Ops5 building-a-new-entertainment-brand

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  • 1. Building a New Entertainment Brand:The Story of Community Gaming CentresCanadian Gaming Summit - 20 April 2011
  • 2. Building a New Entertainment Brand BC’s Model Flashback Envisioning a New Future – Four Cornerstones 20/20 Hindsight – Issues – Successes – Regrets – Results
  • 3. 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
  • 4. BCLC: Net Win Growth$18.0 $2.5$16.0 $15.20 $15.40 $15.00 $14.70 $14.80 $14.10 $13.40 $13.40 $2.0$14.0 $2.03 $12.80 $1.95 $1.94 $12.20 $1.91$12.0 $11.00 $1.78 $10.00 $1.61 $1.5$10.0 $9.00 $1.40 $8.00 $8.0 $1.25 $7.10 $6.40 $1.14 $1.0 $1.03 $6.0 $0.94 $0.89 $0.75 $4.0 $0.5 $0.46 $2.0 $0.38 $0.38 $0.41 $0.0 $0.0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 CANADA BC
  • 5. BCLC: 2011 Net Win Projections $464.9 Lottery $16.0 eGaming Community Gaming (slots) $166.9 $1,339.3 Bingo Casino $39.3
  • 6. Building a New Entertainment Brand Flashback
  • 7. 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
  • 8. Flashback to 2004: PerceptionsBingo players said….Bingo is a social ritual that’s important to me, “Bingo couldbut far short of ideal. be more “You should be entertainment “Get away from allowed to based , rather Cheese Whiz socialize while than just a poured over you’re playing.” sterile room. nachos.” It could be more fun.” “We should be treated less like cattle and more like valued customers.”
  • 9. Flashback to 2004: PerceptionsNon-players said…..I can’t see myself playing. “Smoke-filled halls” “Crummy prizes” “Bingo is a “Boring” game for old people and losers”
  • 10. Flashback to 2004: Ideal “Exhilaration.”What players and non-players wanted….. “Freedom, “Sharing, escape “Something for humour.” from everyone. everyday.” Go as a group, play some “Dancing!” games and “Not too meet up later dressy.” for a drink.” “Having fun, feeling good about myself.”
  • 11. Flashback to 2004: Reality
  • 12. Flashback to 2004: Reality
  • 13. Flashback to 2004: Reality
  • 14. Building a New Entertainment Brand Envisioning a New Future
  • 15. 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
  • 16. 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
  • 17. 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
  • 18. Strategic Response:Differentiate Our Facility Portfolio
  • 19. Strategic Response:Reinvent the ExperienceFour Cornerstones:1. Exciting, inviting facilities2. Product variety3. Remarkable guest experience4. Effective marketing
  • 20. Four Cornerstones:1. Exciting, inviting facilitiesVision:• 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
  • 21. Exciting, inviting facilities
  • 22. Flashback to 2004…….a reminder
  • 23. Exciting, inviting facilities
  • 24. Four Cornerstones:2. Product VarietyVision:• 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
  • 25. Product Variety
  • 26. Four Cornerstones:3. Remarkable Guest ExperienceVision:• 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
  • 27. Remarkable Guest Experience
  • 28. 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.”
  • 29. Effective Marketing
  • 30. Building a New Entertainment Brand 20/20 Hindsight
  • 31. 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
  • 32. 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)
  • 33. 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
  • 34. 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
  • 35. Community Gaming: BCLC Net Income$100 $91.2$90 $81.1$80 $76.2$70 $63.2$60$50 Net Income$40 $36.7$30 $27.9 $18.8$20$10 $- 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
  • 36. Building a New Entertainment Brand