Episode Transcript
[00:00:00] Speaker A: But before I start, I want, you know, I want to put my. My.
My kangaroo. My kangaroo hat. Just, just a little bit, you know, because there's this amazing thing that you can say about Australia that not many people know is that Australians are the biggest gamblers in the world. And a lot of gaming content is really. It came from Australia and you definitely had a front row seat for that.
[00:00:27] Speaker B: You know, like, if you've got a game and you want to test it on. In scale, you.
You know, somewhere like the Philippines or South America. I was flying between Melbourne and Sydney one day and I happened to get seated next to John Howard. So John Howard was former Prime Minister of Australia, and John's a very personable individual. And, you know, so I sat down and after we took off, he said, you know, you're wearing a suit. You know, obviously you're in business. What. What business you're in. I said, you know, I'm a crown. Said that. And he said, crown, yes. He said, thing about gambling is, and this is like completely unsolicited, he said, I was adamant that we would never get online gaming in Australia before. We've got a problem that we, you know, we just need to solve.
How do you make sure that you're getting the best minds around that issue?
And not just the best minds, but different minds who think about things in different ways.
[00:01:27] Speaker A: Welcome to IGB podcast IGaming Checkup with Dr. Eyal, brought to you by IGB in partnership with RubyPlay.
I am Dr. Eyal. I've been passionate about games and the people that makes them for many years. Humans have been playing games of chance even before we could write. So what is going on here?
Why gambling games are so central to our experience as a species, and why something as simple as a slot machine is also the hardest game to make sure. There are plenty of igaming podcasts out there covering industry trends and headlines, but this isn't just more of the same. We are here to challenge assumptions, invite sideways thinkers and industry outsiders, and explore the complexity of an ever evolving, fascinating and innovative space. If you are ready to think differently about iGaming, you are in the right place. Let's go.
So today's episode is the Australian VIP room, and I have here Ken Barton joining me from Sydney, Australia.
Ken has been a leader in the gaming in the gaming industry for many, many years, for decades even.
And I'm really excited of having you over with us in the episode.
But before I start, I want to put my kangaroo hat just a little bit, because there's this amazing thing that you can say about Australia that not many people know is that Australians are the biggest gamblers in the world. And a lot of gaming content is really. It came from Australia and you definitely had a front royal seat for that, myself included as well, you know, for, for. But I was wondering why, why do you think like what, why do you think that Australians are such big gamblers? Like what, what's. What makes Australian connect to risk so much? Because I have my theory but I wanted to hear yours first.
[00:03:37] Speaker B: Well, thanks for the introduction Eyal. I thought you might start off saying, you know, I've got some capability or knowledge in this area but it's. You're the home of the biggest degenerates in the world and there is a little bit of that.
So as you know Australia was settled by the British in 1780s and originally we were the receptacle of the overflow of convicts. And so the sort of the white Australia population, um, many, many of us can trace our heritage back to people who were released from prison and sent on boats out to Australia.
So we, we didn't start off with the cream of the crop. We, we weren't, we weren't, we weren't sort of the aristocracy. We weren't kind of like, you know, the landed gentry from countries or noblemen or you know, knights or squires. We were pretty much, you know, the people that they couldn't squeeze into prisons. So we probably have a long history of being on a slightly edgy country in terms of the population because we're up there in alcohol consumption. We're in fact up there in, in alcohol production. We've got some of the biggest wine production, beer production and as you say, we probably, I think there was always a bit of a debate about Japan because the Japan spend on gambling is a little bit hard to trace because a lot of it's on pachinko and sports betting and things.
But you probably, I doubt you'd be massively wrong if you said Australians per capita are the biggest gamblers in the world.
[00:05:19] Speaker A: Oh no, that's, I think it's not only that the biggest, they're twice as big as second.
And yeah, by the way, Japan is at $250 billion per annum industry in, in, in pachinko alone. It's, it's, it's crazy when you, when you actually take a proper look at it which, which I have a few years back but I have a different theory, you know, that's why I brought my kangaroo. So I think that in Australia Everything tried to kill you. You know, you've got hailstorms in summer with hail, you know, stones the size of, of a cricket ball, right. You've got spiders in your backyard that are extremely poisonous and you even have that, you know, the largest spider is the Huntsman spider by the size of my hand. But not many people, many people know that, but each spider has a wasps that specialize in eating that spider. So imagine if you have a spider this big, the wasp that specializes in eating that spider is the size of a bird.
