Coincidentally, we just finished reading a book that’s just been released: Winner Takes All -- Steve Wynn, Kirk Kerkorian, Gary Loveman, and the Race to Own Las Vegas, by Christina Binkley, the former Wall Street Journal reporter (now columnist) who covered Las Vegas and gambling for a decade.
The book goes into a fair amount of detail about Gary Loveman and his highly improbable rise to become one of the "kings" of Las Vegas. What follows is a brief synopsis of the extensive coverage in Winner Takes All of Loveman and Harrah’s and their relationship to the industry, as seen by a business reporter who had nearly unfettered access to the seats of power in the Las Vegas casino industry for a decade.
(We highly recommend the book to anyone interested in the histories and personalities of the biggest Las Vegas builders and dealmakers, and the behind-the-scenes wheeling and dealing surrounding MGM’s takeover of Mirage and Mandalay, Harrah’s buyout of Caesars, the opening of Bellagio and the Wynn, the development of CityCenter and Harrah’s Epicentre, and much much more.)
Loveman grew up in Indiana, got his undergraduate degree at Wesleyan in Connecticut, and attended MIT, where he received a Ph.D. in economics. He was 29 in 1989 when he was hired by Harvard as an economics teacher.
He first came to the attention of Phil Satre, Harrah’s chairman and CEO, who’d started a management-development program with two Harvard econ professors whose specialty was customer service; they invited Loveman, "the hottest labor economist on the market," to attend the program in 1992.
Loveman, who Binkley describes as "not knowing a thing about gambling, though he’d once visited Monte Carlo in Europe," subsequently wrote a letter to Satre, which resonated with the CEO, whose focus at the time was on Harrah’s fledgling Total Rewards marketing program. Satre immediately hired Loveman as a consultant.
Loveman consulted for Satre for several years. When Satre was preparing to retire, in an effort to replace himself, he hired Loveman as the chief operating officer. This was an extremely unconventional and somewhat controversial move at the time, given that Loveman was a Harvard economics professor and had virtually no experience running any company, let alone a major casino corporation. Nor did he have any background in gambling.
On Loveman’s part, it was also a radical move, given that he was a year away from tenure at Harvard and his wife and children had no intention of moving to Las Vegas from Massachusetts. (Last we heard, Loveman was still commuting between the two every week.)
"Because he didn’t accept many of gambling’s well-worn maxims, Harrah’s general managers shuddered when Loveman arrived," writes Binkley. Also, "[He] disdained the casino industry’s predisposition to hiring its own" by recruiting a former University of Chicago math whiz and an American Express executive. Loveman and his team of "propeller heads" weren’t interested in fancy casinos and the Strip’s social perks; for their business models, they studied Rite Aid, Victoria’s Secret, and Capital One Corp.
Quickly, Harrah’s began to rearrange itself (with the departure of many grizzled veterans) behind Loveman’s mathematical models and data management and marketing experiments, focused primarily on the Pavlovian responses of Harrah’s tens of millions of Total Rewards members.
Loveman’s main competition within Harrah’s for the CEO and chairman’s job once Satre retired was Colin Reed, Harrah’s then-CFO. He’d worked for the company for 24 years and was Satre’s heir apparent -- before Loveman showed up, that is. Reed "read his crystal ball" and resigned in 2001; Satre retired as CEO in 2003 and chairman in 2005, and Loveman inherited both jobs.
Loveman and his team continued on its quest for marketing eminence and technological dominance, as well as the consolidation of smaller locals casinos around the country. Binkley does a ste
