Reinvention – Las Vegas in the ‘80s
Las Vegas was the most popular gaming spot in the world as the 1980s dawned, but the general malaise of the 1970s continued. Hardcore junket players from New York and New Jersey turned their back on Nevada when gaming was legalized in Atlantic City and new properties in Laughlin, Nevada (like the Riverside, Tropicana, Harrah’s, Edgewater, and Colorado Belle) put a serious dent in the cash flow across the tables in Las Vegas. Gaming revenues in Sin City were flat, the patient was critical.
Newspaper and magazines articles lamented the fate of Las Vegas and its low hotel occupancy rates just as they had in both the ‘50s and ‘60s, but as usual, casino owners refused to go quietly into the desert night. Instead, new ideas were brewing, including, again, family entertainment themes.
The Sundance Casino opened downtown in 1980, adding a spark of interest, followed by expansions at other properties like the Tropicana – which had been purchased by Ramada Inns, Inc. after a skim operation by Kansas City organized crime figures was uncovered – which built its 21-story Island Tower in 1986. The property had an upsurge in revenue and cruised through the decade with moderate earnings.
Across the street at the Dunes, the South Tower was added in 1979, but the extra rooms didn’t change the tempo in the casino, which continued to suffer a decrease in guest traffic and poor revenue. In 1983, Stuart and Clifford Perlman of Caesars World offered to purchase the Dunes for $185 million, but the deal ended after the Perlman’s ran the property during a three-month trial period and found the proposed deal to be a likely money pit.
The Dunes Resort filed for bankruptcy protection in 1985, and Steve Wynn offered $115 million for the resort, eager to add his name to the Las Vegas Strip, but his offer was declined. Donald Trump offered $100 million the following year, but his proposal was also rejected. Trump turned his attention back to New Jersey, but Wynn still had his eyes on the Las Vegas Strip.
Steve Wynn on the Las Vegas Strip
After being rebuffed by the Dunes, Wynn decided to build his own property instead of refurbishing an existing one as he had done with the Golden Nugget Casino on Fremont Street. To that end, Wynn turned his attention to the Castaways, a tired old property a block away from the Dunes that had seen better days. Originally opened on September 1, 1963, it was purchased in 1970 by Howard Hughes for $3 million, long after its popular 1500-gallon aquarium bar featuring peek-a-boo, nearly naked women swimming about at regular intervals.
As a Hughes property, the resort grew to include 35,000 square feet of gaming space and more than 1,700 rooms. It survived the ebb and flow of gaming revenue in the 1970s and struggled into the mid-1980s on its last legs. The property closed in July 1987 and demolished.
Wynn purchased the land and quickly began construction of a new type of Las Vegas property, a mega resort, which he helped design with a South Seas theme. The high cost of construction, $630 million, was considered highly risky by the banking establishment, especially given the condition that the Las Vegas Strip was in financially. Unable to finance the luxury project through conventional methods, Wynn worked with Michael Milken, then the king of high-yield, high-risk bonds. It was the junk-bond use and high cost that set financial experts speculating that Wynn was risking more than a half-billion dollars on an untried, unlikely to be successful last-ditch effort to save Las Vegas. Wall Street watched with great interest as their bonds floated the project. Speculation was that the property would have to net more than $1 million dollars per day to be successful. A staggering sum at that time.
Local casino owners were less worried, and some were in fact following similar plans for their own projects. While the Mirage opened to fanfare and enthusiastic crowds of gamblers on November 22, 1989, the world took note that even a risky project could be successful if the final product met public approval. The resort was new, exciting, and the first build on the Las Vegas Strip in 16 years.
Opened as the world’s largest casino with 3,044 rooms set into a Y-shaped hotel tower standing 29 stories, the Mirage featured upper-end restaurants and a huge 100,000 square foot casino with table game limits set well above those of surrounding properties. Wynn’s marketing department culled their lists and offered luxurious vacations to their best players that included gourmet meals and large suites and high roller rooms that occupied the top five floors of the resort.
Massive interest in the property and a successful casino made the naysayers take note as the Mirage met its revenue goals in less than two years. Steve Wynn continued building his empire with the Treasure Island Hotel and Casino, which opened in 1993.
Circus Circus Enterprises
The most prolific casino group of the 1980s was Circus Circus Enterprises, formed in 1974 to purchase the Circus Circus Hotel Casino from Jay Sarno, who had opened the property in 1968. The group opened a sister property in Reno in 1978 and acquired Silver City Casino and Slots-A-Fun Casino in 1979 and then the Edgewater Casino in Laughlin. They went public with a NYSE offering in 1983. The following year the group purchased the Colorado Belle in Laughlin.
Majority owners William Pennington and William Bennett put their emphasis on cheap entertainment for families, turning their play center and big top exhibits into arcade babysitters and stressing $6.99 dinner buffets and $4.95 prime rib dinners. There wasn’t much for people too young to gamble to do in Las Vegas, so the local Circus Circus Hotel with $29 rooms was a hit.
The success of all Enterprise properties convinced Bennett and Pennington that they too should build a series of mega-resorts on the Las Vegas Strip across from the venerable old Tropicana Hotel. Their plans started in 1987 and the first of their three resorts, the Excalibur, opened in 1990.
The Excalibur resort was named for the mythical sword of King Author and featured a Medieval theme throughout the property with an outside façade depicting a huge castle sprawling across 70 acres. Inside the highest turret the wizard Merlin could be seen from miles away, watching over the property. Inside, gates, doors, and other statuary brought the whole image of castles and perhaps Camelot to life.
The resort offered 4,000 rooms and passed the Mirage as the largest hotel in the world. A large arcade and fun center with exhibits and other family entertainment dominated the minds of families and children and helped fill the many rooms available.
Circus Circus Enterprises continued their themed resorts by opening the Luxor in 1993. It sits in giant pyramid shape next door to the Excalibur with a Sphinx watching out over the cars passing by on the Strip.
The 1980s in Las Vegas was mostly a holding pattern as small properties closed and a few new properties began construction and opened. Mostly, the decade was the drawing board that the real boom of Las Vegas in the 1990s brought the world.