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Long Legacy

40 years of stable ownership makes Boyd Gaming unique in casino industry

Long Legacy

Like many of his generation, Sam Boyd showed up in Vegas virtually penniless and searching for a place to put his gambling experience to work without risking his freedom. Boyd, who had operated bingo games and dealt cards on a gambling ship out of Long Beach, California, in the 1930s, arrived in Las Vegas with in his pocket and a job as a dealer.

Life was tough, but Sam Boyd eventually earned enough to become a partner in several casinos. But he wanted better for his son, and urged him to get an education and concentrate on another business.

Bill Boyd took his advice, and went off to college at the University of Nevada, Reno (before there was a UNLV, he points out) and then to law school at the University of Utah, where, after a two-year interruption from the Korean War, he obtained his law degree. Boyd settled down to practice corporate law, but then, like today, it’s hard to separate the gaming industry from other businesses in Las Vegas, and lots of casino operators were his clients. That became his path into the gaming business.

“I was representing someone who wanted to open a small casino in Henderson, called the Eldorado,” he explains, “and he asked me if I would mind taking my fee out in stock. Later he asked if I wanted to buy some more stock.

“He only had $20,000, and $100,000 in those days was the capital that we were looking for. So I said, ‘sure.’ So I went to the bank and borrowed $15,000 and bought 15 percent of his company. So that was my first experience in the gaming business, but I really got there as a lawyer.”

Sam Boyd also invested in the Eldorado, and brought Bill in with him as an investor and board member in the Union Plaza in Downtown Las Vegas. With his knowledge of Downtown, Sam suggested that father and son build their own casino. The result was the California, the first casino to be built off Fremont Street at First and Ogden, which opened on January 1, 1975.

“The first nine, 10 months were really, really tough,” Boyd admits. “But one day, my dad said, ‘What we need is a niche market. And that’s going to be Hawaii.’ We had lived there before we moved to Las Vegas, and he was involved in gaming over there. He knew that the Hawaiians loved to play.

“He and I would go to Hawaii for five or six days every month, and sell our package. We called it the ‘Hawaiian Package’ for the travel agents, and it really caught on. We started doing quite well, and we did just what he said. We made the California Hotel their home away from home.”

Even today, native Hawaiian food and entertainment, and executives who wear Hawaiian shirts continue to make the California a comfortable destination for islanders.

Once the California was settled, Boyd began to eye a piece of property he owned with some other investors on Boulder Highway, between Downtown and Henderson, where no casinos existed. They were able to buy the adjacent property at Boulder Highway and Nellis and immediately began construction on Sam’s Town. Again, the experts thought they were crazy.

“My dad and I both got calls from friends in the business, who told us we were out of our minds. ‘You’re going to lose the California, you’re going to lose the Eldorado. You can’t possibly make it out there, because you’re in the middle of the desert.’

“Well, we opened Sam’s Town, and we were busy from the first day. In fact, I had one of those naysayers call me about four weeks after we opened, and asked it we had any stock available. And I was happy to tell him no.”

Nevada Nod

In the early ’80s, Nevada was still untangling the hooks of organized crime. When the owners of the Stardust and the Fremont were found by state regulators to be unfit to operate gaming in Nevada, Bill Boyd was approached.

“I got a call from Patty Becker, who was serving on the Gaming Control Board at the time,” Boyd recalls. “She told me that there were problems at the Stardust and the board was going to hold a hearing to revoke their license. She said the legislature had passed an act called the supervisory statute, that allowed the Gaming Control Board to recommend an individual or a company that was actually licensed to operate the gaming. So, she asked, ‘Would you go into the Stardust and run it for us so we can save more than 2,000 jobs?’”

Boyd went back to the company board members and got their approval, and took over the Stardust and the Fremont, which was controlled by the same company.

“We walked in, and I was naive enough to think that we would be welcomed, because we had a reputation for integrity, and we knew the business,” he says. “But no. It was like a war when we got there, not because we were the Boyd Group, but that was their place; they didn’t want anybody else in there.”

And although the Strip was new to them, Boyd says they simply applied principles that they knew worked in their casinos, again angering the former license holders.

“Our predecessor wouldn’t allow the dealers to talk to customers,” he says. “We were just the opposite. We wanted the dealers to talk to customers. We changed that immediately. And that was something completely different than what they did. But the business is the same… The customers may be different, but that really wasn’t an obstacle at all.”

