High Roller Betting $550 Million That New Resort Is a Winner

When Steve Wynn first visited here in 1952, sharing his father’s dream of a flashy bingo parlor on a patch of desert called the Strip, $5 million could have bought the clump of casinos that captivated the 10-year-old.

Today, Wynn is spending more than a hundred times that amount on a desert paradise that staggers even his immense imagination--a new Golden Nugget Hotel & Casino on the Las Vegas Strip.

The youngster who was star-struck by this neon fantasy land 36 years ago has become Nevada’s golden boy. With a penchant for pizazz and a flair for doing deals, he promises the best is yet to come for the city that sent his father back to Maryland in 1952, nursing busted dreams.

Listed by Forbes Magazine

“You ain’t seen nothin’ yet,” boasted Wynn, chairman of Golden Nugget Inc. and listed by Forbes magazine as one of the 800 most powerful executives in America.

Equally at home in the board room or at the blackjack table, Wynn has taken the Golden Nugget from a honky-tonk casino in downtown’s Glitter Gulch to one of the nation’s premier gaming companies with revenues of about $190 million a year. And he is betting $550 million that his new resort, scheduled to open in the summer or fall of 1989, will be “a wonderment the world will flock to see.”

Wynn already has $200 million invested in the Golden Nugget downtown, where the Las Vegas gaming industry was born. He says his new 3,300-room property on the Strip, now attracting a more upscale breed of gambling visitor, is the forerunner to other giant developments there.

“For half a billion dollars, you could have owned the entire state of Nevada,” Wynn said, comparing his blossoming resort with his first visit to Las Vegas in the ‘50s.

His father, Michael, hoped to open a bingo parlor on the sparsely settled Strip in those days, but a downtown casino heard of his plans and opened its own operation, forcing Wynn and his son to return East. Ironically, that casino was the Golden Nugget.

Steve Wynn returned to Las Vegas in 1967 with a $35,000 bankroll. He engineered a deal with the late billionaire Howard Hughes for a piece of land next to Caesars Palace, resold it to the resort months later for a $1-million profit and used that money to buy into the Nugget.

Today, that $1 million would hardly cause a ripple in this gaming capital.

“We’ve already invested more money in this property (downtown) than the entire capital expenditure of the city of Las Vegas,” Wynn said in a recent interview in his plush office atop the downtown resort.

“The enormous megabuck investment is not only necessary, it has become the safest route to take,” Wynn said. “We’ve learned that a destination resort like Las Vegas is the perfect launching pad for bigger and better projects. This place is a big, huge, roaring, successful destination resort, with people coming from all around the world.”

Giant Properties Foreseen

With nearly 17 million visitors expected in 1988 and tourism growing at a double-digit pace each year, Wynn says Golden Nugget won’t be the last giant property built on the booming Strip, where 20,000 new hotel rooms are under construction or planned.

Wynn admits that he suffered from an attack of cold feet seven years ago when he shelved plans for a similar project, down the Strip from his present development.

“I started one of these babies for $400 million in 1981 and chickened out,” Wynn recalled. “We didn’t know the impact of New Jersey on Nevada; we had a recession starting that scared the dickens out of everybody. We didn’t know how Las Vegas would handle a recession, how it would handle a recession including Atlantic City and deregulation of the airlines. There were no nonstop flights here from the East Coast anymore.”

“Those questions were frightening, frightening enough for me to say ‘Hey, I ain’t gonna spend $400 million. We could make a mistake.’ Now, five, six years later, we saw what happened with the recession--practically nothing. We saw what happened with the airlines; that hurt a little bit but we overcame it. We saw what happened with Atlantic City--$1.8 billion (in gambling) in Nevada in 1979 to $5 billion today. Nobody dreamed there was that kind of elasticity in America.”

Wynn said he has already talked with Caesars Chairman Henry Gluck about joint ventures on major sporting events, particularly boxing. When completed late next year, the Nugget and Caesars will occupy a one-mile stretch of the famous Strip.

Wynn Bristles at Trump

Wynn bristles at competitor Donald Trump’s claim that Atlantic City has stolen from Las Vegas the title of boxing capital of the world. Trump has, in recent months, landed the megabucks Mike Tyson-Larry Holmes fight and the upcoming Tyson-Michael Spinks bout.

“He’d better make that claim while he can because he won’t be able to make it long,” Wynn vowed.

The two gaming giants are hardly best of friends. Trump has been quoted as calling Wynn a “classic underachiever.” Wynn has called Trump “twinkle toes.”

The two were competitors when Wynn owned the Golden Nugget in Atlantic City. Wynn’s sale of the Atlantic City Nugget to Bally Corp. for $440 million last year was a factor in blocking Trump’s efforts to take over Bally’s.

Months later, Trump announced that he had bought a 4.9% stake in Golden Nugget Inc. and indicated that he might try to acquire controlling interest in Wynn’s company. Wynn still fumes over the publicity Trump generated from that move.

“He did that for publicity and admitted it,” Wynn growled. “He never owned 5%. He owned 2 or 3 and he sold it right away.”

Will the new Nugget be locking horns with Trump for the big fights? “You bet we will,” Wynn vowed.

Wall Street analysts are generally high on Wynn and his enthusiasm but a little less confident about the gaming market’s capacity to support his dreams.

Daniel Lee, an analyst for the investment firm Drexel Burnham Lambert Inc., said Wynn’s income estimates for the new resort may be overly optimistic considering the competition on the Strip.

“The big uncertainty is what that casino can do,” Lee said. “I think it will be successful because of Steve Wynn.”