Later, this would all look like Hollywood fun. Spilotro’s attorney, Oscar Goodman, quit keeping mobsters out of jail and got himself elected Mayor Goodman. Among the gin-guzzling mayor’s truly original proposals: cutting a thumb off the hands of graffiti artists who defaced public property. He also proposed televising the punishment. (The Goodmans were civic contributors. Goodman’s wife, Carolyn, founded the city’s most prestigious private school, the Meadows, whose campus has buildings named for casino kingpins. It’s where all the gambling bigwigs send their littlewigs.)
In the 1980s, it took imagination to compare Las Vegas to Disneyland. Steve Wynn had that imagination and he loved Disney. In fact, his fascination with the highly detailed theme parks would come up again and again over the years.
Wynn moved to Las Vegas at the age of twenty-five with his wife, Elaine, and a ten-month-old daughter in tow. He sought out some of his dad’s old connections and managed to get invited to the opening of Caesars Palace in 1966, where he says he was upgraded to suite 1066—the suite he says was occupied the night before by Teamsters honcho Jimmy Hoffa.
Wynn’s first attempt to enter the casino business was inauspicious, to say the least. He made, at best, an ill-informed investment in the mobbed-up Frontier casino. Law enforcement soon prosecuted the management for its underworld ties. Wynn wasn’t implicated, but he was forced by financial circumstance to leave the casino industry to work as a liquor distributor for a few years.
This would become one of those incidents that people would later use to suggest that Wynn has had an unusual number of brushes with organized crime. Numerous law enforcement investigations for gambling licenses have failed to conclude that Wynn ever worked for or with organized crime, and Wynn has vigorously denied any such involvement. It can be safely said, though, that many people living in Las Vegas in those years bumped into folks who were connected to the Mob.
It was an imaginative local banker named Parry Thomas who became a mentor to the fatherless Steve Wynn. Thomas used his considerable influence to help this kid with moxie buy a piece of land from Howard Hughes. Wynn then sold the land to Kirk Kerkorian in 1969 and used the profits to buy stock in a real casino—a run-down place called the Golden Nugget in seedy downtown Las Vegas. The Nugget’s primary advantage was that it was a publicly traded company. That enabled the shareholder Wynn, four years later, to oust the management on a tip that employees were stealing from the mismanaged casino. He installed himself as the Nugget’s president and chairman. It was a hostile takeover, but from the inside.
“The key to my progress was that I had the stock and voted myself in,” Wynn says.
The Golden Nugget quickly became a mom-and-pop thing, and that’s pretty much the way Wynn has run his businesses ever since. Elaine arrived each day with a cup of coffee in her hand. Wynn hired his twenty-one-year-old brother, Kenny, who had been working at a men’s store. He also hired people he figured were smart, like Bobby Baldwin.
Wynn discovered Bobby Baldwin while being thrashed by him at poker. Three decades before poker became a televised sport, in 1978 the Oklahoma native won the famous gold bracelet of Binion’s World Series of Poker. He later wrote a folksy book of poker advice called Tales out of Tulsa, by Bobby “The Owl” Baldwin.
In a typical Wynn move—spying someone talented and creating a job for him—Wynn hired the professional poker player as a poker-room consultant in 1982. For the next twenty years, Baldwin would keep track of Wynn’s details, freeing the boss to be creative. Wynn “never really enjoyed operations, because it involves a lot of interaction with a lot of people at a lot of different levels,” Baldwin says. “Steve frustrates easily with that stuff. He’s short on patience. I’m long on patience.”
Wynn renovated the Golden Nugget, expanded it, and hired casino hosts who knew how to bring in high rollers. He even tried to create a Disney-esque animatronic dinner theater using robotic actors. The plans never came to fruition, but according to a former Disney employee who worked on the project, he created mock-ups of Asian and Mexican shows, created to appeal to regions where high rollers were coming from.
When he expanded into Atlantic City in 1980, Wynn launched a corny television advertising campaign that featured Frank Sinatra treating Wynn like a towel boy. He was on his way to stardom.
In 1989, the cementlike caliche soil at 3400 South Las Vegas Boulevard heaved up the Mirage Hotel and Casino Resort. It isn’t an exaggeration to say that Las Vegas was never the same.
