Caesars CEO Makes Case For Suffolk Downs Casino
BOSTON — Lately, much of the attention on the nascent gambling industry in Massachusetts has focused on Foxborough, where multi-billionaire casino magnate Steve Wynn has been trying to drum up support for a proposed development.
Now his main competition has done the same in Boston. Caesars Entertainment is teaming up with Suffolk Downs to prepare a rival bid. The Las Vegas company is run by someone with Bay State roots.
Many of the business leaders at The Boston College Chief Executives’ Club of Boston luncheon Tuesday already knew the CEO of Caesars Entertainment. After all, Gary Loveman is an MIT-trained economist, who worked at the Boston Fed and was teaching at Harvard Business School when he left in 1998 to work in Las Vegas.
“And when I left the classroom, I went to Harrah’s the next day — I had 14,000 employees. And in Las Vegas, let me assure you, the word professor is a pejorative term,” he said.
Loveman turned his academic chops into industry cachet. He brought analytics to Harrah’s customer loyalty program, which is now considered the industry’s gold standard. Loveman became CEO. Harrah’s has since merged with Caesars.
Now the company he heads wants to open a casino in the state where he still lives. Loveman told the audience, which included Boston Mayor Thomas Menino and the state’s top regulator, State Attorney General Martha Coakley, that residents will feel less apprehension about casinos once they see them up and running.
“If we were to meet here in a few years, we would find a lot of hysteria would have subsided,” he said. “We would find, hopefully one of the best right here in the City of Boston.”
Loveman is saying very little about the proposed development. Caesars went public last week, and he said he’s not allowed to talk about specifics yet.
Some analysts have looked down on the IPO, saying Caesars has way too much debt — upwards of $20 billion. And one reason the company isn’t sitting prettier is because of a big missed opportunity: Asia.
“They’re already behind the eight-ball compared to their other Las Vegas counterparts,” said Bill Beatty, the editor-in-chief of CalvinAyre.com, which claims to be the world’s biggest gambling news website. It’s based in the Philippines for a reason: Asia is booming. The Chinese gambling bastion of Macau alone has revenues that are six times what Las Vegas does. And Beatty said Caesars does not have a casino there.
“If a gambling company does not have a gambling license to do business in Macau, they’re doing their shareholders a major disservice,” Beatty said.
Now, Caesars is planning 25 gambling operations elsewhere in Asia over the next five years. The company is also investing in Internet technology, with the hope the U.S. legalizes and regulates online poker. So with those big growth plans into new markets and all that debt, why does Caesars want a casino in Boston themed after an old-school horse racetrack?
“Caesars is a company that has followed what you might refer to as a McDonald’s strategy,” said Bill Eadington, the head of the gambling research center at the University of Nevada-Reno. He said Caesars is very opportunistic and has partnered with many smaller gambling operations across the country, partly because it has the best loyalty program. The more places for its members to go, the better. And if a new part of the U.S. decides to legalize expanded gambling, Eadington said Caesars wants to be there.
“Their expertise in terms of operations and in terms of developing a strong market is almost (unparalleled) in the gaming industry. And I’m sure they will bring that to the table if they’re the successful bidders in Massachusetts,” Eadington said.
Suffolk Downs’ Chip Tuttle said Caesars Entertainment has a 5 percent ownership stake in the proposed casino, so the company is not putting down the cash as much as bringing the expertise. And some local savvy: Loveman still commutes to Las Vegas from Wellesley.
“Now Mr. Mayor, we’re pretty fond of Boston. If there’s going to be a casino in the eastern part of the Commonwealth of Massachusetts, we think Boston’s a pretty good place!” Loveman said.
Loveman may be hoping his familiar face appeals to business and government leaders trying to guide the commonwealth into a new and unfamiliar industry.
This post was updated with the Morning Edition feature version.