Pulse

Casino Blankenberge: cooperation and solidarity

By William - 10 February 2022

Cooperation is key to tackling the multiple challenges facing the European casino industry, both land-based and online. G3 speaks to Dominique (Domi) De Wilde, CEO of Casino Blankenberge, Secretary of the Belgian Gaming Association and newest Board Member of the European Casino Association, about the future of land-based and online gaming, and the challenges presented by illegal operators in Europe.

Why did you become a member of the ECA?

Before entering the casino industry, I worked with PwC in Belgium. I have a legal background and I also qualified as chartered accountant. In this role I conducted the due diligence for the Rank Group for its casino operations in Belgium. I subsequently joined Rank as financial manager for their Belgian operations.

My predecessor at Casino Blankenberge held the position of secretary of the Belgian Casino Federation, which was a member of the ECF, the European Casino Forum. I joined him taking part in ECF meetings before the association eventually became the European Casino Association. When my predecessor left, I took over as managing director of the business, as the secretary of the Belgian Casino Federation and continued as a member of the ECA.

As a newly appointed Board Member, what is your remit within the ECA and how much engagement do you have with the association?

Members of the ECA attend two meetings per year; the first at the General Shareholders Meeting held at the ICE show, and the second is the Summer Meeting, which has now become the ECA Industry Forum. The contrast from member to board member is that I’m now much more involved in the association. We are working currently on the Strategic Paper that will be proposed to our shareholders at the ICE meeting. There’s more involvement in strategic discussions, planning, working groups etc.

Recently, Casino Blankenberge was acquired by the online gaming group Kindred/ Unibet. I am truly convinced that land-based and online casinos have more in common than there are differences, especially in the field of illegal gambling and issues with banks and financial institutions. If I can play a role in bridging these two sides within the ECA, then I’m happy to do that.

How important a role does the ECA play in promoting the positive activities of casinos in Europe?

The ECA’s role can hardly be overstated. Collectively, the ECA represents 900 casinos with more than 70 000 employees in 28 countries. The association represents privately-owned casinos as well as state- owned casinos who, by definition, have a larger impact and greater influence at the national and political level. The ECA is THE voice of the European casinos.

A very beneficial ECA practice is the surveying of members to highlight regional and local issues that affect the industry. The ECA also plays an important role in maintaining the high profile of the industry and defending its interest and reputation. The association is also closely monitoring European legislation and its impact on the industry.

What more can and should the ECA be doing in your opinion?

At a recent ECA meeting I championed a more proactive approach to be taken towards the illegal gambling businesses. Of course, it is not obvious for the ECA to address this directly, but we need to apply pressure upon regulators to act and prosecute locally through the national casino associations.

It must be one of ECA’s main area of focus to explore all available legal means to tackle illegal operations. We need to defend the interests of legal, regulated operators. The agenda of the ECA in terms of compliance, GDPR and responsible gaming are to be commended, but a firmer approach to illegal markets is needed, with greater regulatory influence too.

What are the universal issues challenging all members of the ECA?

The overall universal issue is to secure a profitable land-based casino industry within an ever and fast changing gaming landscape and increasing digitalisation. Therefore, we need to open up strategic alliances with other players in the industry to reinforce our financial position and to get access to new markets and new businesses. We also need to tackle overregulation and create a level playing field amongst the different gaming actors.

Is Belgium’s online/land-based hybrid model the right way to handle the interconnection of both environments?

In Belgium, the online industry is tied to the operation of an A-class licenced land- based casino. As a result, Belgium received a lot of interest and visibility at the international level for this decision and it formed the basis for other countries to adopt a similar system.

It must be stated that the Belgian land-based casino operations have a high-cost base, which makes it challenging to maintain profitability and financial independence. The gaming tax rates vary between 30 to 50 per cent of GGR and Belgian casinos are paying hefty concessions and contribution fees to the authorities.

