Summary

In this episode, Nick and Don speak with Derik Mooberry, CEO of Zitro USA. Learn about Zitro's rise from niche electronic bingo provider to a global supply-side powerhouse, its plans for the North American market, and the company's increasingly compelling Class III slot portfolio. Also in this episode, leveraging superstar inventory to dial-back free play.

Transcript

Nick Hogan:

Good morning, Don. How are things in the Midwest today?

Don Retzlaff:

Good morning, Nick. It’s beautiful. It’s another year where August is cooler than June and July. It’s maybe 80 degrees today in St. Louis. So not bad at all.

Nick Hogan:

And you haven’t been blown away by a tornado, which is good news.

Don Retzlaff:

Yeah, no severe weather at all in months.

Nick Hogan:

Okay, cool, cool.

Don Retzlaff:

What’s weather like over there in the summer?

Nick Hogan:

Oh, maybe we get into the eighties sometimes. Sometimes we get sun if we’re lucky, but other than that, it’s just Northwestern Europe, lots of gray, so it’s a mixed bag, but it’s not too bad here in this time of year. So, okay, so industry news out last week, Don, I caught a headline about maybe it was a couple weeks ago, about further delays in New York City’s selection process for the city’s three proposed casinos. Now, Don, you and I, we know several people who’ve been wrapped up in these bids from the word go, and it seems like each time we see them at a trade show or other industry events, the question, how are things going, New York? Is invariably met with a long hefty groan. So after seeing that headline and I then read a New York State senator had referred to the process as quote an embarrassing picture of an ineptitude, I decided to take a closer look at that structure there and see what’s going on there.

And indeed, it seems like a bit of a red tape nightmare. So as I understand, as opposed to the process that led to the upstate openings back in 16 and 17, the New York State Gaming Commission is actually not the body with final say over these licenses. So instead, the state created a five person gaming facility location board, which is going to render the ultimate decision. But this board can’t even review proposals until they’ve been ratified by two thirds majorities by, so-called Community advisory committees, which are reviewing the details of the projects proposed for their given municipal communities.

So we have committees, piggybacking committees here, so it sounds like. In any event, the original deadlines for proposals was 31 August of this year with the community advisory committees to be announced and seeded no later than 30th of October. And then from there, the advisory committee votes were to be submitted no later than 27 February of next year. However, the state has now announced that the last milestone is now the first. So proposals are due by 27 February with the advisory committee votes due by 27 June. So that’s a nine-month delay. And what insiders are saying is that they don’t really expect it to be the last. So Don, it looks like it’s going to be a while before you’re bankrupting the big apple with your slot play.

Don Retzlaff:

There’s always delays. I’ve been waiting for a New York and Texas it seems like for 20 years.

Nick Hogan:

Yeah, there you go. Japan’s another one. Yeah, it just keeps on going. Okay, so we can move on to listener questions here. Don, before I do, let me say that we love to tackle any questions that anybody listening may have. If you have a question about what we’re presenting or something you’d like us to present, please drop us an email at reelcast@reelmetrics.com. That’s R-E-E-L C-A-S-T#Realmetrics.com, our policy is to keep all questions anonymous, so please speak directly and don’t worry about us revealing your identity, not something that we do.

So Don, this one comes from an operator in the American Midwest who asks, hi guys, in the last episode you were discussing free play and Don made the comment that if you have the right product set at the right hold percentages, you can safely dial back the free play. Can you expand on this a bit? PS, if you’re ever in the neighborhood, please come see us. We’d love to buy you guys dinner. Don, so first of all, thank you to the listener for that question as well as the dinner invite. Trust that we’ll be cashing in next time we’re in the hood. So Don, do you want to tackle that question there?

Don Retzlaff:

Oh, that’s such a tough one. I ran a casino that had a very low penny hold percentage, and it really worked well for us. We didn’t have a lot of amenities and it gave players a chance to have time on the vice without subsidizing their play. And then we’ve really seen a big change since COVID and we’ve seen a lot of companies dial back on free play. And it’s worked, especially for those customers that have say an ADT below 150 or $100. So many of the casinos that we work with have a rated slot play of 50 to 70%. And so you’re not hitting those players anyway, they’re a good chunk of your players with free play. And we’ve really seen that the games that you select really has a big influence on how long they’re playing and what their average bet is.

And that’s been the big difference that we’ve been seeing. The top 50 games out there have such a longer session time and have such a higher average bet that companies can dial back on their free play. And if you want to push it towards your better customers, which shows the majority of your revenue. So it’s always a tough one. I’ve had bosses that say, “We don’t compete on hold, we compete in the mailbox or in their email box.” But there’s so much of that play out there not as unrated. And I know a lot of the chief marketing officers out there are trying to figure out how to get those customers. I think the best way to