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July 06, 2020

The Road Back: Bobby Soper, Sun Gaming and Hospitality

ROBIN-HARRISON-MILLAN
The Road Back: Bobby Soper, Sun Gaming and Hospitality

Ready or not, casino properties across the US are reopening. Safety measures, non-gaming amenities, and economic concerns are all top of mind for casino operators as they enter into the uncharted territory left by months-long casino closures. 

As Clarion Gaming prepares to discuss the Road Back with some of the land-based sector’s leading figures, Sun Gaming and Hospitality president and CEO Bobby Soper offers advice and discusses strategies that will help the industry adjust to the new normal.

By Cole Rush

At Sun Gaming and Hospitality, Soper is involved with a variety of projects spanning the gaming industry as a partner, investor, and consultant. Currently, he’s driving online lottery and gaming launches in Asia and South America, consulting with land-based operators to improve their casino floors and non-gaming amenities, and supporting suppliers of esports and sports wagering services. 

The casino industry is changing, and the gaming landscape will inevitably evolve as a direct result of novel coronavirus (Covid-19) closures and economic downturn. Though the future is uncertain and operator strategies can change by the day, Soper says early signs of recovery are positive. 

“Nobody has a crystal ball,” he says, “but we have seen that the reaction in the bulk of US markets, especially regional markets, has been really strong. There’s been a lot of pent-up demand to return to casino gaming.” 

Though reopenings come with challenges and plenty of customer concern, Soper notes that operators have thus far done an excellent job implementing policies that protect casino patrons. 

“There has naturally been a lot of concern related to the pandemic and the spread of the virus. Every customer is different. You have some that aren’t worried at all, and others at the other end of the spectrum who are more vulnerable or perhaps just more anxious about coming back to a casino.” 

All customers are important, Soper continues, so you have to cater to everyone to drive business. “Operators have to assume that a lot of customers fit into that cautious end of the spectrum. They’re nervous, but they’re taking the chance and coming to your property. It’s absolutely imperative to communicate the safety measures and showcase the safe environment you’re creating for them.”

Soper cites sanitation programs, temperature checks, social distancing, and physical barriers as the baseline measures put in place by most operators. “Those are prerequisites,” he says, “The best thing you can do as a property is adopt best practices and mitigate risk. Once you do that, I think there’s an opportunity to kickstart marketing programs that encourage safe play on the casino floor and bring back non-gaming amenities that also implement those safety policies.”

The casino customer experience
Right now, Soper says initial demand is high, so casinos are seeing an influx of players. But as time goes on, he suggests that properties will need to tweak their strategies to attract the players most willing to visit a casino.

“With the high demand, operators haven’t needed a lot of investment to get players in the door. But over the next month or two, they’ll start to learn who’s coming, what segments are there, and what they’re playing. We’ll start to see campaigns created and launched that are consistent with that data.”

Casino gaming is just one piece of the larger puzzle, though. Soper emphasizes the need for a holistic strategy that includes an all-encompassing offer to customers. 

“At integrated resorts, components outside of casino gaming are crucial. Meetings, conventions, live entertainment, nightlife, and restaurants are equally critical. They drive business.”

But these “non-gaming amenities” come with their own challenges, especially with lingering Covid-19 concerns. Soper cites restaurants as a key example: “It’s very difficult to operate a restaurant at 50% capacity. You typically see peaks on weekends and make your profit margins when you run at capacity for two, three turns per night over the weekend.”

He notes that other on-property draws have similar problems. “Non-gaming amenities encourage longer visits, drive revenue, and build loyalty with customers. But this creates some tough decisions. When do you open these other entertainment venues? Say you have a venue that seats 500 but you can only allow 250 now. If you run that event, you’ll probably lose some money. Operators have to be very astute. Does it make economic sense to operate amenities at a loss?”

Economic standing may play a role in these tough decisions, according to Soper. He continues to say that properties that operate on a long-term basis have more flexibility with their non-gaming offerings: “Operators with capacity and balance sheets to run these amenities, even at a loss, may find that those events are a difference-maker in terms of encouraging customer visits.”

To further complicate matters, operators have to take great care in what they offer to consumers as incentives to visit. Special offers are enticing and can drive more on-property engagement, but with health and safety policies in place, these can be risky. 

“You don’t want to overbook your restaurant through special offers and create long waits or a bad experience for your customers,” Soper says. “I think we’ll start to see some unique marketing offers in place of more traditional promotions like gift giveaways, which are harder to run now due to social distancing needs.”

“Time will tell how these strategies work, but the industry will see a lot of adaptive planning as properties decide what they are willing to do to drive customer engagement.”

The big picture: Economic impact
Health and safety remain top of mind for industry stakeholders, but Covid-19’s reach extends to the economy as well. The economic impact of the virus can’t be overlooked, according to Soper, because it represents a long-term issue with impact well beyond temporary closures. 

“The big picture that isn’t always the focus is: what about the economic environment? Are we going to see a repeat of 2008, when we have an 18-month recession, poor consumer confidence, and a decade to get back to where we were? Or are we going to bounce back quicker this time?”

The need for “economic survival,” Soper argues, will undoubtedly shape the industry going forward. Jobs and livelihoods are at stake, alongside massive businesses. When federal loans and subsidies dry up, customer confidence will define the future of gaming. Soper cites recent demand in regional markets as a good sign, but he’s careful to note that the outlook isn’t as positive across the board. 

“Right now, it’s really difficult to fly to destination markets, and that creates a challenge for businesses operating in places like Las Vegas or Atlantic City. Gaming destinations were disproportionately affected by 2008’s recession, and we might see similar outcomes in the near- to mid future.”

On the other hand, regional success bodes well overall for the casino industry. The pent-up demand is a good early indicator of how well the industry will recover. 

“The future will largely be determined by the progress of the virus, but the positive here is that we’ve had a great response and plenty of demand in regional driving markets. That’s a very good early indicator.”

Still, Soper clarifies the ongoing need for caution. “We have to wait and see how reopenings perform over the coming weeks and months. From there, we need to focus on long-term economic impact.”

A road back; A look ahead
The casino experience will evolve, and the economy will fluctuate. And though Covid-19 will inevitably alter the casino industry, many of those changes will mark transformative shifts in how players engage with casinos.

Soper finds one silver lining particularly exciting.

“Despite the obvious negative impacts, there are plenty of positive opportunities that have surfaced in recent months, and number one on that list is online gaming.”

Though sports betting has taken a hit due to widespread league shutdowns, online gaming has seen a boost during the pandemic. Soper believes that the digital arena presents a “tremendous opportunity” to spark legislation that would bring igaming to new markets. 

“We’ll start to see progress at the legislative and political levels in jurisdictions that already have some propensity to move forward with online gaming. Those who have been slow or hesitant to legislate in the past may now have more incentive to do so. Consumers now see the value [of online gaming] and have been exposed to it more than ever before. It’s a way to capture lost revenue and engage new players.”

Digital channels can benefit land-based properties, too, Soper says. “It’s important to implement igaming now. Tie those licenses to your land-based facility so it complements your offering. The proactive thinkers in the gaming industry will make that push.” 

Join Soper live on Friday, July 10 during ICE North America Digital’s The Road Back webinar series, when he will discuss these strategies and the future of gaming at length. To reserve your place for an individual webinar, or to register for the entire series, please click here

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