A conjured-up meeting of the Gaming Hall of Fame’s membership might get interesting.
I’d feel sorry for the person who had to handle seating arrangements.
The continuing proxy fight over the direction of slot machine manufacturer International Game Technology has put several legendary gaming personalities on opposite sides of the dispute.
Disagreements between gaming executives are not uncommon. But it’s been years since the industry has seen a family feud quite like this one.
The bickering turned personal. It figures to get even more heated leading up to IGT’s planned shareholders meeting March 5 in Las Vegas.
Several observers fretted that IGT Chairman Phil Satre could see 25 years of good will he established during his tenure as chairman and CEO of Harrah’s Entertainment washed away over the next few weeks.
“Phil has to start worrying about the damage this is doing to his reputation with gaming industry leaders,” said one former longtime slot machine company executive.
Satre, 62, was inducted into the Gaming Hall of Fame in 2003. Under his leadership, Harrah’s (now Caesars Entertainment Corp.) became a Nevada and regional casino giant. He was well liked by investors and employees and was even rumored as a potential Democratic candidate for governor in 2006.
Satre moved into the IGT role four years after retiring from Harrah’s.
Former IGT Chairman Charles Mathewson and analyst-turned-investor Jason Ader are soliciting proxy votes from company shareholders to gain three seats on IGT’s eight-person board. The group controls 3 percent of IGT’s outstanding shares.
Ader and Mathewson believe IGT’s current management neglected the company’s core slot machine business and “alienated” casino customers. The actions caused IGT’s financial performance to deteriorate, they argue, with the share price falling more than 20 percent during the past three years.
IGT responded with a letter to shareholders on Feb. 1, defending the company’s financial stewardship and business decisions.
However, the letter also spelled out how Mathewson, during his 17-year tenure as chairman and after he left the board, enjoyed a “lavish lifestyle” at the expense of the company and had an “old school” approach to corporate governance.
Satre authored the letter along with IGT CEO Patti Hart.
The language incensed Mathewson. He called the comments “misleading and untruthful personal attacks.” He said IGT turned its guns toward him to divert attention away from the company’s “poor management decisions.”
Mathewson, 84, went into the Hall of Fame in 1997.
Satre and Mathewson have roots in Reno and are longtime friends. Mathewson, reportedly, helped bring Satre onto the IGT board in January 2009. Ten months later, Satre was named chairman.
That friendship may now be history.
Ader, 44, was one of the industry’s leading analysts on Wall Street in the late 1990s through the early 2000s. He did as much to build the reputation of the casino industry as a worthy and reliable investment as any Gaming Hall of Fame member.
Ader operates his own New York-based investment firm and is a member of the board of Las Vegas Sands Corp. In an interview last week, Ader said he cleared the IGT proxy fight with Las Vegas Sands Chairman Sheldon Adelson, a 2011 Gaming Hall of Fame inductee.
“I wouldn’t have done this without approval early on,” Ader said. “If they were not supportive, I wouldn’t be doing this.”
But he also advised Adelson to stay on the sidelines.
Wynn Resorts Ltd. Chairman Steve Wynn wasn’t going to be silenced.
In a brief but scathing statement, Wynn tore into IGT for what he called a “paid professional attempt to smear” Mathewson, his friend for 30 years.
Wynn, who was inducted into the Gaming Hall of Fame in 2006, said IGT’s management wants to divert attention from its own performance.
All the vitriol has to concern former Nevada Gov. Bob Miller, who is on the boards of both IGT and Wynn Resorts.
Miller has found himself in the middle of two proxy fights; the continuing Wynn battle with defrocked shareholder Kazuo Okada, and now IGT’s pissing match.
Miller has been a member of IGT’s board since 2000 and was brought into the company by Mathewson. The two-term governor, who has been named in several Securities and Exchange Commission filings in the IGT proxy fight, is trying to keep Mathewson out.
Wynn’s siding with Mathewson, however, has to cause some confusion.
It’s unclear whether the Ader group will get enough proxy votes to change the board’s makeup. But we know they are getting under the skin of IGT’s management.
Ader produced a website — rescueigt.com — where information about the proxy battle is posted, including Securities and Exchange Commission filings and investor presentations.
Only, you can’t access the website from inside IGT’s corporate offices. The company’s Internet servers block employees from viewing the website on IGT computers. Even outsiders, using smartphones or tablet computers connected through Wi-Fi while in IGT offices, can’t view Ader’s websites.
Several IGT employees emailed screenshots of the blocked messages to sources.
That move by IGT is corporate paranoia.
Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at firstname.lastname@example.org or 702-477-3871. He blogs at lvrj.com/blogs/stutz. Follow @howardstutz on Twitter.