Archive for December, 2010
The first Canadian casino was not in a province, but in the Yukon Territory. Its operation received little notice. The casino is a special exception for this remote northern location and has not spawned attempts to duplicate it elsewhere. Still, the casino operates under the guidelines of the 1969 Criminal Code amendments.
The Yukon Territory had considerable gambling activity during the Klondike gold rush days of the Gay Nineties. Gaming halls offered a wide range of gambling opportunities along Dawson City streets. After the gold fever subsided, Canada annexed the territory in 1898 and began enforcing the Criminal Code. Gaming activity declined.
Under the 1969 amendments, the territory granted a special gaming license to the Klondike Visitor’s Association, a division of the Yukon territorial government. The license permits casino gaming from mid-spring through the summer months at a location known as Diamond Tooth Gerties (Diamond Tooth was the name of a renowned Klondike personality). The 9,000-square-foot gaming facility offers twenty-six games of blackjack, roulette, wheels of fortune, and poker as well as fifty-two machines. Maximum bets are as high as $100 per hand. The casino has a professional manager and gaming staff. The casino is open from 7:00 p.m. to 2:00 a.m. during the spring and summer seasons. Patrons pay an entrance fee of three dollars. Annual passes are available for ten dollars. Alcoholic beverages and snacks are available, but there is no restaurant. Live productions in the style of the gold rush days entertain the patrons. A regular feature is the Ballad of Sam Magee Show. Although designed to attract tourist play, the casino draws the most play from Dawson City residents. The casino attracts annual play of about $1 million. Gross wins approach $400,000. The Canadian government under the 1994 Lottery Licensing Act and Regulations receives 25% of the gross win. Remaining profits minus payroll expenses go to promote tourism and preserve historical buildings. A deputy minister within the territorial Ministry of Justice regulates the casino.
Wyoming has a quarter horse racing circuit that draws betting action to tracks at Evanston, Gillette, and Rock Springs. There are also charity bingo games and bingo games operated by the Wind River Reservation. Wyoming residents are within the marketing areas for the low-stakes casinos of both Colorado and Deadwood, South Dakota. The state also borders Montana, with its policies for machine gambling. For this reason, there have been several attempts by Wyoming business groups and by some political leaders to authorize machine gambling in taverns as well as low-stakes card games. These efforts have never received serious consideration.
 Stephen Alan Wynn may be considered a modern day “savior” for Las Vegas. Even though the Las Vegas Strip had not exactly died in the 1980s, it was not healthy. Wynn may not have raised a Lazarus from the grave, but he certainly performed the role of “healer” for a moribund casino industry. He “healed” with the medicine the community vitally needed – a good dose of entrepreneurial risk-taking and an infusion of new capital investment. Revenues for the Strip were flat in the 1980s. No new Las Vegas property had been constructed since the completion of the MGM Grand (now Bally’s) in 1973.
Other investors had shunned the town. New Jersey casino magnate Donald Trump had rejected Las Vegas. Wynn, however, turned away from his Atlantic City ventures and came back to the city of his corporate beginnings, Las Vegas. He “put it all on the line,” and he “rolled a seven” as he developed what was truly the first mega-resort for the Strip, the Mirage.
In its sixty-five-year history in Las Vegas, the casino industry has many times had to call on individuals to rescue it from pending crashes into oblivion. A post-World War II economic letdown threatened to suspend a flow of tourist dollars as well as local dollars that could go into casino coffers. Bugsy Siegel appeared on the scene with his vision of world-class tourist-destination casinos; he built the Flamingo, and the Las Vegas Strip was in business. In the 1960s, federal investigative authorities focused attention on organized crime with investments in Las Vegas casinos. Mob-run properties went into decay as their owners sought anonymity. Almost like a miracle, Howard Hughes, a “legitimate” multi-multi-millionaire, came to Las Vegas and began buying properties and giving the Strip a cleaner image. Steve Wynn established himself as “the” entrepreneurial personality of Las Vegas with the opening of the Mirage in November 1989. This bright star was then only forty-seven years old, but he had already accumulated many years of valuable experience in the gambling industry and even before that many years near the industry.
