quote what I like about casinos is that they allow us to build hotels a slot machine or a blackjack or a roulette table they have no power it's the non-casino stuff that gets people to come back again and again close quote with us today the man who said that and who by Universal agreement reinvented Las Vegas Steve win shooting at The Win Las Vegas uncommon knowledge now welcome to uncommon knowledge I'm Peter Robinson win Resorts the owner and operator of luxury casino resorts in the United States and China on revenues in 2013 of 5.6 billion net income of more than 1 billion and a stock price that has risen Over The Last 5 Years From roughly $37 to well over $200 more than Quinn tling in value with us today the company's founder chairman and chief executive officer and by wide agreement the man who reinvented Las Vegas Steve wnn Steve I ordinarily thank guests for joining us but since we're shooting today not only in your hotel but in your home this is your Villa at the wi Las Vegas thank you for permitting us to join you I was listening to your introduction and I One thought passed through my mind better to be lucky than smart okay new kid in town in 1967 25-year-old Steve win arrives in Las Vegas with money from the family business a string of bingo parlors back East he buys a small stake in the frontier Steve this town in 1967 I once you heard you say that Las Vegas hotels when you got here were more like Motel they weren't real hotels what did this town look like in those days there were 160,000 people there were eight or nine hotels on the Strip uh they were with one or two exceptions lowrise structures and if they had a highrise it was with three or 400 rooms uh Del Webb had built a Sahara that had a th000 rooms the Stardust was basically a motel with 1,400 rooms the rest of them were two and three story structures with little small high-rises attached to them small casinos with 300 slot machines and 40 games and a showroom and it was a small town a company town and and what brought you here in the first place from upstate New York you grew up in Upstate New York you were operating fingo parlor when my father died and and when I was a senior in school on the table in heart surgery we were broke was my senior year and at Penn I graduated and I had the business the family business in Maryland and I had the Bingo that was licensed in Maryland I had run it while I was a student that's how I got my allowance I'd go down from Philadelphia to Washington every weekend and run the Bingo and I I wanted to be a developer and because I was in a county that was adjacent to the Baltimore Washington International Airport right I wanted to build an industrial park and I could buy a farm for a million dollars that was next to the A airport and I could get it zoned for the airport other people might have had a hard time but I knew my way around the county I thought I could get the zoning and I didn't have any money I was worth about $50,000 or $25,000 and I found John MacArthur of Banker's Life in casualty and offered him half of it if he would lend me the million to buy the farm he said no but he asked me a bunch of questions about where I'd gone to school and what how was my business legal and all that sort of thing and I left and I went back to Maryland and two weeks later I got a phone call from his office saying that Mr MacArthur uh he and Getty were the two richest Americans at the time he owned Banker's Life in casualty by himself wanted to see me again in New York and that he'd pay for my airfare I paid my own airfare and up to The Plaza Hotel and I sat with him and in effect he told me that the insurance company ow own this land on the Strip a closed hotel called The Last Frontier the insurance company had been trying to his seller it to get rid of it and so far it been unsuccessful but a group of men had come to him to lease it for a very very big price if he would add $5 million for a highrise for more rooms right and he said that he would like to have someone in the Lessie group that represented his interests would I like to go there and he would arrange me to get two or three or four per for virtually nothing few thousand dollar $25,000 and he said he'd pay my way to go take check it out and I said 'I pay my own way and I ended up on Thanksgiving of 1965 in Las Vegas you're 23 years old 23 years old with my wife Elaine and I was with a friend of my father's who had arranged for me to meet MacArthur and we started this little weekend in Palm Springs and we were at a restaurant called Ruby's dunes and Sinatra was at the next table with some people totally by happen St by luck and he walked over to say hello to the guy I was with and we got introduced he what are you doing out here well we're going to Las Vegas tomorrow because Steve has been invited to join a deal for a new hotel on the Strip Sinatra did a double take I looked like I was about 16 years old so did Elaine what hotel on the strip I I quickly sort of described what Mr McArthur was doing and he said to her where you staying he said well we'll stay at the dunes no you won't you'll stay with me you'll stay with me at the Sands I'll take care for you and the young people here and the next thing you know we're in Las Vegas guests of Frank and atra staying in a