Companies squeezing out Sports Books general managers

Jun 21, 2011 3:00 AM

 

"At this time, your services are no longer needed."

When the general manager of a major property told his sports book manager he was being terminated on "Black Friday" last week, the manager asked why?

He hadn’t been in any Human Resources issues or violated any company policy and had not exceeded budget more than any other book in his chain. But when asked why he was being let go, the GM replied again with the coldest and most unfriendly of prepared statements:

"At this time, your services are no longer needed."

The person who got terminated was a friend of mine, and from personal knowledge I can tell you he had made his sports book one of the shining examples in the state of how a book should be run. His team ran with great morale, he made money and, more importantly, followed Nevada’s Gaming Control Board and Federal regulations by the book.

"At this time, your services are no longer needed."

I’m not going to mention who the team member was or the GM of the property, but it’s in a long line of something that has been a regular occurrence in Nevada casinos over the last four years during a very tumultuous time. In recent months, the terminations have been more about the salaries and tenures of individuals than actual job performance.

"At this time, your services are no longer needed."

I’ve had quite a few friends in all areas of the hotel/casino operation who have been let go in the last six months and all of their plights have been relatively similar. They had high salaries, had been with the companies over 10 years and hadn’t moved up to higher positions.

Although their status had been recognized as invaluable throughout their reign, they were let go as a cost cutting measure by corporate Las Vegas.

"At this time, your services are no longer needed."

Granted, it’s a business world and heads have to roll as others climb to the top, but something has changed in Las Vegas over the last decade for the worse. Companies are squeezing the front line like never before, but at the same time increasing their pie-chart readers in the finance departments into army-like proportions.

These guys analyze everything the operation does and make recommendations on how things should be run, although many of these people are fresh out of college and have never even worked one day in a live operation.

"At this time, your services are no longer needed."

When I first got into the sports book world I admired bookmakers like Sid Diamond, Art Manteris, Jimmy Vaccaro, Scotty Schettler, Bert Osborne, John Avello and Richie Baccellieri. I wanted to do what they did, use my perceived knowledge on games in all sports to the benefit of a casino’s monetary gain, and I did.

But the corporate structure took on a whole other approach. It no longer was about being smarter than the bettor, it became about analyzing full-time employees and doing underhanded tactics to eliminate labor.

"At this time, your services are no longer needed."

In all the Nevada gaming corporations right now, the bottom line is beating last year’s month and quarter with a goal of winning the year. With that strategy, and the economy being in a slump, it no longer is about guest service, employee morale or complying with GCB rules. Those aspects can get anyone fired on the spot, but a precedent has been set recently that you can be fired for no cause at all.

There is something drastically wrong with that. Some people work very hard to achieve success in their field and attain their rightful wages over the long haul, but the new thing with corporate Vegas now is to chop the labor.

One of the cute tactics used by GM’s all over town is to terminate employees with unprecedented charges to shave payroll for a few months. Human Resources, once thought of as a company’s neutral territory, has been ordered to go through with the "terms."

A GM looks pretty smart by saving a few thousand dollars in labor while shuffling paperwork across desks for months to fill in the positions. Meanwhile, they still demand guest service with the depleted staff and also demand salaried employees take part in company programs such as "Diversity."

When a manager is being ramrodded with a staff that is manipulated by the company to be less than needed to run an operation, the last thing they want to do is take mandated two-hour weekly classes on how "diverse" their company is.

"At this time, your services are no longer needed."

My hopes are that a company like Cantor Gaming or William Hill pick this ex-sports book manager up because no one operates a satellite operation with more tickets written than this gentleman. He handles high-end clientele, knows all the GCB and Federal rules to a tee and has a great demeanor about him that transcends well for the property.

For all the other folks who have been affected by the clever tactics of the companies, keep on plugging away and hope you find yourself working for a guy like Michael Gaughan, who – if he terminates you – it’s because you really did something wrong.

In the meantime, I have a few ideas for the corporations to increase revenues without depleting staff. Over the last few years the hotel division has been the most creative in gaining incremental income through lodgers. Things like resort fees, phone charges – despite not using it – and gym fees have increased revenues through the roof.

But what have you done lately? These numbers were great last year, but 2011 is here.

I recently stayed at a Las Vegas hotel and they gave me the option of using a free slow Internet service or paying $14.99 for high speed. I bought the service, as most people do, but it takes a lot of work for a hotel to set up a slow pace on the Internet when they already have paid for the fast speed.

Even though you pay for the resort fees, apparently the gym is isn’t part of it. What kind of resort is that?

So how about parking? Every city in the world charges an arm and a leg for parking. I was in San Diego last week and paid $28 a night to park my car, which is the going rate everywhere. Instead of sacking good managers, how about charging for valet and self parking?

Hotels could go even as far as charging for a change of sheets, or even maid service. That would really cut down the costs. A lot of lodgers don’t even care if their room is made up or dressed down with chocolates on their pillow. Eliminating that service could save a bundle without sacking a high end salary.

How about making money at the bell desk? A mandatory company fee for bell service and storing bags could make a ton of cash for a hotel. To go even deeper, how about mandating a fee for every dollar a tipped person makes like the IRS does for all tipping categories?

Things like that wouldn’t be popular with the employees, but this is what it has become.

"At this time, your services are no longer needed."

My overall suggestion would be to deplete the staff of pie-chart readers within the corporation’s analysis departments who have no idea what happens on the front line.

Just a short decade ago, it used to be that the GM and president of a company had the trust of their managers and directors to run a pretty successful operation without feed back from some 23 year-old questioning P&L lines.

The pie-chart readers today just accentuate problems with numbers, yet, don’t do any problem solving. But if they don’t create chaos within, they become expendable, too.

Steve Wynn and Michael Gaughan understand how things should operate and their businesses haven’t been meddled with over the years in corporate Vegas.

It would be nice to see some of these corporations do some old school Vegas and roll the dice and see how things come out without the payroll weight of analysts dragging them down.

And just once, I’d love to see one of the pie-chart readers being told, "At this time, ‘his’ services are no longer needed."