Sunday, May 22, 2022

Security and safety under the spotlight


Asia’s casinos are likely to face higher costs as they improve security in the wake of the attack on Resorts World Manila in June.

The assault by lone gunman, Jessie Carlos, which resulted in the deaths of thirty eight people including the gunman, has placed casino security across the world in the spotlight. Regulators and authorities are almost universally making demands of operators to strengthen security and increase cooperation with law enforcement.

The tragic fact is that no level of security can prevent the actions of armed attackers, but the casualties in this case were not caused by the direct actions of the shooter but by smoke inhalation as a result of his setting fire to gaming tables.

As such, Resorts World is facing criticism, investigation and allegations of inadequate security and safety planning at all levels. This is a natural reaction to such a tragedy and subsequent hearings have revealed missteps by the security at the casino. But there is no proof at the moment that any of the allegations have substance. What this has done is motivated regulators, law enforcement and governments to look at operators in their jurisdictions and engage them in discussion as to the adequacy of their security and safety planning.

In Macau, the Gaming Inspection and Coordination Bureau (‘DICJ”) called all of the six operators to a meeting almost immediately after the incident and asked how they would enhance their security. The DICJ suggested five measures and asked for responses from each of the operators as to the efficiency and viability of these. They also asked the operators for proactive suggestions that would further limit the likelihood of a similar attack in Macau and enhance the security response if such an event did occur.  There was also a demand for closer cooperation between the operators and the DICJ and Polícia Judiciária (“PJ”), the police who are responsible for law enforcement in the casinos in the territory.  

The DICJ is requiring a priority response and it is obvious that this will not be allowed to drift but will require planning and actions virtually immediately. Such deliverables will include all aspects of safety and not just security as the tragedy in Manila has highlighted the need for ample fire protection and holistic risk management.

All of this comes at a time when the volatility and downward pressure in recent years on gaming revenues has resulted in the operators significantly reducing headcount and other security costs in order to maintain business margins. This will no longer be acceptable in the industry and the costs of introducing technology like metal detectors and the increased manpower required to operate such enhanced security will be significant. Similar requests to those of the DICJ are being made by regulators in nearly every jurisdiction. My colleagues in the Security Risk Management service line of our business have received calls for immediate assistance in conducting security audits in a number of smaller jurisdictions as well as interacting with the security management in a number of major operators.

Somewhat counter intuitively the risks of such armed attacks is, despite the evidence of the Manila incident, perhaps less likely in the less developed jurisdictions where the casino security guards are more overtly armed and likely to respond with deadly force. However, it is now incumbent on operators everywhere to address the duty of care that they owe to their staff and customers alongside the protection of their business assets.

The costs to operators will be unavoidable and the task of industry professionals shall be to design the most effective combination of risk intelligence and analysis, technology and manpower to deliver acceptable levels of protection to their staff and customers. Obviously, in the Manila event, risk analysis would not have warned of any imminent attack but in certain jurisdictions more susceptible to political or ideologically inspired violence it is a very useful tool in the hands of security. Likewise technology such as metal detectors is useful but requires significant extra manpower to operate. Whatever the costs, the operators are under pressure to protect their staff and customers with as much dedication as they display in protecting their assets.

Casinos in major jurisdictions employ highly competent and experienced security executives who are working to address the issue in the most efficient way possible. However, no matter the skill that they bring to the table this is going to significantly increase costs in order for the remedying of any shortfalls and the enhancement of existing precautions to satisfy the demands of regulators and governments. If one takes the case of Macau, it is also apparent that operators will need to negotiate with immigration to obtain work permits for the increased number of suitably skilled security staff that will be required. In another jurisdiction my company is already consulting on training or importing similarly skilled people for a major operator.

One other challenge is the need to put enhanced procedures in place without negatively impacting the experience of the customers. The upside for the operators in the long run is the better protection of their businesses, staff and customers and an enhanced sense of safety for the critical element, the customer.

Hill & Associates

John Bruce is managing director of Hill & Associates, an Asian based risk consultancy. John has specialized in providing advisory services to the gaming industry in Asia for over fifteen years mainly in the investment and compliance areas. His company has provided security risk management advisory services to major businesses throughout Asia for over twenty years and has specialists in risk intelligence and analysis alongside specialist security advisory experts who provide holistic security services to clients worldwide.

 

 

 

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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