B in the Know Vendor Series: Tangam Systems
Tangam Systems was featured on Bennie Mancino's 'B in the Know' Vendor Series on YouTube, where Benny interviews Tangam's Ari Mizrachi.
Bennie and Ari talk about casino reopenings across the US, data analytics and how it impacts decision making, real-world examples using data, Tangam's software and the COVID-19 webinar series, and more.
The majority of the video is transcribed below and includes timestamps for each section. Check out the video above as well as Bennie's channel.
Bennie Mancino: Hi everybody and welcome to another edition of “B in the Know”. I am your host, Benny Mancino, live and direct from the Midwest and my guest tonight is for our new Vendor Series since G2E was cancelled and we'll talk about that later. It is Ari Mizrachi, the SVP and Head of North American Business for Tangam Systems. Welcome Ari!l
Ari Mizrachi: Thanks for having me, Benny.
G2E Las Vegas & Tangam Systems (6:13)
Bennie: So let's talk about it G2E! You would have been there. I'm walking the floor and your company, as I understand it, has software that is table games optimization. It finds all the key performance indicators and optimizes the games so that they're at their most optimal level. Is it for me if I have a 12 game operation? Is it for me if I have a medium-sized operation? Who is your software going to benefit the most?
Ari: That's a great question. We have clients that have 25 tables and we have clients that have 650 tables under one roof, so we run the gamut. As you know Benny, I come from an operations background. Four years ago, I had the privilege to come to Tangam but before that I was in operations. I started as a part-time dealer and worked my way up to Senior Director of Table Games and Poker Operations.
To explain it and give you the elevator picture of our software, I like to think about it like this: baseball evolved in the early 2000s where data became more important to make decisions. When you think about revenue management in the hotel or airline industry, that evolved as well. But prior to that how did we make business decisions? We used our gut feel.
In table games operations, when I broke in over 20 years ago, a lot of decisions were made based on gut feel, based on walking the floor and on experience. Nothing will ever replace that but what I've also learned is about 20 to 23 years ago Table Management Systems came out. It went from manual ratings to using technology to collect ratings, to do bills and credits.
The one thing that I think I got ignored is because the main purpose of those systems wasn't for analytics. It was for marketing or accounting. There is so much valuable data that operators collect everyday, whether it be ratings data, occupancy data or any operational data, the prices of the games and more.
Importance of Data for Table Games Operations (8:30)
Ari: If I'm an operator and I want to be the best, why not use tools that you're already using to take your operation to the next level? So what's the argument when you hear about Tangam? Most people think we're only sending recommendations to the floor, raise games, lower games, open games or close games. Any table games operator, who is proud and as you should be, would ask, What do I need software for when I train my staff? I pride myself on training everyone. Why would I need some technology to send prompts out to the floor when that's what I've been teaching for the last 10/20/30/40 years?
But at the end of the day, you want to try and get an edge on making your team even better. Why not use the data that you are already collecting? And that's what's happening. Our software is marrying the operational experience of your Pit Managers, who I like to call Revenue Managers, and on the live side of our software, we're seeing things in real-time that the naked eye could never see and that's the truth. That's why we look at data.
I think of COVID-19 as an interesting time when you think about data because if you're a data person, which I know you are, over the last four months all you hear is on the news we got to follow data. Well I believe that in any business if you're collecting data that is usable enough to optimize your business, why ignore it? What our software has done and what our company has done in 10 + years, is to make that very easy on the operators. You're already collecting it. What does an operator do with it?
When people mention “big data” or “AI”, two buzzwords used when you collect a lot of data but often you don't know what to do with it. It's like drinking out of a fire hose. Our software takes all of that out and reviews all the data that you're already collecting and gives it to an operator that's very understandable and easy to use to make better decisions. What's great about our business is that I'm the test dummy, if I understand it, then so will anyone.
Bennie: You make a couple good points there. Why not use the data? If you don't know how to use the data, if you don't know how to interpret the data, it can really get you in trouble. It reminds me of Caesars in the mid-90s when they went data crazy. They created a huge database and they got rid of all of their operational guys and went to all MBAs. Once they collected all this data, they didn't really know who was a good player and who was a bad player. They were in a mad rush to find some operational people to tell them who was good and who were the bad players.
Snapshot based decisions vs. Data-Driven Analytics (11:20)
Bennie: A key thing that makes your software so valuable in almost every situation is optics. Optics and snapshots can get you in more trouble in table games than anything else. It took me a long time to get over the pride and to understand that.
It was just the other night, I had a manager come up to me telling me how this game is just totally dead all the time and it's not performing. I said, “Do you know that game that has the second highest win per hour of any game in here?” and he says, “You're kidding me!” and I said, “No, it's such a fun game and has such a strong house advantage. It gobbles the players up so much that when you come out here and you take a snapshot, you see nobody's there and you think the game is no good and we should move it to something else.”
Ari: Do I get to guess on the game? It's one of two games, DJ Wild or Mississippi Stud.