My wife got stung by one of those bad boys, you know, so it's, it's in Australia you've got this, you know, wildlife, everything tries to kill you. The lightning, the animals are poisonous. The most poisonous plant in the world is Australian. So it's like this really edgy experience that you have. Being an Australian in your backyard, living in Sydney, living in Melbourne, you experience this edgy lifestyle and it's like everything is out to get you. And in that kind of environment of risk, it makes perfect sense that gaming or gambling, it seems like, you know, a very natural, you know, thing to do because you know, everything, like everything is so risky everywhere. So you, you know, so I, I kind of find that and I think it's kind of cool about Australians and taking risk and, and, and being happy to kind of take risks not just in life but in business as well.
And yeah, so I, I find it's all kind of in my head. At least it's all kind of connected. And, and I love your explanation about the, the, the, the history of Australia. You know, where the people came from, you know, for the white Australian. And so they all combined with the natives. So it's quite a fascinating, fascinating story really.
[00:07:37] Speaker B: Yeah. I think on the hazardous animals, I mean one thing that we have got in our favor is we don't have land based carnivores. So we're not running away from lions or tigers or anything that might eat us. But as you say, when you wake up in the morning, you are taking some risk in Australia because the things that'll kill you aren't necessarily the things that you might be all that conscious of. So as you say, we've got the world's most dangerous spiders, we've got maybe not all the top 10 poisonous snakes, but we've probably got seven or eight of the top 10 poisonous snakes in the world.
[00:08:14] Speaker A: Jellyfish. The most poisonous jellyfish.
[00:08:18] Speaker B: Well, I was going to say when you get into the water then it gets a bit more scary.
Yeah, well, there's a thing called the. I grew up in the north of the country in North Queensland and they've got this thing called the Irukandji jellyfish, which, its body is the size of your little fingernail and it has tendrils that lay out the back and they just float in the water. But the mortality rate of people stung by that thing is almost 100%. Because if you get stung by a Irukandji jellyfish, you're not likely to, you're not likely to survive. And that's, that's just one of the jellyfish. There's a whole range of jellyfish and then we've got poisonous fish, octopus. Yeah, the blue ringed octopus.
And, and of course, if you, if you want to go into the, the mangroves and the, the kind of, the estuaries of the north of Australia, you're likely to find the oldest predator in the world being a crocodile. And we have serious.
[00:09:12] Speaker A: Every year, every year someone getting up by a crocodile in Australia, it's, it's unfortunate fact. Yeah, that's mostly tourists, actually.
[00:09:20] Speaker B: Yeah, mostly tourists. Mostly.
And I've, I've been up to the Northern Territory and have been fishing and you know, you just don't go on the land in the Northern Territory. You know, they'll bring down buffaloes. So tourists have got no chance.
[00:09:39] Speaker A: So. Yeah. So you think with that in mind, it doesn't seem like such an extreme thing to be the biggest gambler because it's the biggest gamble just waking up in the morning in Australia.
So, Ken, I was wondering for some of our listeners, our viewers, they might not be as familiar with Australian businesses and all this is some of what I would like us to cover today, but I want you to introduce a little bit about yourself. You know, like in your history. You started in Boral, which is more of a construction company, the CFO there for over a decade, then you move into Crown and you've been there for quite a while as cfo, then leading the digital, as CEO, then leading the whole company, then now most recently, you know, with your current company, Gender Fitness. But I'd like you to tell us a little bit about your career and your story and how that can relate to the Australian story as well.
[00:10:39] Speaker B: Well, I started off in consulting before I even got to Boral. So my first job was with, and you'll find a bit of a theme here of my, my career ends on big notes. So my first employer was Arthur Anderson, which was a global consulting accounting firm. And Accenture was when I joined you Know, a small division within Arthur Anderson which ultimately got, you know, obviously split off and later on IPO'd. So I joined Arthur Anderson and was there for 10 years, left and went to work for a building materials company in Australia.
And then not long after I left, you know, Arthur Anderson encountered the problems with Enron and ultimately Department of Justice sanctions and you know, the firm essentially was collapsed and split up and broken up and absorbed by other accounting consulting firms around the world.
