John Kivinen, Interview, Casino Life Ukraine
In adventurer’s life. That’s what John Kivinen has led. The Finnish hotelier transitioned successfully into the gaming industry, and has opened casinos from Kiev to Cameroon and beyond. Now, with casino gambling freshly legalized in the Ukraine, Kivinen is looking forward to bringing a cosmopolitan product to an area that used to be characterized by “unheated kiosks at every corner with half a dozen slot machines each.” He took time out of his globe-trotting schedule to speak with us.
How did you come to work in the gaming industry?
I had a career of almost twenty years in the hotel industry. After finishing my first contract as General Manager of the Savoy in Moscow in 1996, it was taking me some time to find a suitable new job in the hospitality sector. I was then approached by an established gaming company who were opening a slot operation in Ukraine. They wanted to buy a hotel in the Crimea. While negotiating the hotel deal (which eventually fell through) I started opening slot casinos in Kyiv. I was promoted to run Eldorado Gaming International - over sixty units in eleven countries - in 2000. While I can never completely quit being a hotelier, I haven’t looked back since then.
Image: John Kivinen
What is on your wish list for the reopening of the gaming market in Ukraine over the next five years?
Our company does not have a wish list. We plan to write our own story. We aim to be the leading slots-only operator in Ukraine. We will have six or seven licences by the end of 2022, in other words at least fifteen hundred machines on the floor.
How will the Ukraine Land-based Gaming market 2021 compare in size to that of pre-2009?
This new market will be better regulated than before. The law is clear and limits the scope and size of the market from pre-2009. We will not see unheated kiosks at every corner with half a dozen slot machines each. This is good for the city, the consumer as well as being clearer for the operator. The atmosphere in four- and five-star hotels adds to and improves the experience that we can give our guests.
The challenge to profitability that the new licence fees cause will push all operators to work hard on all aspects of the business from customer service to marketing, technical service, systems management and cost control.
All in all, I don’t think the size of the new market can ever quite reach the levels of pre-2009. It can be successful to everyone involved, though.
Having a background in Hotel and Hospitality, how important is Customer care in not just acquiring but also retaining patrons?
Customer care is the most challenging part of operating a land-based casino. Players arrive with expectations of not only good games and good service but also of winning money. As we don’t and cannot direct the flow of winnings, even more emphasis has to be put on that feeling of being cared about. Most patrons are intensely focused on the game itself, so the attention given to them often has to be particularly low-key and considerate.
When I moved over from the hospitality industry, it took me quite a while come to terms with this balancing act. The hospitality industry aims at full satisfaction to each and every customer. This cannot be reached to the same extent in the gaming industry, because many players enter hoping to win big. Giving a fair and good quality game as well as the perfect amount of attention is the challenge we face.
Image: Hotel Opera, Kyiv
Responsible Gambling is promoted in established Gaming Jurisdictions worldwide. Is that an aspect that Ukraine should embrace also for the future health and stability of its citizens and the industry?
Responsible Gaming has always been present in our work as gaming professionals, whether it is written into legislation or not. We have to be alert to signs of problem gambling and react. Having less operators due to the limitations set by the new licences will make it easier for the Gaming Commission to focus on this issue.
What excites you most about the reopening of the Ukraine market after so many years and what aspects of this new era make it better than pre-2009?
Moving gaming “inside”, off the streets, is the biggest driver of progress. The considerably higher licence fees increase the overhead and pushes us to work harder. Skipping over one decade also means new technology, new games, new cabinets. Still, the basics of gaming stay the same. We are here to offer exciting entertainment in a comfortable and safe environment.
What appealed to you about this new role for you at Volna 4444?
Getting back into business. I have been away for a couple of years and I am itching to go again.
What are the key advantages Volna 4444 can provide the companies of whom you distribute Casino machines?
We will be using the latest models and systems available in the market. Apart from being a good test market for new products, our casinos will act as showrooms for potential future operators.
