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between just 12 and 13 per cent – these are people who say that they visit a casino at least once a year. That means that almost 90 per cent of adults do not understand about casinos and what they offer. So my job is to try and talk to all those people who have whatever image it is of a casino and to encour- age them come at least once to change their minds. It’s by offering these different types of peripheral activities that we’re trying to do that. Take for example the casino at Luxueil-les- Bains [in eastern France]. It’s a venue where we’ve done a lot of work this year. We doubled the area given over to the restaurant and created an entry from the street, so that it has a separate identity. In this way we’re making it attractive not only to the players but also to an external public. So we’re creating periph- eral activities that are about the love of games and then we can work on helping the target audience of these peripheral activities to discover the other games we have to offer.


CR: What are the other elements of the new business plan? LL: The third axis is a new loyalty programme, which we have worked on with our partner and shareholder LotoQuebec. It’s a pro- gramme that aims to reward client loyal; it’s national, so the player has one single card that is good in any of our casinos. The more the play, the more points they earn, giving them access to privileges, free meals at the restaurant, as well as bonus points that they can use to buy goods or trips etc. The impor- tant thing is that they can also use the same loyalty card whether they play offline or online, making a complete bridge between the two. The fourth axis is an acceleration in the


development of table games: in France this has never been an area that has had much work done on it, so we are looking at poker in order to develop it and to give it more importance. We’re also creating innovations in traditional games and launching new games. For example at Montrond near St Etienne we are launching mini-craps. That’s a way to revitalise a part of the casino that has been left a little on one side.


CR: You’ve had slot machines since 1992 and before that it was entirely a table market. LL: That’s true but as soon as the slot machines arrived, the whole market concentrated on them because it was easy and the growth was there. And with slots, it’s the players who supply the service – it was not labour-inten- sive. So bit by bit table gaming was neg- lected, but today we realise that these games are nevertheless attractive and above all, they reach out to another population.


CR: So the fifth and final axis of the business plan is the launch of your online gaming offer. LL: We’ve had a ‘play for fun’ online platform for a year now but at the beginning of Decem- ber we transformed it into a ‘play for real’ site.


CR: What does online gaming represent to you? Is it already contributing to the turnover? LL: Not at present. At the moment, I would call it marginal. There are two ways to look at online gaming: there’s a good side and a bad side. And as yet we don’t know which way it will go. The good side is that our poker players who play in the physical casinos learnt to play online – that whole market is created online, first on play for fun, then the players took part in small tournaments that were not too expensive. What they want to do is play like on the TV and in tournaments in physical casinos. It’s thanks to online poker players that we have a poker clientele in the physical casinos. The possible bad side to all of this is that we are operating in a global market; I don’t think that people will all of a sudden spend more on gambling because there is more of it around. That means it could take up more of the gambling budget of those who until now did not gamble online. For the moment, we cannot say that since the opening of legal online gambling in France there has been strong impact on activity at terrestrial casinos. But that’s normal: when it was illegal, people still managed to play poker, sports betting and casino games. Since the new law, the only


46 February 2011 • interview


The Discothèque La Siesta at Casino La Siesta on the Côte d’Azur is the largest open-air nightclub in France – and helps to bring a younger clientele into the business


casino game authorised online is poker. So we’re only getting competition in one kind of game, whereas beforehand there was illegal competition across the whole range.


CR: How soon do you think the government will authorise full virtual casinos? LL: I don’t think it will happen anytime soon because online slot machines are very similar to lotteries, for example, which would be in direct competition with Française des Jeux, which runs the lottery. The first thing we would do perhaps is put the Magic Casinos Jackpot online but that would be just like the lottery as well, so I don’t think the govern- ment would allow that. And also there are plenty of studies that show that slot machines on the internet are very dangerous in terms of addiction, especially among young people. So with those twin dangers, I don’t think we’ll get virtual casinos tomorrow.


