Simon Thomas has crossed divides in the gaming and gambling industry during his four-plus decades of working in it. He’s seen life in arcades, bingo halls and casinos, served as National President of Bacta, Chair of NCF, the Casino Association, and was a force in taking the industry global through ATEI and ICE. Now, he owns the iconic Hippodrome Casino in London’s west end – a landmark operation in the UK’s entertainment sector. Here, he talks to Coinslot about lockdown, trading out of a pandemic, the gambling review and everything in between.
Coinslot: It’s been the toughest year the industry has ever experienced, and the long shadow of Covid will likely continue through the summer. The government’s package of support has been uneven to date – employees on furlough payments whilst directors received no payments, grants for some sectors, nothing for the supply business, no support for Covid secure measures etc. So, what do you think the casino businesses needs from the government in terms of grants, tax adjustments and business support schemes when the Covid restrictions are finally eased?
Simon Thomas: Lots! But realistically the likelihood of the government paying for the damage it has caused to our sector is fairly low. We need to impress on them that the cash flow to the exchequer (the Hippodrome alone paid over £100m in tax in the three years pre covid) is worth protecting.
Our balance sheets have been damaged because of government decisions, so support like extended rates relief, and help to pay unpaid rents should be a given to help us recover. A cut in gaming duty, consistent with the cut in VAT for the rest of the hospitality sector would also help.
But the most important and most likely solution, has to be legislative change to make our product fit for the digital age so we can better compete. And we have a timely opportunity with the current gambling review. We particularly need more electronic products and to be allowed cashless transactions. Relatively small, and reasonable, changes such as these, would give our customers more choice and lead to significant investment to develop better and more ambitious casinos to cater for wider audiences.
It has to be noted that we work in an entertainment eco-system, where we all thrive if everyone does well. More exciting venues, offering better and wider-ranging facilities for customers, would have a knock-on effect not only for the Exchequer but for our neighbouring business community – the bars, restaurants, theatres, nightclubs. Unus pro omnibus, omnes pro uno (one for all and all for one!) – it’s never been more important than now.
Coinslot: The UK gaming and gambling industry is a resilient one, albeit not as resilient as it once was, and it has taken a massive hit in the past year. Consumer confidence, the role of the high street, changes to payment methods – it’s going to be a very different businesses environment going forward. What response are you anticipating when your business starts up again, and what help will it need – both nationally and locally – to adjust to a new normal?
Simon Thomas: We opened our new outdoor Rooftop Terraces on April 15, and the response have been phenomenal, demonstrating that there was a tremendous hunger among the public to return in droves, not only to the Hippodrome, but to the wider West End for entertainment.
Pre-sales for Magic Mike Live, our theatre show devised by Channing Tatum, have also broken new records, while bookings for our Heliot Steak House once again demonstrate an appetite to return to normal life.
However, we’re realistic, and until the promised June 21 social distancing rules are dropped and the masks come off, we’ll be well below previous trading levels.
Much also has to be done to rebuild confidence in the transport system and also re-introduce the London night tube services which supported wonderfully well the night time economy and supported the ambition to become a true 24- hour city.
Tourism also has to return and what’s frustrating is the lack of ability for us to plan because every day the news media delight in highlighting news of different strains that may derail the timetable.
The government ran ‘Project Fear’ very well. We now need them to run ‘Project Confidence’ as well and drive the recovery.
Coinslot: It is the year of the gambling review and new modern legislation has been promised by the government. What is the casino sector looking for in the new gambling act? And what changes do you want to see implemented, not just for casinos but across the gaming and gambling arena?
Simon Thomas: We are taking the Government at its word that the purpose of the review (we don’t know yet whether there will be a new Act) is to ensure that legislation is fit for the digital age; and in doing so finally implement the changes envisaged by Parliament when it passed the Gambling Act back in 2005. The Gambling Act was intended to modernise the entire casinos sector – but the Government at the time adopted the precautionary step of running a trial of new style casinos first. A review of these test reforms was scheduled for 2013 but has never taken place.
The reforms we seek are grounded in what customers tell us that they want – wider choice and availability of the games that they enjoy (including gaming machines and electronic versions of traditional casino games), the ability to place sports bets in a casino (as is commonly the case internationally), and the ability to use modern payment methods, subject to social responsibility controls. These can all be achieved largely or entirely via statutory instrument without the need for a new Act.
The introduction of these reforms would help operators give customers a more enjoyable and safer casino experience and in so doing help the sector to recover from the damage of the lockdowns – triggering reinvestment and preserving employment and tax flows.
Looking at the review more widely, it is critical that the Government sticks to its pledge to balance the needs of consumer enjoyment and personal freedoms against the need to update customer protection measures. There are some who – far from wanting to modernise legislation – wish to see the clock turned back to an age where gambling policy was grounded in moral disapproval. The Government must take action where there is clear evidence to do so, but also ensure that the interests of the recreational gambling consumer are respected in policy and in law.
Coinslot: The gambling review has been described as a make or break moment for the industry. And there are many who argue that the decision makers, and indeed, the regulators, neither understand the mechanics of the business, nor the contribution it makes to local communities and the economy. Is this a fair criticism, and if so, what points are you putting forward to enlighten the decision makers?