When was Volna 4444 founded in Ukraine?
All operators in a newly formed market are by definition new. So are we. The company investors are Ukrainian.
Volna 4444 is an operator and a distributor in Ukraine, so you will not only be operating Machines Licences but also supplying Slot machines – is that correct?
In fact, Volna 4444 is an operator only. We have a partner with whom we work closely who will be a distributor, but I can get back to you about that later.
What are amongst the company’s primary goals for the next 12 to 18 months?
First and foremost, we want to have a flying start to our operations. We will open two units in Kyiv, two in Kharkiv and one in Mariupol followed by another dozen or so within the first year and a half. We will operate in Kyiv, Kharkiv, Lviv and Odessa but also in many smaller towns with only one three or four-star hotel. This will give us the opportunity to develop our operations and customer service with less urgency.
In 2014 you moved from operations to supply and from Europe to Africa. How did you find initially the transition?
Actually as C.E.O. for Eldorado Gaming International I (and the whole company) had moved from Europe to Africa by 2010. We opened operations in Central African Republic, Cameroon, Namibia and Ghana.
As Managing Director for Novomatic in Ghana I was practically operations-only. We had half a dozen slot and table casinos of our own as well as profit-sharing machine placement in Ghana, Benin and Nigeria.
By the time I joined Novomatic (Novogaming Ghana), the company had decided to close the operations and concentrate on profit-sharing. Novogaming Ghana was then sold.
What were the objectives required by Novomatic in your role of Managing Director Ghana and what where your main achievements during your time in the role?
Novomatic hired me to streamline and clean up an operation that had problems turning a profit. By the time I left, it was in the black for the first time. It was then sold to an operator close to Novomatic.
Your role then moves on in Novomatic to Advisor. Were you still employed and what were your primary objectives?
My title was changed as the company looked for a suitable task for me. I was sent to Namibia with the hope that I could take over the operations there as Managing Director. That wasn’t to happen as Namibia’s extremely strict immigration and work permit policy stopped me (and, as it turns out, my career at Novomatic) after less than two years.
I never quite had the opportunity to give back to Novomatic. They were very patient with me, keeping me on their payroll and showing me their world for months on end, while trying to find something to fit my skillset.
Image: Hotel Bratislava, Kyiv
Growing up what kind of future did you envision for yourself?
I didn’t. I have never been ambitious in the sense that I would plan a future. I have done the jobs given to me the best I can and seen where that takes me. I have tried to enjoy the ride.
Looking back over 40 years what are some of your standout memories from your time working in Hotels and Casinos?
In the hotel business I particularly enjoyed conventions and other special events. The third hotel I worked at was adjacent to and operated the Government Guesthouse of Finland. It consequently hosted several top delegations, including simultaneous visits from the leaders of the United States and Germany and their teams in 1992. Also, we were the venue for the hyper-prestigious Bilderberg conference in 1994. Top C.E.O.’s, prime ministers, presidents and royalty… plus a healthy profit for the hotel.
The boutique hotel atmosphere at Savoy Moscow was great. Guests were very close and even big stars had lots of time for long informal discussions as they were far from home in a different time zone.
It was a true privilege to be building Eldorado Gaming International into a small success story. It had some teething problems when I took over as C.E.O. Thanks to a great team of regional managers as well as the coolest owners you could imagine, we turned it into a very profitable business in the challenging market.
What can you tell us about the projects you have worked on so far, and the difficulties and successes you have experienced?
The ex-Soviet Union market was lucrative. Eldorado Gaming International originally operated in Estonia, Latvia, Ukraine, Russia, Kazakhstan and Kyrgyzstan. We opened over sixty casinos of various sizes and shapes. Not every unit was profitable but in whole the company was a great success. Living and working in the region, especially in the gaming business, was worth a book or two. Colourful.
I consider being an important part of that business for over ten years my biggest challenge and the biggest success I have been a part of. Also, we were lucky or cunning enough to sell our business in Kyiv two years before the industry was shut down.