Boyd eventually bought the properties once the licenses were stripped from the previous owners, giving it control of four Las Vegas casinos—the California, Sam’s Town, Fremont and Stardust—as well as the Eldorado in Henderson.

It was at that time gaming expansion began rushing across America, and Boyd meant to be a player.

State by State

Boyd targeted the Mississippi market, developing a Sam’s Town casino in Tunica County, which opened in May 1994 and recently celebrated its 20th anniversary. But that was just the start of a frantic five months.

“On July 1, we opened the Silver Star, which was a casino owned by the Mississippi Band of Choctaw Indians and managed by our company,” Boyd explains. “And in September, we opened the Treasure Chest in Kenner, Louisiana, just outside of New Orleans.”

While the multiple openings stretched the abilities of Boyd Gaming, Boyd credits the dedication of his employees for the successful debuts.

“The only reason we could do that was because we had great teamwork from our people in Las Vegas,” he says. “Nobody in that part of the country knew our business, so we had to take what we called ‘shadows’ to each property in every department to help show them what we do, how we operate this business.”

The next project was a cruising riverboat (the casinos in Mississippi and Louisiana did not have to sail) in Missouri. Not only were the logistics more complicated, but the regulatory system was less friendly.

“We had our boat docked in Kansas City and we started cruising,” he says. “But all of a sudden the Gaming Commission decided that a dockside barge was good enough. We had no chance then, because our land-based property was too small, so we sold our boat. We always felt that that was very unfair to do, to get a company to invest there first, and then change the rules. But they did it, so we sold our boat and left Kansas City.”

In Illinois and Indiana, Boyd was invited in by local partners who could not operate a casino on their own.

“We were there in East Peoria, Illinois, and then we went to Blue Chip in Michigan City, Indiana,” he says. “We bought both of those from some of the local people that had started them, but were just in for the investment, not for the long term. We finished the hotels that they had planned, and they’ve both been very successful for us.”

Boyd Gaming’s big play developed in the early part of the 2000s, when the company developed the Borgata in Atlantic City, a property that cost close to $1 billion. Boyd explains that he wasn’t thinking about Atlantic City until he received a call from Steve Wynn, who had been granted a plot of land to develop at least three casinos.

“I got a call from Steve, and we operated in Downtown Las Vegas together,” he says. “So Steve says, ‘I’m calling you first, Bill. I’m going to build my own place and I want to be next to you.’ At that time Steve had the Mirage and Treasure Island. He said, ‘I’m the Mirage, and I want you to be the Treasure Island.’ In other words, he wanted the more upscale place. I was OK with that because Treasure Island was doing quite well.”

But he wanted to limit the Boyd property to 1,200 rooms. And then MGM swooped in and bought Wynn’s Mirage Resorts, and the landscape changed. Then-MGM President Terry Lanni had a different idea.

“He told me we could build as many rooms as we want and make it as nice as want. So we were able to really change things,” he says. “In fact, our front desk area was built for 1,200 rooms, not for the 2,000 we ended up building. But we made it work anyway, and it has been very beneficial to us.”

Borgata immediately became the dominant property in Atlantic City, a position it retains to this day.

“I think our competition in Atlantic City really underestimated us,” he says. They thought we were just a Downtown or local operator, so I don’t think they really expected a lot of competition. It worked to our benefit, because when we opened, I think everyone was shocked, with what we had there and how much business we did.”

While Boyd laments the situation in Atlantic City, with the closure of four properties in 2014 and threats to several more, he says it was inevitable.

“No one likes to see places close and jobs lost, but I think it’s at the right size now,” he says. “With all the competition around, I think everybody can be successful; I certainly hope so.”

Back in Nevada, Boyd’s relationship with another son of a legend—Jackie Gaughan—resulted in another huge expansion for the company. Michael Gaughan, who owned Coast Casinos—the Orleans, Barbary Coast, Gold Coast, Sun Coast and the under-development South Coast—decided he wanted to sell. Boyd bought the casinos for a total of $1.3 billion and installed Gaughan as board member for Boyd Gaming. But it wasn’t a good fit.

“Michael never really liked corporate life,” says Boyd. “He had never been involved in a corporation, and asked how I could stand all the convoluted corporate decision-making and SEC regulations. I told him if you’re public, you don’t have a choice. So he’d been with us for 12 or 15 months when he came to me and said, ‘I don’t really enjoy this; I’d like to go back to operating my own property.’ So, we already had the South Coast open, and we made a deal where Michael could take that, change the name to South Point, and we got the other properties. And he’s very happy now. I have lunch with him every few months.”