The Mirage initially cost $630 million—more money than anyone had ever spent building a casino resort. Michael Milken made it all possible. In addition to helping finance the place with junk bonds, Milken told Wynn how to dress (in a suit) when he met Wall Street investors.
The Mirage was the first place where Wynn was able to meld his own wacky passions with a resort. Vacations in Hawaii gave him the idea of putting a fifty-four-foot-high volcano in front of the hotel. The volcano was really a water fountain with natural gas burners. Sound was piped into speakers that were planted in trees and along the sidewalk and the lagoon on Las Vegas Boulevard. The volcano was rimmed with waterfalls that sent 100,000 gallons of water per minute cascading down the rocks into the lagoon. The lagoon’s 2.3 million gallons of water were lit with 1,000-watt lights. Invisible under the water was a special-effects plumbing system with jets that spewed gas that was set afire by pilot lights, creating bubbles and flames that erupted like molten lava for the seven-minute show. All this was controlled from underground rooms that smelled of chlorine and were accessible only through the maze of car-valet tunnels.
Wynn discovered, during the test phase, that the gas was stinky. He added a piña colada scent, then installed filters to remove the gassy odor.
The volcano’s job was to lure people from Caesars Palace next door or the Sands across the street. “People today just stand there and stare because they’re used to sinking ships and all sorts of special effects,” says Jaime Cruz, a mechanical engineer who helped build the volcano at the Mirage. “But on opening night, I remember hundreds of people standing on the street, watching the volcano, going, ‘Oooh, aaah.’”
At the Mirage’s front desk, four-foot sharks sliced the water of a 20,000-gallon aquarium. An indoor tropical rain forest grew in the tall atrium, where orchids clung to trees and bridges in a humid microclimate. This would become a Wynn signature—a sylvan garden under glass. “I was trying to appeal to women,” Wynn says, proving himself the first Las Vegas casino operator to recognize that women were customers worth catering to in a big way.
The Mirage had a convention center and ballroom, swimming pools, retail shops, and 3,100 hotel rooms—including Las Vegas’s most lavish high-roller suites. Wynn rolled the dice, building a $20-million show around white tigers and a little-known pair of bruder-like German illusionists who called themselves Siegfried and Roy.
Wynn gets the credit, but there was a lot of Bobby Baldwin in the Mirage’s details. Baldwin insisted on having sixteen service elevators in the Mirage so that room service didn’t share elevators with guests, speeding delivery. “Bobby was all about the nuts and bolts,” said Alan Feldman, the Mirage’s former spokesman. “How you get the lettuce from the warehouse making sure it doesn’t wilt.”
“It was my job to decide how many restaurants and how big,” Baldwin says, “and it was his job to make it beautiful.”
The Mirage was so big and costly that many people on the Strip and on Wall Street predicted disaster. Analysts calculated the Mirage would require revenues of $1 million a day to break even. Unheard of. “It would be hard for Steve to get his $1 million a day even if we all were sitting on our duffs,” Henry Gluck, the chairman and chief executive of rival Caesars World, told BusinessWeek.
Wynn offered braggadocio in response. The Mirage would be “a wonderment the world will flock to see,” he insisted. “We’re gonna skate.”
Gluck, a German-Jewish refugee from Nazi Germany who bussed tables in a hotel before he ran one, wasn�
�t sitting on his lanky duff. Nor was the rest of Las Vegas. Instead, out came the bulldozers.
Gluck began to remodel Caesars Palace, adding high-roller suites and a conveyor belt designed to ferry 9,000 people a day from the Mirage’s doorstep. The conveyor belt operated only in one direction. People had to walk back out.
Gluck also lit on an innovation that forever changed Las Vegas: shopping. The idea came from his wife, who spent more than her share of time in Las Vegas wishing she was at home in Beverly Hills. She told her husband that women would be happy to have a little more Rodeo Drive on the Las Vegas Strip. This revelation led in 1992 to the Forum Shops at Caesars Palace, a partnership with mall developer Sheldon Gordon. Rivals and even some friends warned Gluck that the shops would be his Roman tomb. But the Forum Shops would one day produce the highest revenue per square foot of any shopping center in the nation.