Africa was and still is very challenging. Eldorado failed in Central African Republic but had a very successful business in Cameroon for four years. It was closed down due to the landlord’s - who was also the license holder - gambling (sic!) problems. Breaching contracts in Africa is not exceptional, and legal solutions aren’t really available, so we left without putting up a big fight.
Image: Hotel European, Mariupol
My team and I opened Caesars Casino, the now leading casino in Accra, Ghana. The building process was very African with delays due to disputes with the landlady and changes in the building company. However, in general Ghana is a good country to do business in. I cannot take credit for the great eventual success of Caesars’ operation as I left two weeks after the opening party to join Novomatic.
My input at Novomatic was limited by time and scope. In Ghana the task I was given was to clean up the company so it could be sold to a partner. It is never the job you prefer to take, but working for an industry behemoth under the most knowledgeable man in the business was rewarding. In Namibia (the best country in the world to live in) the challenge from day one was bureaucracy. Namibia is dead against allowing foreigners to enter the job market due to high local unemployment.
Of all the casinos you have visited during your international career, which are amongst your favourite and why?
I don’t gamble myself. My favourites have more to do with the atmosphere of the city and the hotels. I was surprised to like Café de Paris in Monaco, but maybe I would choose the Bellagio in Las Vegas as my favourite.
Out of business hours how do you relax?
I like to travel. I am 28 countries short of visiting every country in the world, a task that I will get back to when we get over the pandemic.
I would still play football seven days a week if I had where and with whom to do it. I am terrible at it but it has never stopped me. In lieu of playing, I follow the English Premier League keenly.
Is there much difference between Casinos in Africa and Europe?
The atmosphere in casinos in Africa is very different from the European one. In Africa for many patrons gambling is their main leisure activity. Players are predominantly foreigners and, in many places, the Chinese community dominates the market. This affects marketing and the atmosphere of casinos, sometimes quite dramatically.
Is a Casinos success like with a hotel simply a case of location location location.
No. At least in the countries where I have been involved, gamblers are willing to travel for a better gaming experience, especially as it allows for less exposure – many gamblers enjoy privacy. I think this probably applies to most markets. After all, the two most famous gambling cities, Macau and Las Vegas, require travelling to.
In the hotel industry, location is a means to an end. City hotels need good location because people stay in a hotel to sleep before and/or after doing business or visiting the city. Central location can alleviate your timetable considerably in today’s congested cities.
What impresses you most about working in the Casino Industry?
The similarities worldwide. The excitement of gambling is very human and gambling is everywhere, whether you legalize it or not. Our industry harnesses this power and ensures a safe environment for the gambler. It also serves a societal purpose by directing big parts of gambling revenues to the governments.
Does the Machine Licence provide for food and beverages to be served to patrons and if so are you planning to look to develop that based on your experience in the hotel and hospitality sector?
Complimentary food and beverage are forbidden under the new law. Furthermore, all casinos will be located in four- or five-star hotels. This allows us to concentrate on our core business. We will be buying services from the hotels.
In your opinion, what are the most important factors slot game manufacturers should consider when developing new products and business strategies for Eastern European Gaming operators?
I think game manufacturers are well aware of the requirements of different markets. Ukraine and other Eastern European markets are male-dominated, which is reflected in the most popular games on the market. There are a couple of leading manufacturers with their established game mixes that have a head-start. Their games were played pre-2009 and are still played widely online. However, every market develops – and so will this one. We will see new manufacturers and new games find their place on the floors of the casinos.
Have you anything else you would like to add?
I think the whole gaming world will follow this new start in Ukraine. We will be starting in the midst of Covid-19 and it will bring its own challenges. We will have to pay even more attention to hygiene including but not limited to disinfecting the machines more often than before and requiring face covering from all, starting with our personnel. Social distancing is a completely new challenge that we will have to work with by building plexiglass separators between machines and other protective structures inside the casinos.