MITCH GARBER

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The Gazette: Montrealer Mitch Garber betting big on future of online gambling

Montreal multimillionaire Mitch Garber is CEO of Caesars Interactive Entertainment, the people who run the World Series of Poker. The company’s Las Vegas parent, casino giant Caesars Entertainment, is a money-loser with major debt issues, but Garber is betting on a bright future for his subsidiary here. A week ago, he bought out part of struggling software developer Electronic Arts, a major local supplier, acquiring 19 of its Montreal employees and the intellectual property to the Facebook and mobile game apps they make for the World Series.

Garber, 48, earned $17 million a year between 2006 and 2008 when he ran Gibraltar online gambling company PartyGaming. He lived in London and Tel Aviv before jumping to Caesars in 2009 and returning to his hometown, Montreal. With degrees in industrial relations and law, in the 1990s he practised as a gaming industry lawyer and also worked as a Montreal radio sportscaster. Active in the charitable causes of Cirque du Soleil founder Guy Laliberté and singing superstar Céline Dion, Garber lives with his wife, Anne-Marie, and their two teenage sons in Westmount.

(This interview has been edited and condensed.)

Q:What’s the advantage of being based in Montreal?

A:It’s a good mid-point between Vegas and Europe to do a lot of things that we do. And we’re very interested in expanding here, because there’s a lot of great software development talent and a great appreciation for poker and gaming in general.

How big is the company?

We’ve had over 100 million downloads, and we have almost 500 employees in Tel Aviv, Ukraine, Belarus, Santa Monica and now Montreal. We’re one of the largest social mobile app development companies in the world.

In 2009, you told us you’d soon have “hundreds” of employees working for you here. You’re only up to 46 now. What happened?

Good question. Back then, we were anticipating a federal bill that would legalize online poker in the U.S., but that hasn’t happened; it stagnated. Two states did pass their own legislation, however, and that will have a big effect on us.

How?

It’ll mean we’ll be operating online real-money poker in Nevada this summer and it should also mean we’ll be operating online real-money poker and casino games in New Jersey by the end of 2013 and beginning of 2014.

That means more work here in Montreal?

I do plan to build out a larger part of that operation in Montreal. We’re also in the middle of developing a very sophisticated online poker platform, and we’re actively hiring high-level Montrealer developers now for that.

Do the money woes at the parent company concern you?

Interactive requires a low level of capital expenditure and is experiencing a very interesting growth phase now. We’re very happy to contribute to the parent company, which remains highly profitable — highly leveraged, but profitable.

Twenty billion dollars in debt, missed estimates on declining revenues, net losses over the last three years — those don’t worry you?

No, we have a lot of exciting new developments: a casino in Baltimore, an incredible observation wheel in Vegas, renovating one resort and opening another, several restaurant openings. And on the online side, it’s extremely exciting, too.

Why are most governments, including Canada’s, still reluctant to legalize your industry?

I really believe it’s just an educational process. People used to be scared of online commerce, but now they’re not. Same with gaming — they’re getting less skeptical. But politicians are of an older generation; they take longer to educate.

Has the poor economy made them more receptive?

The need for taxes in the States has helped our lobbying efforts dramatically, I think. Money that’s being made offshore that could be made and regulated locally, create employment income, and be taxed — that’s becoming more important.

How do you address concerns over money-laundering and other forms of organized crime traditionally associated with gambling?

I think we address them pretty easily. We are the most regulated business in North America, maybe even in the world. The licensing process is more arduous for us than in banking or health care or securities or any other area.

Sounds like you get asked that question a lot.

All the time. It’s the gaming industry, it’s a sexy industry and there’s a lot of old movies about it. But anyone who’s been to Vegas in the last 10 years realizes it’s more than just that. It’s about Cirque du Soleil and Céline and Gordon Ramsay.

Funny that you should be based in Montreal, with all its corruption scandals these days.

Actually. I think we’re very lucky. People love Montreal. Certainly the recent scandals are not great, but they’re not unique to Montreal. A lot of other cities and municipalities have them — and we don’t have Rob Ford (laughs).

What do you think of Loto-Québec?

I used to be one of their lawyers, so I have a great affinity for them. It’s the best government-run lottery and casino business in the world. They’ve been great partners to the World Series of Poker, and we’ll talk to them about getting involved online.

What do you think of compulsive gamblers?

They’re a very small minority, but a very important minority. We don’t like it when people lose money — that’s a misnomer, it’s emphatically not the case. We like it when people are entertained and have fun, when they gamble within their limit.

It is harder to weed out a problem gambler in the virtual world, though, isn’t it?

You know, we have algorithms and software that can detect certain types of behaviour, and we can flag it. It’s not the same as seeing a human being in a casino, but if anyone feels they have a problem, they can reach out to us for help.

jheinrich@montrealgazette.com

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