Master of the Game
by Paul Doocey
July 15, 2009
2009 Casino Marketing Lifetime Achievement Award
Ask Lyle Berman to pick his best moment as a public speaker and chances are he will recap the speech he gave at the 1994 opening of Grand Casino Avoyelles in Louisiana. After hours of listening to orations from a host of state and tribal dignitaries, the audience, which had been standing in line since early morning to get in, had become, well, a might cantankerous. In an act of face-saving improvisation, when it came his turn, Berman simply said, “Let the games begin” and quickly moved aside to avoid the stampede of people into the casino.
“It might not have been the best response I ever got to one of my speeches,” said Berman in his 2005 autobiography (“I’m All In: High Stakes, Big Business & the Birth of the World Poker Tour”), “but my efforts were certainly appreciated.”
Appreciated, yes, and in their own way those four words also are an apt summation of Berman’s career. Indeed, it is his love of games of chance — especially of the casino and poker variety — that led him to invest, found and operate many prestigious gaming ventures, a list that includes Grand Casinos, Lakes Entertainment, the World Poker Tour and, most recently, PokerTek, an innovative developer of automated poker tables. Along the way, his business practices and marketing acumen have influenced scores of former employees who now hold executive positions throughout the industry.
In recognition of his accomplishments and his continued impact, Berman will receive a “Lifetime Achievement Award” at the 2009 Casino Marketing Conference, co-produced by Raving Consulting and BNP Media Gaming Group, taking place July 20-22 at Paris Las Vegas.
Winning a casino marketing award would have been unimaginable when Berman started out working at Berman Buckskin, a family-run business specializing in leather apparel. When he joined the company in the 1960s, Berman Buckskin was a Minneapolis-based outlet with annual sales of $1 million. Berman, though, saw untapped potential and launched the company on an ambitious and risky expansion program. The timing was propitious, coinciding with a decade-long boom in shopping center development. Riding this crest, by 1978, Berman Buckskin was a 27-store chain generating $25 million a year in sales.
“The biggest marketing lesson I learned from my time in retail was that location trumps all,” Berman says. “This is equally true for gaming; in fact, it all depends on location, whether in a competitive market like Las Vegas or Mississippi or in a monopolistic situation like some Indian tribal casinos find themselves in.”
In 1979 Berman and his father sold the chain to W.R. Grace, with Lyle staying on to run the company. Renamed Bermans: The Leather Expert, the operation grew to 200 stores in malls across the country.
“By the time my tenure with Grace was at an end I had learned how to manage a business, not just run it,” he recalls in “I’m All In”.
This, however, was not his final foray into the world of mall retail. In the early 1990s he and his business partners backed Steve Schussler and his Rainforest Café themed-restaurant concept. Berman acted as company president in its early years, during which it became a worldwide brand and one of the top-grossing eateries in the United States. He sold the business in the mid-’90s to concentrate on gaming. But, as Berman relates it, his entrée into casino development and management was really a fortuitous accident. Fresh off the windfall from the sale of the leather goods chain he was struck down with a brain aneurysm that nearly killed him. He considered himself retired until he received a visit in 1989 from Stan Taube and Dave Anderson, who were seeking funds to develop a casino for the Mille Lacs Band of Ojibwe Indians in Minnesota.
“It was really dumb luck that they came to me,” Berman says. “[But] I had been playing poker in Las Vegas since the early 1980s and knew the power of a slot machine. So I instantly recognized that [a tribal casino in Minnesota] would be a pretty good idea. They were looking for a limited partner, and I said I would put up all the money out of my own pocket, some $3 million, if they would make me a general partner and elect me chairman and CEO. They said yes.”
Calling the new company Grand Casinos, Berman and his partners opened Grand Casino Mille Lacs in 1991. By 1996, Grand had opened three more tribal facilities — Grand Casino Hinckley in Minnesota and Grand Casinos Avoyelles and Coushatta in Louisiana. The company also built four of its own — Grand Casinos Gulfport, Biloxi and Tunica in Mississippi and The Stratosphere Hotel & Casino in Las Vegas. Berman’s $3 million investment had spawned a publicly traded company that by 1996 had a market cap of more than $1 billion and employed 20,000 people.
