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Peter Brooks Interview
Casino International recently met Peter Brooks, Executive Deputy Chairman of Genting Stanley and asked him about the company’s plans for the future, the renovations at Crockfords in London and much more besides…
Peter Brooks is, as Executive Deputy Chairman of Genting Stanley, one of the most influential people in the British casino industry. It seems fitting that he works in the Genting Group, a forward-thinking and aggressive casino operator that owns properties worldwide, with more in the pipeline, including Sentosa, their Singapore development which looks set to be something really special.
When the Genting Group bought Stanley Leisure in 2006, it became part of an organisation with a net value upwards of $10billion US. The acquisition meant that Genting owned more casino properties in the UK than anyone else, with 44 operational at the moment. The company also recently launched an online gaming interest, www.circuscasino.com, its first online casino brand. Peter talks to Casino International about all this and more…
Casino International: How long have you officially been with Genting Stanley?
Peter Brooks: I started work for Genting in the casino sector in the second half of 2004; when we acquired Maxims Casino Club. We took control of that in the beginning of 2005, and working as a director there was my introduction to the casino business. I got myself certificated and began to learn about the business. That carried on to late 2006 when, having bought Stanley Leisure, what we agreed was the right thing to do was to fold oversight of Maxims into the bigger estate. I was doing that two days a week because I had various other jobs that I was doing, the largest of which is I’m Chairman of a company called Enodis which manufactures food service equipment.
CI: How does Genting Stanley’s presence work online? You, as a group, have very different properties in Crockfords, Maxims, Stanley,with very different clients. Are you going online as a group brand, or with individual brands?
PB: At the beginning of 2007, looking forward to the ability to advertise we decided we should undertake a branding review because we had a whole mish mash of different names, different fit outs, different premises, and different markets in the provincial estate. We basically took three brands; Circus, Maxims and Mint. Circus is for the fun general player, general audience, Maxims is more for the professional, aspirational player, it’s a more discreet, slightly more luxurious and Mints for the traditional gamer; that’s crudely how we’ve done it and it was literally to get the whole thing under way.
We had quite a debate about what brand we would use to launch our online product, because you could launch on all of our brands but then it becomes A) very expensive and B) rather diffused, so we wanted to hit it with a single brand. We decided to go with Circus as the brand and we’ve launched circuscasino.com as our first online brand.
We’ve got somewhere in the range of 4-500,000 contactable accounts in the land-based estate and we will look to access as many of those people as possible. We will treat the online business, which is an offshore business, quite clearly separate, although for the player we will aim to provide a seamless service so that the distinction should be invisible to the customer. The online business will treat the land-based business as an affiliate, like any other online supplier and paying affiliates, so we will incentivise the land-based estate to contribute to getting people to play online. If you play back two years that would have been very hard to do because there would have been the natural reaction of cannibalisation; there’s still an element of that inevitably but people have been surprised to discover how many of their land-based members are also playing online.
Between a quarter and a third of our players in clubs today are also playing online and we want them to play with us and not somebody else, it’s a pretty simple story.
We’ve rolled that out starting with CircusCasino.com, and we have the ability with our software supplier to add ‘skins’ so we can add Maxims, we can add Mint… We haven’t decided whether we will or will not do that, because we may want to focus all of the promotion effort on the one name.
I’ve not mentioned the upmarket London brands – there is undoubtedly a place for a high roller online site, it should use a brand like Crockfords, which offers a very different perspective on customer service. The way people get looked after here [Crockfords] is very personal, very high level and you need to find the right ways to replicate that. You can’t do that through a mass market site. We’ve gone at this in a very energetic way, in a sense of that we know we’re behind and we want to catch up. We really only started work in earnest in the last couple of months in 2007, so getting the launch in that compressed time frame is quite a feat. Right now we’re very focused on getting the CircusCasino brand recognised online, then we’ll make a success of that and see where we go.
In the pre-Genting days, Stanley Casinos made two attempts at going online, and neither succeeded, so it almost became part of the DNA of the company – “we don’t do online”. It was quite remarkable to see how quickly the mindset of the team in the company turned around from “we don’t do online” to “actually guys, we’ve got no choice here”. When you look at the online results you can see growth, you don’t see growth in the land-based clubs. It was a very easy sum to say yes, we have to do this.