suite when everybody in the world is crowded into the Sands to get a glimpse of the Rat Pack but these were the classic days of the Rat Pack it was it they were there you you can't really explain to people today what it was like we we went to the showroom the sand showroom had 500 seats the coper room where the Rat Pack work was a tiny nightclub how many seats have you got here at the at the wind Las Vegas oh 1500 usually nothing but everything's big now but it was 500 seat SE joint we were in line we're at the end of the line we come to the Mater D you know typical guy with the card and we say win Leber guy hello Mr wi welcome to SS says to the cab take down the booth five we get taken in there's 497 people in that room we walk in the older guy and the two of us we look like his kids and we sit in a booth in the center of the ringside on the right is Lucille Ball Elizabeth Taylor and their and other people on the left is Gregory and vernique peek and Roger Moore and his wife everybody in the room is somebody or a giant customer of the Sands right they had some dancing girls like the the Copa girls and they went off stage and without an announcement Frank Sinatra de Martin Sammy Davis Jr Peter Lawford and Joey Bishop walk out the place goes nuts everybody is cheering because Sinatra and Martin and Davis knew everybody that was in the room got it and so they start walking around the apron of the prum hi Lizzy hi Lucy hi hi Greg hi verie you know hi Raj like this kind of sonra says are you like the seat kid everybody looks at me and say what mafiosa son is that you know or whatever they think right I mean it was so funny so cool Dean Martin Mr Cool Frank Sinatra The Boss Sammy Davis the Court Jester with more Talent than anybody Peter Lawford and joy Bishop were sort of like Furniture Steve Steve you're a big you're a big- Time businessman but what you're telling us is you came to this you fell in love I was totally I had no intention of staying uh I just wanted to take my wife on a vacation when my dad died we never had a honeymoon right so it's two years later from 63 to 65 I figure this will be fun right the Mater D said to me when the show is over stay in the seat we get taken when the showroom empties through the back to the lounge there's Louis Prima Key Smith Sam buter and the Witnesses on stage two Reserve tables we sit down in the reserve table thousand people the casino's cramming to see this it was an open Lounge right five minutes later Here Comes Frank and Dean and Sammy sit next to us and on my first night in Las Vegas I end up sitting next to them watching Lou Prim and key smith F and at that point I am toasted I'm going I'm staying I don't care what the heck is going on anywhere else I got to figure out a way to being around here what fun this is so you buy a small stake in the frontier was a slot manager and assistant credit manager it emerges not long after you buy the stake that some of the shareholders in the frontier are fronting for the Detroit mob and you nobody accuses you but you sell out I tell you how I got lucky in the frontier the only time I myself came within spitting distance of what you'd call bad guys right was in that early days when I was a slot manager at the frontier inent the place opened in July of 67 it was sold to use in November the whole experience lasted four months now at that time Howard hughes's Banker Perry Thomas right who owned the Valley Bank the Thomas of macarina here in town he's 92 years old he's become my second father ever since I was that age right per Thomas was trying to buy the frontier for Hughes I didn't like the people in the hotel for because they didn't know what they were doing I wanted to go home so I was lobbying other shareholders from California some other shareholders that we ought to sell the Hughes which put me in odds with the guys from Detroit who didn't want to sell to Hughes but I was sort of the agent of the Mormon Banker Perry Thomas got it as it turns out the US attorney wrote testified in a letter from me when I got licensed in New Jersey that on the wir Taps that the government had the guys from the Detroit guys in Las Vegas talking to the ones in Detroit were complaining about me that I was causing the place to be sold by lobbying the other shareholders and he wrote a letter that Not only was Mr win have nothing to do with those people he thwarted their efforts to stop the sale the Hughes so I was very lucky that I was in the wrong place but the government happened to be the witness got it and at 25 years old it could have turned out differently right I could have been tainted by that right that's the only time that I became remotely close to that stuff uh got it and and the banker convinced me to stay it was it was Hughes bank and his son is my colleague who did all our designing with me of the hotels all these years this is another piece this is a theme in your story you collect people people people seem to stay with you get to that in a moment so you sell the frontier you do a couple of land deals well I went in the liquor business with the help of my banker I became a distributor in Reno in Las Vegas right of liquor wine and beer and then you buy a big enough steak in the Golden Nugget downtown then I bought the key thing okay was Howard