Bennie: It was DJ Wild. He was telling me how bad it was and how we had to get it off the floor. When I showed him the data, he was thoroughly amazed. A lot of our bosses, the guys that you have to convince to buy your software, they're the guys that take the snapshots and see this and they don't understand that the snapshot doesn't necessarily tell you what the data will show you. That's where your product becomes very important.
Ari: In this type of situation, where a certain game that financially performs really well but operationally from the optics, looks like it's dead as a doornail. Depending on who the decision maker is, the finance person might add a second table which would be a huge mistake. The operator, if they're not looking at their financials, might get rid of that table which would also be a huge mistake. This is what our software tries to do. It shows your operational data as well. The game may not be all that busy but it is bringing in a lot of money.
Comparing Different Table Games (13:49)
Bennie: While we're talking about this and a lot of people will be able to relate, I know you’re going to guess this right. If you had to look at a game in that same category and look at the optics and say, “Wow, this game is awesome! It's always full. It's the greatest game in the world! Which game would that be?”
Ari: Let It Ride. My thoughts on Let It Ride is that it is the only poker derivative where there's only one bet that is committed to it. Before there was Let It Ride? There was Let It Ride and Caribbean Stud were the only two carnival games out. What did they compare it to back? It was compared to a Blackjack game that had no side games, no progressives, and had the best rules in the game.
Let's say if win for open hour was a KPI back then, I bet you even though Let It Ride might not perform well compared to its cousins, the other poker derivatives, back then even though it was probably earning $89 an hour, it was a lot more than a $10 3 to 2 game.
I almost feel bad for Let It Ride because we as operators are comparing it to another poker derivative which we probably should but back then it performed really well because it was being compared to something else completely different.
Bennie: Getting back to the optics, if you look at Let It Ride, you're saying, “Oh my gosh, people are just attracted to that game because they could spend hours playing,” and if they’re in Las Vegas, can have several drinks, enjoy the hell out of the people watching and never spend a dollar and that's why they liked it.
Ari: PaiGow is another one where you can sit. It pushes 24% of the time and life is good.
Tangam’s Table Game Optimization Software (16:02)
Bennie: Tangam’s software can actually suggest a change in game type too?
Ari: Yes. Our software stands on three pillars: there is the live module of our software which everyone talks about which are the prompts going out to the floor in real-time, which I say is your last chance to be optimal. You're thinking about how many games do I have on the floor, which games do I want on the floor of those.
Say you have a 100 table game operation, you have to decide which games, side bets, or progressives. Then you have to decide when you’re going to schedule the games. Lastly, it's the price point and those real-time recommendations.
Our software does that which is very important and is what I call the “sexy part” of Tangam but the other two pillars are the scheduling module and the diagnostic/analytical modules. They are just as or arguably more important than the overall package of our software.
Spending More Time Crunching Data than Making Decisions (16:58)
Bennie: A person would think that during this time with limited game space and seating, they would really need a product like yours now. Doing the math daily and trying to figure out what's working best for me right now is getting to be a chore. I got to work, Ari. I don't like to work, you know? I like to work but I don't like to work, you get what I'm saying? I'm digging into the analytics 10x as much as I used to.
Plus, I've got meetings, customer complaints to answer, and other work. I don't have time for all this so I'm thinking at this point in time that a software like yours would be more helpful to the operator than ever.
Ari: I'm an operator at heart but I love our product and I'm on the vendor side. The product has given me a platform to do what I love so I think that you nailed it on the head, Bennie. A lot of operators or analysts are spending a lot of time getting the data, sifting through the data and going through the nuances.
I always say you get paid way too much money to deal with all of that. All you need to do is see the final output of that data and to make a business decision. In the world today, why are people still doing that?
I'm not saying Tangam is the only answer but a lot of times when you talk about analysts, most of the time they're just pulling data and putting together reports. We need answers and insights to make a decision. Do I need to add another DJ Wild or not? What data are you going to show me to help make that decision?
Labor Efficiency (19:00)
Bennie: A perfect example of how the data, unless it's direct like Tangam does, can be misconstrued. Right now we've got a little bit of a labor burn in Craps. Now you’re only allowed to have three people on each side of the crap game.
On Saturday night, my average headcount was 92 people, so you do the math. I have eight games open and still struggling but I'm now opening six tables with a possibility of seating six players, so I have 36 spots for 90 some players. The math doesn’t work. What do I have to do? I have to open up more games than I normally open to try and compensate for that, which results in a labor burn.
Then they look at say, “Your drop is down x amount so your labor should go with it.” No, this is COVID-19 times, boys! Things have changed. Now your labor goes up and they just can't understand that because it defies the laws of casino economics that's been going on since the beginning.
They can't get the idea that this just doesn't work. With a software like yours, would give a little bit more color to the actual situation.