CI: The new business lounge at Crockfords is very impressive; what customer is it aimed at? Where did the idea come from?
PB: It came from the top. The chairman has a very particular view on how to deal with in particular the Asian market because Asian standards of hospitality are very, very high. Shortly after we bought the company, the freehold of the next-door building became available and the chairman said we should buy it, and that we needed to create a facility so that visiting business people that had flown in overnight could come and have somewhere to have a shower and to change, and that we should provide them with a business facility, and that’s really where it started.
As for the rest of the renovation and expansion work, we were not expecting that the smoking ban would extend to private members clubs, but at the very last death throes of the debate in parliament as you know it did, which had left this club with a problem as there is no smoking facility. What we’ve done is to design alterations at the back of this building, so that on the third and fourth floors you have new areas and there’s also a very exclusive suite and terrace, so people can game and go out onto the terrace to smoke; on the fourth floor will be a very high-quality suite. In order to do that we had to free up space in this building and that was really what lay behind the chairman’s thinking in terms of buying next door because it would provide us with the means to move offices and staff accommodation to free up the space we needed within Crockfords.
CI: Have other revenue-earning areas of the casinos picked up since the smoking ban? I’m thinking specifically of restaurants.
PB: Well you’ve put your finger on one of the assets. We’re seeing something of a generation change in the casinos, we see many more younger people going in, and they are not going in so much to play on the tables, as to use all the facilities including drinking, so we’re definitely seeing bar sales go up significantly.
The food offering is much more of an open question. If you have a typical casino setup and you’ve got to come in and show ID and you can’t bring any kids, who are you attracting for your casino food offering? We’re seeing some improvement in sales; again it very much varies club by club. If you take our new Circus in Edinburgh where we’ve got a very nice eating facility, well set up, we had Jean Christophe Novelli do an evening there, we’re seeing the food sales definitely pick up. There are other clubs where the food offering, quite rightly, is essentially pitched at providing a snack or better for a gamer, and it’s not going to make a difference.
One of the things we’re looking at, as is everybody else, is where can we create a restaurant facility where people can come in with families directly off the street without having to go through ID and all the rest, because realistically if you want to compete as a restaurant you’ve got to be able to do that. There are lots and lots of good restaurants – how are we going to persuade them to come to a casino to have their dinner?
CI: But if you look at a casino like the Opera House in Scarborough, they’ve pitched the place as a venue for adults to go out – so they’re kind of looking at the lack of children, for example, as a benefit. There’s potentially a market there…
PB: You’re putting your finger on what is the core issue, you’ve got to pitch the offer for the market and what gamers are actually wanting, very much varies. I think that most casino operators, but I’ll only talk about us, we’re still feeling our way for what’s the right offer and it’s a challenge really.
CI: If you had a Maxims somewhere and it’s not working, could you re-open and re-position that as a Circus, for example?
PB: Probably not at the moment, my guess is that over time we will migrate to a single brand, but one of the things about the British casino industry Is, it hasn’t been heavily invested in over a long period of time so the high street leisure offering has raised its game beyond belief.
There will be lots of experimenting for every operator. I think people are genuinely looking for the right way forward, there’s no doubt there is a future but I think the industry is searching for that right way forward.
CI: Has there been any significant growth or reductions to the Stanley group since taking it over?
PB: Yes there has been some growth, but I should be clear in saying that is basically about programmes that we inherited and have decided to pursue.
We have proceeded with the transfer of a small club in Edinburgh called the Berkley to the new Edinburgh Circus. We opened the new Nottingham Circus which was brand new, that was June, in December we opened the new Liverpool Circus, that was an additional club, so those are three things that we’ve done, and we’ve proceeded with major refurbs in Birmingham Maxims, and Southend. Those are the headline things, so there’s been some expansion there, but we’re operating now in a very tough market, when you add that to the experimental element of finding the right way forward as you look at these new markets, it’s work in progress.
Our Managing Director was over recently, we’re looking at transferring our site in Southport. We’ve got a site there which is in an old cinema, it’s quite a senior operation and we’ve got no lift, it’s upstairs, so we need to make a move, and we’ll be moving to a new development on the Waterfront. We’ve got three or four other plans in the offering so this is definitely a long-term game for us.
CI: The other big issue for the industry is the change in tax laws; is there much dialogue with the government about that? It was such a big change, and it seemed something of a knee-jerk.
