Gaming Industry: Maintaining a House Edge on Talent DevelopmentBy: Jason S. Chaffin
2018 could very well be a landmark year for the gaming industry. The momentum of high-profile mergers (over a dozen in 2017) will continue to have effects throughout the year as familiar brands and casino experiences greet new audiences. The expansion of gaming in several states as well as reservation land opened more opportunities to show the positive relationships casinos and supporting businesses can have on communities. And certainly not least, October brought the industry before the Supreme Court in a case that can create momentum for more forms of wagering to be available to more people. The growth of responsible, legal gaming is accelerating. That said, there have recently been a number of high-profile negative headlines in the industry. Companies need to be prepared to address the highs and lows by building a talent pipeline that is ethical, adaptable, and ready to deliver peak performance in bigger roles.
Expansion and Consolidation Stretches Leadership Demands
The big players keep getting bigger with familiar brands (e.g., Caesar’s Entertainment, MGM Resorts) reaching into new corners of the country. At the same time, M&A consolidations such as the recently announced Penn National/Pinnacle juggernaut bring multiple brands under the same management. Both situations require efficient and accurate assessment of the leaders of new locations or combined organizations. In new locations, maintaining a consistent quality of leadership, usually the top three layers of a company, has implications for the company as a whole. As with any company, new casino resorts and other gaming businesses usually need to both hire local business leaders as well as relocate seasoned experts from more established markets like Las Vegas or Tunica. Because both individual executive hiring decisions, as well as the combined “culture” of the leadership team is so important, it is vital to have an experienced and attentive partner in the process.
Tribal and Independent Casinos—Investing in Long Tenures
Of course, the vast majority of gaming locations are not affiliated with publicly-traded household names but are no less key employers and contributors in their communities. Different talent challenges exist for smaller casinos, racinos, slot/bingo parlors, and poker rooms, as well as in tribal casino locations. With a usually smaller pool from which to take their leaders, they will want to invest in high-performing junior talent and groom them for long tenures. This entails earning their loyalty by keeping them consistently engaged and challenged. There are few more dedicated senior executives than those who “grew up” in their companies. Focusing on shaping development opportunities as well as paying close attention to succession planning helps mitigate the difficulties and expense in having to look around for external hires. To that end, HR and talent executives often leverage executive coaches and development planners to accelerate the effectiveness of high-performers, as well as bring out the best from diamonds in the rough.
The Electronic Frontier
Black Friday exposed misdeeds of some companies while forcing all those who would take wagers (as well as place them) online to reboot. However, in the intervening time, land-based casinos have opened online presences bounded by their state jurisdictions, and multi-state reciprocity laws are being crafted. The momentum of legislation is on the side of continued expansion. Additionally, a federal government focused on reducing regulation—and led by someone with casino experience—suggests that the Black Friday may someday soon go the way of Prohibition. In addition to the online analogs to the games of brick-and-mortar casinos, the internet has provided many legal avenues for U.S. gamers—and even more internationally. Gaming companies again are faced with talent concerns. Recruiting and developing in-house teams requires them to compete with a larger universe of tech companies for talent. Working with the right vendors and consultants requires alignment of their goals with external entities (not to mention more compliance complexities). In these instances, organizational development experts can keep everyone pushing toward the same goal.
The Bottom Line
No company can afford big misses when hiring executives or investing in talent development. However, companies serving the booming gaming industry face pressure from regulatory and government scrutiny as well as their growing competition. The industry thrives on customer analytics and the detailed crafting of pleasurable experiences for its audience. Creating and executing a prudent plan for assessing and developing talent is more than a hedge bet, it’s a lock.
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