Making the News

Philadelphia Inquirer

Originally Published:Sunday, November 23, 2008

"We've been riding this wave of international and domestic gaming expansion, because the expansion has taxed the industry, in terms of expertise," said Spectrum founder Frederic Gushin. "We look at ourselves as a high-level service."

The Go-To Adviser as Gaming Grows
A N.J. firm is cashing in as it helps nations and companies pursue gambling.

By Suzette Parmley
Philadelphia Inquirer

LINWOOD, N.J. - The phones don't stop ringing for Spectrum Gaming Group L.L.C. at its headquarters here, or at any of its 10 offices worldwide.

Whenever a company, a government or a tribal nation is contemplating casinos, it will likely call on Spectrum - the not-so-little-anymore firm that's growing along with the gambling industry's global expansion.

Spectrum has done economic analyses and background investigations, and advised new markets and companies on gaming regulations in more than 25 U.S. states and territories and more than 40 countries on five continents - and it is looking for more. The firm wants to crack Africa, and if gaming is ever contemplated for Antarctica, it vows to be there.

"We've been riding this wave of international and domestic gaming expansion, because the expansion has taxed the industry, in terms of expertise," said Spectrum founder Frederic Gushin. "We look at ourselves as a high-level service."

Gushin, 59, a former assistant attorney general for New Jersey's Division of Gaming Enforcement, started Spectrum in January 1993 out of the basement of his Lawrenceville home.

His first client, an Indian tribe in Washington state, hired him to do a compliance audit. The first breakthrough job came in December 1994, when Spectrum got a contract to advise the New South Wales government on an Australian company that wanted to build a casino in Sydney.

Business kept growing through the '90s, and so did Gushin's need for additional staff.

In 2003, Gushin merged his expertise, resources and contacts with that of Michael Pollock's, a former journalist and spokesman for the New Jersey Casino Control Commission, who at the time was publisher of the newsletter Gaming Industry Observer.

Gushin had gotten to know Pollock after hiring him as a gaming consultant in Puerto Rico and San Jose, Calif., after the Observer had added the service.

Since joining forces, the two men have steered Spectrum through rapid growth as co-managing directors.

The firm's tentacles seem to reach everywhere. Spectrum got the call in 2004 when Pennsylvania needed help drafting regulations for its fledgling gambling industry, and in summer 2007 when West Virginia was writing regulations for live table games. Last summer, Spectrum submitted a 301-page report on the potential effect of legalizing casinos in Massachusetts.

According to Inc. magazine's 2008 list of the 5,000 fastest-growing private companies in the United States, Spectrum Gaming was ranked No. 728 based on revenue growth.

In 2004, the firm reported revenue of $1.1 million. Last year, revenue was $6.5 million.

"If you want the cheapest service, it ain't going to be us," Gushin said with a laugh. "But we provide a high level of expertise in the areas of service that we offer."

Spectrum has 13 full-time and several part-time employees and more than 50 associates worldwide, with offices in Macao, Tokyo and Manila. This month, it added a European office, in Ascona, Switzerland.

The firm also employs more than 30 full-time consultants in Spectrum's sister company, Spectrum OSO Asia Ltd. (SOA), based in Bangkok.

SOA significantly bolstered Spectrum's presence in Asia when it was established in 2003. Spectrum owns 15 percent of SOA, and Spectrum employees on assignment from the United States often work in SOA's offices in Hong Kong, Macao and Tokyo.

Gushin and Pollock pluck hires with backgrounds similar to theirs - former regulators, journalists and casino executives with expertise in gaming. Among its staff with impressive pedigrees are William O'Reilly, a former FBI agent, who is chief executive officer of SOA; and Mark Robinson, the former Immigration and Customs Enforcement attaché in Bangkok, who does investigations for SOA.

One of Spectrum's biggest jobs came in December 2005, when it was retained by the Singapore government to do background checks on the four applicants for the licenses for the nation's two multibillion-dollar resorts. That job was completed in June 2007.

During that 18-month period, Gushin said, Spectrum turned down work from potential clients to prevent any conflicts of interest with its Singapore project.

"We self-policed ourselves and turned down over $700,000 worth of business during that time," he said. "Governments are placing their trust in us to do these international investigations, to New Jersey or Nevada standards, so we have to do it right."

The Casino Association of New Jersey, the lobbying group that represents the interests of Atlantic City's casinos in policy matters before state lawmakers, hired Spectrum last year. As a controversial proposal to add video-lottery terminals at the Meadowlands Racetrack was being debated in Trenton, Spectrum prepared two studies for the lobbying group on the economic impact of Atlantic City's casino industry on the local, regional and state economy.

"We don't accept a job if someone wants us to reach a predetermined conclusion," said Pollock, 54, who in the 1980s was a casino reporter for The Press of Atlantic City.

Spectrum's fees range from $7,500 for due diligence on an ambassador in the Philippines, to multimillion-dollar contracts with governments. The company also works for Wall Street firms and produces gambling conferences, including the Pennsylvania Gaming Congress, held each February in Harrisburg, and the East Coast Gaming Congress, held every May in Atlantic City.

Pollock said Spectrum had no immediate plans to become publicly traded.

"Certainly not in this market," he said.

With gambling's explosion in 48 U.S. states and more than 100 countries, some say Spectrum is poised for even more growth.

"It's work that there will always be a need for because you're going to have some jurisdictions adding gambling, and others are going to be reevaluating regulatory practices," said David G. Schwartz, author of Roll the Bones: The History of Gambling and director of the Center for Gaming Research at the University of Nevada, Las Vegas.

But it's keeping up with the demand that has become the firm's biggest challenge.

"The core of Spectrum's reputation is a high-end product," Gushin said, "and we don't want to do anything - even growing too rapidly - that could undermine that."

 


Contact staff writer Suzette Parmley at 215-854-2594 or [email protected].

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