was in his fifties. Broad-shouldered and oversized enough to require an extra-wide jacket, Loveman was a commanding presence. With a deep sonorous voice, he apologized for dining solo. But, he explained, he did not have time for a proper lunch on that busy day.
He gave the impression of not suffering fools gladly, so after some small talk, I got to the point: I asked if I could follow Caesars from time to time over the course of a year to study how they collected data on their clients. Initially, he expressed some caution.
He had good reason. He had navigated several difficult years. Many casinos had suffered a losing streak following the 2008 financial crisis, but Caesars had taken an especially heavy blow. Revenue had fallen from a peak of nearly $11 billion in 2007 to $9.1 billion the next year and, as things turned out later, would end up stuck in the range of $8.5 billion in 2012 and 2013.
The drop alone was bigger than the annual GDP of entire small nations. For all the companyâs cleverness in mining customer data, it remained many billions of dollars in debt. Some people wondered if mighty Caesars would ultimately have to declare bankruptcy. A more conventional CEO might have shooed away a writer at such a time. But Loveman decided to gamble. He agreed to allow me to see what happened in his corner of Vegas.
2
A Harvard Professor Comes to Vegas
A Business Professor Rolls the Dice
No one would have ever wagered that someone like Gary Loveman would end up fitting into the casino boss shoes once filled by the likes of Benjamin âBugsyâ Siegel and Frank âLeftyâ Rosenthal. Loveman did not grow up in the shadows of the casino world or dream of palling around with the Rat Pack. In fact, through his thirties, he had only once even set foot in a casino, in Monte Carlo, the setting for the first James Bond novel, Casino Royale . His encounter with the European version of gaming did not convert Loveman into a regular gambler. He lived in the Boston area; the world of gambling was remote. In any case, wagering invokes the uncertainty of chance. Loveman preferred the exactitude of math and data.
Loveman had grown up in Indianapolis, where his father worked as a supervisor at a telephone manufacturing plant. In college, when classmates were busy chugging beers and chasing girls, Loveman would frequently stay in, pulling out pencil and paper to calculate stock returns and price-earnings ratios manually, just to see how quickly he could do it. After graduating from Wesleyan University in 1982, he spent two years at the Federal Reserve Bank of Boston. He kept on calculating through graduate school, eventually earning a doctorate in economics in 1989 from the Massachusetts Institute of Technology. His thesis examined differing rates of unemployment in the United States, Britain, France, and Germany. That same year in Las Vegas Steve Wynn opened the Mirage, the first new hotel there in sixteenyears. The exploding volcano outside the hotel and tropical scenery signaled the start of a new construction boom that changed the face of the city. Yet the bright neon and glitter of Vegas remained a world away from Loveman, who, with his PhD in hand, landed a job teaching at Harvard Business School.
Even within Harvardâs rarefied atmosphere, the business school stands apart. Many students and faculty members consider themselves a cut above the rest of the elite campus. Situated on the other side of the Charles River, south of Harvard Square and the historic core of campus, the business school is just far enough away to deter the busloads of tourists who regularly spill into Harvard Yard. With wood floors, stately desks, plush armchairs and couches, and a series of chandeliers hanging above, the main student building resembles the lobby of a luxury hotel. Whereas the rest of campus freely opens its doors to all students, Harvard Business School limits some of its facilities to its own. Future tycoons work out in
He gave the impression of not suffering fools gladly, so after some small talk, I got to the point: I asked if I could follow Caesars from time to time over the course of a year to study how they collected data on their clients. Initially, he expressed some caution.
He had good reason. He had navigated several difficult years. Many casinos had suffered a losing streak following the 2008 financial crisis, but Caesars had taken an especially heavy blow. Revenue had fallen from a peak of nearly $11 billion in 2007 to $9.1 billion the next year and, as things turned out later, would end up stuck in the range of $8.5 billion in 2012 and 2013.
The drop alone was bigger than the annual GDP of entire small nations. For all the companyâs cleverness in mining customer data, it remained many billions of dollars in debt. Some people wondered if mighty Caesars would ultimately have to declare bankruptcy. A more conventional CEO might have shooed away a writer at such a time. But Loveman decided to gamble. He agreed to allow me to see what happened in his corner of Vegas.
2
A Harvard Professor Comes to Vegas
A Business Professor Rolls the Dice
No one would have ever wagered that someone like Gary Loveman would end up fitting into the casino boss shoes once filled by the likes of Benjamin âBugsyâ Siegel and Frank âLeftyâ Rosenthal. Loveman did not grow up in the shadows of the casino world or dream of palling around with the Rat Pack. In fact, through his thirties, he had only once even set foot in a casino, in Monte Carlo, the setting for the first James Bond novel, Casino Royale . His encounter with the European version of gaming did not convert Loveman into a regular gambler. He lived in the Boston area; the world of gambling was remote. In any case, wagering invokes the uncertainty of chance. Loveman preferred the exactitude of math and data.
Loveman had grown up in Indianapolis, where his father worked as a supervisor at a telephone manufacturing plant. In college, when classmates were busy chugging beers and chasing girls, Loveman would frequently stay in, pulling out pencil and paper to calculate stock returns and price-earnings ratios manually, just to see how quickly he could do it. After graduating from Wesleyan University in 1982, he spent two years at the Federal Reserve Bank of Boston. He kept on calculating through graduate school, eventually earning a doctorate in economics in 1989 from the Massachusetts Institute of Technology. His thesis examined differing rates of unemployment in the United States, Britain, France, and Germany. That same year in Las Vegas Steve Wynn opened the Mirage, the first new hotel there in sixteenyears. The exploding volcano outside the hotel and tropical scenery signaled the start of a new construction boom that changed the face of the city. Yet the bright neon and glitter of Vegas remained a world away from Loveman, who, with his PhD in hand, landed a job teaching at Harvard Business School.
Even within Harvardâs rarefied atmosphere, the business school stands apart. Many students and faculty members consider themselves a cut above the rest of the elite campus. Situated on the other side of the Charles River, south of Harvard Square and the historic core of campus, the business school is just far enough away to deter the busloads of tourists who regularly spill into Harvard Yard. With wood floors, stately desks, plush armchairs and couches, and a series of chandeliers hanging above, the main student building resembles the lobby of a luxury hotel. Whereas the rest of campus freely opens its doors to all students, Harvard Business School limits some of its facilities to its own. Future tycoons work out in
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