Several antecedent events might have suggested that Stephen Alan Wynn was going to be a strong individual, a leader with personal magnetism. He was born in Utica, New York, on 27 January 1942. His nuclear family was critical in his development. Stephen Alan Wynn was the grandson of a traveling vaudeville performer and the son of gambling entrepreneur Mike Wynn, who, due to the times, was required to operate on the margins of the law, if not the margins of society. Steve Wynn’s mother, Zelma, commented, “If you ran a bingo parlor, some people looked at you as if you were a bookie” (Smith 1995, 36). (Evidently being a “bookie” was not a good thing in her eyes.) Steve Wynn’s inheritance from his grandfather and father suggests that the excitement of entertaining and gaming may have been ingrained in his genetic makeup. Wynn’s tie to gaming was more than just genetic, however. He was also exposed to bingo facilities, other gaming, and the personalities of a marginal gaming industry early in his life.
1952 was a time of importance that appears to be noted in many profiles of Wynn. Steve Wynn has also verbalized it in several personal interviews. When he was just ten years old, his father, Mike, brought him to Las Vegas. There the father attempted to become established as a bingo operator in the gambling Mecca of the United States. Steve saw the desert and the mountains, and he rode horses. But most important, as a preteenager he saw the action of Las Vegas, and seemingly it left an indelible imprint. While in college at the University of Pennsylvania he studied chemistry, gave serious thoughts to becoming a doctor, graduated with a degree in English literature, and even briefly pursued legal studies. Yet Steve was destined to seek a career in gaming.
Although Steve may have found his dream, his father did not have a winning experience in Las Vegas. His bingo establishment within the Silver Slipper Casino lost out to competition from the better-heeled Last Frontier next door. Mike Wynn also lost his gaming profits through personal gambling activity. (Steve told one reporter, “My father made a nice living from bingo, but he’d lose all his money playing gin or betting on baseball. And God forbid if there was a crap game in the vicinity”). Mike was given further negative news when the Nevada Gaming Board denied him a gaming license in April 1953 (Karlen 1990, 397).
Michael Wynn’s personal drive for the golden ring ended prematurely. Heart failure led to his death on an operating table in 1963, at the age of fifty-five. A business opportunity, or perhaps necessity, was placed into the hands and on the shoulders of the twenty-one-year-old Ivy League college graduate, Steve. The weight of necessity was heavier, too, as Wynn married Elaine Pascal two months after his father died. Someone had to manage a string of bingo halls. But more than an opportunity or a necessity, a rekindled dream was placed directly in front of Steve Wynn. He was not destined to be a chemist, a doctor, a literature teacher, or a lawyer. He was destined to chase his childhood dream and achieve a success that eluded his father. Perhaps now the mission was clear and dominant in his mind. He was going to go to Las Vegas. And he would not only make it in Las Vegas, he would make it big in Las Vegas.
Steve Wynn has been able to achieve his triumphs while somewhat confined in mobility by an incurable eye disease called retinitis pigmentosa. He is unable to drive a car by himself, as his range of vision is limited. The disease may progress, but it has not been accepted as a burden by Wynn. He does consciously seek to conceal its limiting effects from the public, and in some ways it might propel his desires to achieve. He certainly expresses a desire for visual perfection with his personal appearance and his properties. He is always impeccably dressed (even when purposely informal), and his properties rate kudos from architectural analysts and public alike for their good taste and detailed fixtures and furnishings. Paint lines are exact in corners, and brass railings are always polished. Wynn is noted for having a temper, and invariably the story is told that he expresses loud verbal displeasure when he observes that one light bulb is burned out in a sign with perhaps hundreds of lights. As a blind person is often credited with having a sixth sense, Steve Wynn’s limited range of vision seems to give him a heightened sense of detailed vision. The physical limitations of his eye disease are outwardly considered to be but an inconvenience.
Wynn brought his family – wife, Elaine, and daughter Kevin (born in 1966; a second daughter, Gillian, was born in 1969) – to Las Vegas in 1967. Through contacts gained by work in his father’s bingo halls, Wynn was given an opportunity to make a 3 percent investment in the Frontier Hotel and Casino. Subsequent investments brought that to 5%. The opportunity must have been especially sweet considering his father’s sour experiences in 1952. With the investment came a job as a slot manager. His new associates, however, were not the best people in gaming. They were exposed in a cheating scheme and later subjected to a federal criminal indictment. As a result, the property was sold to the Hughes organization, and Wynn, untainted by the activities of his associates, had to move on.
