New World Gaming in Casino pastures new

Away from the new multi-billion Dollar integrated casino resorts being contemplated by the top-tier of massively capitalised casino operating companies, there are fiercely determined entrepreneurs bootstrapping their way into their first casino business. Although the scale of casinos differs, exactly the same development process takes place and it’s a very long and difficult journey from the lobby of the parliament building to the lobby of the casino.


One such entrepreneurial team discovered the Cape Verde Archipelago and their hearts and minds were captured by its people, its culture, its landscapes and its huge potential. They set about developing several hundred holiday homes on Sal, one of the eight inhabited islands, and planning numerous follow-on businesses including a casino resort on the more exclusive island of Sao Vicente. Then came along the credit crunch...

However, undeterred, they secured the rights to Fortim Mindelo, a historic building and site with a commanding view over Mindelo Bay and forged ahead. With New World Gaming as their casino advisors, a detailed market feasibility was undertaken; business plans crafted; license bid tendered and the casino licence for Sao Vicente was won.

Meanwhile the anticipation of a casino resort in Mindelo was a catalyst to spur-on the upgrading of the deep-water harbour in order to boost cruise ship business (up 25% on previous year) and the opening of a new International airport with weekly flights directly from Paris, Amsterdam and Lisbon. The determination and passionate commitment of the two entrepreneurs from Ireland’s County Cork and their local partners is making an astonishing contribution to the transformation of Cape Verde’s tourism economy.

Mindelo is now a new port-of-call for the ARC yacht race and has seen large increases in sports-fishing tourism from the USA, Scandinavia, Europe and Russia. Overall, Cape Verde was voted at the top of the list as the “most wanted” holiday destination for 2014 by British respondents to an online poll.

Further afield, the current economic situation has encouraged governments to look to casino taxes as additional sources of revenue. Enlightened governments will recognise that casinos, like any other business, need to be based on a sound and detailed understanding of the market, need careful planning on capital expenditure and due consideration given to cash flow sensitivities. They will set their expectations of tax levels, structures and timing accordingly. They will also recognise that there are relatively few organisations that have the capital and resources to undertake the scale of IR developments seen in the likes of Singapore and even these massive companies need to prioritise the timing of their developments.

We spoke to David Marshall, Associate Director in New World Gaming, and an expert on European casinos, and he takes a look at the situation in Cyprus. Marshall says: “Whilst the currently preferred option is to have a single, large global-brand, IR could provide the country with a unique offering in the region, until of course the next global branded IR opens in the region.

“Cyprus already has excellent large resorts which need only the addition of the casino element to turn them into IRs; integrated resorts which are uniquely and proudly Cypriot in character. Distribution can be optimised by issuing several licenses providing choice for visitors and the competitive forces necessary to maintain standards of service and product appeal that serve to differentiate Cyprus as a preferred casino destination. It remains to be seen if a suitable global-brand IR operator will come to the table and if so, what the offer will be. War and poor economic performance in the region; the bank account “haircut” executed by government last year... It’s difficult to imagine that global corporate companies with their institutional investors would have the risk appetite for Cyprus. Is it not a job for the Cypriot entrepreneurs who developed successful resorts without the benefit of a casino in the first place?”

David Marshall’s recent joining of New World Gaming and Associates fulfils its goal to provide clients with the services and level of expertise of a blue-chip corporate “Head Office,” as a shared service. Please see David’s bio and more information on New World Gaming at www.newworld-gaming.com. Email enquiries@newworld-gaming.com to find out about investment opportunities in the Mindelo casino and other such opportunities.

Original article in Casino International - online

http://www.casinointernational-online.com/

http://tinyurl.com/mdu2woh

www.newworld-gaming.com

Can You Afford to Skip the Casino Feasibility Study?

The idea to develop a casino is often driven by circumstances such as having sub-optimized space in the foyer of a hotel, the need to fill a gap in hotel occupancy or the availability of a license as part of a tourism investment scheme. All too often the idea develops a life of its own and the next steps are the creation of a casino design (that neatly fits the development team’s perception of what players want) and the start of construction, followed by the search for casino management. The problem is that there are common misconceptions about casinos and gamblers that lead developers into pitfalls time-and-time again! More about that later but let’s look at how the most successful operators go about things…They start with an understanding of the market, its willingness, size, disposable income, access, competition (for all entertainment), market-specific needs and compatibility of the player profiles with other users of the hotel, resort or entertainment complex. This understanding then forms the basis for the remainder of the feasibility study which estimates the number of potential visitors and their frequency of visit, the length of the average gaming session and the average stake. Extrapolating further, projections about the capacity requirements in terms of equipment, floor area and operating times are formulated. Finally, financial spreadsheets are crafted to present a supported and considered opinion on profit, capital expenditure and returns on investment. But more than just the numbers, the feasibility focuses thinking on how to optimize the opportunity, on flushing out potential fatal flaws and on what will be required to compete effectively in the market. The feasibility does not need to be a lengthy and expensive exercise conducted by a celebrated academic. What’s sufficient in the early stages is to understand whether you have a rough diamond or a worthless glass chip. A professional casino consultant will be able to deliver an initial feasibility for a reasonable price in as little as 10-working days, providing not only a decision point on the idea or opportunity at hand but also delivering a framework for screening future opportunities. Let’s look at some of the pitfalls…

The “license to print money” myth is a surprisingly popular assumption about casinos and one that seems to prevent people from conducting all the usual due diligence and care that would go into say, a shop or restaurant opportunity screening exercise. Examples that come to mind follow. A large casino was developed in a jurisdiction where there are restrictions placed on slot machine maximum stakes. The revenue expectations of the slot machines were heavily relied upon to render the casino viable. When a revenue capacity model was run on the slots by an experienced manager several days before opening, it showed that it was a physical impossibility to generate the required slots income with the number of machines installed… The casino failed to live up to expectations. A large casino developed in Britain by a US operator failed miserably because it did not understand the propensity for live gaming or the mobility of players in the market, whilst a British company failed spectacularly in Las Vegas because it didn’t understand the customer and made fatal design flaws.

The “James Bond” image is another popular misconception about players and casinos. The Pareto Principle applies heavily to casinos with approximately 80% (or more) of the revenue being produced by 20% (or less) of the visitors. That 20% does not constitute people who don formal dress for an occasional night out; it’s more typified by the frequent visitor who feels at home in the casino in comfortable, casual wear. The un-initiated 5-Star Hotel manager is invariably aghast at the presence in his or her lobby of the “non-James Bond-ness” shall we say, of the casino players! “Where’s that casino manager, he’s obviously got this all wrong…” And on goes the conflict-of-interests. The feasibility study will enable the corporation to identify these conflicting situations in time to create solutions such as providing a separate casino entrance and differentiating F&B standards and prices in the hotel and casino.

I recall an incident where a group of executives went to great lengths to propose the development of a large caravan park in the grounds of a destination casino resort, some 2 hours drive from a major city. The executives proudly began to present their highly polished and detailed plan to greatly increase footfall to the resort when much to their dismay they were harshly reprimanded by the CEO. They had failed to recognize that the hundreds of caravans on the road would delay the 20% of visitor that produce 80% of the revenue and the significance of such shortening of the gaming session!

The feasibility study will highlight the key drivers of the casino and let you put into perspective the priorities of the business. It will help you avoid fatal/serious flaws and give you the best chance of optimizing your opportunity. Now wouldn’t you agree that’s an excellent result for 10 days’ fees!

http://www.newworld-gaming.com/index.htm