November 22, 1989, thousands of people crowded Las Vegas Boulevard next door to Caesars Palace and across from the Sands, the latter of which had hired Sha Na Na to compete with the new opening. The crowds were looking toward three golden towers, whose panels consisted of two sheets of glass that encased 24-carat-gold mylar film. More expensive than colored glass, this maintained its golden color no matter the conditions of the sun. Steve Wynn had noticed that the Golden Nugget’s colored-glass tower often looked greenish depending on the sun’s angle. He did not want greenish glass on his Mirage.
In addition to the Mirage’s volcano and lagoon, there were palm trees—1,100 of them—as well as pines, ferns, flowers, and grass. Lawns and pools abutted private entrances into high-roller bungalows, one of which housed the singer Michael Jackson, with whom Wynn was planning a “Jackson Attraction” that would feature the performer’s memorabilia.
At the opening moment, Wynn stood by a palm tree, queasy with fear and flanked by Michael Milken. This is how indebted Wynn felt to Milken for helping him finance his dream: Wynn said a few years later, “I would do anything for Michael, without limit. I would do just about anything to extend his life a week.”
People predicted that 100,000 people would visit the Mirage that day. As it happened, the number was more like 200,000. They skipped Doogie Howser, M.D. and Night Court on television that evening for the opportunity to see this newfangled Mirage. They overran the casino floor upon the opening of the doors and they snatched up so many coins for slot machines that the casino was caught short of cash.
Two days later, Wynn got an inkling of the monster he had created. He surveyed $800,000 worth of trampled grass and muddied flower beds around his lagoon. He also got one of the scares of his life.
“There were some kids and they were drinking and they were all excited and wanted to be macho, so one of them walks across the grass and climbs in the water. He’s standing there up to his waist,” Wynn says. The volcano was scheduled to erupt any moment in gas bubbles and flames. “He’s about to get third-degree burns in his crotch.”
Wynn says there are three kinds of possible mistakes in opening a new resort. Category 1 mistakes are fixable—broken equipment and the like. Category 2 mistakes are more costly and “more painful”—requiring redesign. Of Category 3 mistakes, he says, “This is the one you have nightmares about,” when you’re trying something no one has done before. “You open the hotel and you’re completely blindsided. The volcano was one of those.”
“It was a nightmare,” Wynn said. “It was a Category 3 mistake. I should have seen it. Sometimes you just misfire.”
As it happened, someone saved the day. “One of my plainclothes guys jumped in and grabs this guy by the neck and pulled the dipshit out,” Wynn says.
The volcano represents the moment that Las Vegas slipped into its goofy modern era. Gamblers became outnumbered by wilding tourists in golf shirts, more interested in eating and shopping than wagering.
As Wynn stood in front of the Mirage and took it all in forty-eight hours after the opening, it hit him that he had made another mistake. He turned to his PR guy, Alan Feldman, and said, “I can’t believe I didn’t build something overlooking the volcano.”
In the following year, the number of visitors to Las Vegas increased 16 percent, to twenty-one million. The Mirage surpassed the Hoover Dam as southern Nevada’s number-one tourist attraction. This led to a decade-long building boom during which thirteen crazy new megacasinos shot up on the Strip at a cost of $8.8 billion. Las Vegas became so overwrought that people came to associate the city with silly theme parks and fakery.
Shortly after the opening, Wynn had the Mirage’s lawn replaced with a wider sidewalk and a wrought-iron fence. And then, said Wynn, “because people won’t be daunted, we put [in] a beam-and-eye system where if someone steps through all that, it shuts the whole volcano down.”
The old Las Vegas was already beginning to die. Sammy Davis Jr. was suffering with throat cancer and a new Las Vegas was being born. Wynn announced he was teaming up with Michael Jackson to build a replica of Diamond Head Mountain in Hawaii behind the Mirage that would feature two swimming pools, a water slide, and luxury high-roller villas. This mountain was not to be. But Steve Wynn recycles his ideas. The mountain would return.
Completely outside of Steve Wynn’s radar that year, 1989, a twenty-nine-year-old MIT-trained economist named Gary William Loveman finished his doctoral dissertation, Changes in the Organization of Production and the Skill Composition of Unemployment. Loveman had conducted field research on why unemployment rates differ around the world and used mathematics to solve the complex problems.
