«With good regulation, taxation, and a secure gambling environment, man problems will not exist» ― the interview with Senior Business Advisor Eduardo Morales Hermo
The editorial staff of slotsandcasinos.org has presented a new section where interviews with people famous in the gambling industry will be published. Today our interviewee is a gambling consultant and investor Eduardo Morales Hermo.
Eduardo has 50 years of experience in business and consulting in the gambling industry. He often attends various exhibitions and summits dedicated to gambling. Eduardo Morales Hermo took a few minutes to answer our questions and tell our readers what connects him to the industry and what challenges await those who want to open a casino.
― Hello, Eduardo! You graduated from Emmanuel College, University of Cambridge and have a degree in Economics and Marketing. Did you already know then that you would be working in iGaming?
― When you are 22 you only expect what is next and how can you find a opportunity to have a nice stable job and do not look into the industry or sector you can be involved.
― Many experts say that you have to really love gambling to have a successful career in this field. Do you like gambling?
― I do not particularly enjoy gambling. In fact I never gamble. I love the industry and I have been involved one way or another for over 50 years so, I must like what I do otherwise I would not be doing it. I think is a very interesting and particularly special industry, which is overwhelmingly regulated to protect consumers and allow to lose its stigma which was earned during the prohibition years.
― Do you think that risk-taking and gambling are advantages or disadvantages of modern man?
― To gamble from basics to many other ways, is intrinsic of the human being, there is is part of the nature of the individual taking risks, modern or not, and what is important is that the risks are taking under a protected environment which guarantees the fair results of your gamble, therefore if you allow gambling under an adequate regulatory framework you stop unguaranteed illegal and not regulated protected gambling, minimizing the risk. In any case Gambling always existed and will always do whether is regulated or not.
― Is running a successful business in gambling different from retail? In what way?
― Like any other industry, digital or online business requires a different business set up and operation management, structure, investment etc., the essence of gambling and its different segments remains the same whether the offer is retail or digital, it is the way you establish and run the business. And both channels complement one another under an omnichannel offer which is the best of both worlds in order to capitalize one another and enhance an offer to a universal customer base. Gambling has evolved with time and technology implementation which moves the trend of the consumer habits, and like any other sector, by doing that you do not lose track of the demand which what you always aim to supply at its best and preferences as in any business.
― Tell us about your first experience in the industry. What kind of difficulties did you have?
― The only handicap of the gambling industry is the lack of regulation or a bad regulation, As I said before gambling is there, is in the spirit of the human being, and providing you do it under control and adapt your risk to your capacity it can be an entertainment. So the difficulties I found in my long time dedication to gambling is the lack of understanding of the regulators or those in charge of making the law, and coming up with regulations which defeat the purpose of the intention of any regulatory environment, and that makes difficult to to help the incumbents in developing their business properly and with the necessary sustainability.
― Why did you decide to get involved in gambling?
― I did not get for any reason, it just happened that I was offered a job by a non gaming amusement company and I took it. Then in Spain the gambling regulation was established in 1976 by depenalization of gambling and many companies had to move on into the new product allowed under the consequent gambling regulations put in place thereafter. I adapted the company and myself to the demand.
― You have one more degree from the University of Nevada, Las Vegas in New Technologies applied to Gaming and Entertainment. Does specialized education help in your work? Or is it personal experience that matters in gambling, and is a degree just a line on your resume for employers?
― Education, training and practical execution helps in whatever you do in life. having an strong educational and training background is key to the best performance of whatever work you have to do. Then experience increases your capacity to make decisions and choose the best on any decision you have to make. And finally, you must enjoy and like what you do, that helps a lot in implementing your work better and efficiently. Any line in a resume has to be proven in practice, so each line must mean what it implies.
― Do you find it easier to understand and optimize the financial side of a project or any other aspects? What is more important, in your opinion?
― The most important aspect of any project is being realistic, use common sense, and know what you are doing. Mathematics is just a tool to obtain the efficient formulas, but you just provide the facts and key elements in which you base your projections and financial expectations. Definitely know what you want to do and how to do it, bearing in mind the environment and circumstances that can impact on the project.
― Why is it necessary to consult a specialist like you in general?
― Just know how and experience in what you have to assess and use common sense as well as being sincere and realistic in your assessments. An expertise report or assessment is a cheap investment in order to make a decision that can either make you lose or win. Is important that the basis of the assumptions used for any advisory are accrued and solidly based.
― Do you notice problems quickly in the business plans you’re evaluating? Is it usually a lot of mistakes, or do you only need to fix a few details?
