FRANCISCO VIDAL CAAMAÑO, SORTIS & GOLDEN LION CASINOS COO “Main Brazilian cities should have up

GMB - First of all, tell us a about your career in the gaming market

Francisco Vidal Caamaño - My professional career is divided into four well-defined phases, a first stage as a croupier in London and Las Vegas (4 casinos), a second as Head of Hall in Spain (3 casinos), the third as manager of casinos in the Dominican Republic and Peru (7 casinos), and a fourth, which is the current one, in corporate positions as Director of Operations / Managing Director in Panama, Mexico, Croatia and Spain (totaling 24 more casinos). In summary, I have developed a professional career in 8 different countries, directly playing the day-to-day life of 38 casinos, and worked in 8 different companies (4 Spanish, 2 English, 1 American and 1 Panamanian). Mine is an organic and natural trajectory in the industry, growing in the ladder following the traditional route in the area of operations.

I am currently COO in a company that manages three complete casinos in Panama City, one of the most competitive markets in Latin America. Among my main tasks I would highlight the design of the company's operations strategy (mix of product tables and machines, limits policy, credits), the development of the annual marketing plan (loyalty program, promotions policy, social media strategy and media) and a third block of coordination of support areas (Human Resources, Management, Compliance and Systems), in summary is a hybrid post with direct report to the owners of the company where I’m in charfe of the management of both day-to-day operations and the areas of the company. I would leave out the security, surveillance and audit departments, which report to the shareholders' board. Having recently taken over as Director of Operations for Sortis Golden Lion Casino, what is your evaluation and what are the plans for the future? The evaluation is very positive, the company lacked the structure to manage 3 casinos in the city (especially in the current hyper competitive environment), it was administered in a very personalistic way. With my arrival and that of a team of executives mainly coming from Codere and Cirsa, that really is creating a professional management team accustomed to work under the highest standards of exigency, organization and planning. Looking to the immediate future, the idea is to consolidate the 3 properties that we have in Panama City to later expand in other regions of the country as in the countries that surround us. The company’s team has a lot of experience in other close markets (Colombia, Mexico, Peru, Dominican Republic) and will appear good opportunities in the near future either via acquisition or own development. At the Brazilian Gaming Congress, that takes place next June in Sao Paulo, you will be one of the speakers about the casino industry in the country. What are your expectations for the event and the most important points that will be addressed in the conference? The truth, I approach the event with enough enthusiasm, I understand that it is a fabulous initiative to regularly gather the main players in the industry (government, operators, suppliers) and that gradually we can define what we want for the future gambling industry in Brazil in its different versions: gaming venues, digital, etc. Regarding the main points that I will address during my conference (I prefer not to overtake), these would be linked to a series of principles that operators of complete casinos should follow if we want the industry to develop in a healthy and sustainable way. I will talk about what the gaming experience should be like at tables and machines, how the relationship with customers, the training of professionals in the industry, responsible gaming initiatives and the requirements so that the industry keeps a constant innovation capacity. All this from the perspective of an operations professional, someone who knows the format of complete casinos from within, not from the watchtower operations reports, Excel sheets, and PowerPoints presentations. I do not pretend to tell anyone what to do, but like to communicate a series of ideas that I believe would help the industry to be born with sustainable bases of operation and optics. How does the international casino market see the legalization process of gambling in Brazil? What are your expectations on the opening of the Brazilian market after approval?

I see it with great interest, all types of operators (from US, Latin Americans, European) are waiting for what will be the legal framework, since it will define the models / business formats that can be implemented. And hence depending on several key factors such as the tax regime that can realistically define investment commitments and business expectations. As far as my specific area of action (full casinos) is concerned, I expect that the main cities of Brazil can have 2 to 4 casinos with a comprehensive offer of both gaming products (tables, machines, poker, sports betting) as well as additional services (hotel, restaurants, entertainment areas, spa, shopping), places that have the infrastructure to become the main entertainment centers of their cities. In my opinion it is preferable that the offer in the complete casino format is limited, and not that each 50 room hotel has a casino, as that degrades the format. Then, there would be other models such as bingo halls with machines that could also enrich the gaming offer and serve other segments of the market. Given your trajectory, what is the main difference between the regulation process of gaming in Brazil and others around the world?