Role Reversal

Boyd’s string of successful operations came to a screeching halt in the middle of the first decade of the 2000s. Boyd’s follow-up to Borgata was going to be Echelon Place, the site of the former Stardust that Boyd imploded in 2007. Echelon was going to be the second of the huge mixed-use developments on the Las Vegas Strip, following MGM’s CityCenter. The $4 billion dollar property was to have included four hotels, an expo center, a shopping mall and more.

Construction began in 2007, but was quickly suspended in August 2008, for what was then suspected to be only three or four quarters. By 2009, it became clear that Echelon was not to be, and Boyd put it on hiatus for at least three years.

“We had been working on it for several years, before we even started construction, and we had about $1 billion invested in it,” Boyd explains. “We could see the recession coming, and we knew that if we didn’t stop construction immediately, we would be in trouble. And so we did. In fact, we took a little heat when we stopped. A lot of people thought we were crazy, but we thought it was the wise thing to do. Fortunately, we were right.”

In March 2013, Boyd Gaming revealed it had sold the site to Malaysia’s Genting Group, which has announced plans for Resorts World Las Vegas. Genting, which operates the world’s largest casino in Malaysia, also owns an integrated resort in Singapore, a racino outside of New York City, and interests in gaming around the world. Boyd says he believes Genting will be successful in Las Vegas, and talks about meeting Genting’s chairman, KT Lim.

“He told me, ‘We get in the business for the long term. We know that we may not make money when we start, but we’ll eventually do well. We don’t ever get into anything looking at the short-term,’” Boyd says. “And I think that’s probably part of the Chinese way, generally.”

Boyd is philosophical about the Echelon experience.

“Everything in life doesn’t go always just the way you plan it,” he says. “But you have to be willing to make the decisions that will keep you alive. And we did that. And for quite a while, all we thought about was surviving, and after that, with all that money tied up, drawing no interest or anything. But we just buckled down, and everybody worked hard, and we were able to come out of that.”

Boyd says he’s still interested, however, in the Las Vegas Strip.

“If the right opportunity came along, we would certainly be interested in that. Many of our good customers tell us that they would like to come to Las Vegas for a vacation. So we knew that a lot of those people would have come to stay with us, if we had opened up Echelon. And we think that would still happen, if we have the right opportunity to get to the Strip.”

Building a Culture

As one of the few—if not the only—gaming companies to survive for 40 years under the same ownership, Boyd says there is no secret to the company’s longevity.

“Our mission statement says we operate with the greatest degree of integrity and that we strive to increase shareholder value by cooperation. When I mentioned the three places that we opened in four and a half months, I don’t think anyone could have done that as quickly as we did it. We did it because we were like family.”

To maintain that family feeling, Boyd never ties an employee to the company.

“We’ve never had a contract in our company,” he says. “When I happened to mention that to (MGM’s) Terry Lanni when we were doing the Borgata, he told me that MGM has one staff attorney that only does contract work. Well, we don’t do that. We think if somebody is unhappy, we wish him well.”

The personal touch is important to Boyd.

“I go to all the properties at least once every quarter,” he says. “I tell all our team members to call me Bill, not Mr. Boyd. Before we bought Peninsula Gaming, which was the last company that we bought, we had 50 percent of our employees that had been with us 10 years or more. And I know you won’t find any other gaming company where you can say that.”

Boyd was also instrumental in the founding of the National Center for Responsible Gaming (NCRG), one of the most important institutions in gaming. When Boyd Gaming entered Missouri, they had to abide by regulations that required investment in combating problem gambling. Boyd Gaming put the first $100,000 into the center, which was based in Kansas City in those early days.

“My dad used to tell me, ‘You don’t want anybody to lose more money than they can afford to lose. That’s not what we’re here for.’ He was always very, very careful with that, not to let somebody (gamble) more money than they could afford to lose. You might give them a few hundred dollars more to get home, but don’t let them knock themselves out by playing too much.”

Boyd, now executive chairman of Boyd Gaming, points to his company’s involvement in the communities where they are located throughout the years.

“My dad was one of the businessmen that started the United Way in Las Vegas,” he explains. “The thing he was most proud of is starting the first Boys & Girls Clubs in Las Vegas and in Henderson. He even went to Reno, and got his friends to start a Boys Club up there as well. We’ve always had the feeling that if you’re successful, you have to be willing to give back to your communities, and we’ve done that, not only in Las Vegas, but all around the country.”

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.