― Normally yes, if there are problems……. There are basic facts that come up quickly. And we all make mistakes because we take decisions and do things. Others will find these problems or defects in my work as well. Normally the level of professionalism of those that prepare a business plan is generally high, therefore some times is a matter of criteria that makes the difference, and in that case experience and knowing the real facts matter.
― Which gambling idea will you 100% reject?
― All ideas are good because they come from a human mind, and as a principle I never reject any idea as a whole, one need to evaluate it individually case by case. Ideas enriche the individual and any project.
― Is it important to have a special approach to choose the staff at an online casino?
― You just have to know what position you need to cover, establish a job description and find the right suit thru resume and interviews that give you the right value of the individual, and if it suits the position, then performance will say if you are right
― Many casinos complain about staff turnover. Why do you think it happens and how to avoid it?
― Is important to have people that is happy with what they do, listen to their suggestions as to how to improve their work, and we do not have to forget that like any industry there is a natural churn on the labour force as well and you have to be prepared for it. Everybody is replaceable.
― Have you ever had to provide your services to a company that was on the verge of closing?
― What was the first thing you advised them to do?
― Some go ahead and close, some change their direction and some a full restructuration, that goes case by case.
― You have more than 20 years of experience in iGaming. Do you have a successful way to run an online casino? Tell us about it in general terms.
― Well, nowadays there are many, hundreds if not thousands, of successfully run online casino, where product or content is normally a commodity, enhanced technology is a must, addressing the consumer with the right product and environment, customer is the king, so all resources must aim to bring on board, make your brand their preferred brand, loyalize and retain your customers with the best experience by differentiating your customer support, use your marketing and commercial actions efficiently. You must be aware of the consumer trends, what are the competitors doing in each market you are in, in a few lines you can just describe some generic but there are a lot of factors that you need to consider when you come to optimize your business and have the best customer experience as success for your business.
― In what ways have casinos changed over the last decade?
― Unfortunately land based or retail casinos have not changed enough in the last decade to meet the consumer trends, with the exception of destination hubs like Las Vegas, and some positive exceptions, most of the casinos continue making the gambling offer their main and sometimes only proposal, which, limits their scope as to the consumer profile they address their offer. Land Based casinos need to broaden their scope towards more fun and entertainment and addressing new generations to come inside even if they do not gamble, because that will enhance their possibilities to increase their player base with a well designed cross sell strategy between different areas of the casino space. In addition the complement of offering their casino and gambling offer online will definitely improve the customer base in both directions. They must have in kind the trend of the consumer and specially the new generations who normally are not casino clients. It all depends as well on the regulation, space and conditions of each casino.
― More and more new gambling jurisdictions are appearing in the world. Have the legal aspects of online casino operation become more complicated today? What problems do casinos face?
― There are many regulations in place and more are coming along more and more in order to bring onshore the offshore online casino offer. The regulations are no complicated in principle. Some more than others have more specific requirements but, first of all the need of a regulation si paramount, and of course if it is properly done much better. The important factors are they they have a complete product contect offer including all the casino and betting verticals, a proper licensing regulation to provide legal security to the incumbents, a reasonable 10>20% max direct game tax based on GGR, well designed responsible gaming rules, important to approach the illegal offer with strong barriers to stop unfair competition. With a good regulation, taxation and secure gambling environment, man problems will not exist.
― Which markets are the most profitable now and in the future? Which ones can be avoided?
― All markets are profitable with the adequate conditions. At the end an market will adapt itself to the offer and demand, and in regulated markets just a few operators can have enough scale to be profitable. European regulated jurisdictions are mature or becoming mature, and represent the ,ore advance market configuration, but others emerging are gaining pace fast, like USA or many LatAm markets, with the precaution on the latter ones of how you evaluate its volume based in the income per capita range. The Asian markets are still missing, still almost all non regulated with an strong offshore offer, and would represent a huge business volume if and when they became regulated.
― You also advise online game providers. If I were a newbie developer, what would you advise me?
― Yes, I do and would not identify any on here.
― You could create a real mega iGaming corporation with your experience. Why did you choose consulting instead?
― I really did not choose exactly, I suppose I did not have the necessary funds to invest on an operation. I have always been more involved in business development, creativity, business strategy and marketing, entering in new markets, preparing regulatory framework for the industry in both retail and digital. I know I would have made much more money, or not ??? …. but I enjoy what I do and always try to give my best to each project I am involved. I am happy doing my work and even more if my client is satisfied, which is the main objective.
― Is there anything you’d like to wish our readers?
― Thank you to those that had the patience of reading this, I am always here to provide whatever I can from the best or my knowledge. I d not have all the answers not have either the best, I am just me and my still limited knowledge, that is why I keep learning every day as I have done all my life.
― Thank you for your interesting answers.
― Thank you so much for having me here, you are very kind.