Casino fixer gambling on win in UK
Allan Solomon’s Isle of Capri wants to be the first US casino operator to open a large-scale venue in Britain. But only one will be allowed and competition is fierce
THIS week we’re doing lunch. It’s the pragmatic choice — my interviewee, Allan Solomon, executive vice-president of the American casino operator Isle of Capri, has yet to take an office in Britain, so we meet at L’Escargot, in London’s Soho. It seems a casino operator kind of thing to do.
And anyway, Florida-based Solomon, trimly moustached and a dead ringer for Mel Brooks’s better-dressed, younger brother, looks like he might appreciate a nice meal.
He had hoped to be building a string of American-style casinos here by now, but has found himself stymied by the British government’s sudden change of heart over gambling liberalisation. He is not alone. A clutch of American operators are now trundling round Britain, puzzling over what happens next.
“Yeah, we’ve spent a lot of money looking for sites,� says Solomon, “under the assumption that there would be a number of larger-scale casinos, then we were disappointed when that number was reduced to eight, and really disappointed when that was reduced to one.�
He studies his smoked-salmon starter pensively. Solomon, aged 69 but looking 10 years younger — “it’s the Florida climate� — has been jetting in and out of Britain for three years now, attempting to establish a beachhead for the Isle of Capri invasion.
His company, which he co-founded with chairman Bernie Goldstein in 1992, is already one of America’s top 10 publicly listed gambling businesses, with a $1 billion (£560m) turnover and a host of Caribbean-themed sites along the Mississippi and elsewhere. He has just had one river boat wiped out by Hurricane Katrina in Biloxi. It never rains but it pours.
Isle of Capri’s British interests include a £6m investment in the Ricoh Arena, Coventry’s new exhibition centre and football stadium, which includes space for a 130,000 sq ft casino. Options on other sites were also taken.
That was before the British government, following a concerted scare campaign during the last general election, changed its mind and announced it would approve only one regional, super-casino — 1,250 slot machines, 50 gaming tables, live entertainment — to be run as a pilot.
An advisory panel will pick the site, reporting to the government before next autumn. It will also choose sites for eight medium-sized and eight smaller casinos — all rather bigger than what was allowed before but not enough to excite the overseas operators.
In short, what was going to be a gung-ho liberalisation has slipped into bureaucratic quicksand, leaving Isle of Capri, which prides itself on being first to market in its target localities, desperate to get that pilot-site tag. Solomon had been on Radio 4’s Today programme, just hours before we met, banging the drum about his Coventry project.
But he faces fierce competition. Last week Las Vegas Sands, another American operator, announced that it had been given approval by Glasgow city council to develop a £120m entertainment complex, including a Las Vegas-style casino.
Harrah’s, which now owns Caesars Palace in Las Vegas, wants to build a £75m casino in the new Wembley stadium. MGM Mirage and others have also been looking around. South African Sol Kerzner wants a casino at the Millennium Dome. That’s before you even start listing the British contenders.
Who’s going to get the nod? “Right now,� says Solomon, making his pitch, “Coventry is the only one ready to go. In Glasgow, they have just outlined the planning, they (Las Vegas Sands) have loads of things still to do.�
Whereas Coventry, he says, could be up and running before the end of next year. Nobody else could move that fast. Then he lists more reasons why it has to be Coventry: it’s part of a regeneration scheme, it has easy parking, it’s not in a residential neighbourhood.
“And it’s jobs. After the car manufacturers laid off people, our casino would re-employ 1,100 in skilled jobs. With other jobs linked in (providing services and supplies) you’re talking about some 5,000 jobs created in total.
“Once the British get to know the product, they’ll find casinos acceptable. There are clear economic benefits, and it doesn’t create additional crime and all the other falsehoods that people associate with it.�
So why does he think British politicians got cold feet?
