Chris Moore chats with David Heap, former Group CEO, TCS John Huxley Group
Many in the casino industry will remember when TCS and John Huxley were two of the most intense rivals in the casino equipment market. I remember that at every exhibition I attended, both companies were expanding, becoming more innovative and increasingly competitive. However in early 2003, as a surprise to many of us, both companies merged to become the major, global table games casino equipment supplier.
David Heap had joined TCS Group as CEO in 1996 and took full control of the new combined business. The new company TCS John Huxley, has expanded far beyond the level that the individual companies probably could have achieved. David’s career in the casino gaming industry has been focused on the leading edge of product development alongside global distribution which makes him one of the industry’s most knowledgeable and innovative CEO’s. We recently caught up with David, his answers to our questions provide a broad view of his concepts, ideas and evaluations. Although David retired from the casino equipment industry some 3 years ago he has in more recent times taken up some consultancy projects that may well see him return on a more permanent basis.
Chipper Champ, the original automatic chipping machine, was your company’s first product that made a massive impact. How much effect did it have on TCS’s success?
Chipper Champ was the “business foundation” product for TCS. The success of the first automatic gaming chip-sorting machine for roulette established the business in just about every regulated casino worldwide. By doing so, in effect, Chipper Champ helped create the opportunities and funding for the development of a comprehensive and integrated range of other gaming related products and support services that the Group is renowned for today.
The founder and owner of TCS, Bertil Knutsson, was most certainly one of the industry’s colourful characters. How did he influence your career?
I was introduced to Bertil at a gaming industry event in late 1995. At that time I was the managing director of Bell Fruit Services, the UK’s largest single site operator of low stake gaming and amusement machines. I subsequently joined TCS as their group CEO during the following year. Taking on this new role with Bertil, who was the group chairman, enabled me to further develop and enhance my general international business skills and experience. Working with Bertil, my new role gained me access to the world of casinos for the first time. My career up until then had mainly been spent in the UK domestic market in various senior general management roles in the commercial laundry and waste disposal industries. Working with Bertil in the global casino market was a great career opportunity.
We understand that TCS had a very special relationship with Novomatic for many years. As the CEO you would have worked hand in hand with Jens Halle, one of the industry’s most popular characters. What are your recollections following his recent, tragic death?
Both for our company and for me, on a personal level, the involvement with Novomatic and Jens Halle goes back as far as 1997. The products we worked on together turned out to be real ground breakers. For example Touchbet Roulette, the first live casino table game that could be played via a personal electronic terminal. Touchbet Roulette transformed the game of roulette for the player and for casino operators resulting in many thousands of terminals being installed around the casino world. During all the years I worked with Jens, he was a much trusted business partner, a loyal friend and a wonderful family man. His recent sudden and premature passing is of course sad and tragic for his family and many friends. It is also a major loss to the casino industry that he helped so much to grow and improve.
Was it your company’s ambition to buy out John Huxley, or was that just the way things worked out?
I have been asked this question many times over the years. It is true to say that Bertil was always interested in acquiring the John Huxley Company. We both recognized the combined product, brand strengths and synergistic opportunities. Like all acquisitions and mergers timing turns out to be of critical importance. It so happens that 2002/3 was the right time for both companies, so I guess you could say, the coming together of both companies was the realisation of an ambition and just how things worked out.
Your operation in Stoke as a major employer and a highly important contributor to the city seems to be a perfect strategy. Why did you choose Stoke and do you support their football team?
The selection of Stoke was a fairly straightforward process of research and analysis. Following the acquisition of the John Huxley Group of Companies we knew we had a year in which to relocate the John Huxley manufacturing and administration facilities from their HQ in North London. In considering various options and locations we decided on Stoke because of its geographical location (mid-country) good transport access (just off the M6) and what was at the time a good pool of “craft skill” and engineering labour. We were also able to find an excellent site from which we could build to our own design the facilities we needed for the longer term. As for Stoke football team, I always wished them well of course, whilst remaining a lifelong ardent Chelsea Fan!
During your gaming career you have had an exclusive view of the international growth of the industry. Do you expect things to carry on growing, to slow down, or to flatten out?
It would be true to say that during my time in the casino industry, and gambling/gaming in general, that growth has been phenomenal, both for land-based gambling and online in particular. Of course during this period of some 23 years there have been some slow-downs, more than offset by the explosive growth of online and land-based gaming in Asia and elsewhere. Looking to the future I see no reason for the current trends not to continue. Everything of course is market related and driven by local micro, and macro economics and regulation.
