It started when Gary Loveman took over Caesars Entertainment back in 1998 as COO. Since Loveman was the perfect example of hiring someone who had no experience in gaming, it’s not surprising that he immediately started hiring people who were MBAs or Ph.Ds but didn’t really know a thing about gaming. And when he became CEO in 2003, that kind of hiring accelerated.
Loveman, a former Harvard business professor, believed that anyone with a solid, successful business background could achieve success in the casino industry. Therefore, his properties became full of people with impressive letters after their names that supposedly would thrive in gaming but knew little about it.
And in many ways, that strategy made sense. After all, up until that time, you had to have extensive experience in gaming to become a senior executive. You didn’t need to have actual experience in the casino, but finance, hotel, operations, marketing, even in a couple of instances food and beverage would get you to the top, as long as the majority of your experience was in gaming. The theory was you had to understand how gaming works because it’s different than any other business.
But Loveman thought that attitude limited business development in casinos because it was essentially a “this is the way we always did it” mentality. Very few property presidents had those letters after their names, so they didn’t know what worked in other places that might work in gaming. Loveman’s idea was to bring in fresh eyes, a new way of looking things, applying business tactics to gaming that work in other businesses.
And to be fair, the way business—at least at Caesars properties on the Las Vegas Strip—was developing, there was less and less knowledge of the casino necessary to succeed. With gaming revenues as a percentage of overall revenue shrinking each year, leaders of the big properties had to understand how to integrate many areas—many separate businesses, if you will—into one overall operation, and simply being a good casino operator wasn’t enough anymore.
At the same time, however, these decisions made by these outside-the-industry executives sometimes didn’t work because without gaming experience, the decisions sometimes negatively impacted players, the lifeblood of every business.
But overall, it’s an idea that’s been accepted. After all, Loveman’s successor, Mark Frissora, came from the rental car field. The American Gaming Association brought in Geoff Freeman in 2013, an association executive with no gaming experience, and the organization appears to be leaning in that way again for Freeman’s successor.
And you would think that gaming experience would be crucial on the manufacturing side, but that’s gone by the wayside for many years as video-game developers, social media experts and straight businessman have reached the pinnacle on the supplier side.
And you certainly can’t discount the value of education. Whatever letters you have after your name, the days of sitting box at a craps table, moving up to pit boss, casino manager and then rising to become CEO of a casino have long passed. Today you need to be grounded in education—particularly business, finance or hospitality—if you hope to reach senior management.
Running a casino today is much more difficult than it was in the past when you only had to get your slot and table numbers and how that high roller did the night before. Today, that high roller probably has a lot of letters after his name, so he knows how to play the game. And believe me, you’d better know your math before you negotiate with him.
Today, a good CEO simply has highly educated people under him running each department. He or she can count on their expertise to deliver the best customer experience while still counting the beans. A leader no longer has to understand how theoreticals work at the table games. He doesn’t need to know what items work best on the menu of one of his gourmet restaurants. He doesn’t really need to know how the books balance because he’s got good people who he trusts to deliver quality work and advise him on the best decisions.
So welcome new blood into your organization. They may not be familiar with what goes on in and around the casino, but they damn sure know how to fill a hotel, staff a department or make your customer comfortable. And that’s what we need, educated experts dedicated to success.