So, so then I joined a building materials company called Pioneer, was working in Houston, Texas from 1997 to 2000. And in 2000 they got a takeover bid from a UK company called Hanson. And so I left with the conclusion of the takeover, joined Boral, was at boral for, for 10 years, left there on good terms and, but, but the, the thrill and the excitement of, of the gaming industry caught my attention and so in 2010 I joined as the CFO of Crown Resorts. So Crown Resorts at the time had the biggest casino in Australia which was Crown Melbourne, biggest by a lot of margin.
[00:12:28] Speaker A: It's a lovely venue as well.
[00:12:30] Speaker B: It's a very nice venue. Yeah. At one stage pre Macau it was the most profitable casino, single site casino in the world and, and also had a second property which, which is probably the, you know, I think arguably by some measures the second best casino Australia in Perth had the interest in.
[00:12:55] Speaker A: It's, it's, it's, it's a really, it's a really special place with its own style of gaming, its own regulation, its own everything. It's, it's crazy.
[00:13:03] Speaker B: Yeah, yeah. And it's a really nice resort and the weather's great and it's, it's a really interesting property and it's the only, the only gaming allowed in the entire state of Western Australia is in the casino land based gaming.
And so we had Melbourne and Perth, had a joint venture in Macau with Melco, some operations in the UK and emerging operations in the Philippines and looking at other ventures around the place and early on starting to plan for another Crown property in Australia in Sydney which ultimately was opened in 2022.
So very interesting portfolio. It was global, it was, you know, had a very strong market position, very strong cash flows and you know, just generally a very, very good business.
So 10, 10 years of CFO, about a year and a half as CEO and I left in 2022.
It's a bit of a potted history.
[00:14:10] Speaker A: They are and you know like many people again are not aware of the strong origins of gaming in Australia. It's not just the Slot machines. But it's gaming in general. Like it's just a few examples you can think of, you know like a Lane Ensworth turning a dentistry equipment company into a slot machine company. You get the Aristocrat reinventing the wheel twice. You know that's, that's kind of, that's that started in Australia. Like the, the virtual, the virtual slots, like the electronic slots I guess you can, you can call them the, you know and then you, you, you, you look at, you know, then you've got the, the, the shuffle masters with the 88 fortunes later on the whole, you know, the hold and spin that comes from a high roller that then have like a, a relationship with Aristocrat and then you know, rolls out the whole, you know, hold and spin is one of the most successful mechanics. It's Australian, you know from 88 fortunes at the perceived persistency.
Huge, huge thing like the tripod mechanics. It's come from this game Australian. Even outside of slots you're thinking of, you know, in igaming you think megaways was done by Big Time Gaming.
The whole concept of, of, of this kind of a brand of a, of a, of a mechanic with, with a buy feature and all that that comes from, from a Sydney studio in Australia, you know, sweepstakes. The whole sweepstakes phenomenon started by vgw. Again an Australian, an Australian Lawrence that started this, started this company. I came up with this whole concept crypto casinos started in melbourne, you know, stakes.com so if you look at practically every element of gaming and eye gaming and you know it's the top performing games, top performing platforms, top performing, it's all come from Australia. And this is, I find this amazing.
It's almost strange. And how do you, what's your opinion about that? Like what, what makes Australia so uniquely positioned to drive innovation in such a way for, for decades now.
[00:16:29] Speaker B: Yeah. And look, just to round out your, your set there, I mean obviously you've got ed craven and stake.com Lawrence Escalante in his business.
But also if you go back even further, Crown was the initial casino that came up with the concept of electronic table games. So everything that's happened in electronic table games all started in Crown.
The Angel Shoe, the Angel Eyeshoe with the card reading that was developed conjunctly between angel and Crown. So there's been across Australia as you say pretty much in every category of gaming. And it's not like we're a big population. You know, even now we're only 25 million people. So it's not like it's the biggest market and you've got, you know, as you say, big companies like Aristocrat, Ainsworth, that all came out of Australia and even today they've got, you know, major presence here. And it's. I think part of it is people are willing to invest in developing a product in Australia because it's a good test market. You know, like if you've got a game and you want to test it on, in scale, you might go to, you know, somewhere like the Philippines or South America. But if you want to test something that might work with, you know, the, the affluent countries around the world in a quarantine way because as you pointed out, we're surrounded by sea and no one wants to, you know, go into the water because it's full of sharks and jellyfish.
So you can test it in it in an environment which is, it's, it's lucrative. So, you know, if you come up with an innovative gaming product, it's not like it's just R and D. It's actually a real business with potential, you know, earnings and cash flow that come from it.
