He came, he saw, he conquered
ceo FocUs GARY LOVEMAN, CAESARS
GARY LOVEMAN, CAESARS ceo FocUs
He came, he saw, he conquered As head of the world’s largest gaming company, Caesars CEO Gary Loveman is one of the most powerful figures in the industry. Gareth Bracken enjoyed an in-depth discussion with a true gambling giant With a worldwide empire of 54 casinos, yearly revenues of $8.9bn and ownership of some of the most recognisable brands in gaming, Caesars Entertainment Corporation are the biggest in the business. Top of this enormous tree is their respected CEO and president Gary Loveman. Associated with the company since 1998, the former Harvard associate professor has been at the helm since January 2003, during which time he’s overseen a number of major acquisitions, steered the company through the global financial crisis, and been named as the industry’s best CEO by Institutional Investor magazine on four separate
domains closed down, their funds frozen and members of their hierarchies indicted – helped or hindered the case for US poker regulation. Again Loveman is ardent. “I think it helped enormously,” he says. “The fact that in the absence of a legalisation with a proper regulatory structure, the business is essentially unenforceable has taught legislators that they need to fix this. You need to allow this to be properly regulated and then you have a solution that’s a winner on all counts, including job creation.” Legalisation of online poker would clearly be welcomed by Caesars, with Loveman confirming that they would look to launch their brands
“I’ve never been more confident that online poker regulation is coming. There’s now a sense of inevitability to this” occasions. There can be few better candidates with whom to discuss the current state and future prospects of the global gambling industry. I’m speaking with Loveman in the same week that the Alderney Gambling Control Commission (AGCC) have revoked three of Full Tilt’s operating licences, and that the US authorities have released a statement describing Full Tilt Poker as a “global Ponzi scheme”, so it seems the perfect time to get his take on the prospects of online poker regulation in America. “I’ve never been more confident that it’s coming,” he says emphatically. “There’s now a sense of inevitability to this. You talk to legislators about it, it’s no longer a debate about should this happen, it’s much more about when and exactly how will this happen.” I wonder then whether Loveman feels the events of Black Friday – when three major online poker operators including Full Tilt saw their dotcom 52 gamblinginsider.com
online in America as soon as it became legal to do so. The company’s World Series of Poker brand, which already offers real-money online poker for UK residents, would be central to any online push. Loveman believes a combination of the WSOP product and Caesar’s Total Rewards loyalty scheme would produce a “superior proposition and a very powerful offering” to the online poker market, especially as the project can be supported by such a large network of land-based casinos. The Total Rewards scheme to which Loveman refers is a loyalty system that he developed himself, and now boasts over 40 million members. The more money a customer spends on casino gaming the more reward credits they receive; credits which can be exchanged for perks such as show tickets, meals and rounds of golf. Although he admits to not seeing gaming consumers as necessarily the most gamblinginsider.com 53
ceo FocUs GARY LOVEMAN, CAESARS
naturally loyal customer group, Loveman says the opportunity for loyalty is enormous as there’s so much we can do to make their experience a favourable one”. To illustrate this point he offers the example of a consumer buying table salt, a process that doesn’t involve much risk, and therefore includes little need for loyalty. Customers will not be overly concerned with which brand they opt for. “But with things like aeroplane travel, leisure activities, cosmetics and indeed gaming – things that are very personal where you feel like you have a lot of risk – you want to trust the provider,” he says. One way in which Caesars look to further develop this trust is through the use of customer analytics. Using the Total Rewards scheme, the company ensure they know as much about their customers’ likes, dislikes and preferences as possible. This allows them to tailor an individual’s experience to the greatest degree possible by offering them the most relevant rewards. As Loveman puts it: “I need to learn from what they’ve been willing to share with me on previous visits, and build
GARY LOVEMAN, CAESARS ceo FocUs
a proposition that’s highly customised”. This approach, he feels, is vital for creating something “unique and valuable” that distinguishes Caesars from their competition, a factor he feels is particularly important given the high levels of similarity he has observed in the gaming experiences offered by other casinos. While discussing these analytics, Loveman makes reference to a customer who might spend $1,000 a day in one of his establishments, an example that highlights another aspect of Caesars’ strategy, the targeting of mid-level consumers as opposed to focusing purely on the high rollers. He reveals the approach has its origins in a time when the company was known as Harrah’s, before its takeover of Caesars Entertainment and adoption of the Caesars name. “Harrah’s was a brand that was principally in the non-destination market, places like St Louis, Louisiana and Reno, where the middle market customer is by far the predominant customer,” he explains. He does however note that the company have since widened their scope into the more destination-oriented markets such as Las Vegas,
