Lessons for casinos in 'Ocean's Eleven'
Joseph Plumeri, chairman of one of the world's biggest insurance brokers to the casino industry, has been dealt his fair share of surprises.
But nothing prepared him for the day he walked into the Bellagio casino's corporate offices in Las Vegas and, instead of meeting his client from MGM Resorts, came face to face with actor Andy Garcia, who was filming Ocean's Eleven.
'I walked right into a set ... and there was a film being shot,' said the Willis Group CEO, who was there to meet MGM's then chairman, Terry Lanni. 'I said, 'Jeez, I'm sorry.' And the director said, 'You look good, we want to keep you.''
Plumeri was given an actor's guild card and appeared as an extra in the blockbuster. But while Ocean's Eleven is a fictional tale about a group of thieves who rob a casino magnate, played by Garcia, Plumeri says there are real lessons to be learned for companies in his trade.
Casinos need to keep enough cash on hand to cover the bets on their gaming tables, making them juicy targets for theft.
In the film, Garcia's vault is robbed of more than US$150 million. Would a real gaming company be able to file an insurance claim for such a massive loss?
'You don't insure against that,' said Plumeri, whose company counts four of six licensed casinos in Macau as clients. 'There are limits to what you are going to be able to get for [casino theft] ... it's not gazillions.'
Insuring gaming firms, especially in emerging jurisdictions, carries a unique risk profile. 'You have got more regulatory issues than you would have in a normal, you know, business,' Plumeri said.
He cited as examples regulatory limits on the number of casinos or gaming tables companies are allowed to operate.
'There's no such thing as regulatory insurance,' he said. But the impact of some regulations can come under the fold of so-called business interruption insurance.
This was the case for an unnamed casino developer in Macau that filed a sizeable claim related to construction of one of the city's mega-resorts. In another case, a casino filed a 'significant' insurance claim after part of its property was damaged, forcing it to cancel planned events.
Other potential risks are more commonplace: natural disasters such as typhoons or pandemics like the 2003 outbreak of severe acute respiratory syndrome (Sars).
'As the CEO you have to look at the company as a whole and understand where all the pitfalls are that can get you in trouble. That's the first thing you do. Insurance is the end result of that study,' Plumeri said.