News - August 1, 2018 - by Ray Hagar
By Ray Hagar
One regret Phil Satre has about his 25-year, Hall of Fame gaming career with Harrah's Entertainment, is that he didn't take his company into the Macau gaming market of China.
Satre, speaking Wednesday on Nevada Newsmakers, retired as chairman of the board of Harrah's Entertainment in 2005 after 25 years with the company. The company later changed its name to Caesars Entertainment.
"Harrah's missed out on Macau and I will accept some of the responsibility for that," Satre said. "I was at the tail end of my career and we didn't pursue it aggressively."
Satre, a former standout Stanford University football player, currently is the chairman of the boards at Nordstrom and IGT. He is a member of the American Gaming Association's Gaming Hall of Fame and UNLV's Business Hall of Fame.
Other gaming companies like Wynn Resorts and Las Vegas Sands did pursue holdings in Macau after 2001 and they hit the Mother Lode of gaming.
"It turned out to be a remarkable market, and of course, the largest in the world and an incredibly important source of earnings for the companies that participate there," he said.
Macau has been the world's No. 1 gaming market for more than a decade, overtaking Las Vegas in 2007.
Satre decided to pass on Macau because Harrah's Entertainment "had some serious concerns about the regulatory environment and the overall environment that existed from some early business that I had taken there," he said.
Some of Satre's misgivings centered around Macau gaming mogul Stanley Ho, who had a 40-year Chinese government-granted monopoly on Macau gaming until the government ended it in 2001, paving the way for the Las Vegas companies.
Ho had extensive ties to Chinese organized crime and let them "operate and thrive" inside his casinos, according to a report from New Jersey gaming regulators. Ho, however, has denied he had any ties to organized crime. He had never been convicted or arrested on a gang-related crime, according to reports.
Satre said he did not want to jeopardize Harrah's expansive holdings in the United States by trying to enter a market with sinister undertones.
"At the time, we had licenses not just in Nevada but we had licenses throughout the United States, more than anybody else in the industry," Satre said. "We had expanded our properties into more than 26 locations and to be honest with you, I was worried we would jeopardize those licenses because they would see us as having taken a reputational or regulatory risk that we didn't need to take."
In 2010, New Jersey regulators forced MGM to divest its holdings in Atlantic City because of a business relationship with Stanley Ho’s daughter, Pansy Ho.
"It did not surprise me at all," he said. "Atlantic City was the toughest regulatory environment in operation. You may not remember this but when Hilton was our partner, they could not get a license there. Atlantic City refused to license Hilton, They refused to license a couple of other organizations, like the Legacy Caesars organization. They let them in but said that owner, that executive, they can't come."
Now, however, Caesars Entertainment is “pursuing a number of growth opportunities in Asia, including Japan,” Steven Tight, its president of international development, told some Asian gaming media outlets. The company is all in with Japan -- with plans for casino resorts in Osaka and Tomakomai, according to published reports.
Satre supports Caesars move into Japan, a high-tech island nation that analysts see as blossoming into the world's second-largest gaming market, next to Macau. Japan's parliament approved casino enabling legislation in December of 2016, opening the door to future U.S.-style casino resorts.
"Japan will be very much like that (Macau)," Satre said. He listed the advantages of Japan's gaming market as "the density of the population, their propensity to gamble and their willingness to take risks. I think we will see that as another important market."
Satre touched on other gaming developments:
MGM lawsuit: Satre said he does not agree with MGM's strategy of filing suit against the victims of the Oct. 1 mass shooting at Mandalay Bay in Las Vegas in hopes of avoiding liability.
MGM said in a statement the filing was meant to provide a "timely resolution" for shooting victims who sued or will sue in the aftermath of the attack during the Route 91 Harvest Festival. MGM said litigation filed against it "must be dismissed."
"I don't know the reasons why someone would have taken the steps MGM took," Satre said. "I have a lot of trust, confidence and admiration for Jim Murren (chairman, CEO of MGM Resorts International) and many of the people who work for Jim. So I'm sure they had advice that said: 'If you are going to protect long-term the interests of this company, and there is a safety act, which was enacted after 9/11. Here's what you have to do rather than what you want to do.' And so with that decision, that is the only way I can read into that and how that decision might have occurred."
He would not follow the same strategy if something similar had occurred when he led Harrah's.
"It would have been a difficult decision for me to do what they have done," he said. "I can't imagine suing the victims."
Interaction with Donald Trump: "We (Harrah's) made a joint venture agreement with him in 1982 to build a casino-hotel together and it ended up being called Harrah's at Trump Plaza (in Atlantic City). It was on the boardwalk, as opposed to the marina area and it opened up in 1980.
"From the outset, we did not have a very pleasant relationship.... I'll leave it there."
Wynn Resorts upheaval: Satre praised Wynn Resorts management for keeping the company on track after founder Steve Wynn stepped down as CEO and divested himself of all his stock (he was the company's leading stockholder) in the wake of sexual harassment allegations. His former wife, Elaine Wynn, is now the company's top stockholder but Satre said he did not think she wanted run the company on a day-to-day basis.
"I don't believe Elaine Wynn wants to get back on the board (of directors)," he said. "I don't believe Elaine Wynn wants to be part of the management team or any of those things. She wants to protect a very important investment for her."
Eldorado Resorts success: The addition of the Isle of Capris’ facilities in May bumped up the number of Reno's Eldorado Resorts properties to 19 in 10 states, raising the worth of Eldorado's regional gaming enterprise to $1.7 billion, according to the Reno Gazette-Journal. It is a far cry from the lone downtown Reno hotel-casino, with 282 rooms, that family patriarch Don Carano started in 1973.
"It is just a fabulous story and one that is so good for the company, the state and the employees here and everywhere else," Satre said. "They have done a terrific job."
The Carano-family company reminds Satre of Nordstrom, a chain of U.S. department stores where Satre sits as chairman of the board.
"Being involved with Nordstrom, where it is four family members who are part of the leadership there, fourth generation, this is the second generation at the Eldorado. I know it is not easy. It is not easy for the families to carry on the direction, leadership of the founder, the vision of the founder and Don (Carano), bless him -- I know he was proud (of his family), right up to the day he passed away and he'd be even prouder today."
Satre joked: "Gary (Carano) the CEO, did an internship program (with Claudine Williams) at our Holiday casino, Holiday Inn in Las Vegas and I attribute that to a lot of his success."