CR: So having instituted this new business model, how is it working for you? LL: The change along these five axes means that now we are considered the most prof- itable operating group in France – and it’s


not us saying that, it’s the analysts . We have a ratio of EBITDA over turnover in excess of 30 per cent. The economic crisis pushed us to re-examine the group’s business model, at the same time we transformed the business whilst remaining the company with the best profitability in the market. Here’s another example. We are the third


largest operator in France with 20 casinos, in total we employ 1,600 people, we generate around E100m in net turnover and E210m in gross turnover and all with a headquarter staff of just 25 people for both the online and offline activities. We now have a business model that is very operational and very light, which is why we have the best profitability in the market.


CR: Will the measures that you have put into place, the peripheral activities, themselves contribute to the turnover and the profitability? LL: Yes. The business model is calibrated so that each element is profitable, that’s what we’re basing our growth on and the result is almost immediate. We’re seeing around ten per cent growth in the peripheral activities and that will feed through into the group’s profitability.


The online offer is one the five elements of the new business model


JoaCasino St Cyprien


CR: Can you, will you, must you convert those who use the peripheral offerings into players? LL: In part, yes. But it’s a small part and it takes time. The objective of JoaGroupe is not to be the biggest but our ambition is to change the opinion of people in France about the world of casinos. That’s what I fight for every day. If people enjoy these peripheral activities, little by little they will realise that the casino is a destination, a place of celebration and entertainment. It’s some- where where lots of things are happening. Yes there is gaming for those who enjoy it, but there also other things to do. In the strat- egy, of course, we’re using the peripheral activities to get people in the door but then you have the products and the offers that facilitate the flow into gaming. So we have put a programme in place that will help to welcome first-time visitors, for example introductory sessions to poker and black- jack and we have installed some slot machines that are very simple – a classic three-reel machine with a 20-cent stake. We have it called Simply Joa: if we see that someone is a first timer, or has hardly ever been inside a casino, we’ll show them how to play the machine for example and also give them a diploma. So that is the strategy: you offer the peripheral activities and then cater to the first time visitor so that they know how it works.


CR: How is the Magic Casinos Jackpot working for you? LL: There are two periods: there was the launch, which was pretty good because there were all these different operators that were gathered around the same project – so that was already a success. But then the actual product that was placed in the French market was a little bit disappointing in terms of the attractiveness of the game. The principle is good but the game was not optimum. So we launched a new programme on December 10 and in the first weekend at least the new game was giving satisfaction. Magic Casinos Jackpot has already succeeded in awarding the largest ever casino jackpot in Europe, at just over €5m, a European record.


CR: Do you think it attracts visitors? LL: The old game? No. But it helped visitors to understand that it’s possible to win a lot of money in a casino. It also allows us to market the gaming options in the peripheral activi- ties, to advertise that they can have a go at the Magic Casinos Jackpot for €1.50. It’s some- thing that we can use to introduce visitors to the casino, to let them see the machines they’ve heard so much about and the huge jackpots. When you let people know about that over dinner say, it’s pretty attractive. I think that the first stage was a success in that the project was realised but I believe the new programme will be more of success.


CR: The unions are very strong in France: how relations with employees been in the last year or so? LL: They’ve been no harder than in previous years – and no easier either. In the middle of the crisis, it was difficult because of staff redundancies and there wasn’t much job creation. But we have created jobs in the peripheral activities and in the relaunch of the table games. There weren’t really any big movements in the area apart from a strike across the 20 casinos. But I wouldn’t charac- terise it as difficult, at least not more difficult than in other industries.


CR: What’s for the future? LL: The thing to understand is that JoaGroupe is a company that has developed through external growth. It was the sixth casino group in 2000; in 2010 it was the third. Now that we’ve finished instating the business model, we can get back on the path of growth. In 2010 we won two licences, the first


close to St Etienne, at Montrond-les-Bains. There is an existing casino there but we’re going to build another twice the size and move it there. We’ve also won a new licence at La Seyne-sur-Mer in the south. In successive stages, we’ve reworked the business model: the crisis is almost over. We have a new business model; we’ve acceler- ated development of both the physical estate and the online casino.


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