Affinity Gaming CEO gives business tips
EDITOR’S NOTE: Michael Silberling is Affinity Gaming’s CEO. The casino gaming company is headquartered in Las Vegas and operates 11 casinos in four states, including Silver Sevens and Primm Valley Resorts in Southern Nevada; Rail City in Northern Nevada; along with three casinos in Colorado, two in Missouri and one in Iowa. Under his watch Affinity has become the fastest-growing regional gaming company and here he shares his guiding principles.
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I became Affinity Gaming’s CEO in August 2014. This is my first CEO role and while I have more than 20 years of global casino industry management experience, there was still quite a bit of education on the job. However, whether the task at hand was a familiar one or required on-the-job learning, I was guided by a clear vision for the company and how I wanted to lead.
This vision — and more so the team I’ve built since taking the helm — has made Affinity Gaming the fastest-growing regional gaming company with recurring double digit EBITDA (earnings before interest, tax, depreciation and amortization) growth year over year. As a first-time CEO, I wanted to share my guiding principles.
1. Only surround yourself with greatness. You have to assemble a qualified and passionate team that all will work together toward the same goal. My executive team has what I call the four I’s: intensity, intelligence, inquisitiveness and initiative. My job is to remove the obstacles that hinder them from doing their job, provide them necessary resources to perform their job efficiently and trust their decisions.
Our chief financial officer, Walter Bogumil, recently won an award for Financial Executive of the Year in the gaming and hospitality industry; a testament to his dedication, hard work and success that he brings to our company every single day. Some people are fearful of hiring intelligent, ambitious executives as direct reports, but I would not do anything other than just that. The M.O. before my arrival was to hire as cheaply as possible for all roles. I try to pay what the role is worth to get an “A” team player.
2. Do less, but do it better. You hear many sports coaches talking about “back to basics” and “blocking and tackling.” Hospitality in many ways is not rocket science. You give customers a good experience, and they will come back. We have realized that we don’t need to spend excessively by throwing a ton of promotions at our customers and hoping something sticks. Instead, we’ve gotten back to the basics by simply focusing on customer experience, atmosphere and improved product. That is not to say that we don’t use data and science in our marketing approach, but it is focused on providing the right offer at the right time to our customers.
3. Look at profit, not revenue. Anyone can drive revenue, which can ultimately lead to what I call “profitless prosperity.” Also, anyone can cut costs, often to the detriment of the long-term sustainability of the business. The trick is to spend money where there is a return and continuously look for efficiencies and productivity improvements. Sometimes that will lead to spending more, like recently when we reinvested $3.5 million to renovate Whiskey Pete’s hotel rooms at Primm. Immediately, we saw a tremendous uptick in guest response and profitability. On a side note, if you haven’t been to Primm Valley recently, you’re missing out!
Take a day trip to catch one of the great concerts at Star of the Desert Arena, ride the log ride or roller coaster, go golfing or try out our new hotel rooms at Whiskey Pete’s. We’ve partnered with C3 to book our entertainment acts at Primm, also spending more money to do so. But now, we get our acts for less cost and sell more tickets leading to a greater return.
We used to yield the price of our rooms ourselves. We’ve partnered with Duetto Research to yield the 3,000-plus rooms in our portfolio while spending more money but driving greater occupancy and average rate. And other times, it leads to spending less, like when we removed marketing offers that did not lead to increased profitability. I never ask our managers to cut costs, instead I ask them to remove waste and increase productivity.
4. Act locally, think globally. It’s important for companies to give back to the communities in which they operate and their employees live. Last year, we partnered with the Alzheimer’s Association with a six figure contribution — the largest in Nevada.
I’m proud to say we are well on the path to donate more this year. It’s good business, particularly for the casino industry which is viewed by some with suspicion, to be active community participants and leaders.
Somewhat unrelated to my guiding vision for the company, here are some thoughts on how to pursue your career and live your life.
● Follow your passion, not the herd. Finding an area of personal interest to pursue professionally gives you a much higher likelihood of job satisfaction and success. My first elective course in college was probability and gambling, which led to my passion for the gaming business. I remember interviewing at Kraft and having someone ask me why I wanted to sell macaroni and cheese. The reality was, I had no interest in that. Others followed the “hot” career thinking they would make a lot of money.
The reality is if that job is “hot,” you have probably already missed the boat in terms of getting in at the front-end of a growth curve. Right out of business school, I started at The Promus Cos. (later Harrah’s and now Caesars), and have only become more passionate about hospitality management since then.
● You can have a life outside of your job. As you grow in your career, your time will become more constrained, but you should still make time to be an active participant in the community. I don’t think I took more than a day off in my first decade in the business, but after spending time in Australasia and Europe I realized there could be some work-life balance.
Las Vegas has so much to offer locals — some of my favorite things to do outside of work are hiking at Red Rock and supporting the independent food scene downtown, such as Carson Kitchen. With the hockey and football teams coming into town, we will be living in the premier sports fan destination in America.
The Raiders and Golden Knights coming to Vegas are just two more reasons for Vegas to be one of the best places to live and work.
And I should finish with the most important thought. Spend time with family — parents, spouse/partner, kids – no one ever dies thinking they should have spent more time at work.