But, but also the Australian gambler is actually quite a sophisticated gambler. So they are very discerning about what they will, despite the scale and everything, but very discerning. So they're very accustomed to gaming product and very willing to toss something out if it's not working. So I think for a lot of companies, if you wanted to come up with a concept in gaming and you wanted to test it in a market that, you know, is a market that the standards, you know, the expectations are high in terms of the excitement, the experience, the different differentiated product.
Australia is a pretty good place to come and, and you can be pretty sure if it fires in Australia, it'll work in other places. So, you know, you've talked about Aristocrat, Aristocrats, an exemplar in, in this space in terms of technology. And Scott Olive, you know, like, you know, sits in his sort of lounge room and, and he can test it and he's, you know, he's got this great market just all around him that he can just say, here's an idea and, and you can probably, I don't know if he does this, but you could probably immerse yourself in the clubs and the pubs and all that environment where you've got gamblers who will tell you very quickly if something's rubbish. And so it's like, you know, maybe Australia is the gambling of quilt in New York. You know, if you can make it here, you could make it anywhere.
[00:19:52] Speaker A: Talk about Scott Olive and you know, High Roller and yeah, the hold and spin. I thought for me this game, the innovation that was around the multi denim machine.
So you look at some small innovations like a multi denim machine where you don't try to sell many machines in different denomination but just one machine with lots of denim made no sense in a way, but makes perfect sense. And then Scott Olive coming with that concept with a really good game design and practically take the market globally. And it worked in Australia you had lines in casinos, lines in the clubs and the VIP rooms in the different pubs around New South Wales. Lines waiting to play this machine. And shortly after, within a year it was I think at some point 80% of any coin that went into any machine anywhere in the world went into a Lightning Link machine. It's insane that, that's disruption at its purest form.
[00:20:52] Speaker B: Yeah. And you know the DNA of Light & Wonder now is Australian as well.
[00:20:58] Speaker A: Yes. Yeah that's true. Yes that you know the, the leadership as well. So I think, I think it's, it's, it's quite interesting and, and I find it surprising that often when I mention this there's not a lot of awareness of how key a role Australia is playing in, in the global, in the global iGaming and gaming markets.
It's, it's. Yeah, maybe it's because of the size but it's, it's surprising that many people.
[00:21:25] Speaker B: Are not aware of it and we're probably not out there advertising it. You know, I don't know if you've been to the Scandinavia. When you sort of go to Norway all they talk about is Novo Nordisk, right. Like the biggest company in Europe and they're very proud of like you know, we invented Ozempic. You don't get a lot of kind of, you know, politicians and leaders in Australia saying we invented Dragon Link. You know, like look at what we've done for the world. We gave you Lightning Link and Dragon.
[00:21:53] Speaker A: Link but it, the Australian regulation is very, very strict. There is no Igaming, no illegal Igaming in Australia to speak of. And it's, it's mostly the Australian, Australian gaming is mostly land based gaming on tab shops like with, with, with sport betting. But do you think this is something that might change in Australia in, in your opinion in the, the coming years?
[00:22:19] Speaker B: Well, we, we have a very big sports, online sports betting business now. So you know Flutter subsidiary Sports Bet is the biggest down here and at one time Sportsbet, which was a Subsidiary of Flutter was the most profitable division of Flutter, so kind of outpaced the uk, outpaced Europe, outpaced the US So we also spent a lot of money on online sports betting. No legal, online, real money, casinos.
That's always been kind of a red line for Australia and that's been a bipartisan position for a long time and it's kind of in the DNA of the, kind of all the political groups across Australia. I was, I, I can give you an anecdote if, if, if you. So I was flying between Melbourne and Sydney one day and I happened to get seated next to John Howard. So John Howard was former Prime Minister of Australia and John's a very personable individual and you know, so I sat down and after we took off, he said, you know, you're wearing a suit, you know, obviously you're in business. What, what business? You. I said, you know, I'm at crowns here. And he said, crown? Yes. He said the thing about gambling is, and this is like completely unsolicited, he said, I, I was adamant that we would never get online gaming in Australia because the last thing you'd ever want to see is people who bet their house sitting at home. We just don't want that. And I think that philosophy probably preceded him and has certainly proceeded him that sports betting is kind of a national phenomenon and it's almost entirely on thoroughbred.