“I need to learn from what customers have been willing to share with me on previous visits, and build a proposition that’s highly customised”
London, New Orleans and Tahoe. “As our brands have extended into the higher end categories then we pursue whatever calibre of guest is appropriate to that brand,” he concludes. This response leaves me intrigued as to how it is decided which brands should be attached to which establishments. What makes a casino best suited to being a Caesars or a Harrah’s or a Horseshoe, to name three prominent Caesars brands. “A lot of it depends on what the state institutional circumstances would be,” Loveman explains, citing the example of a new casino his company have just bid on in downtown Baltimore. “The Maryland tax structure is the highest in the country, so in that sort of circumstance there’s not enough economics to offer the kinds of things you would find in a Caesars, so it would either be a Harrah’s or potentially a Horseshoe.” Asked what he would consider to be the main brand values of Caesars as a whole, Loveman makes the fair point that the group is made up of many differing subsidiaries, each boasting their own style and image. As well as Harrah’s and Horseshoe, names like Bally’s, Flamingo, Rio and London Clubs International all fall under the Caesars umbrella. Overall though, he feels Caesars represent “opulence, indulgence, the highest level of luxury and amenity, and a deep tradition of entertainment”. This, he says, is the image of the brand “as it comes to the guest and as we would like to bring it online”. The online arena is clearly an area of great focus for Caesars at the moment and Loveman confirms that he sees internet gaming as the company’s “principal growth vehicle” in the long-term. The low set-up cost of such ventures is one of the biggest perks, as a gaming website
The Rio is just one of several Vegas casinos in Caesars' group
Elton John is a resident entertainer at Caesars' Las Vegas resort casino
54 gamblinginsider.com
gamblinginsider.com 55
ceo FocUs GARY LOVEMAN, CAESARS
can be created for a fraction of the expense involved in building a large land-based facility. That isn’t to say that Caesars won’t continue to drive traffic back and forth between their online and offline products though. “One of the reasons we think we have a distinctive proposition in the online world is that we can take an online player and reward them through our offline facilities,” Loveman explains. “So if you’re a poker player at the Caesars site, we can reward you at Caesars Palace Las Vegas or wherever it may be.” It’s clear as we discuss upcoming developments that Caesars still believe very strongly in their land-based offerings. Loveman confirms there are two casino constructions currently underway in Ohio, with the Baltimore establishment looking probable as well. He considers it likely that his home state of Massachusetts will legalise casino gaming in the coming weeks, revealing that he “likes our chances” of being able to develop a facility in Boston. There’s plenty going on in the online sphere as well, with the growth and development of Playtika a particular focus. Caesars reportedly bought 51% of the Israeli social games developers for a fee thought to be around $40-45m earlier this year, and Loveman sees a big future for that particular market. “Online gaming for money is legal in a tiny percentage of the world’s population today, whereas social gaming of the sort Playtika provides is legal everywhere, and is open to all ages” he says. “In that regard it offers perhaps a much bigger potential.” Showing similar promise is the mobile sector. Caesars’ World Series of Poker brand has a smartphone offering known as Hold’em Legend and Loveman is confident about the rise of mobile gaming, stating that he can “absolutely” envisage a time when it is just as popular as traditional online gaming. “I think we all believe that all of these technologies are moving to better and better mobile platforms, so I think that’s definitely coming,” he says. These ongoing developments clearly motivate Loveman, with his hunger and passion for all things gaming clear to see. Describing the industry as a “terrifically engaging business that’s fun to be involved in”, he speaks enthusiastically of the challenges available to both himself and the company in general, making particular reference to “getting the online opportunity brought to fruition”, as well as the openings on offer in Asia. Asia actually represents something of a double-edged sword for Loveman, providing him with some of his most exciting future prospects but also a couple of instances that, in his own words, “we’d like to have done differently”. He lists the Philippines, Taiwan, Japan
A PERSONAL TOUCH Gary Loveman also took time to tell Gambling Insider about his interests outside of work... Do you play much poker yourself? I like to play poker. I’m not nearly good enough to cause anybody who’s a good player any concern, but I do enjoy playing. I enjoy other forms of gaming, sports betting and other casino games when I have a chance to do it. What sports are you particularly interested in? I’m an owner of the Boston Celtics basketball team so I follow that. I’m also one of the new owners of AS Roma [pictured] in Serie A. There’s a group of Bostonians who bought that team about two months ago. What’s the extent of your involvement with Roma? I’m not involved at all. A colleague of mine from Boston is the managing partner of this and he’s in Rome and looking after things. I’m just an investor and a fan.
