The state of gambling from the head of Caesars
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The state of gambling from the head of Caesars
Jeremy Hobson: Take a look at the local newspapers this morning in Omaha, Kansas City, or Lansing, Mich., and you’ll find the same story: A casino is — or might be — coming to town. States across the country have turned to gambling as a way to boost tax revenues and employment in this difficult economy.
We’re going talk about the world of gambling now with one of the industry’s big players: Gary Loveman. He’s the president and CEO of Caesars Entertainment, and he joins us now from Las Vegas. Good morning.
Gary Loveman: Good morning, Jeremy.
Hobson: Caesars operates on four continents, which means you’ve got a great view of the global economy right now. Who is doing best and who’s doing worst?
Loveman: Well, the casinos in the U.K. have had a hard time for quite some time, partly for regulatory reasons, but also because of a weak economy in the U.K. And then casinos in Atlantic City have had 39 out of 40 months of revenue declines associated largely with new competition in that area, but also with a weak economy. We have a casino in Latin America that services Brazilian clientele; I would suggest it’s probably doing the best out of all our facilities.
Hobson: And what does that tell you? I mean, does a weak economy make people gamble less or gamble more? Do you better in times that are tough or times that are great?
Loveman: Well, we do better when times are great. A lot of our business comes from customers at the high-end, and these are customers whose activity increases when their circumstances are better.
Hobson: So where’s the next big place? Where do you want to be?
Loveman: Well domestically, we’re going to open a big new casino in Cleveland here in just a few months, probably in May. We have one in Cincinnati that’s coming in 2013. We’ve bid on a casino license in Baltimore. Then, internationally, there are markets we think will open in places like Japan, Taiwan, Vietnam and Korea, and we intend to be active in all those markets.
Hobson: I have to say though, when you say Cincinnati, Cleveland and Baltimore, those don’t sound like places that are filled with high-end gamblers to me.
Loveman: Well they’re filled with lots of gamblers that heretofore haven’t had anywhere to go.
Hobson: How do you see people gambling 10 years from now? Are we going to be doing it on our phones or what?
Loveman: Certainly. People will be doing it on multiple platforms. You see people today involved in social gaming, and then I think over time you’ll see for-money gaming — especially poker — taking place on mobile platforms, tablets and computers.
Hobson: Are you worried that something like Apple, for instance, could start, you know, the iCasino and really change the business and you’ll get competitors that you never even thought about?
Loveman: You have to be vigilant about that. The challenge for people entering this industry is that it’s a very heavily regulated, very highly licensed industry. It’s quite an involved process. I don’t suspect that many of these companies will choose to put themselves through that. Instead, they’ll have companies that specialize in being gaming operators, like us, provide those services on their platform, whether that platform is Facebook or an Apple platform.
Hobson: What do you say to the people who think that there’s just a real problem with gambling — it does lead to social problems and that we shouldn’t be expanding it in this way?
Loveman: I think that’s absent any evidence to support the argument. This is a business where the vast, vast majority of customers enjoy this form of entertainment safely and a very small — and by that I mean 1 to 2 percent of the people who consume this service do so at some harm to themselves and their families. Now, that’s not in any way to belittle the consequences of this problem for the individuals that are affected. But it is to suggest that it ought to be treated against that factual backdrop.
Hobson: What’s your game when you go to the casino?
Loveman: I like sports betting and 21.
Hobson: Gary Loveman is chairman, CEO and president of Caesars Entertainment. He’s speaking with us from Las Vegas. Gary Loveman, thanks so much.
Loveman: Glad to be here, Jeremy.
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