There's a little bit of, you know, other codes and other sports, but it's, it's predominantly on thoroughbred racing and we, we have a very deep culture that hinges around racing. So we've got a, a race every year in Melbourne on the first Tuesday of November.
[00:24:38] Speaker A: The race that stop this state. So it's true. Everyone stop and stare at the screen.
It's, it's like you gotta, you gotta see it to believe it. And then, you know, it's, it's amazing. Yes.
[00:24:49] Speaker B: The race that stops the nation. Yeah, they've got a holiday.
[00:24:52] Speaker A: You put a silly hat and you always put a silly hat.
[00:24:55] Speaker B: Yeah. So you got to put a holiday in the state of Victoria. But as you say, the entire country gathers in hotels and restaurants and just to watch a three minute horse race at 3pm in the afternoon.
But it's, it's a, it's kind of like the, the entry into summer and it's a holiday and it's a great social event. It's a Tuesday, so it's not like it's, you know, a weekend or anything but, but there is this very strong affinity with horse racing and Gambling on horses and the whole spectacle that goes with sports and it's a big industry in terms of employment and everything else. And it, it's kind of elevated. It's not like, you know, some of the, the racetracks you see in kind of rural parts of America. I mean it's, it's right in the middle of the big cities that very prestigious events, the, you know, the great and good of, of the corporate and political life all go to these events. And as you say, they, there's a strict dress code that for every event there's a different color and a different flower and a different attire. So, so the whole sports racing thing is a horse racing thing is part of the culture of Australia. But that then I think kind of gives some coverage to betting on horse racing as well because it gets you more engaged in the event. And, and, and so there's a sort of a long term cultural acceptance that betting on horses is okay. And, and you know, Beck Fair, which was, you know, originally a Crown business, basically was the pioneer of online sports betting in, in Australia, so won a High court case that opened up all the sports betting Australia to be managed out of one location because otherwise it would impinge on freedom of trade between states. And so they want a high court case to open up sports betting in Australia.
And as you know, the bet fair is an exchange. So it started, it opened it up, but then the online fixed odds businesses all just took off and took over. And ultimately sports bet that we're talking about, which is the largest of the online sports bet businesses, you know, has come to dominate.
So I think there's that kind of dichotomy between absolute prohibition on online casino, online social obviously is okay, but an absolute cultural and political acceptance of online sports betting and embracing it and actually being supportive of it. So it's, it's an interesting dichotomy.
[00:27:30] Speaker A: I think it's also about slot machines. You know, like the property in Sydney for Crown is, doesn't have slot machines still. Right.
And then in Bezwood, when I was designing games for Burswood, the regulation treated slot machine as something to, it's almost something wrong with it. You know, this is why they try to regulate. There's nothing that is allowed to spin. There's no adjacency relationship between the symbols. They really try to almost regulate it out of existence. I'm kind of wondering, you know, in this, in this environment, how can traditional, you know, casinos stay, you know, stay relevant and evolve when, when things are becoming more and more digital when, when, when the businesses around the world and, and, and people find that more and more of their life goes online and you got brick and mortar casinos in Australia really have to be very cautious with slot machines and extremely limited with, with their business in, in, in the online space.
[00:28:31] Speaker B: So yeah and, and there's a few things there Al. One thing is that yes Crown Sydney doesn't have gaming machines but when it comes to problem gambling the, the kind of the one that most of the, the the sort of gambling sort of the anti gambling groups targeted slot machines because of the, the speed of the decision making the non interacting with an individual Table games have always been considered a bit more of a sort of interactive social event.
The the game speed is a lot slower. You know even you know high stakes baccarat which is the fastest of the the Games takes about 40 seconds for a decision whereas slots obviously can be much faster.
And so table games is always a bit more acceptable. So most of the challenge around gambling has been the harm that could be done to individuals by slot machines.
In the case of Sydney I think it was slightly different. I think the issue in Sydney was it's already got a lot of slot machines. There's a hundred thousand slot machines in the state of New south Wales with 8 million people.
I think, I think I may be out of date with this.
[00:29:47] Speaker A: Give Vegas a run for its money. Right.
[00:29:50] Speaker B: So I was going to say I might be able to date with these stats Al but at one stage New South Wales had more slot machines in the state of Nevada.
[00:29:57] Speaker A: Yeah yeah yeah.