56 gamblinginsider.com
GARY LOVEMAN, CAESARS ceo FocUs Loveman recently joined the business advisory council of Republican Govenor Jon Huntsman.
But he also remains a supporter of Democrat Senator Harry Reid’s pro-gambling agenda
Loveman sees a lot of potential in mobile gaming
and Korea as “potentially very exciting markets” that Caesars are “very attentive to”, while Singapore and Macau are, for the time being at least, the ones that got away. Loveman is refreshingly honest when discussing the aspects of his tenure that haven’t worked out as he would have wished, openly admitting that he had hoped to be operating casinos in both Singapore and Macau by now. With regard to Singapore, where licensees are protected until 2016, he now sees a region of “limited opportunity”, while Macau is described as an area that’s “difficult for new companies to enter”. Overall though, Loveman hopes the job he has done to date can be viewed as a good one. He cites the growth of the company under his leadership into the largest in the industry, the increase in employee numbers from 14,000 to a peak of 90,000, and the enhancement of the company’s reputation within the communities where it operates. He also describes as a “very good result for our shareholders and the people who manage the company” the increase in Caesars stock price from about $14 a share when he took over to about $19 by the time the company went private. This leads us on to the subject of Caesars cancelled IPO late last year. The company were initially taken private in a $30.7bn transaction led by private equity firms TPG Capital and Apollo in January 2008, but attempted to engineer a return to a public listing in late 2010. A plan to offer 31.25 million common shares for between $15 and $17 a share failed in November, but Loveman has no doubts that the business will eventually regain its public status. “I don’t know how we’ll end up doing this in the future, but the company
“Social gaming is legal everywhere and is open to all ages. In that regard it offers perhaps a much bigger potential than online gaming for money” will one day be public again,” he asserts. “That will be either through some sort of IPO, or some other method of getting our shares into public trade.” On the subject of finance, I ask Loveman about his involvements with Governor Jon Huntsman and Senator Harry Reid. Huntsman is a Republican presidential nomination candidate to whose business advisory council Loveman was recently appointed, while Reid is the Democrat pro-gambling Nevada Senator who Loveman has in the past helped fund. How difficult has it been, I wonder, to juggle these involvements, bearing in mind the two men represent different political parties? Loveman is unwavering in his assessment. “So far, not very,” he says. “I’m an advocate of Governor Huntsman’s agenda for economic growth in the country, but of course Harry Reid has been a tremendous supporter of our efforts to generate job creation through online gaming. So I think those two things are quite consistent and I haven’t had any problem reconciling the two.” Throughout our conversation Loveman demonstrates himself to be a fluid and informed orator, dealing with a variety of questions in the same receptive yet assertive manner. He comes across as a man very much with his finger on the pulse of the gaming industry, speaking openly and passionately about Caesars’ plans for the future. After nearly nine years at the top he clearly still has the hunger to attack the company’s challenges head on as he looks to take the organisation from strength to strength.
