Congressional Black Caucus Political Education and Leadership Institute
Frank J. Fahrenkopf, Jr.
President and CEO, American Gaming Association
I am glad to have the opportunity to speak to all of you today. As many of you know, my organization, the American Gaming Association, is the trade organization representing the commercial casino industry. While commercial casino gaming is now legal in 11 states—Nevada, New Jersey, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Michigan, Colorado and South Dakota—the AGA’s role is national in scope. We represent casino operators, along with equipment manufacturers, suppliers and vendors, financial services companies, and others that work with the gaming industry, on federal legislative and regulatory issues that affect our business, as well as on industrywide issues.
Relatively speaking, this industry has not had a national presence for very long. As recently as 15 years ago, the industry was only doing business in two states—Nevada and New Jersey. The AGA itself has only been in existence for eight years.
As casino companies expanded during the 1990s and employed many more people in many more states, leaders in our industry recognized that not only did they need national representation with the AGA, but they also saw that they needed their work forces, at all levels, to reflect the diversity of their customers and their communities.
A number of you—including our host for this event, Congressman Thompson, who serves as chairman of the Congressional Black Caucus Political Education and Leadership Institute—were there in 1998 when, at the invitation of the CBC, AGA member companies highlighted some of their best practices in minority hiring, promotion and contracting. One of the programs discussed during that presentation originated here in Tunica. The “Adopt-a-Town” program—developed by Grand Casinos, now part of Park Place—involved identifying areas within a 50-mile radius that had high unemployment, then partnering with that community, educational institutions and local government to address barriers to employment such as transportation, child care, and communication and social skills. Not only did this create the stable work force needed by our industry, but it also served the needs of area residents as well as the entire community. These types of pioneering efforts by Grand Casinos, and similar initiatives by Harrah’s Entertainment, earned both companies recognition from the Clinton administration, which in 1997 honored leading businesses for their achievements in getting people off welfare and into the work force.
Again in 1999, the AGA made a presentation to the Congressional Black Caucus Foundation detailing some of our existing initiatives and outlining our future plans. In the following year, we hosted a luncheon for the CBC, both members and staff, to provide a briefing on the industry.
As a result of these meetings, we recognized that up to that time diversity was one of those issues that had remained a company-by-company effort. Now that the industry had a national presence, we determined to work together as an industry to achieve more than we could as individual companies. In the spring of 2000, AGA member companies met to discuss the idea of forming a Diversity Task Force—the goal being to develop an approach to diversity that created inclusion in all business relationships and job categories within the industry. To do that, the task force would share and publish best practices regarding employment, procurement and construction, and compile industrywide diversity statistics.
Three years later, I believe the AGA’s Diversity Task Force has made considerable progress toward that goal. The multidisciplinary task force is now composed of human resources, purchasing and public relations executives from almost every major U.S. casino operator.
Since its inception, the AGA Diversity Task Force has embarked on several major initiatives. The task force has 1) collected and aggregated employee data regarding race and gender in order to establish a diversity “baseline”; 2) conceived and produced an event to promote minority participation in the gaming industry among supplier and vendor companies; and 3) analyzed and developed strategies to measure baseline supplier/vendor purchasing and contracting data.
Let me give you a little detail on those initiatives.
To establish a “baseline” from which to work, PricewaterhouseCoopers, working with the Human Resources Subcommittee of the AGA Diversity Task Force, collected and aggregated EEO-1 reports filed by our member companies with the EEOC. The data were then compared to the entire industry group under which casinos were classified at that time, called “Miscellaneous Amusement and Recreation Services,” as well as to the overall U.S. work force. The results were reported by PwC in 2001 in a report called the “Gaming Industry Diversity Snapshot.” Here are some of their findings:
- In 1999, the 17 participating casino companies employed an estimated 187,495 workers, which represents just over 50 percent of the total casino work force (direct employees). The single-largest job category was service workers, representing 101,395 employees.
- 56.1 percent of the work force was white, compared with 65.5 percent for Miscellaneous Amusement and Recreation Services, and 71.6 percent for the U.S. work force overall.