Hughes sold me the corner next to Caesars for a million dollars a million a milion $100,000 why why did he sell to you he was famous for holding on to everything it was a strange narrow piece of property that had come into His ownership by means that no one quite understood and it was in his name I bought it from Howard robarts Hugh Jr not the Hughes tool company this strange silly piece of property was purchased in his name when when the people that took over hughes's operation when he left town tried to find out how it came into ownership by Hughes neither he nor anybody else can answer the question and he was mystified himself and my banker Perry Thomas intervened and had Hughes sell me the piece of property because it was it next to anything that heugh was owned and he lent me the million too to buy it including $100,000 for interest 10 months later I sold it for two and a qu million to Caesar's Palace I made a m my first million dollars I was 29 years old and I paid my tax I had a partner AB Rosenberg that owned the third who own J&B Scotch who would sign the note at the bank with me and on my $600,000 I invested in the Golden Nugget and got control of the company and that's been the size of my whole investment from day one $600,000 $600,000 made on a land deal with Hughes you got control of the Golden Nugget now that's moving pretty quickly through an interesting chapter right there I was 30 you were 30 you end up as chairman of the gold Golden Nugget now as best I can tell no rooms just a casino just a casino little Casino had a, 800,000 shares of stock AT3 or4 a share about a 7 million company got it and I got 10% of the place for 600 like that and you began rebuilding the Golden Nugget yes you rebuild the Golden Nugget at a time when such things were possible in life everything is about timing okay everybody thought that Las Vegas was the underworld right it wasn't they were gone got it got it but it was too early for Wall Street to come yet but the Mormon Banker knew about it and he said to me when I wanted to go home when we sold the frontier Steve you should stay here the town needs young people you'll end up owning the place he actually said those words to me my net worth was $50,000 everything from that point forward was with the help of the Mormon Banker he lent me the money he got me in control position at the Nugget he lent me he and First Security of Utah the bank of the LDS church right lent me my first 12 million to build my rooms at the Nugget I I was in the right place at the right time you know there's an awful lot of hard work and smart people but they don't always find themselves so so much the beneficiary of timing and opportunity in my case I just fell into it next next chapter here mid 1970s New Jersey voters approved casinos in Atlantic City in 1978 you buy a piece of property in Atlantic City you rip it down you'll be you build the Atlantic City Golden Nugget and you operate that profitably for not quite a decade and you sell it in 1987 to Bal to come back to this town why did you go into Atlantic City and why did you get out the business opportunity in Atlantic City uh they opened an Memorial Day of 78 right the same weekend that I opened the Golden Nugget first 600 room Hotel the called the Golden Nugget rooming house I was a ski friend I'm a powder skier and a skier right and the president of Resorts International was Jack Davis was a powder skier with me we used ski together in Utah Jack Davis had invited me the year before to see the boardwalk and said next year we're opening it's going to be a big thing you should be here Steve I said I'm building my hot tell in Las Vegas I don't want to come here I made a mistake I a Memorial Day rolls around I have the best weekend of of in the history of the Golden Nugget cuz I have rooms I'm all proud of myself I and Jack Davis on television because Resorts open to New Jersey I call Jack Davis and say Jack I saw you on TV it looks great he says unbelievable I said we opened the Hotel this weekend I broke all my records we did $50,000 in slot machine business for the weekend and the place used to do4 $5,000 a day we did $10,000 or $88,000 a day I said how' you do he he's gets quiet on the phone and he said actually we did 150,000 I thought for the weekend my God three times as much as a nugget and then after a beat he says a day what we did $700,000 the first three days in slots we're having trouble counting the money from the tables because it's all stacked up and Buck crates what Steve get on the plane and come here the next day I was on the plane and I went to see Jack Davis and I walked in his office at Resorts International couldn't get through the crowds to get to the elevator he sitting back in his desk and like I told you so okay we're going to get some land he says go see Manny Solan at the Solomon at the Strand motel at the opposite end of the boardwalk he wanted to put me as far away as he could and I went to see Manny Solomon and bought the property that the next day and it looked so good right and everybody was rushing and remodeling these dumpy old hotels I said if I build a new one that's all bright and shiny right they want the Las Vegas experience I'll be the guy that gives it to him and it took me an extra year I didn't open till 