Loveman has expertly guided Caesars through the choppy waters of the global recession
gamblinginsider.com 57
GARY LOVEMAN, CAESARS ceo FocUs
He came, he saw, he conquered As head of the world’s largest gaming company, Caesars CEO Gary Loveman is one of the most powerful figures in the industry. Gareth Bracken enjoyed an in-depth discussion with a true gambling giant With a worldwide empire of 54 casinos, yearly revenues of $8.9bn and ownership of some of the most recognisable brands in gaming, Caesars Entertainment Corporation are the biggest in the business. Top of this enormous tree is their respected CEO and president Gary Loveman. Associated with the company since 1998, the former Harvard associate professor has been at the helm since January 2003, during which time he’s overseen a number of major acquisitions, steered the company through the global financial crisis, and been named as the industry’s best CEO by Institutional Investor magazine on four separate
domains closed down, their funds frozen and members of their hierarchies indicted – helped or hindered the case for US poker regulation. Again Loveman is ardent. “I think it helped enormously,” he says. “The fact that in the absence of a legalisation with a proper regulatory structure, the business is essentially unenforceable has taught legislators that they need to fix this. You need to allow this to be properly regulated and then you have a solution that’s a winner on all counts, including job creation.” Legalisation of online poker would clearly be welcomed by Caesars, with Loveman confirming that they would look to launch their brands
“I’ve never been more confident that online poker regulation is coming. There’s now a sense of inevitability to this” occasions. There can be few better candidates with whom to discuss the current state and future prospects of the global gambling industry. I’m speaking with Loveman in the same week that the Alderney Gambling Control Commission (AGCC) have revoked three of Full Tilt’s operating licences, and that the US authorities have released a statement describing Full Tilt Poker as a “global Ponzi scheme”, so it seems the perfect time to get his take on the prospects of online poker regulation in America. “I’ve never been more confident that it’s coming,” he says emphatically. “There’s now a sense of inevitability to this. You talk to legislators about it, it’s no longer a debate about should this happen, it’s much more about when and exactly how will this happen.” I wonder then whether Loveman feels the events of Black Friday – when three major online poker operators including Full Tilt saw their dotcom 52 gamblinginsider.com
online in America as soon as it became legal to do so. The company’s World Series of Poker brand, which already offers real-money online poker for UK residents, would be central to any online push. Loveman believes a combination of the WSOP product and Caesar’s Total Rewards loyalty scheme would produce a “superior proposition and a very powerful offering” to the online poker market, especially as the project can be supported by such a large network of land-based casinos. The Total Rewards scheme to which Loveman refers is a loyalty system that he developed himself, and now boasts over 40 million members. The more money a customer spends on casino gaming the more reward credits they receive; credits which can be exchanged for perks such as show tickets, meals and rounds of golf. Although he admits to not seeing gaming consumers as necessarily the most gamblinginsider.com 53
ceo FocUs GARY LOVEMAN, CAESARS
naturally loyal customer group, Loveman says the opportunity for loyalty is enormous as there’s so much we can do to make their experience a favourable one”. To illustrate this point he offers the example of a consumer buying table salt, a process that doesn’t involve much risk, and therefore includes little need for loyalty. Customers will not be overly concerned with which brand they opt for. “But with things like aeroplane travel, leisure activities, cosmetics and indeed gaming – things that are very personal where you feel like you have a lot of risk – you want to trust the provider,” he says. One way in which Caesars look to further develop this trust is through the use of customer analytics. Using the Total Rewards scheme, the company ensure they know as much about their customers’ likes, dislikes and preferences as possible. This allows them to tailor an individual’s experience to the greatest degree possible by offering them the most relevant rewards. As Loveman puts it: “I need to learn from what they’ve been willing to share with me on previous visits, and build
GARY LOVEMAN, CAESARS ceo FocUs
a proposition that’s highly customised”. This approach, he feels, is vital for creating something “unique and valuable” that distinguishes Caesars from their competition, a factor he feels is particularly important given the high levels of similarity he has observed in the gaming experiences offered by other casinos. While discussing these analytics, Loveman makes reference to a customer who might spend $1,000 a day in one of his establishments, an example that highlights another aspect of Caesars’ strategy, the targeting of mid-level consumers as opposed to focusing purely on the high rollers. He reveals the approach has its origins in a time when the company was known as Harrah’s, before its takeover of Caesars Entertainment and adoption of the Caesars name. “Harrah’s was a brand that was principally in the non-destination market, places like St Louis, Louisiana and Reno, where the middle market customer is by far the predominant customer,” he explains. He does however note that the company have since widened their scope into the more destination-oriented markets such as Las Vegas,
