Heading into G2E everyone is looking for the next trend, the next big thing in the gaming industry. We all want to know what to expect in the year to come. Thousands of people will be scurrying around the displays searching for a glimpse of the future. Slot machines, slot machine displays and slot machine manufacturing companies will dominate the speeches, the dialogue on the floor and the after show analysis. However, there will be other things worth seeing that may escape the analyses.
When G2E is over and we have all gone home, for a few days, maybe even a month or two we will think we have glimpsed the future. But, by January something will have happened that reshapes not only our thinking, but the industry. Remember last January when Caesars and Tropicana bought the Atlantic Club and closed it? That event shaped the rest of the year for Atlantic City as three more casino closings followed it. The closing of those four casinos in Atlantic City and one in Tunica have significant implications for the industry as a whole.
In July, another major-industry-changing event occurred when the mega-merger between IGT and GTECH took place and it was followed by another merger between Scientific Games and Bally. The consolidation in slot manufacturing trend is not new, but this year it took on a new dimension. The slot machine companies are getting bigger and bigger, while the smaller ones are disappearing. Those two events, the closing of casinos in Atlantic City and the mega-slot mergers defined 2014 and probably 2015. Those are signs that none of us missed, but who amongst us saw signs of them at G2E last year? I know that I did not.
Although not quite so dramatic as the consolidation and closings, there are other signs that also indicate changes in the industry. Recently, Boyd announced its COO was leaving to “spend more time with his family.” Okay, I admit the quote is mine and not part of the announcement. It is used so often to cover up other issues that I could not resist. COO Paul Chakmak is leaving Boyd, but is not being replaced. Instead the company’s CEO, Keith Smith, will be assuming his duties. It is a clear signal that Boyd is changing its strategy. Boyd is leaving its growth and expansion phase and retreating into cost savings and restructuring to cope with poor gaming revenues across the corporation’s casinos. Boyd is not as large as Caesars, nor does it have as much debt. But the underlying economic problems in the industry are just as obvious in Boyd’s simple personnel change as it is in Caesars debt restructure.
Boyd Gaming Corp. said Tuesday chief operating officer Paul Chakmak was leaving the casino company…Company CEO Keith Smith said he would assume Chakmak’s responsibilities with the Las Vegas-based regional casino operator. In a statement, Smith said Boyd has been looking for ways to improve its operational performance. “Given today’s operating environment, we believe that more direct oversight and a streamlined decision-making process will position us to improve our operating performance going forward, and allow us to execute our growth strategy more quickly and effectively,” Smith said. Howard Stutz, Las Vegas Review-Journal, 9-15-14
In Connecticut, Scott Butera has left Foxwoods for, of all things, the Arena Football League. Butera was very positive in his statements about Foxwoods. But he was looking forward to an exciting new challenge.
Foxwoods CEO Scott Butera, a key figure in the restructuring of the casino’s $2 billion debt, is stepping down at the end of next month to pursue an opportunity outside the gaming industry, the tribe that owns the casino announced Wednesday. Butera has been chief executive at the country’s largest resort-style casino since late 2010 and will remain involved in negotiations with Foxwoods Resort Casino’s lenders as a senior adviser. Associated Press, 9-16-14
The Arena Football League has hired entertainment and hospitality executive Scott Butera as its commissioner. Butera will leave his job as CEO of Foxwoods Resort Casino to become the league’s seventh commissioner. He succeeds Jerry Kurz, who became commissioner in 2010 and is now the league’s president. Associated Press, San Diego Union-Tribune, 9-22-14
Butera’s departure from Foxwoods is also a clear sign of a shift in policy and the stresses that the economy is putting on all casino companies. It indicates that Butera thinks there is no future at Foxwoods, that it will not be growing or expanding and his particular brand of magic – he is a “turnaround specialist” – has run its course. Butera probably felt his time at Foxwoods was limited. He must have expressed an interest in the football job; I can’t imagine the Arena Football League was scouring the country’s casinos looking for its next CEO.
We may search G2E with all the diligence at our disposal, but the clues to the really big changes and even the overall health of the industry are likely to remain hidden from us. Those have a way of revealing themselves in real-time and real events, not stepping into the limelight in a crowded hall. Still, G2E will be interesting; there will be new slot machines galore to see. There will also be hundreds of other new products covering every aspect of the industry. There will be speeches and presentations given by industry leaders and experts and there will be the keynote speeches by Steven Wynn and Sheldon Adelson. I have never heard Adelson speak, but Wynn never disappoints and maybe, just maybe one of them will give us a glimpse of the future.