The sandy-haired Loveman had grown up in a blue-collar family in Indiana. He earned an undergraduate degree from Wesleyan University in Connecticut, which did not prepare him for the rigorous mathematics required by MIT’s doctoral program. “Sitting in class was like listening to Swahili,” he says. Despite his rough start on the north shore of the Charles River, he had managed to catch up with such sheer grit that he secured himself an Alfred P. Sloan Doctoral Dissertation Fellowship and a shot at economic stardom.
This made him a hot commodity in 1989’s market for young economists. Loveman was offered jobs by Duke University, the University of Chicago, Cornell, and Harvard—the latter offering him no fewer than two jobs (at Harvard Business School and the Kennedy School of Government). Princeton interviewed him, but didn’t offer him a job. MIT was in the process of producing an offer when Loveman accepted one of the jobs at Harvard.
So as Steve Wynn was swaggering through the final construction stage of the Mirage, Loveman was joining the faculty of the Harvard Business School and entering his first semester of teaching.
Loveman was well received at Harvard, where several of the department’s more senior professors predicted he would become one of the country’s foremost labor economists.
That would have been a bad bet. Loveman, after a few years at Harvard, would move on to much bigger things.
Chapter Five
THE GREAT RACE
Las Vegas exists because of that almost violent hand-to-hand combat place that is the Strip.
—STEVE WYNN
If you feel a need to blame someone for the Las Vegas skyline of the 1990s, consider pinning a blue ribbon on the fellows at Circus Circus Enterprises. As the plans for the Mirage were being drawn up, Glenn Schaeffer sent a memo to his boss at Circus Circus, Bill Bennett. Shaeffer proposed building a casino at the southernmost end of the Las Vegas Strip.
The result was the medieval-themed Excalibur. Hokey beyond belief. Bigger than the Mirage by nine hundred rooms and costing half as much—$290 million—it opened seven months after the Mirage.
Bennett and Schaeffer were skilled at running what’s known in Vegas as a “grind joint,” so termed because it grinds the cash out of its customers the hard way—nickel by nickel. Their primary property was the clown-headed monstrosity, Circus Circus, which had been developed by Jay Sarno.
Excalibur was inspired by Neuschwanstein Castle in the Bavarian alps—a crazy concoction of Romanesque, Gothic, a
nd fairy-tale architecture built by Bavaria’s King Ludwig II, who really should have lived in twentieth-century Las Vegas. King Ludwig was a sort of nineteenth-century Liberace, known as much for moonlight picnics with his stable boys as his rococo taste.
Ludwig’s insatiable urge to develop grandiose castles has uncanny parallels to Wynn. Ludwig went deeply into debt building three outlandish palaces: Neuschwanstein, Linderhof, and Herrenchiemsee. One biography says that Ludwig “took a special interest in the building of all his palaces, sometimes to the extreme irritation of his architects and craftsmen.” Having alarmed his cabinet with his spending, Ludwig was declared insane by a kangaroo court and drowned mysteriously in 1886. He left behind plans for two even grander palaces, which were to have been themed: Chinese and Byzantine.
A century later, Excalibur was a papier-mâché version of Neuschwanstein. More Disney than Bavarian, its crenellated walls and white turrets spindled over the Strip like an overgrown child’s toy. It became an instant, if comical, success.
Wynn established his territory by pissing on theirs. The fellows at Circus Circus were very good “with the Kmart set,” Wynn said snidely.
But one evening in mid-1991, Wynn and his poker-playing right-hand man, Bobby Baldwin, showed up at Excalibur and asked to be shown around. They were casing the joint.
Inveterate gamblers are driven by the adrenaline and endorphins that their bodies release as they lay it on the line. Once accustomed to $100-a-hand blackjack, $5 hands no longer offer a thrill. When it comes to developing casinos, the same can be said for Kirk Kerkorian, who outdid himself and Wynn with his next project, for which he would recycle the name MGM Grand. It was to cost $1 billion—an Emerald City of Oz–green extravaganza on the corner of the Strip and Tropicana Avenue.
Winner Takes All Page 4