“I need to learn from what customers have been willing to share with me on previous visits, and build a proposition that’s highly customised”
London, New Orleans and Tahoe. “As our brands have extended into the higher end categories then we pursue whatever calibre of guest is appropriate to that brand,” he concludes. This response leaves me intrigued as to how it is decided which brands should be attached to which establishments. What makes a casino best suited to being a Caesars or a Harrah’s or a Horseshoe, to name three prominent Caesars brands. “A lot of it depends on what the state institutional circumstances would be,” Loveman explains, citing the example of a new casino his company have just bid on in downtown Baltimore. “The Maryland tax structure is the highest in the country, so in that sort of circumstance there’s not enough economics to offer the kinds of things you would find in a Caesars, so it would either be a Harrah’s or potentially a Horseshoe.” Asked what he would consider to be the main brand values of Caesars as a whole, Loveman makes the fair point that the group is made up of many differing subsidiaries, each boasting their own style and image. As well as Harrah’s and Horseshoe, names like Bally’s, Flamingo, Rio and London Clubs International all fall under the Caesars umbrella. Overall though, he feels Caesars represent “opulence, indulgence, the highest level of luxury and amenity, and a deep tradition of entertainment”. This, he says, is the image of the brand “as it comes to the guest and as we would like to bring it online”. The online arena is clearly an area of great focus for Caesars at the moment and Loveman confirms that he sees internet gaming as the company’s “principal growth vehicle” in the long-term. The low set-up cost of such ventures is one of the biggest perks, as a gaming website
The Rio is just one of several Vegas casinos in Caesars' group
Elton John is a resident entertainer at Caesars' Las Vegas resort casino
54 gamblinginsider.com
gamblinginsider.com 55
ceo FocUs GARY LOVEMAN, CAESARS
can be created for a fraction of the expense involved in building a large land-based facility. That isn’t to say that Caesars won’t continue to drive traffic back and forth between their online and offline products though. “One of the reasons we think we have a distinctive proposition in the online world is that we can take an online player and reward them through our offline facilities,” Loveman explains. “So if you’re a poker player at the Caesars site, we can reward you at Caesars Palace Las Vegas or wherever it may be.” It’s clear as we discuss upcoming developments that Caesars still believe very strongly in their land-based offerings. Loveman confirms there are two casino constructions currently underway in Ohio, with the Baltimore establishment looking probable as well. He considers it likely that his home state of Massachusetts will legalise casino gaming in the coming weeks, revealing that he “likes our chances” of being able to develop a facility in Boston. There’s plenty going on in the online sphere as well, with the growth and development of Playtika a particular focus. Caesars reportedly bought 51% of the Israeli social games developers for a fee thought to be around $40-45m earlier this year, and Loveman sees a big future for that particular market. “Online gaming for money is legal in a tiny percentage of the world’s population today, whereas social gaming of the sort Playtika provides is legal everywhere, and is open to all ages” he says. “In that regard it offers perhaps a much bigger potential.” Showing similar promise is the mobile sector. Caesars’ World Series of Poker brand has a smartphone offering known as Hold’em Legend and Loveman is confident about the rise of mobile gaming, stating that he can “absolutely” envisage a time when it is just as popular as traditional online gaming. “I think we all believe that all of these technologies are moving to better and better mobile platforms, so I think that’s definitely coming,” he says. These ongoing developments clearly motivate Loveman, with his hunger and passion for all things gaming clear to see. Describing the industry as a “terrifically engaging business that’s fun to be involved in”, he speaks enthusiastically of the challenges available to both himself and the company in general, making particular reference to “getting the online opportunity brought to fruition”, as well as the openings on offer in Asia. Asia actually represents something of a double-edged sword for Loveman, providing him with some of his most exciting future prospects but also a couple of instances that, in his own words, “we’d like to have done differently”. He lists the Philippines, Taiwan, Japan
A PERSONAL TOUCH Gary Loveman also took time to tell Gambling Insider about his interests outside of work... Do you play much poker yourself? I like to play poker. I’m not nearly good enough to cause anybody who’s a good player any concern, but I do enjoy playing. I enjoy other forms of gaming, sports betting and other casino games when I have a chance to do it. What sports are you particularly interested in? I’m an owner of the Boston Celtics basketball team so I follow that. I’m also one of the new owners of AS Roma [pictured] in Serie A. There’s a group of Bostonians who bought that team about two months ago. What’s the extent of your involvement with Roma? I’m not involved at all. A colleague of mine from Boston is the managing partner of this and he’s in Rome and looking after things. I’m just an investor and a fan.
