Why gaming executives regularly shuffle among companies

Executive hiring in the gaming industry can resemble a game of musical chairs, though notable exceptions show there’s always room for newcomers.

For the most part, executives seem to move seamlessly to new companies and casinos as situations arise where their knowledge of gaming’s unique practices and regulations can be tapped.

They typically move under the confines of an honor code that requires them to leave behind their former employer’s confidential information, most notably their lists of high rollers. The code is always backed up by confidentiality agreements, and in some cases, by non-compete and non-solicitation agreements, preventing departing executives from immediately recruiting employees from their old company.

“When we bring people on, it’s their knowledge that’s relevant,” said Tom McCartney, chief operating officer of the Cosmopolitan and a former executive for the Tropicana Las Vegas, Planet Hollywood, MGM Resorts International and Caesars Atlantic City. “You learn from your life experiences, and that helps formulate your point of view on an issue or strategy. To emulate or copy something from a prior employer doesn’t really flatter you — and a company that wants to be forward-looking wouldn’t be interested in that either.”

The list of local executives who have company hopped is long. It includes McCartney’s boss, Cosmopolitan Chief Executive Officer John Unwin, who had been senior vice president and general manager of Caesars Palace; Marilyn Spiegel, president of Wynn and Encore, who had served as a regional president for Caesars Entertainment; Joe Magliarditi, president of the Palms who previously worked at the Hard Rock, M Resort and Rio; Paul Pusateri, who recently left the Hard Rock as chief operating officer after stints at the Palms, Venetian, Paris Las Vegas and Bally’s; Rob Oseland, the former chief operating officer of Encore who is now president of the proposed SLS Las Vegas on the site of the former Sahara; and Dan Wade, president of the Tropicana who previously worked for MGM and at the Tropicana has teamed with Chief Executive Officer Alex Yemenidjian, himself an MGM alumnus.

Similarly, casino equipment supplier SHFL Entertainment’s chief executive officer is Gavin Isaacs, who came from Bally Technologies and before that, Aristocrat Leisure. And casino ATM provider Global Cash Access Holdings’s No. 2 is President David Lopez, who signed up with GCA after more than a decade with Shuffle Master, the Stratosphere and MGM Grand.

Particularly on the casino floor, people who understand gaming practices and regulations make strong candidates for positions at competing properties.

“Gaming is a highly regulated area,” McCartney said. “So with individuals who are going to manage your gaming operation or the support areas such as the casino cage, it’s critical they understand the gaming regulations and also understand the discipline and the rules as they relate to guests.”

Nevertheless, as in other industries, newcomers sometimes are recruited.

“It works to have a balance of people who understand the technical aspects of gaming, complemented by people who understand service and entertainment from a broader point of view,” McCartney said. “Because of the brand we’ve introduced to the marketplace, we have some real specific requirements for the type of individuals we’re looking for. They have to have an entrepreneurial spirit and innovative spirit. If they don’t have gaming experience, we want them to have the ability and willingness to learn gaming.”

Notable executives who started outside of gaming are chief executive officers Sheldon Adelson, of Las Vegas Sands; Jim Murren, of MGM Resorts International; and Gary Loveman, of Caesars Entertainment.

All brought new ideas to gaming.

Adelson embraced conventioneers at a time when other executives considered them to be low spenders, and he refused to accept unionization at his properties. Loveman emphasized statistical-driven policies for handing out comps to gamblers.

A recent high-level hire who came from within the hospitality industry — but not gaming — is John Caparella, president of the Venetian and Palazzo. He also runs the Sands Expo Center.

Caparella told gaming regulators he was recruited by a headhunter.

“I met with Mike and Mr. Adelson and they made me an offer,” Caparella said.

He already was familiar with Las Vegas Sands Corp. President and Chief Operating Officer Michael Leven from Leven’s previous work in hotels. Before joining the Sands Corp., Caparella was a principal at Redmont Hospitality, a gaming and hospitality consulting firm. He previously has served as executive vice president and chief operating officer of Gaylord Hotels, which owns four of the nation’s largest hotel and convention properties.

Another industry newcomer is Eric Berg, chief operating officer at International Game Technology. Asked by gaming regulators about what attracted him to IGT and a new industry, Berg said the job gives him a chance to use his previous experience in positions heavy on technology and consumer preferences.

He most recently was chief executive officer of SunGard Availability Services, which develops specialized software.

Berg also said a headhunter introduced him to IGT.

“When you actually look at my background, there are parallels,” he said. “I had worked as a chief information officer at Goodyear Tire. IGT sells enterprise software that gaming operators use to run their business. I used to run that type of software. I worked for NCR Corp., which made ATM machines, which are in many respects similar to slot machines. They’re standalone hardware/software integrated network devices that exchange things of value. I worked for Frito-Lay, which is a consumer company. Obviously in gaming, you need to appeal to consumers. And I worked with SunGard, which is a technology company. IGT in a big way is a technology company.”

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  1. The shuffling of gaming executive does not happen as often as one would think. Sure, companies like Shufflemaster, or gaming companies like Penn, are heavy on marketing and expansion. They need to bring in new faces. Larger companies have in house programs to help develop future executives, they anticipate growth.

    The larger gaming companies want a cultural understanding instilled in top management. Hiring outside executives at the top levels does not translate into productivity at the medium or line levels.

  2. I don't think this is much different that what happens everyday in any specialized industry. Car dealerships never hire body shop mangers for sales manager positions and vice-versa. An NFL team is not going to hire a brain surgeon to be head coach. They need people who have made a career out of learning the business at the most complex and detailed level.
    In the big picture, the question is if the Gaughan and Fertitta "born into in the family business" model is more successful than the "hire an outsider" version? Loveman labors under crushing debt, Murren continues to fight a perception that MGM is undervalued as a public stock, and Adelson was saved by Macau 3 years ago.