This is a guest contribution by Boyd Peters. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
“We are going to get a bigger slice of a bigger pie” said the stranger in a blue suit, attracting my interest. After all, the junket industry was shrinking and the regulators were making it harder to have a seat at the table. The sky is falling, right?
I explained that I was not in the gaming industry, and was in Macau to speak to investors. “And neither are we” he replied, and with that I was hooked.
My new friend wanted me to change the lives of 12 people – the children of some of their VIP, studying in Australian Universities. As he explained Macau is undergoing reinvention and they were looking at ways to enhance their offering for some of their clients.
His company was aware I offered a unique intern program and wanted to make this available to some of their VIPs. This program provides students with “front line” experiences which create workplace-ready skills that when armed with quality references help them land dream jobs in the finance industry. This was a hook this operator wanted, something so valuable and exclusive that VIPs will beat down his door and introduce him to their family to obtain it.
This is one of a few strategies I am aware of that operators offer clients to add value and differentiate themselves, while demonstrating to regulators their good corporate citizen credentials. What makes this progressive is the sincerity behind it which is not about numbers and statistics but positively impact the lives of their clients’ families.
Visionary ideas and broader vision
Necessity creates odd bedfellows, and in business it is always necessary. You are either growing, or you are shrinking. You either find new clients or lose existing ones. You are either the hunter or the prey and the junket and casino operate on the pointy end of a very competitive industry.
While some lament declines in month on month revenue, crackdowns, chilling and transition to new countries, others see this as an opportunity to adapt and thrive. Levo Chan of Tak Chun Group states that the end of a cycle is the beginning of another cycle and talks about implementing visionary ideas and having broader vision for operators to thrive. Alvin Chau of Suncity Group is especially committed to diversifying Suncity’s entertainment services and provide new entertainment, tourism and lifestyle experiences to embody his vision of “diverse innovation and being proactive” as the key to growth and success. An intern program is one example of such a lifestyle experience that can contribute to growth.
I first established this Intern program a few years ago while working with a fund manager. They operated in a congested market and were an underperformer who struggled to obtain overseas investors. I was aware that overseas students in Australia were ignored for graduate roles and so reenrolled for further study.
Here I saw the opportunity to offer a hook to win clients through a career gateway for their children, which proved a catalyst to not only win their business but getting more of it over time. This extended to gaining referrals for and receiving requests to take on additional students.
VIP family office
Perhaps a casino or junket operators can position themselves as a VIP family office? As my friend explained, family dynamics prevented their clients from hitting the tables as often as they would like. They wanted to legitimise their relationship and bringing the whole family to the table, not just the VIP. They desired to be recognised for building the wealth of the family rather than being seen as risking it via the gaming.
This can be a sincere service
At its core the Intern program provides experiences, skills and references for the student while showing parents that they are establishing themselves professionally.
An operator wouldn’t have to go to extreme lengths to offer something like this. It could find out what industry their clients’ children sought a career in they could identify what experience and skills are desirable. They can then consider who they can tap into that can help the students children stand out from their peers and obtain some excellent referees. Who they can introduce them to who will mentor them, give career guidance, feedback on assignments and so on.
Only if the operator wanted to offer this on a grander scale would they need to have top level contacts across stakeholders of the relevant industry. In my instance [where I do IPOs for companies on the ASX and help others engage their shareholders] these includes fund managers, regulators, stock exchanges, law firms, clubs, media and stockbrokers- who that prepared to spend one day a month with the student and mentor them.
Keep it unique
Regardless of scope the intern strategy can only be targeted at the Premium VIP. This is about exposing the student to the practical experiences with senior industry figures. As such it requires a senior industry figure to direct it who themselves is active across these stakeholders. As soon as this program is driven by a corporation it will lose its personal its personal value and wither. It is about personalised experiences.
The professional edge
In my instance the student is paid, receives a mobile phone, business card, career counselling and access to legal and other advice. They are flown around Australia to be placed with captains of industry to learn. By compensating those people for their time it preserves the integrity of the relationship and ensures their ongoing participation. To enhance the program I make sure they are eating and resting well, dress and groom professionally and live in a good environment.
Changing lives doesn’t come without cost and the VIP should expect to invest the equivalent of the annual tuition fee to receive this exclusive privilege. For the operator the Perceived Value Differential of this is tremendous. The client pays the Intern director, but the casino/ junket gets the credit for obtaining a position for the child that the family would never have obtained themselves.
A high roller might only receive one shot in their wagering, and would want background noises to be in harmony so they can focus on important decisions in front of them. This is a trait we impart to their children as in business we similarly get just one shot, and the success of someone else’s dream might rest on how prepared and professional we are. There might be millions of dollars of investment and potential resting on the outcomes we can deliver.
This is why the key is that it isn’t just about the student but rather the whole family is in on the journey. Everyone wins together, everyone supports one another
Best for Junket operator or Casino?
The Junket operator should have a relationship with the VIP that transcends the casinos’ and endures longer. Provided they owns the client relationship directly and not via middlemen they are probably in a better position to build intergenerational relationships with the family as well as grow the family’s wealth.
The casino on the other hand may have a good relationship with but must work harder to maintain the client and develop a personal relationship. Perhaps the casino is more suited to a light version of this program for their premium mass clients?
In foreign markets?
Not having a presence in a specific country could potentially be a positive. In my instance I have no interest in local casino’s or junkets because the student needs to know that when mother or father come to Australia they are the only hand in play. I don’t want parents seeing the kids while steaming after tapping out in a session. University is an incredibly emotional and intensive for these children and the sensations experienced in this program might help them glimpse the pressure and intensity their parent might feel at a table.
One step at a time
While I have been taking interns under my wing for a few years, the relationship with the operator has evolved as we find what works best, and we have found that no “one size fits all”.
I am only involved in it from the student’s perspective so cannot provide empirical data about wagering statistics and success in securing new clients. That said I don’t believe they would be doing this if it was not beneficial for them and I am certain that for at least the duration of the Internship the VIP parent has increased loyalty to the operator.
Time will tell how such an intergenerational program evolves and how other operators extend similar offerings to their clients. At the very least responding to their very real needs is a value add that differentiates a junket or casino from competitors
The intern strategy also demonstrates good corporate citizen bona-fides to regulators. At its core this program provides career development to the child who can show their parents they are establishing themselves professionally while studying thousands of miles away. On another level it builds bridges between Chinese students and elite levels of the Australian business community. These are admirable outcomes which should be recognised by regulators
It is not fanciful to suggest that the casino, the junket operators and the sub agents can have a positive impact on the lives of their clients and their families.
For the operator looking for the hook, perhaps just ask what do your VIPs family need, and what are they prepared to pay for that only you can provide for them? The rest might just take care of itself
Authors note: I out myself as an outsider to the gaming industry and uneducated to the nuances within. My desire is to respectfully offer some insights which I hope contribute to the ongoing evolution of the dynamic between the client, their family, the junket and the casino, and enhance the reputation of all parties.
Boyd Peters can be contacted at [email protected]