56 gamblinginsider.com
GARY LOVEMAN, CAESARS ceo FocUs Loveman recently joined the business advisory council of Republican Govenor Jon Huntsman.
But he also remains a supporter of Democrat Senator Harry Reid’s pro-gambling agenda
Loveman sees a lot of potential in mobile gaming
and Korea as “potentially very exciting markets” that Caesars are “very attentive to”, while Singapore and Macau are, for the time being at least, the ones that got away. Loveman is refreshingly honest when discussing the aspects of his tenure that haven’t worked out as he would have wished, openly admitting that he had hoped to be operating casinos in both Singapore and Macau by now. With regard to Singapore, where licensees are protected until 2016, he now sees a region of “limited opportunity”, while Macau is described as an area that’s “difficult for new companies to enter”. Overall though, Loveman hopes the job he has done to date can be viewed as a good one. He cites the growth of the company under his leadership into the largest in the industry, the increase in employee numbers from 14,000 to a peak of 90,000, and the enhancement of the company’s reputation within the communities where it operates. He also describes as a “very good result for our shareholders and the people who manage the company” the increase in Caesars stock price from about $14 a share when he took over to about $19 by the time the company went private. This leads us on to the subject of Caesars cancelled IPO late last year. The company were initially taken private in a $30.7bn transaction led by private equity firms TPG Capital and Apollo in January 2008, but attempted to engineer a return to a public listing in late 2010. A plan to offer 31.25 million common shares for between $15 and $17 a share failed in November, but Loveman has no doubts that the business will eventually regain its public status. “I don’t know how we’ll end up doing this in the future, but the company
“Social gaming is legal everywhere and is open to all ages. In that regard it offers perhaps a much bigger potential than online gaming for money” will one day be public again,” he asserts. “That will be either through some sort of IPO, or some other method of getting our shares into public trade.” On the subject of finance, I ask Loveman about his involvements with Governor Jon Huntsman and Senator Harry Reid. Huntsman is a Republican presidential nomination candidate to whose business advisory council Loveman was recently appointed, while Reid is the Democrat pro-gambling Nevada Senator who Loveman has in the past helped fund. How difficult has it been, I wonder, to juggle these involvements, bearing in mind the two men represent different political parties? Loveman is unwavering in his assessment. “So far, not very,” he says. “I’m an advocate of Governor Huntsman’s agenda for economic growth in the country, but of course Harry Reid has been a tremendous supporter of our efforts to generate job creation through online gaming. So I think those two things are quite consistent and I haven’t had any problem reconciling the two.” Throughout our conversation Loveman demonstrates himself to be a fluid and informed orator, dealing with a variety of questions in the same receptive yet assertive manner. He comes across as a man very much with his finger on the pulse of the gaming industry, speaking openly and passionately about Caesars’ plans for the future. After nearly nine years at the top he clearly still has the hunger to attack the company’s challenges head on as he looks to take the organisation from strength to strength.
Loveman has expertly guided Caesars through the choppy waters of the global recession
gamblinginsider.com 57