“I think there was bad publicity about some of the American operators, the image of Las Vegas type of casino. But those are casinos three or four times the size of what would be built in the UK — there is an overemphasis on that type of super-casino. Our product is more about fun and entertainment as well. That type of Las Vegas casino won’t work in the UK.�
Solomon puts his knife and fork neatly by the side of his plate and sips a glass of Chablis. He makes a convincing advocate — snowy-haired, gently humorous, quietly logical.
Boston-born, he trained as both an accountant and a tax lawyer, and even advised the American government at one stage in a long career that brought him to gambling late on.
As such, he is not what most Brits expect in an American gaming boss. “A lot of the UK team thought Allan would be all black shirt and white tie,� says Neil Sinclair, Isle of Capri’s British property adviser, “but he’s the complete opposite. Give him a chance and he’s pulling out pictures of his grandchildren.�
Solomon, whose father was a shoe wholesaler, is good at putting people at ease. He spent a lot of his career based in Louisville, Kentucky, and likes to describe himself as just “a nice Jewish lawyer from the Midwest�.
But he has worked both in law firms and public companies, and clearly has found his groove in Isle of Capri. Having moved to Boca Raton, Florida — “I liked the lifestyle� — he started the company with fellow incomer Goldstein, an entrepreneur who had been a client in Louisville.
Goldstein had riverside property and a barge business in the southern states, and a hunch that gambling — which Mississippi allows offshore — might work. It needed considerable legal fixing.
So Solomon threw in his lot with Goldstein, and Isle of Capri was born. The move is not unusual. American gaming operates under such tight regulation — the legacy of its early links with Mafia crime bosses — that lawyers frequently call the shots.
Hence Solomon handles the political lobbying, the approvals to open up, the permissions to operate, and the strategy for expansion. “I deal with anything which is outside the four corners of the casinos,� he smiles.
Others describe Solomon as key to Isle of Capri’s success.
“Allan is the strategic glue — he’s tireless, he does every deal for them and he’s a shrewd negotiator,� says Mark Harms, chief executive of Global Leisure Partners, another long-term adviser. “Behind that exterior he is incredibly tough.�
Solomon’s eye for a deal means Isle of Capri now has 14 casino and hotel sites stretching from Mississippi to Colorado, as well as a golf resort in the Bahamas and a racetrack in Florida.
The group has developed a reputation for sharp marketing to local customers, and good community relations. In Biloxi, where it hopes to rebuild its river-barge casino on land — “who’s going to insure a river barge now?� — it’s housing homeless employees in its hotel, and has given $500,000 to the local relief fund.
Britain, Solomon hoped, would provide easier pickings, especially if he moved early — an initiative that now is in danger of backfiring. A lot of time, money and effort could have been wasted.
Solomon nods at the irony, as he picks through a slice of sea bream. He is too diplomatic to say it, but you can sense that he thinks we Brits are a bit mixed up about gambling.
“It’s just this idea that you don’t want the proliferation of gaming, even though the UK has gaming everywhere: betting shops, bingo, bars with slot machines. You don’t have that in the US.�
He makes a face, and tidies up his plate. The point about Isle of Capri is that it’s not a glitzy, Las Vegas-based operation, he says. Its casinos offer a fun night out, no different to going bowling or seeing a movie. All the stuff about the supposedly seamy side of gaming is way off the mark. His core customers are middle-aged women, not mobsters or priapic youths or vulnerable gambling addicts.
“We’ve got the tropical theme, so if you come to our casinos you really feel like you are somewhere else. We want people to leave and think, boy, we had a good time, and we want them to come back, because a lot of our business is dependent on people coming back. It’s open to everyone, you can have a nice buffet and a drink, you don’t even have to gamble.�
He sighs, wrapping it up. The bill is coming. He says he is on for the photo shoot the next day — the happy-go-lucky fixer in his tux at the roulette wheel.
But you get the sense that the British flip-flop over gambling is straining even his practised patience. It has all become too much a game of chance.
And that, funnily enough, makes most casino operators anxious.
2005-09-12
