brink of closure
Negotiating for territories; new agreements
Model did not preclude charities from continuing as Service Providers
By 2003, BCLC/Industry jointly exploring future models
Flashback to 2004: Perceptions Bingo players said….
Bingo is a social ritual that’s important to me, but far short of ideal.
“Get away from Cheese Whiz poured over
nachos.”
“You should be allowed to
socialize while you’re playing.”
“We should be treated less like cattle and more like valued customers.”
“Bingo could be more
entertainment based , rather
than just a sterile room.
It could be more fun.”
Flashback to 2004: Perceptions
Non-players said…..
I can’t see myself playing.
“Crummy prizes”
“Bingo is a game for
old people and losers”
“Smoke-filled halls”
“Boring”
Flashback to 2004: Ideal What players and non-players wanted…..
“Not too dressy.”
“Something for everyone.
Go as a group, play some games and
meet up later for a drink.”
“Sharing, humour.”
“Having fun, feeling good
about myself.”
“Freedom, escape from
everyday.”
“Exhilaration.”
“Dancing!”
Flashback to 2004: Reality
Flashback to 2004: Reality
Flashback to 2004: Reality
Building a New Entertainment Brand
Envisioning a New Future
The Challenges
Create a strong business from a dying business
Ensure the new business can compete long term
Mix existing bingo players with new guests
Encourage investment; create attractive ROI for
Bingo Service Providers and BCLC
Align BCLC and BSP visions
Build positive partnerships with municipalities;
create a financial and entertainment asset
Strategic Response
New Revenues – use bingo gambling facilities to
meet market demand for slots in a responsible way
Differentiate Our Portfolio – distinguish the CGC
experience from Casino and Hospitality facilities to
improve overall market penetration/participation
Reinvent the Experience – create broader appeal
and compete effectively as an entertainment option
Strategic Response:
New Revenues – Meet Slot Demand
8,000 slots in BC; market demand for 14,000+
Bingo model not viable
Casino model not feasible
VLT model not desirable
Bingo halls in BC already offered gambling
Municipal participation in gambling revenues
Community Gaming Centres were born:
– Lower cost operating model (vs. casinos)
– New/Different standards for staffing
– Maintained gambling integrity and player safety
Strategic Response:
Differentiate Our Facility Portfolio
Strategic Response:
Reinvent the Experience
Four Cornerstones:
1. Exciting, inviting facilities
2. Product variety
3. Remarkable guest experience
4. Effective marketing
Four Cornerstones:
1. Exciting, inviting facilities
Vision:
• 16,000 to 25,000 sq. ft. on a single level
• Enter through lively slot zone, transition thru lounge and e-bingo, quiet zone for paper bingo
• Quality F&B amenities; space for group events
• Small stage (100-200 sq. ft.)
• Moderate facility investment
• Most $9M - $11M
• Range $4 - $19M
• Facility Development Comm’n
Exciting, inviting facilities
Flashback to 2004…….a reminder
Exciting, inviting facilities
Four Cornerstones:
2. Product Variety
Vision:
• Bingo – paper, electronic, linked, personal play
• Slots – 50-225, lower volatility/denoms/jackpots
• Tables – electronic only
• Lottery – Lotto, Keno, S&W
• Horse Racing - teletheatres
• Interactives, Multiplayer
• Signage – more subdued
Product Variety
Four Cornerstones:
3. Remarkable Guest Experience
Vision:
• Friendly, personal service
o Chances Customer Service Standards
o Customer Service Training Kits/Modules
• Well-priced, quality food & beverage
o White Spot comparable
• ‘Winnertainment’
o Game Shows
o Musical Bingo
o Lightning Bingo
o Contest Vignettes
Remarkable Guest Experience
Four Cornerstones:
4. Effective Marketing
• Shared marketing roles:
o BCLC supports provincial player development
o SPs support local player acquisition and loyalty
• Common brand to compete for share-of-voice
• Graphic Standards/Templates
• Chances brand positioning:
“Chances celebrates
the thrill of winning, great food
and hours of fun with your friends.”
Effective Marketing
Building a New Entertainment Brand
20/20 Hindsight
Issues
BCLC and SP alignment
- Managing expectations
- Vision (lack of long term view, requirement to invest)
- Slots (number, need for facility upgrades, selection)
- Compensation, contract terms
Access to capital (charity-owned SPs)
Chances Brand: preserve sense of ownership/independence and desire not to become a ‘franchisee’
Municipal approvals: initial reticence but Service Providers and charities were very successful in engaging communities
– problem gambling, crime, policing costs, revenue-sharing, public acceptance
Successes
Player participation and support in small markets
Overall market growth, limited cannibalization
Vision achieved: Four Cornerstones
– Facilities: 15 CGCs, 4 underway, 10 Bingos remain
– Guest experience: F&B, ambience, service
– Variety: products, winnertainment, amenities
– Effective marketing: Chances brand, BC Gold
Municipalities now seek CGCs (new, relocations)
Regrets
Underestimated change management
New operations requirements overwhelmed SPs
Compensation
Contract structure
Over-built bingo floors
Several SPs over-leveraged
No SP downside for delays in build-outs
Results
BCLC: CGC revenues $275 Million
SPs: annual commission/investment 13-32%
Slot cannibalization of Bingo met projections (22%)
Player visitation increased by 50%+
Player satisfaction (77%)
Public support for gambling remained steady
Municipal revenue-share $8 Million per year; plus tax revenues, employment, economic spin-offs
Community Gaming: BCLC Net Income
$18.8
$27.9
$36.7
$63.2
$76.2
$81.1
$91.2
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
Net Income
Building a New Entertainment Brand