[00:30:00] Speaker B: So I don't think, I don't think there was a, a big gaping hole in the market where they needed more slot machines.
So and Sydney was a table games property. So it was all about I guess the more acceptable form of gambling which is tables where you're talking to somebody, you're sitting next to somebody, the decisions are slower so you're not feeling rushed and you can only go as fast as the, the other people on the table.
The Burswood issue, well at Perth issue is a bit different. So Perth would say they don't have slot machines in Perth. They've got a reveal mechanism in a mechanic and a game mechanic and so and that's an historical legacy. New South Wales kind of grew up with you know fruit machines in hotels and they evolved into where we are now.
Perth never had that. So the casino was kind of a big step forward and it was when it was originally established it was we don't allow slot machines but we'll allow A reveal mechanism that replicates a land based guy. So all they are doing is essentially replicating another game. So, so I think there's been that backdrop around people saying enough slot machines, we don't need more slot machines. You know, we probably need less if anything. But then you kind of go from the other side which is, well, if you're an operator, how do you feel about that? And you know, as you say, the world's becoming more digital. People are connected in different ways.
And you know, when I first started at Crown, one of the things. So as you know, Crown was part of previously part of a bigger multimedia business and had television, newspapers, television, magazines and it also had quite a significant digital operations, included car sales, which was a digital car selling platform.
And there was another associated business in realestate.com and what those businesses were doing was digitizing classified ads. So if you went back before probably around 2005 or 6 or thereabouts, the newspaper publishers used to make a significant amount of their profits from classified ads.
And you know, they used to describe it as the rivers of gold because they will never cease because every time someone wants to sell a house or every time someone wants to sell a car, they'll come to us and they'll pay and they'll pay, you know, a significant amount of money to get, you know, highly placed ads and car sales. And RE Ace disrupted that whole market and, and took away that, you know, that really solid, reliable, consistent source of revenue for the, for the publishers. And so kind of the, the DNA of the organization was we like digital destruction but we're just fearful that that could happen to us as well. And so, so Crown was an early innovator in sort of looking at and, and not a, you know, a consultant case study. It was well, let's get into the space that we can in digital gaming. Let's just see what that means in the context of our land based businesses.
So 2004 was the joint venture with Betfair UK that opened up the market to online sports betting.
We bought the whole of the Betfair business from the UK and so it was a whole Crown subsidiary from 2014.
So that gave us the Exchange.
And what we discovered with sports betting was that the fixed odds business was becoming more profitable than the Exchange. So the exchange was good for sophisticated bettors because they could find deep markets and find counterparties to match.
But normal people in a pub with a beer in one hand just want to know what the odds are and put a bet on. And so what was happening is the exchange was a good business, particularly among sophisticated punters.
But the, the retail business, if you like, was going to fixed odds. And so Crown didn't have a fixed odds offering. So we, we got together with an operator, we built a business called CrownBet.
We went from nothing to nearly 300 million of revenue in a couple of years. And, and part of doing both of those businesses was to try and understand to what extent would our land based customer migrate over to a digital experience.
Because the, you know, the working hypothesis was if you like betting on tables, you probably like betting on horse races.
And so we worked really hard to try and create incentives for people who were our land based customers to migrate over to the digital sports betting platform and it didn't really resonate.
[00:35:13] Speaker A: Oh, that's fascinating.
[00:35:15] Speaker B: Yeah. And partly we think the reason was that CrownBet was a new brand and people were already satisfied with their Ladbrokes product or their sports bet flutter product or whatever. So part of it was migrating people over away from their product preferred product was difficult and we pitched at the high end. So you know, we do things like say you qualify for your VIP experience at a Crown property if you're a VIP customer in the sports betting. So with all of the effort in the world and I think after a few years the business had grown, well, I think we kind of worked out that sports betting probably wasn't going to disrupt land based casino bank.
And so the other one that we then moved into was, you know, we could see what was going on with Playtika and we could see what Aristocrat was doing with Big Fish. And, and, and so we said well.
[00:36:20] Speaker A: Maybe to play in app purchase. Social. Social gaming. Yeah.
[00:36:24] Speaker B: And so we thought well maybe that's, that's closer to a slots experience.
So is there a chance that, you know, our slots customers might be attracted to play social casino? And you know, maybe not completely the land based casino, but maybe they'll do one less visit or they'll do something else. And so the very best way to test that theory is not to ring up and ask questions because you'll never get to the right answer, but to offer our top end customers an online social experience.
