Macau Business
To arrive and take over the market. Those are the
plans of GCA President and CEO. How? Simple, says Kirk Sanford.
Because local banks will not be able to compete with their services
and products. Oh, yes! And because that is what they did everywhere
else.
Macau can be a difficult market. How confident are you that this new
service - that can produce a small revolution on the casino floors -
will be a bet that you already won?
Kirk Sanford - If history is any indication of our success,
we have proven as a model here in the US, in major markets like Las
Vegas and Atlantic City. We do business today with the who’s who of
the industry, so we have established a market place here in the US,
we have taken that same model and have moved it to other countries
like the United Kingdom.
There is one fundamental premise in all the markets that we serve,
which is that all gaming transactions are initiated and settled in
cash. You have to have cash to play. So, because there’s always a
need for cash there’s always going to be a need to access that cash
and that’s when we come in.
Debit cards are common around the world, people use them not only to
get cash from ATM’s but also to make purchases. Today, China is one
of the fastest growing credit card markets. We think there’s a
phenomenal opportunity to happen to the credit card side of the
business. Cheques are not so common as they are here, but we also
have credit bureau services. So for casinos that wish to extend
credit to high- rollers they can access our worldwide data-base.
Every casino in the world that extends credit to gaming patrons
relies on our services today, including in Macau. Sands and Wynn
uses the credit bureau services. We are still learning, we started
working on Macau more than one year ago, it is taking us more time
than what we expected because it’s a different market.
Cautious approach
Do you worry, since both markets are so different, that
your services in Macau will not succeed as much?
I wouldn’t say that. There are some risks that we don’t know about.
We are going to be cautious in our approach, we are going to do
things the right way and, to use a game term, let the chips fall
where they may. There is a market today for people providing
standard ATM machines, credit card cash advance is happening there
today, we think we can do it better. Our business model is pretty
simple, anywhere where we have gone is delivering the value
proposition that is better than what the competition offers. So,
where that competition is here in the US, in Europe or in Macau we
think we are positioned from a product stand point. This is the only
business we service that is allowing patrons to access cash for
gaming entertainment.
You are an American company, there are three major
American gaming operators in Macau, some of which are your clients
here in the US, yet your first agreement was with Galaxy…
When we made a decision to go into Macau, early on, we decided to
move in a direction where we were going to deliver a value
proposition consistent with everyone else that was there. We later
came back to the conclusion that we would not go that path, that we
would do things differently, to adapt the technologies that we have
and as a result it took us about eight to nine months longer that
what we had originally planned. As a result to that delay we missed
the opening of Wynn, in particular, which is one of our clients here
in Las Vegas. Because of the types of partnerships that we have and
the trusted partner that we are viewed as, we were forthright and
candid with the client that we were not ready to go to the market.
They had opened and had to have a service provider and as a result
they have one of the local banks there. We think that we are not too
far away from delivering the same types of technologies and service
levels that we offer in the US.
And to grab the same market share in Macau that you have
in the US or even trying to take over the market as you did in the
UK?
We certainly would like to have everybody as a partner. If we do
things right, as we’ve done in the past, I think we will be very
successful. These technologies took us years to build. Some of the
existing banks will need time to change the infrastructure so they
can focus on a very small market. So, at the end of the day they are
going to come back with the conclusion that to spend the resources,
the technology, and investing in the services infrastructure for
this niche market does not pay.
Today Macau, tomorrow Asia
I see Macau as very exciting for you, growing at such a high
level, with so many more casinos to open. But not that far away
other gaming jurisdictions are opening, like Singapore, expanding,
like South Korea, thinking of opening, like Japan. Are you thinking
of entering the whole region?
We do. I think the first step is delivering all our commitments to
the Macau market. If we are successful in doing that we are
confident that we can take the same model and apply it to the other
jurisdictions that you have mentioned. And the benefit that we have,
again, is that a number of the US casino operator relationships
would allow that opportunity to happen for us. But Macau is a very
important market for us, we are very excited about it and hopefully
we are going to prove to Macau operators and the gaming patrons that
what we do is better, follows all the legal [criteria] and the
compliance [laws] and all the other things that need to be done in
order to do business right.
In 2006 your company had almost US 600 million dollars in
profits. The first quarter of this year reached 150 million dollars.
And GCA is only ten years old. How come nobody else succeeded to
figure this formula?
Did I know or have the confidence that you could make a
business out of providing cash access services to gaming patrons?
Yes, I was confident since the beginning. There were a lot of people
that were skeptical, there was a fragment in the market, banks that
were providing certain types of services and credit card providers.
They had already established business models. But why not bring them
all together and be a true one stop solution? It was very logical to
my mind. And then, if we continue to innovate, to establish great
technology partners, success would be garaunteed in such a unique
environment like the casino one. We did prove ourselves.
When you started, however, you needed to compete with an
environment that was already established, banks were providing some
services. How did you find a way to convince the gaming operators?
Ninety percent was ignorance and a desire to do it. I didn’t know
what value met. When now I look back, sometimes I question myself
how did it all come together. But it did because when you look to
all the pieces of the business, it is logical. It makes perfect
sense. If somebody would tell me no I would ask why, and I kept
asking why. Kept innovating, kept finding what the operators and the
gaming patrons wanted and did it better and different than anybody
else.
“We don’t want a compulsive patron”
Your services facilitate gaming patrons to access more
and more credit. Which is good and bad. They can continue to play
because have other means to get cash but this could have social
impacts. What can you do to prevent its negative impacts?
Absolutely. Gaming is entertainment for adults and at some point
people have to take responsibility for their own actions. Having
said that, I also believe that we can play a role to discourage
somebody who may not be making an informed decision at the time. We
want to do the right thing. There are a small percentage of people
that do have an issue with compulsive gambling. We do not want that
patron, do not want to make money from that patron.
This is a service that is meant for convenience and access cash for
a responsible gaming patron to enjoy the entertainment. And that is
the end of it.
You have a partnership with Wing Hang bank. Do you expect
other banks to join you in the future or will you maintain this
exclusive alliance on your growth plans in Asia?
That is what we are committed to do. They have been fantastic
partners. At this point we have no intentions to look outside of
that partnership unless there is a market we can’t serve. I’m
confident that they have what we need.