But Wynn needed help. He found it with two very important friends, who played extremely critical roles in his commercial activities: E. Parry Thomas, president of Valley Bank of Nevada, and investment mogul Michael Milkin. Thomas helped Wynn win a liquor distributorship after he left the Frontier. More important, Thomas helped Wynn make a critical connection with Howard Hughes, also a client of Valley Bank. Thomas found that Hughes was paying a high rent for a piece of property next to his Landmark Hotel and Casino. The property was used for parking space for Landmark patrons. Hughes owned a strip of property next to Caesars, however, and he was collecting a lower rate of rent from Caesars so that it too could be used for parking. Caesars had attempted unsuccessfully to buy it from Hughes for about $1 million. Wynn found the owner of the Landmark parking lot and executed an option to buy the land for about a million dollars. Wynn then approached the Hughes organization and suggested a land swap. Hughes went for the deal. The financing for Wynn’s purchase was arranged by Thomas. Wynn then started to play high-stakes poker. He turned down a cash offer from Caesars to buy the land that would have given him a modest profit. Instead, he initiated a process to win a license for a newly constructed casino that would abut Caesars. He filled out all the application materials and went through the full planning process to obtain all necessary building permits. He even had a contractor break ground, before he extracted the price he wanted for the land – over $2 million. Wynn’s personal profit was in excess of $700,000. This money was then used to buy shares of the Golden Nugget Casino.
In 1971, Wynn purchased a large block of Golden Nugget stock, won a place on the corporate board, and in 1973 emerged as the new chief executive of the downtown Las Vegas property. He constructed a new hotel tower and transformed an ordinary property into the most fashionable downtown casino. From his position as chief executive officer of the Golden Nugget, he masterminded the construction and operations of the Golden Nugget in Atlantic City; by all measures the most successful casino on the East Coast. But Wynn was constrained by resource limitations. Then in 1986 he was given a golden opportunity, as Bally’s perceived that the only way it could defend itself from a hostile takeover move by Donald Trump (owner of two Atlantic City casinos) was to purchase a second casino of its own. (Atlantic City restricts owners to holding only three licenses, so Trump could not complete the hostile takeover if Bally’s had two licenses rather than one). Bally’s wanted the Golden Nugget and wanted it quickly. The company agreed to pay Wynn an exorbitant sum for the property – well above its appraised value – and did so.
Steve Wynn was then free to make his defining Las Vegas move. The move, of course, was the creation of his dream property – the Mirage. It was the first new casino property built in Las Vegas in sixteen years when it opened in 1989. Almost instantly, the Las Vegas community was transformed in its self-image. Development money was flowing into the Strip, not only for a big new property (Circus was building the Excalibur, but that was just a bigger Circus Circus), but also for the world’s premier gambling entertainment center. The Mirage brought a new popular (but still high-roller) casino into Las Vegas along with the world’s top magic team – Siegfried and Roy – in a new production considered the greatest stage extravaganza in entertainment history. The front exterior of the Mirage featured a waterfall with an “erupting volcano” shooting flames fifty feet into the air all hours of the evening. The back exterior included a dolphin tank and arena. Inside, behind the front desk there was a shark tank. The interior also featured a tiger cage adjacent to a shopping mall, along with top-grade restaurants and state-of-the-art convention facilities. A new standard was set for the Strip; a new psychology of pride and growth took over the town. Others jumped up to follow. The Flamingo expanded, Circus Circus grew some more, and Kirk Kerkorian set his sights on creating the world’s largest hotel-casino complex. The new MGM Grand opened with 5,000 rooms, and, of course, Wynn followed with his own Treasure Island (which opened in 1993) and his next dream property, the Bellagio (which opened in 1999). The 1990s became a decade of growth, but the decade would not have happened without its catalyst – Steve Wynn.
The year 2000 brought many surprises, as Kirk Kerkorian of the MGM Grand launched a successful bid to buy a majority of the shares of the Mirage Company. He was thus able to secure control of Steve Wynn’s empire in a $6-billion transaction. Undaunted, Wynn took his share of the proceeds – about $600 million – and looked over the landscape for his next move. For less than half that amount, he was able to take over 100% of the ownership of the classic Desert Inn property, the famous location of Hughes’s campaign to control Las Vegas. Wynn now had one of the historically best high-roller properties, and the only golf course on the Las Vegas Strip – a wonderful launching pad for a fresh start (Smith 2000, 331–354).
Other industrial towns have found their economies transformed from ones of entrepreneurial dominance to ones of corporate dominance with the passing of generations. But in Las Vegas (and Nevada), until 1963 the law precluded public corporations from operating casinos. Although corporations have now built very large casinos, private groups still have a major presence in the industry – Binions, Engelstadt, the Boyd Group. Also, corporations within the industry are still open to personal leadership, as open competition still welcomes imagination even if Wall Street investors shy away from it. Nevertheless, the first wave of corporate leadership in the casino industry did seem to stifle that imagination by trying to impose values of Wall Street and the Harvard Business School onto the gambling floor. At first, the traditional thinking held gambling back from creativity. Wynn suggests that this made his task as an emerging leader so much easier. “There was this sameness… on the Strip. Las Vegas was like the portrait of Dorian Gray. The world had been moving by for twenty years, but everything here stayed the same. You didn’t have to be a genius to be a top dog; all you had to do was walk into the present”.