So, and I'm sure you're familiar Eyal that we, we bought DGN and also an Israeli based business empire, ada.
So we had old Vegas slots and lucky type slots and you know, we're up against some B players by then because the market had been evolving.
But our hypothesis was that if you could offer land based value along with a Online social experience, then maybe you could do well in that space despite the fact that we were relatively late.
And so you know, one thing we could do was we could offer incentives to our top end customers to say look, you know, because you're a valuable customer to us in land based, here's a special package we can offer in the social space. And you know that, that should encourage you to at least try our social product.
And much like the sports betting experience, we didn't get a lot of customers migrating over to social.
And, and, and so that's not a, you know, hypothetical survey based thing. That's you know, we, we, we own, we, we crow still owned DGN when I left. So it had gone on from 2014 to 2008 years of, sorry, 2017 to 2022. So like you know, at least five years of, of trial and you know, it was okay. But what you didn't see was a, a mass kind of people turning off their other social casino product to embrace a crown land based incentive product.
[00:38:51] Speaker A: As long as within your jurisdiction. If the regulatory reality is that there is no thriving business to that developing there, then you probably find that your traditional brick and mortar actually are pretty stable and growing business and you're comfortable staying there. But then still look at opportunities overseas where you can see really massive growth like, like you guys looked at, at, at other partnership overseas.
[00:39:17] Speaker B: Yeah. And I think, I think there's two parts to, I think part of it is yes, you've got a very sticky customer base because they like the land based experience. You know, there's always a sense that, you know, a customer that would come to the property liked getting out of the house, having a meal, meeting people, the whole social experience, you know, and if you, if you went to work on Monday morning in Melbourne and someone said, you know, so what'd you get up to on the weekend? And you'd say oh, I was down at Crown, you know. Oh, that's great. What did you see what happened? What was going on there? You know, if you went to, went to work on Monday morning and someone said what did you get up to? Well, I stayed at home and played social slots, you know, all weekend. Oh, okay.
[00:39:59] Speaker A: And that's the end of the conversation.
[00:40:01] Speaker B: Yeah, so, so there was that the social element. So there was I think stickiness to the customers who liked the real money experience, liked the social aspect, liked the fact that there was two and a half thousand slot machines. So there's a good chance they could find a machine that they wanted to play on. In an area that they liked with people that they knew and, and not find themselves struggling to get onto a machine.
So we thought that was good.
But what I think you see globally is maturing of that customer base that there's not, not that many young people. It's not like there's no young people, but the average age of the customers every year was going up. And so, and so while we weren't that concerned that the existing customers would, would leave, the concern then goes, well, is there another generation of customers that will find slots in a pilling product?
And so that was, that was kind of one of the future proofing issues for us was, you know, how do you find that for us as Ruby.
[00:41:09] Speaker A: Play, we are work from home company. Like we have a big focus on our culture and creating that kind of culture, which can be challenging in an igaming context. You know, there's lots, there's lots of judgment I guess about, you know, people that works in the industry. So we try our best to kind of create this, have a positive, positive workplace. And in your recent, you know, your recent venture, the, the Gender Fitness, this is something that you've been focusing on like, you know, like the culture, culture of companies. So do, do you want to tell us a little bit about that and how do you find anything different between igaming context companies or any, or any companies in general?
[00:41:48] Speaker B: Yes. So my theory on the Gender Fitness product, it kind of emerged when I was running the digital portfolio at Crown. So I had, you know, access to great digital minds, good digital marketing people, you know, technology teams. And it struck me that one of the things which is problematic in organizations is that people walk into a room with different experiences, different history, different approach, different perspectives.
And how on earth do you make sure that everybody who walks into the room, if they've got an idea, don't walk out with that idea still in their mind and never verbalized. But also if you've got a really important issue, if your organization and you're saying, you know, we've got an existential threat, or we've got a, you know, potentially massive value creating opportunity, or we've got a problem that we, you know, we just need to solve, how do you make sure that you're getting the best minds around that issue and, and not just the best minds, but different minds who think about things in different ways.
And so it was sort of originally in the context of trying to ensure that from a gender perspective, everybody had equal opportunity to be seen, to be heard, to be recognized, and to progress through the organization at an equivalent rate.
