Is Jack Binion ready to resume gaming?

May 12, 2009 5:05 PM
Gaming Insider by Phil Hevener |

Operator may take a shot at old Horseshoe

Do you suppose Jack Binion has an interest in another bite of the apple? The "apple" in this case being the Binion’s Gambling Hall that he and his family owned and ran for years as the Horseshoe, one of Nevada’s best-known casinos.

Binion is not saying anything about such a possibility and probably won’t until the moment there is a deal, if that ever occurs.

But Binion is known to be looking for another Las Vegas casino and sources with an eye on downtown real estate transactions speculate Binion may be eyeing the Horseshoe. As possible purchases go it would be a relative bargain. He has the money and a name that would make a big difference on a casino anywhere in the Las Vegas area.

Like other potential buyers of supposedly available casinos, Binion has scouted the Strip from one end to another, but is not ready to pay the "pre-recession" prices current Strip owners are still demanding.

Recent developments downtown suggest the time may never be better for Binion to reacquire the Fremont Street hotel and casino opposite the Golden Nugget.

The magic long ago left the building that was the Horseshoe. The current owner of what was once among Nevada’s best-known casinos now finds his company challenged to make monthly rents to the owners of underlying real estate on which Binion’s is located.

There were once some two-dozen landlords receiving regular payments. Reliable sources say the monthly payments totaled about $500,000 at their peak. That figure has been reduced as a result of changes in ownership in 2004 and 2007 that saw most of the landlords bought out.

There are reportedly six or seven leases remaining.

Four Queens owner Terry Caudill bought Binion’s in 2007 from MTR Racing, which had bought it from Harrah’s in 2004. Caudill rolled it into his existing company but poor business conditions were already taking a toll on the Fremont Street profit picture.

Downtown casino business and the Horseshoe have been sliding down hill for years before Caudill arrived on the scene hoping to pump life back into the Horseshoe. Fremont Street has lost business to the entertainment super stores catering to both locals and visitors on the Strip and in outlying areas.

But the success of the early Horseshoe was based on creative marketing and a finely tuned understanding of customer expectations. Entertainment architecture and a flashy exterior were never part of the formula.

Horseshoe founder Benny Binion, a grade school dropout with the marketing instincts of a genius, died in 1989, about 38 years after opening the Horseshoe in 1951; one of his two sons, Ted, died of a drug overdose about a decade later. It was either murder or an accident depending on which set of allegations you choose to believe.

Jack, the surviving son, ended a family feud about Horseshoe operations by turning the casino over to his sister Becky and leaving to make a fortune running his own casino company.

During the Horseshoe’s best years, a span that stretched as far as the late 1970s, it made more money each year than all of the other casinos in the downtown area put together, a fact confirmed by Binion.

Harrah’s bought the Horseshoe in 2004 but its only interest was in the Nevada rights to the Horseshoe name and the potential associated with the World Series of Poker. About the same time, Harrah’s was buying Jack Binion’s Horseshoe Gaming, which operated successful dockside casinos in Mississippi, Indiana and Louisiana. Binion signed a non-compete agreement that kept him on the sidelines until last summer.

With the Binions at the helm, the Horseshoe specialized in the stuff that drew serious gamblers the biggest bets and limits allowed anywhere. It was the birth place of the World Series of Poker in the late 1960s. The Horseshoe kept enough cash in its cage to make overnight or weekend loans to much bigger casinos on the Strip.

But the times were changing as the Binions in charge of the casino died or lost their focus.

A recent letter written by an official in Caudill’s company that addresses a lawsuit filed by one of the landlords suggests that serious concessions are necessary if the casino is to survive.

"I think the end is near," lamented a source familiar with operations at the casino. "There was no money for necessary improvements. The casino has had too many participation (slot) machines because that’s the only way they could get new product in there."

Golden Nugget owner Tilman Fertitta spent weeks considering a purchase of Binion’s about the time of Caudill’s purchase, only to decide that the monthly real estate rentals did not make sense when measured against the possibilities.

The Horseshoe’s best years have come and gone … or have they? Can they be recreated?

Stay tuned.

Question? Comment? E-mail me at: Phil Hevener