The New Normal: Maximizing Revenue with Labor & Capacity Constraints? (20:32)
Ari: Yes, you’re referencing what every operator in North America, and probably across the globe, is dealing with. Coming out of COVID-19 is a scary time for everyone including the people who own the casino. They've been closed for three months with zero revenue. They're going to open and I'd expect them to be careful with labor. Seems reasonable. If I’m a CFO, or as I like to call them CF-No because they never say yes to a penny, be careful. Watch the store.
The question is if I have 92 customers and maybe we're not going to be as busy. If we're 20% down, that's still about 74 people that you need to service. If they're like, “We only want you to open up six games worth of labor,” that's 36 customers but there are 74 walking through the door.
These types of scenarios need to be presented to the person who's pulling those purse strings. If someone is saying, “We want you to only open only 36 spots,” then I'm going to have $1500 Crap games. Is that what we want as a brand because I can only service 36 customers when I know there's 74 in the building. If I can’t open more tables, then the only lever that you have is price.
Role of Table Minimums (21:56)
Ari: For some operators, you may have to go as high as you've ever gone because you just can't service them. To your question, yes, our software makes it very easy for every side of the conversation to see exactly what you're trying to do. I feel for you and anyone in the operators or finance shoes. At the end of the day, we're trying to service clients and trying to offer the right game, at the right price, at the right time.
Bennie: We're getting into the service of the guests. I can jack the prices up and I can fill the spots with $25 Crap games. A $25 Crap game is a serious number. I had six of them last night which to compare, I didn’t have six $25 crap games when I was in Vegas. It just doesn't happen! I had six last night going full board and I still had a lot of people on the sidelines. It's just amazing!
Scaling Table Games Optimization (22:53)
Bennie: Tangam is now across 9 countries and 6,000 tables?
Ari: We just passed 7,000 tables.
Bennie: Wow, 7,000 tables? And it’s all over the globe like Macau, Singapore and all these exotic places with numbers that just baffle the mind, 600 table games, 400 table games… There is no way someone is going to come over there and say, “Move that limit up!” They have to get the message and someone has to do it for them. What a benefit!
I couldn't imagine running an operation like that, compared to my tiny 84 table game count. I can see the value; it's just unbelievable the time that I'm spending trying to analyze what's going on now. I've seen the data that you produce from your software that would cut that time probably by two-thirds.
Bouncing Back from COVID-19 Webinar Series (24:15)
Bennie: Kudos to Tangam and for giving back during the quarantine that we recently faced. Tangam had several killer webinars and gave back. Of course, I was on one of them but anyway, it was great stuff! It was fantastic and it was free. Tangam didn’t want anything from anybody but just to provide insights and best practices from what you’ve seen work and it was free.
You've given out information that to some casinos could be worth tens or hundreds of thousands of dollars in information for free. Hats off to Tangam for putting that together for the gaming community and table games operation specifically.
Ari: Thank you, I appreciate that. For us, it came about because everyone was on Zoom meetings and while talking about it internally, we started having these open hours. By that I mean that I'm going to leave a Zoom meeting open while working and maybe some of the people I work with can see what I'm doing and ask questions along the way.
Then we thought, why don't we just do something for the world? We work on table games optimization; let's have a webinar and let's talk about the stuff that we love. Let's share our experiences across those nine countries and if somebody got something out of it, that's great. We're very fortunate as we received a lot of great feedback. We weren't looking for anything out of it other than sharing knowledge. It was a work that we're doing anyway and it was really nice to share with everyone.
Request a Free Data Analysis with Tangam (26:04)
Bennie: Right now you guys are giving back again. I see on your website that you guys are giving away a free data analysis. You just take a data dump, analyze it and do all that for free. If someone wants the product, that’s great but if not, that's fine too. Is that how it works?
Ari: Yes, absolutely, no strings attached. We’ve actually been doing that since I've come on board when we engage with some potential clients. This time we decided that instead of meeting with people first, we thought that would just offer it out to everyone.
Our team is very efficient back and mostly based in Canada. We have a team of very, very smart, sophisticated folks that take that raw data that has collected from a casino. We run it into our software, as if you're using it during that time period. Then we come back with a free analysis and will help you with your game-mix, hours, pricing and all those variables to help you with the post COVID-19 or maybe you’ve already been open for some time.
Of course, once you’ve seen the software and appreciate the transparency and the granularity of the data that were able to present you, maybe then you’d want to partner with Tangam long-term, but if it’s not a fit, no strings attached and there's absolutely no cost.
The only negative is that I get to present the analysis to you, so you get to see me again.
Bennie: It’s never a bad thing to meet up with you. You're a wealth of knowledge and we've really become good friends over this time. Even before COVID-19, we’ve bumped into each other over the last few years at different places.
I want to thank you so much for taking the time to be the first of the Vendors Series. I would recommend everybody out to try out the data analysis. You have nothing to lose. Some of you haven't even opened and this is the perfect time. You have the data just sitting there from your previous operations pre-COVID. Take a look at what you’re doing. Are you doing the right things at that time? What's it going to hurt so I would recommend giving Ari a call.