So, for Belgian casinos, online is a lifeline. Without online there would not be many land-based casinos left in Belgium and vice versa, online can only exist in conjunction with an A-licence land-based casino. It is a symbiotic relationship – one cannot exist without the other.

Should the ECA open its membership to online casino operators?

As aforementioned, I believe that the ECA’s primary objective should be dedicated to tackling the issues of land- based casinos, and to achieve that goal, strategic alliances with other players in the industry should be contemplated.

The time where the online gaming business was perceived as a distinct enemy of the land-based operations is now history. The enemies are now the illegal operators.

We are a complementary business with 60-70 per cent of land-based casinos now offering online gaming, either through their own proprietary brands or in cooperation with an online group. Although I do recognise that the businesses are different, I repeat that we must focus on common goals and work together to find solutions.

Fundamentally, we need to retain that we are an organisation of land-based casinos. Online companies have associations of their own. Both associations should collaborate.

Has Covid destroyed CapEx to the extent that European casinos are now the poor cousins of the global industry?

We were closed for eight months in 2020, but what really surprised us was the volume of people that returned when we reopened. We didn’t bounce back to pre- Covid levels, especially in terms of table games. However, slots and electronic gaming revenue immediately rebounded. That said, I think there is a lot of nervousness around the Fourth Wave of Covid, as surviving multiple waves creates ongoing uncertainty.

Capex depends on the future expectations of the investor. It is difficult to say what will happen next with the pandemic as we’re shooting at a moving target. However, we refurbished the casino during the lockdown periods, welcoming back clients to a refreshed environment.

The shopping list for ICE has undoubtedly changed and evolved. Slots have become the most important element within our casino. In 2004, when slots were introduced into Belgium’s casinos, the machines immediately drew 30 to 40 per cent share of the revenue.

Today, that’s now 70 per cent with 30 per cent table gaming – except in Casino Brussels, where table games continue to be very important. So, we will be looking primarily at the new slot technology at the ICE show later this year.

We will also change to a new registration system for the casino as our current solution comes to the end of its natural life. We will need to adopt a new, localised solution, as the system needs to specifically adapt to the requirements of Belgian regulations.

Has the traditional land-based player accepted and incorporated online into their playing habits play during the pandemic?

It was an inevitability that was accelerated by Covid. It worked as a catalyst to speed the adoption of online play by land-based players. Fundamentally, I am the managing director of a land-based casino, not an online casino.

I want players to visit my location, however, if they are going to play online then we guide them to Unibet. Likewise, if Kindred (Unibet) wants to reward its online players with an offline experience, they will send them to Casino Blankenberge.

How positive are you right now about the future of casinos in Europe?

We have seen an important rebound of business after the first and second lockdowns, however, the fourth Corona wave and rising energy prices and inflation are now the biggest threats to the business.

One very positive aspect is that we didn’t witness an outflow of people, as the Belgian furlough system guaranteed 70 per cent of salaries. As a result, we didn’t lose any colleagues during the pandemic.

The change in ownership of Blankenberge Casino into the hands of online operator Kindred – is this as a result of Covid, the shift of power towards online gaming or a natural progression of the industry? And what’s changing as a result of the new ownership?

We are still in the process of integrating within the Kindred Group. This is a smooth process with a great sense of respect from Kindred for our own identity. Our previous shareholder, the Rank Group, was severely hit by Covid, which will have influenced the decision to sell the business in Belgium.

Kindred is a dynamic and inclusive corporation with an entrepreneurial spirit and is very focused on compliance matters, such as responsible gaming, AML and GDPR issues.

Through synergy meetings with the online department, we explore ways in which we can collaborate in both environments and explore future marketing tools we can implement.

The acquisition by Kindred was very well perceived by our staff and other stakeholders. Kindred is a strategic partner that wants to secure its online casino interest in Belgium as opposed to an equity partner buying the casino with a view to selling in three/five years for profit.

Kindred is here to stay, and we hope to contribute to their business development within Belgium.