7980 but the advantage we had even though we were the smallest one was so great at the end of three years we had made more money than the other guys including there's a head start so you know it's again uh what you offer the public and the Golden Nugget of Atlantic City was a big hit because I got Sinatra to come and be the spokesman and hang out with me and and then Dean Martin joined us so why did you sell in 87 because no matter what I said to the government two Governors that they had to take control of that City away from the local government they were so corrupt and stupid the local government was was the pits and I kept saying to governors of New Jersey you must take control of the central planning of this community if it's to save itself right now you're the Monopoly on the East Coast that will end someday and the infrastructure of the city has to be so big that it's like Las Vegas Las Vegas gets is is surviving in spite of everything because the infrastructure here is so big the menu for guests is so great Atlantic City can't just be a local crap game it's got to be a destination city but for that the government had to take over the New Jersey state government not the local Atlantic City Government which was pathetic well they wouldn't and they didn't and I came at one point of the view that Atlantic City was never going to take advantage of its opportunity and would eventually be face obsolescence which I'm afraid is true today and so when the opportunity came to sell I jumped at it and I had already bought the property on the Strip from hughes's nephew that is Treasure Island and the Mirage all right which brings us back to Las Vegas yeah and here comes the reinvention of this town while you're operating in in Atlantic City Las Vegas has some tough times tourism drops there's a lack of new construction and a sense in this town late 70s mid 80s that the best days of Las Vegas are behind it it's losing its competitive Ed Edge and then Steve wi returns and spends more than $600 million building the Mirage making it the most expensive casino to that point point in history it opens in November 1989 with more than 3,000 rooms an artificial volcano lions and tigers in the Sig freed and Roy show acrobats from cir to Cay in 93 you do it again you open Treasure Island $450 million casino with a lake and a pirate ship 1998 again Bellagio 1.6 billion doll Resort 4,000 rooms more than 100,000 sare ft of gaming space to this day one of the big things to do in this town is go over to the bagio in the evening and watch The Fountains of bagio the show so this is Investments of more than 2.6 billion in a town that when you came back for Steve win round two had grown CI so the question here is what did you think you were doing the analysis of the Hilton the MGM and Caesars underpinned the business plan and the opportunity that was that would define the Mirage there had been 22500 room hotels but there had never been a 3,000 room hotel in the World MGM was about tour and travel and they had a shopping center downstairs Hilton was about food and beverage and Convention Caesars was about the leverage of the Cino and international business bakara if you combine the three there was clearly a business plan there that would produce a return on $600 million and the worst case would be50 60 we did 225 right out of the box wow now that proved that you could invest it was a $200 million town before that as far as investment right now all of a sudden we had tripled the capital and Mirage I was asked while the governor was present when I unveiled the model of Mirage before we broke ground what's the importance of this facility I said I think it's going to be a great investment for our shareholders but really the the most important thing about the Mirage will be that it will show that Las Vegas is a safe place to invest over $500 million I didn't realize when I said it how prophetic that statement was because it Unleashed as you mentioned in your introduction a decade of billions of dollars of investment you know these things occurred sequentially and I might add again referring to timing think of the late seven late late 80s and the early 90s that was the era of the Japanese investment of America the wave of we had customers one after another who nobody had ever heard of that came and put up a million dollars to gamble $2 million to gamble I mean the the the first big International money big big right big wave it was in tsunami to use a current term when it came into the mid90s I knew that you could buy the desert in and I had I had advised Nick pritzer of hayatt when he came to see me how can we get in here I said buy the desert in it's got water rights it's next it's got a the desert in had the front on the Strip but the back across from the convention CER but it was way at the North End North End of the strip didn't matter didn't matter no listen the the development makes a location not the location makes a development okay I remind you that the dunes went bankrupt twice after Caesars and MGM were open on the number one corner when I bought the dunes I paid 400,000 an acre for it no one wanted it can you imagine that in 1994 no one wanted 166 Acres with a golf course on the Strip except me and I offered sumomo Bank $70 million for 166 Acres
