As the U.S. gaming industry sees the beginning of the end of the Covid-19 lockdown, Jeff Hartmann, co-founder and president of the Connecticut-based Hartmann Group spends a lot of time thinking about how tribal casinos can find their way back.
Hartmann has teamed up with Michael Soll, president of The Innovation Group, to help tribes reopen their casinos months after they were forced to close them.
Issues for tribal casinos to consider include:
- Addressing the immediate challenges that Covid-19 represents to your tribe, workforce and customers
- Addressing the near-term cash management challenges and broader resiliency issues for Native American tribes
- Business intelligence and recovery operations planning
- Player marketing analytics and strategies
- Public relations and ongoing communication plans
- Business continuity plans to assess and benchmark targets to increase operating capacity
In an interview with GGB News in May, Hartmann said, “The immediate challenges facing tribes are employee and guest safety. But it’s more nuanced, because they’re responsible for their tribal members and they issue distributions. Unlike corporate shareholders who give dividends, it’s difficult for many tribes to suspend distributions because they fund government programs.”
The pandemic’s impact on revenues that service casino debt, plus the added pressure to provide governmental services, is uniquely challenging for tribal casinos versus their commercial counterparts, explained Hartmann, an industry veteran and former executive with two leading tribal gaming operations, Mohegan Sun and Foxwoods.
“Many tribes can’t go to Wall Street to increase liquidity,” he said. “Access for some tribes has been limited. Managing their cash is very central to what they need to do and how they think about reopening. Questions such as, how to staff, guest receptivity, what will the cost be in terms of slot machine separation, and the new requirements issued by the (Centers for Disease Control and Prevention), such as temperature checks, not only for guests but for the back of the house. How do people come in the back of the house? There will be a cost associated with that.
“Then there’s preparing the building, cleaning, pre-return inspections and how to control access.
Social distancing at table games will also be a major consideration. “The new normal will be two or three players on a game,” said Hartmann. “Questions are: What will trigger allowing them to add more? What trigger points allow you to expand your operation? How do you hit those benchmarks?”
There will be ongoing costs of increased cleaning. “How do you hand-sanitize? The cost and liquidity perspective says every dollar spent to prepare is one less dollar that can be used for tribal services and distributions.”
And won’t limiting players to two or three per table constrain the inherent “fun” of games like poker or blackjack?
“The communal experience of gaming won’t be the rich experience it was,” Hartmann agreed. “Dealers will have to work harder to entertain guests. Right now, the entertainment experience is secondary. Folks are seeking that interaction. Most Americans are craving social interaction after being confined.”
Tribes, like commercial gaming entities, will have to adjust their marketing approach, post-coronavirus. “You need to think about your interactive marketing program,” said Hartmann. “How do you deal with loyalty? What’s the messaging of direct mail? How do you mail—to all, or to a select group? How do you model that out?
“Many tribes using guest surveys to determine guest receptivity will need to match the data to the operating plan and the results in marketing, whether email or direct mail.
In this new gaming world, the marketing tactic of busing players to a casino is probably gone, maybe for years, he said. “If people ride on a public bus at all, there will be limitations in terms of load management.”
Public relations will be an ongoing consideration. “The Hartmann Group and the Innovation Group think that once you get data to communicate to employees and guests what the safety plan will be, that has to resonate with guests and tribal leaders.
“With many tribes, their leaders are very active and visible. Communicating to tribal leadership, employees and guests in a concise manner is very important, involving a wide spectrum of communications media. What’s important is the clarity of the messaging and what resonates.”
The goal, he said, “is to demonstrate that what you’re doing will result in people feeling safe. I think there will have to be additional employees to demonstrate that.”
Deciding which patrons will be first to walk through the door will be key, he added. “People who enjoy the experience are highly valued guests. Previously they were getting the high-touch service. That person is extremely valuable. The tribal casino will invite that customer back initially to maintain the relationship with highly valuable guests.”
Casinos that cull every other slot machine will want to make sure the ones that remain are maximizing their returns. “The tribes we work with are looking at the floor and the opportunity to keep the most popular games active,” said Hartmann. “Games that are long in the tooth might be shut down. They’re looking at game layout and adjusting appropriately.”
Tribal leaders need “to make sure all the boxes are checked, that the operating team is considering all the issues.” They must also be aware that some “customers may not come back. Some have been away two months and have found different kinds of entertainment. Many may not have the funds to return. With 10 percent unemployment, many customers haven’t been working for a while, and some have lost their jobs.”
The reduced capacity inside casinos, compounded by reduced spending by players, “is unfortunately the reality of what tribal and commercial operations will face,” he said.
Although the industry weathered the Great Recession, Hartmann says that was a different animal. “There was no reduction in utility of games or capacity restraints. There were spending impacts.” The Covid-19 pandemic “has the potential to be a double whammy—with reduced capacity of play, combined with emptier wallets.”