- The next-largest ethnic group was blacks, with 19.0 percent for the participating casinos, 12.8 percent for Miscellaneous Amusement and Recreation Services, and 14.0 percent for the U.S. work force overall. The percentage of blacks employed by the gaming industry far exceeds Miscellaneous Amusement and Recreation Services and U.S. work force reports.
- Among these participating casino companies, we also found that a greater percentage of black men and women were officials, managers and skilled craft workers than in the Miscellaneous Amusement and Recreation Services category or in the U.S. work force overall. For example, 8.2 percent of black male casino employees were “officials and managers” compared to 5.4 percent in Miscellaneous Amusement and Recreation Services and 5.5 percent in the U.S. work force. And 5.8 percent of black female casino employees were “officials and managers” compared to 3.9 percent in Miscellaneous Amusement and Recreation Services and 3.9 percent in the U.S. work force.
These casino companies also met or surpassed the Miscellaneous Amusement and Recreation Services category and the U.S. work force overall in employment of Hispanics, Asian/Pacific Islanders and American Indian/Native Americans.
Results of the PwC study showed that individual companies were already making progress in creating a diverse work force even before the industry began to work together and build on those efforts.
A separate Purchasing and Contracting Subcommittee was formed to make headway in the area of procurement. The subcommittee’s first program involved bringing together the industry’s top purchasing decision makers with disadvantaged and minority- and women-owned suppliers and vendors. Opportunity Expo debuted in 2002 at the industry’s annual trade show and conference, Global Gaming Expo. Purchasing executives from leading gaming companies, including Argosy Gaming, Ameristar Casinos, Boyd Gaming, Harrah’s Entertainment, MGM MIRAGE, Park Place Entertainment, Caesars Indiana, Mandalay Resort Group, Mohegan Sun, Station Casinos and Isle of Capri Casinos, met one-on-one with representatives from more than 30 certified disadvantaged and minority- and women-owned businesses. The event was intended to give smaller vendors and suppliers greater exposure to our industry, putting them on more level footing with larger, more established competitors.
For last year’s Opportunity Expo, the AGA enlisted the support of several local and national organizations devoted to improving diversity in a variety of industries. Co-sponsors who promoted the event with their members included the Multicultural Foodservice and Hospitality Alliance, National Minority Business Council, U.S. Hispanic Chamber of Commerce and Women’s Business Enterprise National Council.
For those businesses wishing to take part in Opportunity Expo but lacking DBE, MBE or WBE certification, a workshop was held the day before. Sponsored by the Gaming Organization for Leadership Diversity (GOLD), this Diversity Certification Process Workshop outlined the steps necessary for certification, discussed opportunities for these suppliers and vendors within the gaming industry, and educated attendees about the benefits of inclusion.
These initiatives were important first steps for our industry as a whole, but we’ve already embarked on what we think is an ambitious next phase.
While the 2001 Gaming Industry Diversity Snapshot had served as a helpful baseline measurement, we recognized that regular updates were essential for us to track industry progress and measure our effectiveness in these areas. And so we are in the process of updating our equal employment opportunity data. Collection of 2002 EEO-1 data is already complete, and this time it includes data from 138 individual casinos, accounting for more than 255,000 casino employees nationwide—far more than participated in the original study.
As a supplement to this update, the task force is collecting company EEO-1 job classifications by category for the purpose of standardizing classifications within the casino industry. We faced several big stumbling blocks in gathering this data the first time around. One was inconsistency. We found that job classifications differed from company to company. For example, some companies classified a dealer as a “professional,” while others classified him as a “service worker.” While some areas of standardization may be out of the industry’s control, our participating companies have agreed to work toward standardization of job classifications (for instance, “officials and managers,” “service workers”) in order to make these snapshot comparisons more meaningful. The other difficulty we faced, and continue to face, is that in some cases there are mandates that differ from jurisdiction to jurisdiction. For example, some states have required casinos to categorize a job in a certain way, while another requires that job to be categorized in a different way.
