As operators around Asia vye for licenses in new markets, one corporate social responsibility expert suggests they should change their approach.
Jan Jones Blackhurst, executive vice president, public policy and corporate social responsibility, at Caesars Entertainment says not enough is being done to explain what an IR is and the benefits it can bring to society.
The focus has been on how much operators are willing to spend to enter the market, scaring consumers who don’t understand the concept and raising the potential for more stringent regulation to minimize harm.
Jones, who was also Las Vegas’ first female mayor, argues a CSR-led approach would not only help to mitigate some of these concerns, but is also good for business as a whole. This may prove to be particularly true in Japan.
“We get lost in the conversation about problem gambling. We are looking at programs that will help addictive behaviours, but what we should be doing is sitting down with local government and NGOs and community leaders and saying how else can we partner. What can we do that will make your city and region a better place to live?” she told AGB at the World Gaming Executive summit. “As you start meeting with those people you build a network and that’s what we haven’t done.”
CSR programs are beginning to play a bigger role in Asian business, with growing recognition that such policies can be revenue drivers. Some 66 percent of executives from 384 Asian companies polled in a survey by Ethical Corp, said they believe CSR was driving revenue, while 90 percent said it was becoming an increasingly important part of their business.
So what makes a good CSR program? MGM China Holdings won the 2017 Asia Gaming Award in this category in Macau in May.
“What makes a successful CSR program is something that requires a culture from the top all the way down through the organization,” said Sarah Rogers, senior VP strategy and corporate social responsibility. “When you go to a community initiative, the culture is throughout, the most senior leaders all show up for these things, they walk the talk, it’s a culture of caring.”
MGM’s program is based on four basic pillars: arts, the disabled, youth and senior citizens. In addition, the company is focusing on environmental sustainability and the promotion of small and medium-sized enterprises. About 80 percent of the operators’ procurement is now from local Macau businesses.
“The idea behind this is to support the diversification of the economy and to allow the little guys to come up. People want to see innovation with things being designed and made in Macau,” she said.
Aristocrat Entertainment’s CSR program was also acknowledged by peers in the awards as one of the best in Asia. Sales and business development director Chris Rowe says it’s about more than just writing cheques.
“The foundation of the CSR program should tie directly to a company’s values and culture. That’s the best way to ensure that CSR activity not only enriches communities but also motivates and engages staff members and other stakeholders, reinforces company culture and helps to articulate what you stand for as a business,” he said.
Rowe says the company’s CSR activities in Asia have only been underway for two to three years, but the company is seeking to get behind more marginal causes that perhaps have not received such strong corporate and government support.
One example of its program in Macau was supplying the latest games and cabinets to the Macau Polytechnic Institute’s Gaming Teaching and Research Centre (GTRC) at no cost, aiding them build a state-of-the-art teaching lab on campus.
Rogers points out that in a relatively wealthy jurisdiction such as Macau, the programs also need a degree of creativity. One example at MGM was hosting a wedding ceremony for seniors who had not been able to afford the occasion when they were young.
Elsewhere in emerging Asia, the role the operator plays in helping to develop the jurisdiction in which they operate can be even more fundamental.
For example, when NagaCorp entered Cambodia more than 20 years ago, the country was devastated and recovering from the aftermath of the Khmer Rouge atrocities. Founder and CEO Tan Sri Dr Chen Lip Keong initiated CSR efforts from the outset to help people rebuild their lives.
The group’s activities are also based on four pillars: sports, education, community welfare and the environment. The company works with locals to implement the programs, which have included distributing 500 kg of rice a month to orphanages and homes or providing study materials to underprivileged children.
“A commendable CSR program is not a one-size-fits-all solution,” the company said in an email. “We know that each family, orphanage, community, village, province has its own set of challenges.”
“NagaWorld strives to support the efforts of the local communities towards improving their lives by creating job opportunities, providing training, philanthropy and working together with them to implement sustainable solutions.”
In 2012, the company formed the Naga Academy, which provides apprenticeship-based hospitality training institute covering 140 hospitality skills modules which are aligned with the ASEAN Mutual Recognition Arrangement for Tourism Professionals standards.
It has also backed numerous sporting initiatives in the country, including the National Olympic Committee of Cambodia (NOCC) in regional and international games until 2018.
So how much should a company spend? Caesars’ Jones says in the U.S., the average is for every $10 million in revenue earned, a company gives back $1.3 million in wages and social giving, though at Caesars the figure is $4.4 million.
According to Ethical Corp., 35 percent of respondents to its survey would not disclose their spending levels on CSR, while only 9 percent had a budget of more than $1 million. It admits that the respondents were from a wide range of industries and size of business.
However, the true value of the programs may be more intangible. Increasingly savvy consumers are likely to choose companies whose values they support, making CSR a highly valuable marketing spend.
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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