Jeff Simpson Talks to Steve Wynn and Jack Binion About Their Macau Relationship - Tuesday 8th of August 2006
By Our Partners at the Las Vegas Sun
LAS VEGAS, NEVADA The Las Vegas casino business threw a couple of curveballs last week. The biggest shocker was Steve Wynn's announcement that he had hired Jack Binion to run Wynn Resorts' international operations.
Wynn said hiring his longtime friend as chairman of Wynn International is a coup for the company. Binion is widely considered to be the man who understands more about the gambling side of the casino business than any other.
"He's the smartest inside gambler that ever was," Wynn told me. "Jack had an interest in doing something on his own in Asia. He was fascinated by Asia. I told him: 'Jack, I got a (Macau casino) concession. I got land. I got money. What I need is your brain. Come on, throw in with me.' "
Binion did just that. He's already a significant owner of Wynn Resorts, with more than a million shares.
"Steve's brand is strong here, but it's three times as strong in Asia," Binion said. "There's a lot of exciting opportunity in Asia. The long-term prospects for the company are great, and I want to help Steve build a good organization."
Wynn said the move was the result of a year of discussion. Wynn gave up his ornate Macau office for Binion.
"You're the only guy alive I'd move over for," Wynn said he told Binion. "You have to have the boss office."
Binion's getting settled in Macau this weekend. He has about five weeks until Wynn Macau's scheduled Sept. 5 opening.
Wynn and Binion said Wynn Macau's staff is first-rate. "They've been doing what they do over there for 40 years," Binion said. "I'm really a Johnny-come-lately, but I know gambling."
Binion accompanied Wynn to Macau a couple of weeks ago and met Edmund Ho, the Chinese enclave's top official, as well as casino kingpin Stanley Ho. Stanley Ho controls the lion's share of the big-betting action that Wynn and Binion covet.
In addition to Wynn Macau, Binion's responsibilities will include future development on Macau's Cotai Strip. Wynn recently secured a 54-acre site from the government for about $100 million.
Wynn, 64, and Binion, 69, have known each other for about 40 years. When Wynn took over the Golden Nugget, Binion was running the Horseshoe across Fremont Street. The two became more than friendly competitors, Wynn said.
Binion's place was a down-and-dirty gambling hall, while the Nugget aspired to be a destination, he said. Together, they won almost all the money downtown gamblers lost for almost 30 years. "The places worked well together," Wynn explained. "They viewed my place as a dormitory for their casino, and I never could have attracted as many guests if it weren't for the Horseshoe."
The duo often lunched together and regularly went windsurfing at Lake Mead. "We were buddies," Wynn said, characterizing their feelings for each other as based on "not just respect, but trust."
If the Wynn-Binion combination was a figurative wedding, the Boyd Gaming sale of the South Coast to Coast Casinos founder Michael Gaughan was a divorce, albeit an amicable one.
Boyd's surprise announcement figures to be a plus for both sides of the deal, which calls for Gaughan to give Boyd all of his 15.8 million shares of Boyd stock in exchange for the South Coast. Gaughan says he wanted to be the man in charge and that he believes he can turn the South Coast's slow start around.
"There's nobody nicer than Bill Boyd in this town," Gaughan told me. "I'm going to move down there and turn the South Coast around. It will take a lot of work, but we'll do it."
The property will be renamed, as Boyd retains rights to the Coast brand (and the other four Coast properties they acquired from Gaughan and his partners in 2004), but Gaughan said he's not yet ready to disclose the three names he's looking at.
Gaughan and Boyd President Keith Smith told me the deal was good for both parties. Boyd gets some cash and shares and will retire some debt, and the company can focus on its $4 billion Echelon Place redevelopment of the Stardust site and a locals casino it will begin building next year in North Las Vegas.
"This was a win-win for the company and for Michael," Smith said, adding that he expects Gaughan to make the South Coast a success.
It's tricky when successful casino operators try to work together. Big - and justifiable - egos can get bruised, and men who've grown accustomed to taking the lead have to get used to playing second fiddle.
Boyd and Gaughan decided to end their arrangement. It will be challenging for Wynn and Binion to make theirs work.
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