In the areas of procurement and contracting, the task force will begin the process of establishing uniform standards that will enable our industry to track casino spending with disadvantaged and minority- and women-owned businesses. Today, there are as many systems in place in the casinos as there are casinos, and only three states require casinos to collect this type of data. This makes it impossible to collect, aggregate or analyze purchasing data in any meaningful way. However, by standardizing the various vendor categories as well as the classifications of the goods they sell, individual casinos across the country will be able to elect to incorporate consistent information into their purchasing systems that should then allow us to more accurately monitor our progress in these areas.
The first step we are taking to move toward that goal is to convene a workshop where gaming companies executives, purchasing and contracting consultants, and those from outside our industry will share best practices. This workshop will focus on processes for aggregating purchasing and contracting data, as well as programs intended to improve diversity within the industry.
We also will be continuing to expand our national purchasing outreach programs, including Opportunity Expo. In hopes of reaching more of our targeted suppliers and vendors, we have informed several key organizations about the event, who have, in turn, reached out to their membership. Co-sponsors this year include holdovers from last year the Multicultural Foodservice and Hospitality Alliance and Women’s Business Enterprise National Council and new co-sponsors the National Association of Women’s Business Owners–Southern Nevada, Nevada Minority Purchasing Council and The National Coalition on Black Civic Participation. This is certainly an area where we could use your help. The more organizations involved, the better the results will be for both the industry and minority vendors.
We also will be working to measure the success of Opportunity Expo in a more concrete way. While we know that last year’s event provided an entrée for participating vendors, we were not able to determine whether it had any concrete results because we had not established a method to track purchasing data. Therefore, this year, we are adding a new component to Opportunity Expo: We have asked the casinos to monitor purchasing activity from these vendors, which we will compile, evaluate and report each year.
As a culmination of all these efforts in 2003, the task force also has plans to develop and introduce an online diversity resource guide that will help build awareness of our efforts and serve as a tool for the industry as we continue to advance this mission. The resource guide will include an overview of our commitment to diversity issues, information on diversity initiatives and guidelines for best practices. The site will also provide extensive vendor resource information on procurement opportunities.
Beyond our work as an industry, we’re seeing a lot of individual initiatives that are having positive results. One of our recent success stories was the designation of MGM MIRAGE as one of “America’s 50 Best Companies for Minorities” by Fortune. This came after years of committed, focused work in addressing a multitude of companywide diversity issues. MGM MIRAGE ranked No. 31 on Fortune’s list, which ran in the magazine’s July 7 issue. Fortune noted that MGM MIRAGE ranked ninth on the list for minorities within its total work force and 11th for minority new hires. Minorities make up 51.7 percent of the company’s total work force; 28 percent in management were minorities.
There are many more efforts taking place at the state level. For example, here in Mississippi, the state gaming association has been hosting vendor fairs to promote business opportunities with the gaming industry.
From our work on the task force, we know that many of our AGA member companies have adopted similar policies and programs, so we expect them all to be setting new standards for promoting diversity throughout our industry.
Both as an industry and as individual companies, I believe we’ve accomplished a lot in a short period of time. We also recognize that there’s still considerable progress yet to be made. Just as we discovered when we began this process that we could accomplish more as an industry than as individual companies, we feel that we can achieve even greater things if our industry can work in cooperation with organizations like yours. As I mentioned earlier, our outreach efforts on the purchasing side for Opportunity Expo would be even more successful if we had the benefit of your knowledge of professional organizations representing minority vendors, as well as the benefit of your relationships with these groups.
Another area where we could work together to our mutual benefit is in supporting education initiatives that will promote a diverse work force at all levels. One of the best examples of a missed opportunity exists right here in Mississippi. For years, the casino companies doing business here have supported a bill in the legislature that would allow Mississippi’s state universities to offer classes in casino management and other areas relating to the hospitality industry. This kind of training would prepare state residents for a professional career in this industry. For years, however, the legislature has rejected this measure, forcing these companies to recruit from out of state for many management positions. As a result, state residents are not as well represented in the local management ranks as they could be or should be. Working together to pass this legislation would give us a more highly skilled labor pool that would better reflect the community and provide more opportunities for management positions to local residents.
These are just two examples of how our combined efforts can make a difference above and beyond what we accomplish on our own as an industry. Working together, I hope to continue to make progress toward our mutual goal of promoting inclusion in all areas and at all levels of the gaming industry.