And gender is, is one of the easier aspects of diversity to identify because most people are willing to volunteer that they're male, female, non binary.
Once you get into other dimensions of diversity, it gets a lot harder. So Neurodiverse, LGBTIQ, plus all of those other dimensions, people are much less inclined to self identify. So you wind up worrying about the data. But I think if you can get the broad concept that bringing different people into the room is important to try and tap into a diverse cognitive repertoire, but then what happens in the room is equally important and you need to create a psychologically safe environment where people aren't intimidated about speaking up, aren't reluctant to say something because they're fearful that the response may not be good.
And so that's kind of on the person who's convening the meeting to have that approach. My other kind of hack was from a, you know, 20 years as a CFO, was, well, it's all very well to say you want to be inclusion, inclusionary or inclusive leadership, but how do you know? Like, if you haven't got some data, how do you know? So I said, well, you need to build a tool that can measure that, that, that psychological construct.
And so, but you need to do it in a simple way so it's not burdensome. And, and so all of the academic evidence that I've found sort of supports a proposition that there, there are two broad things about being inclusive. The first thing is that you need to have people who acknowledge you acknowledge that they'll come in. And group dynamic theory says that people form subgroups with people who are like them. So you've got to accept that people will come into the room who are members of a subgroup. So, you know, whether that's, you know, I'm used to people who like soccer versus, you know, rugby league, or I'm used to people who like gambling or, you know, not gambling. You recognize that this, they're subgroups. And so you can't diminish the fact they come from a subgroup. But what you need to do is create environment. Everyone feels invested in the outcome of this new group that's just formed. So you've got to get this sense of engagement in the new group. And there's a concept of belonging. So I feel like I belong to this group. So you need to encourage that and psychological safety so that they don't feel intimidated.
But the other part of it, which is quite challenging is you don't want to drive for conformity. So you're not saying to people you know, leave your history, your background, your perspectives at the door and just come along and adapt yourself to this.
Whoever the dominant group is in this room, we want to preserve your uniqueness. And so it's this dichotomy of we want you to belong, we want you to be invested in the group, we want you to feel psychologically safe to speak up, but we also want you to be different.
We cherish the differentness.
And so as leaders, that's a really challenging proposition to embrace both of those principles.
And so there's tools and things you can do. But ultimately, and we found this at Crown because we actually implemented this at Crown, we implemented at Microsoft the ultimately, you've got to give leaders a reason to think about this stuff all the time. And so the way to do that is to collect data and report it and hold people accountable and treat that as a metric like other metrics. And so we built the tool that basically leverages off meetings and collects data about how inclusive are you as a leader, are you bringing different people into the room to discuss issues?
And in that room, do they feel psychologically safe and do they feel like they're invested in belonging to the group? So we did that with a very short, you know, punchy couple of questions to just collect the data about that and leveraged all the data out of the HR system and, and the calendar system to say, well, we can collect all this stuff and turn it into an index. So we got all this data. Once you've got those pieces of data, you can then go back and say, you know, all the things you like to do when you get metrics, because I know Eyal, you're a very data driven individual.
But if once you've got the data, you can start to say, well look, you know, who's doing well on these things, who's lagging behind, who's done an initiative recently that's had a positive or negative impact on this? And so like everything, once you start measuring it, you can course correct, you can find best practice, you can find areas that need more help. So all the good things that come with data but wrapped around a concept of inclusion brings out the best in people who bring diverse perspectives to the table.
[00:48:13] Speaker A: That's, that's interesting. I, I really believe that that's applies to everywhere. It doesn't matter the industry, it doesn't matter the product. I think it applies everywhere. And I think that for, you know, for, for companies like us, like working from home, that becomes even more important. Because very easy. There's no room. It's a virtual room.
[00:48:33] Speaker B: So.
[00:48:35] Speaker A: Okay. So Ken Barton with that, thanks a lot for joining me in the podcast. It's been a really interesting conversation. I hope that we've told someone something about Australia and how important it is for gaming and. Yeah, and the best of luck with Gender Fitness. Sounds like you're doing something really interesting there.
[00:48:55] Speaker B: Absolute pleasure. Thanks A great to see you again.
[00:48:58] Speaker A: Thanks for tuning in to this episode of IGB podcast, Igaming Checkup with Dr. Eyal. There's plenty more to come, so stay with us for more eye opening, thought provoking and stigma challenging conversations that dig deeper into the world of igaming.
