Consultant ups casinos' odds


Randall Fine could be described as a casino industry mercenary, but in a good sense of the word.

His Las Vegas-based company, The Fine Point Group, is a 5-year-old casino management organization and gaming marketing consultant with 25 employees. His team enters either a distressed property or a successful operation and finds ways to increase profitability.

"We're sort of a SWAT team that people bring in to improve performance," Fine said. "We absolutely are mercenaries. We just don't do some of the things one might expect a mercenary to do. You don't hire us to do layoffs. You hire us to improve results."

There is no better example of Fine's efforts than his company's work last year at the bankrupt Greektown Casino in Detroit. The Fine Point Group was given a one-year deal after creditors grew weary of the former management team.

In 12 months, Fine's team grew revenues 9 percent while Greektown's two Detroit competitors saw revenues decline 5 percent each. The Greektown's market share increased from 22 percent to 27 percent and profitability grew by $25 million. Fine said no Greektown employees were laid off.

When Fine took over, the Greektown was appraised at $375 million. A year later, bond holders took control of Greektown at an agreed-upon price of $600 million.

"It's a great case study because Greektown was a very public situation," Fine said. "With a lot of the work we do, we want the clients to get the credit."

The Fine Point Group is now advising Station Casinos in a relaunch of its database marketing strategy. In addition, Fine Point Group is working with the Barona Casino near San Diego, The Mill Casino in Oregon, Lucky Eagle in Washington, a casino in Biloxi, Miss., and the Mount Airy Casino in Pennsylvania.

Fine is also finalizing a management contract for a casino in Atlantic City.

Casinos were never his first interest. Fine had developed and sold a predictive modeling business for the retail industry when he went to work for Harrah's Entertainment in 2003. He oversaw the relaunch of Harrah's Total Rewards customer loyalty program.

Fine reported to Harrah's Chief Executive Officer Gary Loveman, who had been a professor of his during a semester at the Harvard Business School.

"Until I joined Harrah's, I had never been inside a casino," Fine said.

After Harrah's, Fine worked for billionaire corporate raider Carl Icahn as a top executive during his ownership of the Stratosphere, the Arizona Charlie's casinos, the Sands Atlantic City and the Aquarius in Laughlin.

Question: Why did you start the business?

Answer: My feeling was that if we could help Carl's firm make as much money as it did with third-tier assets, we could make any assets improve.

Question: How would you describe your clients?

Answer: We have two kinds of clients. We have clients that call us because they are a disaster. And we have clients that call us because they're a success. Even the most successful people can do better. Barona, for example, has incredibly talented leadership. They wanted us to come in with a fresh perspective and show them some new ideas.

I'm sort of a challenge junkie. The more distressed, the more interesting the job is to me. It is not difficult to look like a genius when the market is growing 10 percent a year. If the market is collapsing, which was the case in Detroit, and you can make a difference, no one can take that away from you.

Question: How does The Fine Point Group operate?

Answer: We have built two separate competency groups. We have a team that is very good at getting customers in the door and getting them to spend more. We have another group that is very good at cutting costs without necessarily reducing the customer experience. Greektown was a great example because we had a revenue-generating team and we had a cost control team working side by side.

Question: What is your role?

Answer: My job is to evangelize what we do. We find people who believe in the kind of casino management philosophy that we have. I then provide the air cover. My job is to give my team the breathing room they need to do the right thing.

Question: Are you interested in operating a Strip casino?

Answer: We'd love to operate something on the Strip. The challenge there is you have four companies (Harrah's, Wynn Resorts Ltd., MGM Mirage and Las Vegas Sands Corp.) that own everything. Until those companies are sort of broken up, assuming that ever happens, there may not be opportunities for companies like ours.

Question: How would you describe Carl Icahn?

Answer: Carl has been successful for three reasons: He's very smart, he has the capital to back up his ideas and he doesn't really care what other people think. So when everybody says the gaming business is going to keep growing at a thousand percent a year, he sells his properties. When everybody thinks gaming is doomed, he starts buying again. He's willing to be independent.

Question: Do you expect to see more competition in the casino management business?

Answer: There are a lot of gaming executives out of work. Forming a management company sounds like a good way to get yourself a job. People see how much money some of these management contracts can be worth. The good news is that I think there are going to be more opportunities for management companies.

Question: Do long-term management deals interest you?

Answer: We're interested in those long-term opportunities, but there have been enough great short-term opportunities. I don't wake up in the morning excited about looking at construction plans. I never aspired to be a real estate developer. I get up in the morning excited about figuring out how I can help a business make more money today.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

 

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