Where Are All The Energy Star Slot Machines?

Where Are All The Energy Star Slot Machines?

When I asked Anne Kelly, Director of Governance at Ceres, why the organization had never assessed the gaming industry before -- noting that Harrah's Entertainment, the biggest player, had 2008 revenues of more than $10 billion and 80,000 employees globally -- she paused a moment before replying.

"Interesting question," she said, adding, "Thanks for bringing a leadership company to our attention."

Why hasn't the gaming industry been looked at by the sustainability media and ranking organizations, and through mainstream media's sustainability lens? Are there leaders and learners, and what are they doing? Why aren't there Energy Star slot machines?

It's not because the industry is too small, or because it has limited impacts on people and planet. The next two largest gaming/entertainment companies, MGM Mirage and Las Vegas Sands, had 2008 revenues of $7.2 billion and $4.4 billion, respectively, and employee counts of 54,000 and 28,000. The U.S. casino industry as a whole had a 2008 turnover of $32 billion. Harrah's, looked at through a hospitality lens, is one of the largest hotel chains in the world, with 1.5 million square feet of meeting and convention space. There are casinos in 40 U.S. states and overseas.

With regard to impacts, suffice it to say that this isn't the software industry, which with some justification points out that its core activity is rearranging electrons. Far from it: When you think of Las Vegas, the emblematic casino town, the images that come to mind are prodigious fountains in one of the driest parts of the world, a constellation of lights visible from outer space, and customers who come to Vegas for entertainment and escape, not to reduce, reuse, recycle.

Is it possible that the collective failure to pay attention -- either to reward good practices, or cast light on poor ones -- has something to do with the "sin" aspects of gambling?

Triple-Headed Conglomerates

In the absence of sustainability assessments or hard data, here's a quick snapshot of the industry's impacts. Gaming companies are essentially triple-headed conglomerates that offer hospitality, entertainment, and gambling. Hospitality sector impacts and standards are of course well established: Energy and climate change, water, waste, green buildings, labor, diversity, community engagement, and the multiple ways a hotel can provide opportunities to and encourage its guests to reduce their impacts.

For the most part, gaming companies' entertainment impacts consist of the environmental and labor issues involved in putting on live stage performances, and some televised events such as the World Series of Poker.

Gaming, gambling, or however you choose to refer to it, is a sector in need of its own industry-specific sustainability metrics. One of the social sustainability issues that comes up frequently is "responsible gaming." All the large companies have signed onto The American Gaming Association's Code of Conduct for Responsible Gaming. To varying degrees the major players have programs that exceed the voluntary Code's standards, and are some combination of employee training, consumer education, responsible alcohol service, keeping minors off the floor, and appropriate marketing.

An issue that ignites greater passion -- no doubt because a lot more money is involved -- is casino partnerships with Native American tribes. Some casinos have failed to bring in hoped-for revenues and economic development; political contributions from Indian gaming revenues were at the heart of the Jack Abramoff scandal, although the federal government has recently tightened oversight of casino contracts.

A Look at the Leaders

Harrah's, the industry leader by size, groups its environmental practices and goals under what it has branded CodeGreen, which aims to take the best innovations that emerge from employee teams at individual properties and implement them enterprise-wide. Each property has a CodeGreen team with management and front line participation that identifies opportunities, and -- with corporate approval -- makes investments and implements change.

Corporate management initially green-lighted projects because they reduced costs. More recently, management has embraced sustainability more broadly, setting enterprise wide policies and goals, recognizing "Green H.E.R.O.S" among staff, and making substantial infrastructure investments with a particular focus on cutting energy use. Some of these investments have payback periods of up to five years, compared with the three year bright line often used by corporations. Harrah's is gathering 2009 enterprise-wide data for its first sustainability report, to be published early next year.

Harrah's Rincon resort in southern California is a joint operation with the Band of Luiseño Indians, which owns the land. Rincon and the Luiseño tribal council -- which has adopted the philosophy/strategy that green business is good business -- work together to reduce the resort's environmental footprint. Harrah's recently completed an 18-month LED conversion project that has reduced energy use to date by 2.13 million kWh. Casino revenues have helped the tribe fund an energy recapture upgrade to the central power plant, and the tribe will soon break ground on a one-megawatt photovoltaic array to feed renewable energy to casino operations.

Harrah's points to other CodeGreen achievements that include: investing in a "tunnel washing" technology in a large laundry facility that saves 12 million gallons of fresh water annually; winning a 2008 EPA Region Two Environmental Quality Award; being the first company in the industry to join Climate Leaders; and providing $700,000 to upgrade the Teacher EXCHANGE, a re-use resource center where public school teachers can obtain slightly used computers and office furniture. The Paris Las Vegas and Bally's casinos in Las Vegas serve premium, house brand bottled water, purified onsite, that outsells Perrier and other high-end brands that take the energy intensive slow boat to Vegas.

The flagship of MGM Mirage's sustainability push is CityCenter, a $9B, 18 million square foot complex of casinos, hotels, luxury condos, and a 500,000 square foot retail and entertainment complex, due to open later this year. Guests can decide how "green" their stay will be by choosing lighting and temperature levels, and frequency of linen changes. MGM's ambitious goal is to have the entire complex LEED certified.

The Las Vegas Sands' Palazzo hotel and casino, opened in 2008, was described at the time as the largest LEED Silver certified building in the United States.

About Those Fountains

So why hasn't the industry been looked at seriously by sustainability media and ranking organizations?

In fact, it hasn't been entirely overlooked. A 2008 CERES/Risk Metrics report, Corporate Governance and Climate Change, looked at 63 consumer and technology companies' level of preparedness to address climate change. Harrah's wasn't assessed; MGM Mirage and Las Vegas Sands received relatively low scores compared to hospitality leader Marriott, although in a near vacuum of enterprise-wide data vacuum, these scores don't tell us much.

Without question, gaming merits closer assessment through a sustainability lens. This will become easier next year as enterprise-wide data begins to emerge.

But the relative invisibility of the industry can't be explained solely by a lack of data. Which brings us to the sin company question: Has the "sin" element of gambling overshadowed the industry's broader and arguably more important sustainability performance?

Hard to say. No one interviewed for this article had a good answer. It may be a matter of perception -- that most people don't think about casino companies as giant hotel chains. It may be that those of us who practice environmental assessment and decision-making, a practical activity based on hard data, simply shy away from the complex moral calculations involved in deciding whether gambling is sinful or otherwise. My thoroughly non-scientific guess is that something about "sin" just scrambles our green synapses and makes us want to turn to another industry.

About those fountains in the desert and lighting arrays visible from space? The major companies say they increasingly use gray water for the fountains, and are rapidly swapping out traditional lighting for energy efficient alternatives.

Who knew?

San Francisco based Steve Voien, principal of voienconsulting and senior adviser with Wallace Partners, LLC, has 12 years experience as a sustainability strategist and communicator, five of these at Business for Social Responsibility, and six years service as a U.S. diplomat with a political/economic, environmental, human rights, and community development portfolio in West Africa, the Balkans, and Washington, D.C. He wrote this article for Harrah's Entertainment.

Slot machine photo CC-licensed by Flickr user tedmurphy.