Simon Thomas: The DCMS policy team has always struck me as being very diligent and enquiring when it comes to seeking to understand what is a fairly complex industry; and there are few parliamentarians with greater experience of gambling matters than the present minister. The DCMS also seems genuinely interested in the interests of the gambling consumer, cognisant of the consumer and social benefits of gambling and willing to strike a balance between enhancement of those benefits and minimisation of costs.
There are many intelligent and hard-working people at the Gambling Commission who do understand the industry and the issues. In recent years however, the regulator as an institution has become more political in its outlook, more campaigning in its style and less focused on ensuring that the market is able to function in the best interests of the consumer and we hope this is changing.
We must remember however that Britain’s gambling industry as a whole has been largely the author of its own misfortunes. On far too many occasions, the consumer has been let down – whether by poor service or inadequate protection. All businesses should seek to champion the best interests of their customers – in the past this has not happened to a high enough standard.
If there is an imbalance of perceptions regarding the social and economic contribution of the gambling industry, this will not be solved by enlightening policymakers; it can only truly be addressed by delighting our customers and encouraging them to speak up for their own interests.
Coinslot: After what seems a lifetime, the UK has now left the EU with a new framework. Free trade in one hand, more bureaucracy in the other. In real terms, what does it mean to the industry and your business in particular? And going forward, where do you see the advantages and disadvantages for the industry?
Simon Thomas: In terms of product, Brexit will make little difference. It’s in the area of staffing and the current search for good labour that is already causing us, and the wider hospitality industry, significant problems. So until a solution is implemented to allow young foreigners visas to work in the UK, there could be worrying labour shortages.
Coinslot: Looking at the next two years, what are the key issues – both threats and opportunities – the casino sector will be facing? And, in an ideal world, what developments and changes would you like to see implemented in that period?
Simon Thomas: The most immediate challenge for Britain’s casino operators is to achieve business sustainability against an uncertain consumer and economic backdrop. For a central London casino such as the Hippodrome, there are big questions about how the capital’s leisure and hospitality market will function. Will people all return to work in offices and if not, how will a reduction in office-based work impact socialising? When and to what extent will the tourism market recover? How will late night entertainment be affected by residual concerns about using public transport? To what extent will Covid measures be kept in place long after the emergency on a contingency basis?
Understanding the extent to which our world has changed is critical in transforming these challenges into opportunities. Last year for example, we undertook a substantial expansion of the roof terrace at the Hippodrome, creating a unique hospitality space high above Leicester Square with stunning views across the capital. This allowed us to reopen for business (albeit just food and drink) five weeks ahead of the wider casino sector. It may be that in the future, consumers will place a higher value on outside space as a result of what they have gone through over the last year. At the Hippodrome, we have long grounded our business decisions in what we hear from customers, our observations of what they enjoy and dislike and lessons we have learned from other sectors and other jurisdictions. This approach will be even more critical as we seek to understand what consumers want going forward and how this is different to what went before.
The Gambling Act review also presents an opportunity to adapt through the introduction of more consumer-centric legislation. It also presents a threat from those who will lobby for a substantial reduction in the gambling market. Here, as in other matters, we will continue to put our customers at the heart of what we do.
Coinslot: Looking at the evolving structure of the UK industry, how do you see the broad and varied sectors fitting together in 2021? Is there more that unites the amusements, betting, casino, gaming and gambling sectors than divides them? Or are they now so different that they have to operate independently – some in leisure and hospitality, some in gambling – and what does that mean for regulation?
Simon Thomas: With the exception of remote gambling and lotteries, Britain’s licensing categories are all products of the 1960s and so largely reflect societal and legislative attitudes that are more than half-a-century old. There is no inherent logic to the current licensing classes which all exist in order to meet the same basic human need for a modicum of suspense, excitement and surprise in life. Part of the problem may be that companies define themselves by the products that deliver the lion’s share of their revenue (gambling), rather than the consumer experience (entertainment). As much as the divisions between different sectors have caused damage to the market as a whole, there is perhaps a deeper problem of introversion in the industry. We should be looking outwards and taking our place within the wider world of hospitality (as the US casino industry has done well over many decades), rather than spending our time on inward-looking squabbles between different classes of business that all provide similar narrow services.
Although we call the Hippodrome a casino, we refuse to let gambling define who we are. We have one of the top-rated steak house restaurants in London, one of the fastest-selling shows in West End history (‘Magic Mike Live’) and as I have mentioned already, eight bars and a stunning West End rooftop terrace. We are the inheritors of a glorious tradition of entertainment stretching back more than 120 years to the launch of the Hippodrome as a place of spectacle and wonder (as an indoor circus) for the late Victorian era. We are inspired by the history of a venue that has hosted entertainers as diverse as Charlie Chaplin, Harry Houdini, Frank Sinatra, Sammy Davis Jr, Tom Jones, Ella Fitzgerald, Prince, The Folies Bergere and The Ballet Russes. These are tough acts to follow – but that is our ambition.