I understand that the main difference is related to the size of the country and the heavy burden of bureaucracy and processes it carries, which is something normal and we can see it as an opportunity to lay a solid foundation with which we can then work with all tranquility and legal certainty. It is preferable a long, but solid process of foundations than another made quickly that, once investments are made, forces all the actors of the market to be constantly litigating. Do you think Brazil has the potential to build a gambling zone like Las Vegas or Macau? How should this area be planned? Do you have possible cities in mind? By having the capacity it has, possibly in the tourist areas of the northeast a special área could be created, and that would bring a high flow of investments towards those zones. However, I am in favor of a model in which the gaming offer is integrated with the cities complementing the rest of their economic / commercial activities. I understand that it is a more mature approach to the activity, rather tan restricting it to a specific area. Is the Las Vegas model better than Europeans where gaming is not concentrated in one zone? Which model adapts more to Brazil?

Las Vegas is a unique and special place that has been built during the last 80 years, and is the result of a series of very special conditions specific to the political and territorial organization of the USA. However, today we find casinos in virtually every state, offering their surrounding communities a very interesting gaming and entertainment offer. As I said before, I am not in favor of concentrating the entire offer of legal gambling in a single place or specific area, and in my opinion Brazil should not create a city like Macau, which is today the destination paradigm of a specific gaming of a country (China). With the possible regulation of gaming, neighboring countries have seen Brazil as a strong competitor in the industry. Do you also see this potential? Perhaps in the short term, some countries that nowadays receive many Brazilian players can be affected (Uruguay, Argentina, Paraguay), but I understand that when Brazil creates its own gaming industry, a larger base of clients will be developed and that when it travels to those countries, it will focus the activity with more naturalness. Anyway, I understand that competition in any activity is generally positive and that the legalization of the gaming industry in Brazil suddenly conditions other countries to adapt their regulations and make them more competitive. As for the international VIP client, obviously there are formats of operations that fit your preferences, logically visit a country like Brazil, with all its natural, cultural wealth, all coupled with a good gaming offer, logically would be a great competitor for the rest of the countries in its area of ​​influence. If the law is passed, do you consider that the country will have a consolidated casino and gambling industry, achieving solid results, generating good income quickly or waiting for a more arduous path for this industry?

I understand that everything goes through the business models that are allowed to operate, the level of competition, their investment requirements and the tax regime.

Depending on these four variables and some others you could actually quantify the level of potential profitability of different businesses. It is not the same building integrated resorts with an investment of USD 300 million, than casinos in 4-star hotels of 5000 m2 that can suddenly be built by investing less than USD 15 million. Other point are the rates that would be established: if rates would be established in the 15-20% band on the net win, or would go to levels of 40/50% that practically eliminate profit margins and would oblige operators to practically reduce their commercial activities to the minimum expression, which loses a great part of its attractiveness with respect to other offers of entertainment. What Brazilian problems do you see as more serious for investors who come to the country? Bureaucracy, infrastructure, costs?

I understand that, in this point, the gambling industry would have the same problems as any other, which would be the usual of a country as large and complex as Brazil: a high bureaucracy, a very complicated tax regime and legislation, and a legal environment in which it is very difficult to operate without adequate advice and partners at a local level.

The positive side that I see is that the difficulty generates the opportunity for solid and consolidated operators to come to the country, companies with experience in other markets and with a track record of doing things well. This foreign investor with know-how, together with the local business initiative can crystallize in the creation of projects (I mean in the case of complete casinos complex) that can become a reference to the international industry. Source: Exclusive: Games Magazine 11/05/17

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