Shuffle Master promises operators a cooperative approach in interesting times
Tim Parrott may not be a gymnast, but he is promising Shuffle Master’s customers a new era of flexibility and partnership.
“My focus is to accelerate our ability to offer a suite of products. We want to be viewed as a valued partner helping our customers manage their casino floor,” he stated amid the din of the recent G2E Asia 2009 gaming industry trade show in Macau.
“I want us to come in with a lot of flexibility and let them [the customers] interchange product, and move things around to generate more revenue per square metre. We can do that with the [product] suite we have.”
Mr Parrott has spent the last few years on the supplier side of the gaming industry equation. He has been CEO of Shuffle Master since March this year. Prior to that he was president and CEO, Americas for Aristocrat, whose parent is the Australian gaming equipment manufacturer. But the bulk of his 20-year gaming career has been as an operator.
“I look at everything as if I still run casinos,” he says. That ability to see life from both sides is a key element in ensuring good communication between Shuffle Master and its customers.
Positive attitude
Mr Parrott admits Shuffle Master was occasionally described in the past as being rather rigid in its approach to product arrangements. He says the company’s focus is now to maximise its flexibility. He adds that Shuffle Master will dip into its vast product suite and allow clients to hand pick the mix that best suits their needs.
“Operators can take comfort from our exchangeability, which enables them to play our products like an orchestra and adjust [the mix] as they see fit for their demographic, location and casino layout,” he states.
“I don’t want any customer to feel that they’re stuck with something. We’ll do lots of things to bring their risk down to a marginal level and, again, if they’re not happy we’ll deal with it very quickly by replacing a product or taking it out [from the floor].”
It helps, of course, that Shuffle Master is pre-eminent when it comes to table games, and table games rule in Asia.
“We’re the market leader in every category we’re in. That’s certainly the case in the utility business with our shufflers and shoes,” states Mr Parrott. “Globally, out of the top ten table game titles, eight are ours including Three Card Poker and Casino War.
“We’re hoping we carry that same ratio over to emerging markets like Singapore,” he adds.
Merchandising approach
Traditionally, gaming in Macau was the domain of high rollers and still is in terms of VIP play’s contribution to gross gaming revenue. An element of resort entertainment arrived with the opening of Dr Stanley Ho’s Casino Lisboa, in the 1970s, but the junkets and VIPs maintained the balance of economic power. In Singapore, and to some extent Cotai, a reclaimed piece of land with integrated resorts that forms the backbone of the ‘new’ Macau, the focus is aimed more at entertainment and mass tourism. Mr Parrott says this trend plays to Shuffle Master’s strengths, because mass gaming floors are all about diversity. He argues that the best operators look at casino floors the way that merchandisers look at supermarket floors.
“There has to be a diverse range of products, from everybody’s favourites through to things that appeal to impulse buyers. In a gaming sense, just as in a department store, rows and rows of the same thing do not create excitement and diversity,” he explains.
This way of thinking, he says, combined with the global economic downturn and operators’ need to reduce costs and bring more people in, makes clever casinos more open to innovation as they seek new sources of revenue.
“Operators have the challenge of high fixed costs and these can only be reduced so far. Then you have to look at various ways to extend the play of people, or to find revenue from new players,” points out Mr Parrott.
Innovation
To that end Shuffle Master is constantly developing games to keep its new product pipeline exciting.
“We’re only as good as the product we have,” he acknowledges. “You always have to come up with a new hit movie or hit record. Now, and in the future, we have very good products in the wings.”
At this year’s G2E Asia, the product creating a particular buzz at Shuffle Master’s booth was the company’s new i-Table, a combination of electronic gaming table and live dealer action. The equipment is just launching commercially in the US and Mr Parrott believes i-Table will be very well accepted in Asia.
“Some of our games might not be what a high limit player would play, but their spouse or friend might,” he asserts. Like any new product, the proof is in the playing he explains.
Positive trend
Asia is targeted by Shuffle Master as one of the company’s key markets for growth. Despite recent turbulence in Asian gaming markets—much of it linked to the fall out from the global credit crisis—the trend is still upward, says Mr Parrott. He says the head count of visitors may have been down at this year’s G2E Asia Show but the quality of delegates was not.
“From a global perspective, Asia is not the exclusive growth area, but it may be the biggest,” he suggests. “We had some traction from Vietnam and other areas at the show and even secured some unexpected business. The Philippines is very exciting in the near term. Overall, Asia holds a lot of promise for us.”
He acknowledges that the situation in Cambodia, where the government is reassessing its gaming model, is unsettling for industry players and financial markets, but it’s really just a “fact of life”. He remarks that Cambodia is not unique; gaming markets in Russia and Brazil are also in transition. In those jurisdictions there is huge impetus to get gaming growth back on track because of the tax dollars it generates, he suggests. “They’re all in need of more revenue and that will sway the tide,” he predicts, believing the US market will also eventually turn.
“We’re a guest in every market we’re in, other than Australia and the US [where the company has corporate offices]. And in any emerging market, in any part of the world, you have to be careful how it grows as regulators get used to what they’re doing.”
Regulatory framework
Mr Parrott has a good grasp of regulatory issues for the industry. He is a founding board member of the American Gaming Association, which was created in 1995 to represent the casino gaming industry on federal legislative and regulatory issues.
“It is healthy where governments are reassessing to make sure they have the proper regulations in place and [the gaming market] is run with integrity. It’s positive for their residents to make sure they’re playing games that are on the up and up; the government is getting its appropriate taxes, and operators are well funded. Although it may be disruptive, long term it [active regulation] is better for the industry.”
