Q&A: Mark Frissora, Caesars Entertainment

Ahead of his keynote speech at ICE VOX, Caesars CEO Mark Frissora spoke to iGaming Business about rescuing the casino and resort operator from bankruptcy, its non-gaming revenue overtaking gaming revenue, collaborating with the tribes, and his faith in gaming’s popularity, even among Millennials

iGaming Business: Your keynote at ICE VOX will focus on the importance of fresh thinking to win over new customer bases. How has Caesars’ journey as a company over the last decade or so informed this perspective?

Mark Frissora: In Las Vegas, Caesars has evolved from a company that generates the majority of its revenues from gaming to non-gaming. During this evolution, we understood that we had to think differently about the needs of non-gaming customers if we were going to execute the transition successfully. Today, we are applying fresh, or what I call “total open mind”, thinking to gaming customers as well. We intend to provide new and different gaming experiences on the product side, and in the casino environment, to secure the next generation of consumers. Technology can be an important enabler of the casino gaming transformation, and I’m pleased that the industry is beginning to take innovation seriously.

You will also be talking about the need for the evolution of product, workforce and culture in the sector. As someone with a successful track record as CEO helping turn around companies such as Tenneco and Hertz, would you say this is something the gaming sector needs to address as a matter of urgency and, if so, what lessons can it learn from other sectors in this regard?

One important lesson I’ve learned over 17 years leading large companies is that long-term success is based on emphasising and balancing customer service, employee engagement and cash management (financial performance). If any one of these pillars is over- or underemphasised to the detriment of the other two over an extended period, the company will not be successful. I believe this approach applies across business segments, and you’ll find that successful gaming companies in the years ahead will have found and maintained a balance that works in their culture.

You will be sharing the keynote platform with NIGA chairman Ernie Stevens. Caesars led the way in forging partnerships with gaming tribes by entering finance and management deals while also supporting tribal self-governance. How are your interests and relationships in this space changing as the Indian gaming sector develops?

We are excited to be able to grow again in the tribal gaming sector. We’ve enjoyed successful tribal partnerships for 20 years and currently have them in North Carolina, Arizona and Southern California. We’ve learned that our partners are unique and we believe we have been adept at appreciating those differences and working collaboratively to achieve mutual success. The evolution of tribal gaming has been one of the most important trends in our industry over the past generation, and we see opportunities for expanded collaboration in the years ahead. Our large Total Rewards database, coupled with our strong gaming brands, help our tribal partners create the most value from their investment.

Increasing workforce diversity has been a focus for Caesars. It’s an issue also gaining momentum in the UK gaming industry after the BBC revealed its gender pay gap last summer. What are the primary goals or benchmarks you have set for the business in that respect?

Workforce diversity has been a priority for me as a CEO because it’s not only the right thing to do, it’s also critical for providing excellent customer service and high levels of employee engagement and, therefore, for achieving long-term financial success. While I was at Hertz, we significantly increased female representation on the senior management team and added three women to the Hertz board of directors. We have made great progress diversifying management at Caesars, and have set a goal of attaining a 50-50 management split by 2025. Overall, we have gender-neutral compensation across the Caesars organisation.

Achieving diversity goals while ensuring the continued engagement of your workforce and also matching the right people with the right jobs can be a tricky balance to strike. How do you go about managing this across the business?

I have been very pleased that the entire management team throughout Caesars has, at the least, been very receptive to the importance of diversity, and many managers were already acting on their own to increase their teams’ diversity. There has been universal acceptance of our 50-50 by 2025 goal and we are also committed to further increasing diversity based on race, ethnicity and orientation. We have built these principles into our core values and culture at Caesars.

You oversaw a huge restructuring and the exiting of the business from bankruptcy last year. What were the most difficult or challenging aspects of this for you as CEO?

Maintaining morale among the management team and front-line employees during restructuring was my top priority. I’m very pleased that, during the restructuring of 2015 through 2017, we not only improved service and engagement results, we also achieved record levels in both categories. That’s a major reason we also improved financial performance for all three years, and one key reason we achieved a successful exit from restructuring.

The Caesars business has been boosted in recent years by Vegas’s recovery, which was founded largely on the growth of non-gaming areas. How can we expect to see Caesars build on this over the next 12-18 months, and are you still looking for ways to grow gaming as opposed to accepting its part of the overall entertainment mix?

Adults of all ages like to game, and it’s our challenge to make our casino offerings attractive across all demographics. I don’t believe gaming will suffer an inevitable decline, because the propensity to game is even greater among Millennials. The issue is illegal gaming, which continues to grow rapidly. For example, over $4.5bn was gambled illegally on the Super Bowl alone in 2017! We need to legalise and thoroughly regulate internet and sports gambling in the US. We will see significant growth as a result. Consumers, the government and the gaming industry will all benefit if legalisation could occur over the next several years. Meanwhile, we are also very focused on transforming the gaming experience. We will focus both on the games themselves and the gaming environment. We will use technology as one way to help create exciting ways for customers to engage with us and each other on the casino floor and throughout our properties.

The Supreme Court could clear the way for NJ to authorise sports betting at its casinos and racetracks as early as Q2. Has Caesars AC started preparing for this eventuality?

No one knows how the Supreme Court will rule. Nor does anyone know how Congress and the states will react to the ruling, assuming SCOTUS changes current legislation. We are watching closely, and we will be engaged in the regulatory process and the business opportunities that may arise in New Jersey and other states from a decision that modifies or repeals the professional sports betting ban.

Mark Frissora will be giving his VOX-Headliner keynote, Don't be the last dinosaur: fresh thinking in gaming to win over new customer bases, at 09:45 on Tuesday 6 February. He is also appearing the same day on the Business Leaders Discussion Forum panel at 14:30 during the Tribal Gaming Exchange seminar.