He attributes Grand’s rapid ascent to two factors. The first was designing properties that would appeal to all types of gamblers and were dedicated to providing them with superior service, affordable food and entertainment, good odds and a comfortable environment. The second was to build a superior product, with the goal of being the “Cadillac” in each of its markets.
Tom Brosig, CEO of the Brosig Group, was president of Grand Casinos during its halcyon days. He credits Berman’s unique operational approach and keen powers of observation for the company’s success.
“A lot is said about Lyle, but as someone who was working for him, just when you thought good enough was good enough he would show you a way to make it better. That was always the unique perspective he gave to virtually everybody who worked for him.”
Casino companies in those days tended to manage their properties in a decentralized fashion, each facility a silo that rarely communicated or coordinated plans with the central office or sister properties. Berman, who came from a retail background that emphasized central management, pushed Grand to operate in this much more synergistic fashion.
“To Lyle it only made sense to structurally organize like a department store, where you would hire all your best people at the central headquarters and did all your strategy, the development of goals and objectives, there,” Brosig says. “The only thing you asked the people in the stores to do was execute the plan.”
In 1998, Berman and the leadership at Grand Casinos agreed to merge with Hilton Hotels’ Casino Division to form a new company called Park Place Entertainment. Pieces of Grand Casinos that were left over from the merger — some land and pending Indian gaming deals — were eventually spun off by Berman into a company called Lakes Gaming. Today, under the name Lakes Entertainment, that spin-off manages three tribal facilities — The Shingle Springs Band of Miwok Indians’ Red Hawk Casino near Sacramento, Calif.; the Pokagon Band of Potawatomi Indians’ Four Winds Casino Resort in New Buffalo, Mich.; and the Cimarron Casino in Perkins, Okla., which is jointly owned by the Iowa Tribe of Oklahoma and the Ioway Tribe of Oklahoma.
Perhaps Berman’s biggest coup as head of Lakes Entertainment was getting his board to agree to fund an upstart company looking to televise poker games. Berman first heard the concept for what was to become the World Poker Tour in 2001, when Steve Lipscomb, Mike Sexton and Linda Johnson met with him and laid out plans to create a weekly television program based on a professional poker players’ tour. Their hope was that WPT would popularize the game as the PGA had done for golf and the NBA for basketball. Berman, a long-time professional poker player, immediately saw the potential.
“Lyle is actually accessible — that is hard to do when you are as successful as he is,” says Lipscomb, who is now president and CEO of WPT Enterprises. “He was the right guy to first approach with this idea. He had resources, believed in poker and knew a lot about it.”
Berman says, “At that time we were looking to diversify into other areas besides Indian gaming. The board liked it, and we told Steve that if he could get the long-term contracts with the casinos we would back it. He went out and got those contracts, we backed it, and it has been a phenomenal trip.”
The first season of WPT was picked up by the Travel Channel in 2003, and it quickly became one of the cable network’s most popular shows, drawing upwards of 5 million viewers per broadcast. The program, which has spawned a host of imitators, is credited with creating the sonic boom in poker play that’s been felt across the United States and around the world.
Berman, who is chairman of the board of WPT Enterprises, is still actively involved in charting its future growth.
“Lyle is a marketing mind that never stops. Quite candidly, as a partner, it sometimes makes you nuts,” Lipscomb says. “But you do have to listen to everything he says because he does what most marketers forget to do — he actually touches the product.”
Indeed, Berman’s experiences as a poker player also led him to invest in PokerTek.
“As a long-time poker player, I often thought about making an automatic poker table,” he says. “In a live poker tournament people argue all the time claiming someone missed an ante or dropped out of turn. The PokerTek concept stops this from happening since, much like an Internet game, you can’t act before your turn. I call it the ‘happy table’ since you can’t make a mistake on it.”
PokerTek currently has 250 tables in casinos throughout the United States.
It’s yet another outgrowth of a marketing philosophy that has stood Lyle Berman well through success after success. And typical of the man, it’s an amazingly simple one.
“If the customer wants vanilla,” he says, “make sure you give them vanilla.”
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