 The primary form of gambling in Wisconsin is found in the seventeen casinos on eleven Native American reservations. The casino gambling was legally authorized in compacts between the tribes and the state, first negotiated in 1992 and then renewed in 1998.
The 1998 compacts permit machine gaming and blackjack table games as well as bingo, and the tribes agree to pay the state 3% of the revenues they win.
The largest gaming complex in the state is on the Oneida reservation near Green Bay. The complex, which includes a full-service Radisson Inn Hotel, a new casino, and a bingo hall as well as satellite gaming areas, has over 4,000 machines and 120 blackjack tables.
The development of casino gambling in Wisconsin fits the general scheme in the United States. It did not happen “on purpose”. It started in 1973 with a public referendum vote that approved a state constitutional amendment to allow bingo games for charities. In 1975, the legislature implemented the action of the voters by designing rules for charity bingo games. Using the status of a charity, the Oneidas offered a bingo game in September 1975. The voters also approved an amendment authorizing raffles in 1977.
For several years, Wisconsin tribes ran games according to the state’s legislated rules. Like other tribes with severe economic needs, however, they took notice when in 1978 a Seminole reservation in Hollywood, Florida, decided to gain an edge on its bingo non-Native American competition. The tribe began offering very large prizes, which violated the state’s rules. The large prizes immediately attracted large droves of customers, and profits increased. As with the Seminoles, the Wisconsin tribe’s actions were upheld as being legal.
During the 1980s, Wisconsin tribes experimented with a variety of games. The Menominees used a Ping Pong ball device to generate numbers for roulette games and also to indicate cards for blackjack games. But the real casino games came in 1987, following the U.S. Supreme Court’s Cabazon ruling, handed down in February 1987.
In March 1987, the Menominees decided to offer regular blackjack games at their gaming facility. In April 1987, just two months after the Cabazon ruling, the voters were asked to amend the state constitution to remove the ban on lotteries and to authorize pari-mutuel betting on dog races. The legislature had put the question on the ballot. The public wanted a lottery to compete with lottery games in Illinois and Michigan and passed the measure by a 70% to 30% margin.
Based upon the lottery amendment, in 1989 the state Department of Justice indicated that the state could negotiate agreements (under provisions of the Indian Gaming Regulatory Act) with the reservations permitting them to have casino games. Yet when the state did not follow through on negotiations, the tribes took the matter to federal courts, where they won a ruling forcing the state to negotiate. Soon after, the governor signed compacts.
In 1992, after the governor had concluded casino compacts for the other reservations, the Forest Potawatomis asked the governor if they could have casino games in Milwaukee. The governor and the tribe compromised on a plan that allows 200 machines at the bingo facility. At a later date, they were allowed to have 1,000 machines.
As the new century began, the tribes’ casinos were winning over a billion dollars a year, according to my investigations for several tribes. Several tribes were seeking new locations for casinos. The four dog tracks of the state were considered to be good casino sites. Some smaller tribes were denied the opportunity to complete a deal for a dog track in Hudson, Wisconsin, because of a decision made by the U.S. secretary of the interior, Bruce Babbitt. A federal special prosecutor then investigated Babbitt, as his political party (the Democrats) had taken large contributions from larger rival tribes that did not want competition from a new casino at the track. He was cleared of any wrongdoing.
Wisconsin represents not only a strong Native American casino venue, but also one in which rivalries among the tribal gambling operations are quite open and obvious.
The Western Canadian Lottery Corporation (WCLC) was formed in 1974 by an agreement among the governments of British Columbia, Alberta, Saskatchewan and Manitoba. The Yukon and Northwest territories have joined the WCLC as associate members, and the products of the corporation are sold in the territories. The products include instant tickets, weekly draws, and lotto games. In 1976, the WCLC governments entered into an agreement with Ontario to run nationwide lotto games. The Inter-Provincial Lottery Corporation is now an organization encompassing all provinces and territories. Sales of the WCLC are recorded by each province, and revenues are distributed accordingly. The profits are distributed within the jurisdictions in a manner designated by the individual province or territory. In 1985, British Columbia withdrew from the WCLC, and it now conducts its own lottery games.
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