PB: The answer to your question is no, I’m very doubtful that the Government understood what they were doing, but we all know that the Treasury’s coffers are running empty and it’s hard for me to believe that the first charity call they’ve got to make is casinos, so we will have to get on and deal with it. It’s very unwelcome. What I think was genuinely a surprise to people, was that the effect of what they did is to increase our costs overnight by more than 20 per cent and you can’t run a business like that. On the one hand they’ve been trumpeting new casinos and regeneration, and on the other hand they killed that stone dead. What was surprising to me, and I went to both the party conferences, was that the MPs for those constituencies which were in line to get a new casino, had simply failed to make any connection between the two, as far as I can tell, so the stories about ‘will all of the new casinos get built?’, it’s a very good question. You can be sure of two things; one, the chances are that they won’t all get built and two, they will certainly be very much more modest than anybody imagined. It’s very easy to be dramatic about this stuff, the fact is that we as an industry received a huge hit with tax, get on with it, people didn’t understand in my view what the wider ramifications are, and those ramifications include what gets built under the 05 act will be very much more modest than would have been the case. You could simply say that it was a Treasury grab of local authority regeneration funding, its one way of putting it. It’s changed the landscape.
The next step in the process is that the DCMS has to publish the rules of the competitions so there will be a hiatus until that happens and then the local authorities will be up and running and I’m sure the government will be quite delighted to pass the baton to the local authorities because there are no votes in casinos. But then you get to the stage where, if you look at where some of these casinos are – Skegness, Stranraer, even Wolverhampton… What began life with a great hurrah and it was going to raise millions of pounds for local communities, the landscape is very different to that now.
CI: It was recently announced Genting Stanley will be working with the NEC on a new development... Birmingham's well stocked with casinos, what are you going to bring that's different?
PB: A fair question. The first aspect is that the NEC is a very important employer and enterprise in the region, but by common consent what it lacks on-site is attractions to keep visitors on site when they're finished going to exhibitions. Partly with that in mind, the NEC is itself investing a large amount of money in the arena and those entertainment aspects, but it would benefit from having other features. It's been a long-held ambition on their part that they should provide more opportunities for people to spend money on the site when they finish visiting the exhibitions and so on.
I think at this time, expanding the NEC offering to more of a MICE offering has, in business terms, to be the right thing to do. That marries with the second point which is that, under the 2005 Act and the Casino Advisory Panel process, the government has passed legislation allocating 16 new licenses; Solihull is one of those, and so Solihull has the ability to allocate or award a large casino license. Given the keen interest on the part of the NEC, it has always seemed to us to be a very attractive site for a new casino, and a new casino is going to come to Solihull. But the fact is, it will be a very different sort of overall offering to any casino that has been in the UK hitherto, and it is going to happen. Will it have an impact on existing casinos? Yes, it will. The existing industry has been very consistent through the process in saying that what the government has done is to create a non-level playing field. The new casinos will have privileges which the existing casino estate does not have and we've said throughout the process that this will have an impact on them. We have to accept that it's happening but it's not something we've welcomed because it doesn't seem, to use a horrible phrase, to be especially 'fair'.
There's going to be a new casino in Solihull assuming that the local authority decides to proceed. I'm going to make the assumption that it will take that decision, and so from my perspective – particularly as I think the NEC is a great partner to be with and it's a great site – I'd much rather we were doing it than someone else.
CI: What do you think is the potential for local customers in the area? What's the catchment area immediately around the NEC?
PB: We've looked at a range of potential 'catchment areas'; the NEC has 2-4 million visitors a year, so that's one. It's a huge transport hub, so you can take a broad view of the catchment area, but as you rightly say there's a local population. Part of the answer to your question will be a function of how successful we are in developing the very attractions I've been talking about. Our concept includes a food court, a 4 star hotel, restaurants, bars and a quality spa as well as additional conferencing facilities and we're looking at creating another major tourist attraction. The hotel element starts with a four-star hotel with possibly a small five-star hotel element; and in phase two it could mean an additional three-star element. When you add those up before you get to the casino we think it will be a genuine tourist destination attraction and a local attraction.
We've thought at least as much about the local area in terms of what we can do to create jobs, and we're quite optimistic about what we'll be able to do both in terms of the numbers of jobs and on our ability to offer training and development so those jobs can be offered locally.
