Behind the big bucks and big deals in Vegas gaming

By Liz Benston

Tuesday, March 18, 2008 | 2 a.m.

A year ago in Paris, Wall Street Journal reporter Christine Binkley walked into an interview with the chief executive of luxury retailer Louis Vuitton expecting a detailed discussion of the brand’s expansion into emerging markets such as Russia and China.

Instead, Frenchman Yves Carcelle — like others who meet Binkley, who spent 10 years covering the gaming and hotel industries — wanted to talk about Las Vegas.

Like an excited tourist, Carcelle grinned as he chattered on about his recent trip to Las Vegas, telling Binkley he was eager to open as many stores there as possible.

Binkley’s just-published book, “Winner Takes All: Steve Wynn, Kirk Kerkorian, Gary Loveman and the Race to Own Las Vegas,” is yet another sign that the gaming business — now so much more than slot machines and table games — has arrived.

The book chronicles three megadeals that consolidated influence among a handful of key executives and made them very rich men.

MGM Grand’s buyout of Mirage Resorts in 2000, MGM Mirage’s takeover of Mandalay Resort Group in 2005 and Harrah’s Entertainment’s acquisition of Caesars Entertainment a few months later created two corporate giants, MGM Mirage and Harrah’s, with control over a uniquely powerful economic engine.

These deals and the men behind them grabbed headlines around the world, which is paying closer attention to this relatively small but impressive corner of the globe.

Unlike other books published in recent years about the gambling business, this one doesn’t focus on the industry’s social ills or its shady, rough-and-tumble past.

This is a book about wheeling and dealing in Las Vegas’ modern corporate era. It’s about the exertion of competition, supercharged capitalism, inflated egos and frayed nerves.

Binkley is keenly aware that Las Vegas, for all its billions, doesn’t get the respect it deserves as a business subject.

“It’s taken the rest of the world a very long time to catch up to where Las Vegas is, businesswise,” she said.

It has pop culture fame in spades and at least one famous icon in Steve Wynn.

Yet the old stereotypes about Las Vegas persist.

Binkley was “astounded” to field initial questions from her New York publisher about “whether the mob was still skimming money from casinos on the Strip.” Many people also are unaware that most of the money made on the Strip comes from nongambling sources, such as shopping and dining.

She began working on the book in 2005 after covering the business for eight years — the year of the dual Strip mergers and the opening of Wynn Las Vegas, then the most expensive resort in history. Although Kerkorian, Wynn and even Sheldon Adelson cast big shadows over the Strip, it is Harrah’s Entertainment’s chief executive, Loveman — still a favorite among reporters for his outsider status as a maverick academic — who may end up having a bigger effect than anticipated.

Loveman enters the book in the third act, after the Caesars acquisition.

“The question still today for Harrah’s is, do they implement the things that worked for them so well at their riverboat properties — these shoddy properties they made efficient and productive?” Binkley said.

“Even more interesting to me is that people on the Strip never spent much time figuring out what Harrah’s was doing. The other companies had this notion that you build a big astounding property and people would come. Loveman’s approach was market it carefully and they will come.”

With substantial detail about the scientific methods Harrah’s used to create its Pavlovian-like Total Rewards program, the book is further evidence of just how far ahead Harrah’s is relative to the competition.

“If he can get the architectural stuff down he’s got so much cerebral power about how to market to low rollers in their homes,” Binkley said. “I think he’s the one to really watch in the future.”

Besides the insider peek at Harrah’s, one of the most intriguing aspects of the book is the portrait of former Harrah’s executive Rich Mirman, who turns out to be more interesting than your typical swashbuckling casino boss.

Mirman emerges as a thoughtful, intellectual man who is truly conflicted about his job enticing people to gamble. He later distances himself from these marketing experiments and becomes the company’s development ambassador abroad, then leaves Harrah’s before the company is taken private.

In a realm of larger-than-life icons, this multidimensional profile of a real human being is as rare as the discovery of a new species.

Executives “may tell you about their divorce or sad childhood but they don’t want to talk about how conflicted they are,” Binkley said.

The final chapter of the book calls Las Vegas “a place that tries so hard yet can’t respect itself, like the class slut.”

Binkley reiterates that many of these casino titans maintain homes in other states and often fly out of town to reconnect with family and friends.

But there’s an even bigger revelation: Giant, mainstream companies such as Disney have passed on opportunities to buy into the gaming industry’s incredible riches, leaving this wealth concentrated in the hands of a few Las Vegas executives.

Although the taboo of gambling has dissipated over the years, there lingers an attitude that this is a crass business best left to tanned men in flashy suits and too-white smiles.

Binkley now writes a weekly style column for The Wall Street Journal — a job that came unexpectedly after someone suggested she write a story about driving a Ferrari.

Writing about fashion and pop culture was a welcome change for Binkley, who realized she had been at the gaming beat too long after a few boring interviews with industry newcomers who knew less about the business than she did.

“I’m a journalist, not a casino executive,” she said. “I’m supposed to be exploring and learning, so I knew it was time to try something new and different.”