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Sunday, June 21, 2015

Leadership strategies for the application economy

Leadership strategies for the

application economy.

At any hour at MGM Resorts International’s 15 casinos across the United States—including MGM Grand, Bellagio and New York-New York in Las Vegas—thousands of visitors are banging away at 25,000 slot machines. Lulled by the machines’ encouraging din, those visitors rang up nearly 28 percent of the company’s $6 billion in annual domestic revenue in 2013.

But the hottest action coursing through MGM’s casinos doesn’t necessarily come in the form of coins and tokens; it’s all of the game and customer data that MGM collects daily and the behind-the-scenes software that transforms the data into critical insights that, in turn, boost the customer experience and profit margins. The task falls to a key new hire in senior management—Lon O’Donnell, MGM’s first-ever director of corporate slot analytics—to show why big data is a big deal when it comes to plotting MGM’s growth.

MGM’s Data Empire

O’Donnell is part of a three-person team that taps software to crunch slot data and determine how individual machines, and the system as a whole, are performing.
“Our job is to figure out how to optimize the selection of games so that people have a positive experience when they walk through the door,” O’Donnell says. “We can understand how games perform, how well they’re received by guests and how long they should be on the floor.”

The team then shares the collective behavioral and performance analysis with colleagues at other MGM-affiliated casinos, who use it to make decisions about, say, when to replace a video poker game that’s losing popularity or how best to arrange the casino floor.

3 Big Data Payoffs From MGM’s “Slotware”:
  • Identify slot machine performance trends across MGM’s largely autonomous casinos.
  • Tweak factors such as game selection, location and hold percentage to encourage more play.
  • Boost profitability and the player experience using data visualization "heat maps" of the casino floor.

Old-School Apps, Next-Gen Tasks

Granular analysis of machine and player data is the ultimate goal. Right now, MGM relies heavily on workhorse enterprise software like Microsoft Excel and SQL Server. The switch to slicker, more sophisticated cloud apps is still on the horizon. One reason why is the regulatory nature of gaming: Casinos tend to organize data in spreadsheets to report to regulators, who review the accounting and verify that slots perform within legal specifications. But those reports are not ideal business intelligence sources.

“Excel is king of the world. As fancy as we try to get, with all of the tools that are available ... Excel is still 80 percent of the work.”

— Lon O'Donnell, Director of Slot Analytics, MGM Resorts International

“Our goal is to make that data more digestible and easier to filter,” says O’Donnell, who estimates that Excel still handles an incredible 80 percent of the company’s workload. In the near term, that means the team is experimenting with data visualization tools to make slot data more crunchable. Heavy-lifting analytics are a goal down the road.

It’s a common challenge in the industry. Gaming software is improving, but there’s no magic bullet for analytics, says Chuck Hickey, vice president of slot operations at Barona Resort and Casino near San Diego. Hickey and his team rely on a mix of off-the-shelf software and internally developed apps to monitor player behavior and performance across the casino’s 2,000 slots.


Slotfocus, a Las Vegas-based slot analytics services company, provides analytics on slots via an intuitive dashboard.

Table Stakes

MGM isn’t the only gaming company enamored with big data—nor was it the first. That distinction goes to the then-independent Harrah’s Entertainment and its data-driven executive Gary Loveman, who left teaching at Harvard Business School for Las Vegas in the late 1990s and turned Harrah’s into gaming’s first technology-centric player.
History, too, has caught up with the industry. For decades, Las Vegas casinos were some of the only legal gambling outfits in the country, so they could afford to be complacent. That advantage disappeared during the past two decades with the rise of legal gambling in 48 states.
“People didn’t know what worked. They looked at the first casino that was a box with no clocks and no windows and said, ‘That’s how you make a casino. It’s a maze, and that’s how you make money,’” says William Dunn, president and CEO of Dunn Gaming Solutions and creator of Slotfocus, a Las Vegas-based slot analytics services company.
Customers are now in control, forcing gaming companies like MGM to employ big data and analytics to better understand and cater to their preferences. And software is increasingly the lever the house pulls to maximize the fun—and profit—quotient and keep people coming back for more.
Derek Korte
Derek is a senior editor at Original9 Media in San Francisco. He's worked as a reporter and editor at various digital media properties and Midwestern newspapers. Previously, he spent several years in PR working primarily with startup technology companies.

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