What in your opinion are the biggest challenges ahead for the established and newly launched international casino suppliers?
The cost of regulation and compliance continue to escalate. There is no doubt that the barriers to entering, maintaining a presence and prospering within the gaming industry are substantial and I am sure in many cases prohibitive. Technical innovation continues at an increasing pace with the resulting rise in the costs of research, development and product development. All markets are extremely competitive. To try to offset some of these elements some companies look to acquire and/or merge. Strategically this is not new, and as such I’m sure will continue for some time yet. This said, it’s normally the casethat as some companies get bigger, and as the major players continue to look to strengthen their position by acquisition, that this activity creates opportunities for growth for the smaller companies. I would argue that some of the smaller and newer companies are also in a strong position to provide excellent customer service and customised product development. The product supply side of the industry has proved itself more than capable of meeting the significant challenges it faces, I’m confident it will continue to do so. The risks can be significant, but the rewards can be fabulous! After all if you are in the gaming business you shouldn’t expect it to be any other way.
Exhibitions must be a massive individual challenge, with access granted to such a wide variety of guests. It must be difficult to focus on your regular clients and to identify potential new customers?
The answer is very straight forward; Surround yourself with a great team of marketing, commercial and technical people that are not only talented and committed but also PLAN. I was very fortunate to have enjoyed the support from a fantastic team of people, at all levels. All I had to do was approve the plans and budgets and then, TURN UP!
Of all the casinos you have visited during your international career, what were your favorite three?
A very difficult question to answer because there are so many great casinos out there that I have been involved with. On a very personal level I have always liked the MGM Grand in Las Vegas, I am not sure why but I have always enjoyed my many stays there over the years. On a purely business level the three casinos that stick in the memory more than most are Mohegan Sun in Connecticut, Star City (now The Star) in Sydney and the Crown Casino in Melbourne. The reason for this was at the time they opened they were all, on a global basis, state of the art, showcase properties, and we at TCSJH had won their orders and successfully installed during the preceding months, the entire live table gaming floors for all three properties. Of course since then the company has installed many new showcase casinos the world over, but at that time these 3 particular projects really helped to put TCSJH on the global map as a turnkey provider for live table games, along with all of the associated table based technologies. In more recent times, the Hippodrome in London, along with the Empire in Leicester Square and Aspers in Stratford, London are also truly great venues.
Of all the casino workers you have met in countries all over the world, who were the most memorable characters?
As you can appreciate I have had the pleasure of meeting numerous casino and gaming people, far too many to count over the years. I can truly say that I can’t recall anyone that wasn’t friendly, hospitable and passionate about their business and the international casino industry as a whole.
Have you ever been a casino gambler?
If you hadn’t gone into the casino industry what other career path do you think you might have followed?
My time in the casino industry is a little less than 20 years, and in gaming some 23 years, from a total career of close to 50 years. Prior to joining the casino industry I had enjoyed a successful career in the other industries and would have continued to do so. By chance I met with Bertil Knutsson and the rest is history, as they say.
You stepped down as the Group CEO of TCSJH and retired from the Industry in April 2012. Why was that and what have you been doing since?
During 2010/2011 I had experienced some serious health issues, and whilst I had recovered to some extent I began to realise that at 64 years old, and having held the position of Group CEO for some 16 years, I needed to change my lifestyle. As importantly the company needed some new blood at the top with a fresh pair of eyes. So following some lengthy discussions with Chairman Bertil, and with his agreement I decided to retire and step down from TCSJH, and did so some 15 months later. Once my retirement became common knowledge I was greatly flattered by the number of people from the industry who contacted me to wish me well and in many cases to offer me various part time roles as a consultant or advisor. For close to 18 months I resisted the temptation and focused my energies in regaining some level of fitness. This said, once this great industry of ours is in your blood, it’s almost impossible to resist its pull. As a consequence, I have over the last year or so taken up a few of the offers, but only on a part time basis. This has helped me stay interested, and involved, and connected with the industry. As for the future, who knows! It has been, and remains both a privilege and an honour to have been so deeply involved in our Industry. I see no reason at this time why that should not continue in some form or another.
We thank David for holding this interview and wish him good health, and luck in the future.