After hire some ask, ‘What’s IGT thinking?’

A major car manufacturer wouldn’t hire an executive from Victoria’s Secret to design automobiles. Nor would an international oil company bring aboard someone from Baskin-Robbins to plan growth initiatives.

So why does the gaming industry’s largest slot machine manufacturer believe it can stock its corporate offices with executives who have little if any experience in the casino business?

Ten days ago, International Game Technology named John Vandemore as chief financial officer, the person who explains the company’s financials and strategic goals to Wall Street.

Vandemore comes to IGT from Walt Disney Co., where he was CFO of Imagineering, Disney’s theme park development arm. Vandemore also worked for investment banker Goldman Sachs and accounting firm PricewaterhouseCoopers.

The problem is that the current roster of gaming analysts doesn’t know him.

Since taking over as chief executive officer nearly three years ago, Patti Hart has filled IGT’s corporate offices with executives from IBM, Microsoft, Broadbank Interactive Television, and SunGard Availability Services.

Hart spent years with California Silicon Valley technology firms before joining IGT’s board in 2006.

"I now have six years in the gaming industry," Hart said last week. "I believe that qualifies my experience."

Hart wants IGT viewed at as a gaming technology provider. In December, the company unveiled the IGT Cloud, an information service that delivers slot machine content to casinos around through a network, the next step beyond server-based gaming technology.

Explaining technology to a Strip casino president is not the same as selling computers. That’s one reason slot machine floor managers were reluctant to embrace server-based gaming. They were afraid it would confuse customers.

So wouldn’t it be nice to have someone speaking for IGT who has at least set foot in a casino once or twice in his or her career?

Many gaming insiders are perplexed by IGT’s hiring and the exit of longtime executives with years in the gaming industry.

"I’m really not sure what’s going on over there," said one Wall Street analyst who follows the company but who did not want to be named because he had not published any comments on the new CFO. "I have a lot of questions to ask Patti."

Hart said her hiring method is simple. She wants best executive from any industry if she believes that person can make IGT a better company.

"We go after the best athlete available," Hart said. "It really doesn’t matter where you get your experience. We have brought on board a lot of people with strong capabilities."

Rival slot machine manufacturers, such as Bally Technologies, WMS Industries, Konami Gaming and MultiMedia Games, are watching things unfold with amusement. Any dip in IGT’s sales means marketshare gains for the competition.

IGT does have one ace in the hole, so to speak. Longtime gaming figure Philip Satre is chairman of the company’s board. He’s backed Hart in the past and shows no signs of changing his position.

Hart has support on Wall Street for her company remake.

JP Morgan gaming analyst Joe Greff said he didn’t know the new CFO. But he didn’t view the change "as incrementally increasing execution risk or creating any incremental issues."

Macquarie Securities gaming analyst Chad Beynon said new management had "reinvigorated" shareholder interest.

"IGT (is) a different type of company," Beynon said, "more akin to a technology conglomerate versus a traditional slot vendor."

One issue concerning analysts and investors is IGT’s $500 million purchase of social gaming giant Double Down Interactive, which developed Facebook’s Double Down Casino.

Union Gaming Group principal Bill Lerner speculated that the move would lead IGT to launch an online gaming website in the United States that could contend with casino operators — buyers of IGT’s slot machines.

"IGT has no plans to operate an online casino in Nevada and compete with our customers," Staci Alonso, IGT’s vice president of marketing, said in a Jan. 17 email.

Alonso, ironically, is one of the few IGT corporate executives with years of hands-on gaming experience.

Stifel Nicolaus Capital Markets analyst Steven Wieczynski said the CFO hiring had more to do with replacing Pat Cavanaugh, who was one of the last upper-management employees who worked under previous IGT management, than with the Double Down deal.

"We have thought for some time that Ms. Hart would look to bring someone into the CFO position that she hand-picked," he said.

Whether IGT’s corporate office restructuring turns out to be goofy is up for debate.

Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz. Follow @howardstutz on Twitter.