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THE MEN WHO MADE LAS VEGAS - THE CEO THAT REFASHIONED THE STRIP WILLIAM BENNETT

 

THE MEN WHO MADE LAS VEGAS
by Byron Craft

THE CEO THAT REFASHIONED THE STRIP
WILLIAM BENNETT

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He was a furniture store chain owner and a failed investor who found new ways to market the glitz and glamour of Las Vegas to Mid-America. With his partner, he took over Circus Circus… it was bleeding red ink and he turned it into the ultimate meal ticket. The CEO showed Las Vegas how to cater to the non-wealthy and their families, establishing a trend that dominated the casino industry for over two decades. His company went public which started Wall Street’s love affair with casino stocks, and through diversification, he pressed Sin City to nurture its town and talent.

 

Becoming a gambler wasn’t part of William G. Bennett’s life plan. Bill Bennett was the son of an Arizona rancher and the grandson of Glendale’s first mayor. He was born November 16, 1924 and served in the Navy as a dive-bomber pilot during World War II. He came home from the war to build a chain of retail furniture stores headquartered in Phoenix and sold out in 1962 to concentrate on Wall Street investments.

A friend of Bennett’s started a financial corporation. It seemed that every other company his friend started made considerable profits. When different stocks didn’t sell as well as expected, Bill Bennett, believing in the company, bought up all he could get his hands on. “I got to be kind of a pig,” he admitted regretfully years later. Mismanagement by one of the company’s officials led to a public scandal and the stock dropped $20 in a single day, and in the end dropped to $2. He was bankrupt. Bennett went broke trying to be a financial player. It wasn’t his fault, admitted Bennett, but “I was so damned embarrassed I wanted to get out of town.” So he moved to a new city and a new industry.

Bill was acquainted with L.C. Jacobsen, the president of Del Webb Corporation, a construction and land-development company that had diversified into casino resorts. Jacobsen had wanted to get non-gambling types into the business. “Most of the people running the hotels at that time had come up through the ranks as dealers, shills and so forth, and they really had no business background at all,” said Bennett in an interview in 1975.

Jacobsen’s plan was to get qualified people with business backgrounds and education, and teach them the gambling business. At that juncture in gaming history it was a revolutionary idea. However, William G. Bennett was the only one who was ever accorded the privilege by the Webb Corporation… Jacobsen’s reign as president ended a short while later.

Bennett started in 1965 at Del Webb’s Sahara Tahoe, where he worked as a casino host at night and spent his days working in the hotel’s departments, one by one, until he understood them all. Six months later he was made night general manager. “I never heard of such an animal, but the general

manager didn’t like to work at night, and they wanted to accommodate him,” said Bennett. “About five months after that they transferred me to run The Mint in Downtown Las Vegas. It had been losing about $4.5 million a year. I made some money that year starting out $2.5 million in the hole. The next year we made $9 million, and the year after, I think it was $19 million.”

Somewhat dazzled by the successful turn-around, Del Webb later inquired if Bennett could manage both The Mint and the Sahara Tahoe. He replied, “I can, if you buy me an airplane.” “No damned airplanes,” roared Webb. “Air-West has all kinds of them.”

Bill took on the additional job at no additional pay. He was annoyed vis-à-vis with both conditions. He had become aware by then that the Webb organization seemed able to train or hire bright managers, but they left the company to become stars at other resorts. Webb’s pay structure was the reason for the high rate of turnover. “I was managing two hotels, and the rest of the managers had one each, and we were all paid the same $150,000 a year, whether you were making money or losing money.”

The Del Webb Corporation did reward Bennett with stock options, and he obtained five million dollars in shares. Subsequently, Bennett left the company in March of 1971 to team up with Bill Pennington of Reno to form a company that leased electronic gambling machines to casinos.

Three years later, the partners leased the troubled Circus Circus casino from its founders, Jay Sarno and Stanley Mallin. An option to buy came with the lease, and they eventually exercised that option in a multifaceted transaction that would not be complete until 1983.

William Bennett accredited Sarno as “the greatest idea man to ever hit Las Vegas,” but was tight-lipped about any mistakes Sarno may have made. Other people in the gaming industry thought that Jay Sarno’s big blunder was opening the casino with no rooms. He believed that the unusual casino would attract all the players it needed from less interesting properties on the Strip. Unfortunately, Jay Sarno was sadly mistaken. Circus Circus was a casino without a hotel. It was just one, big, pink and white tent-shaped building, where tourists and gaming enthusiasts didn’t stay long. They came to see the new attraction and then returned to the hotel casino where they were staying. William G. Bennett preferred to talk about changes he and Pennington would make, starting by adding a 395-room tower.

The most difficult change Bennett brought about was bringing Circus Circus’ unique carnival-style midway under management control. “We had a few problems with concessions fleecing the customers, or at least conducting their operations in a way that made people angry,” Bennett recounted years later. The new partnership closed down the questionable operations and converted the carnival midway to its own department answerable to the hotel.

Bennett and Pennington had also noticed that the majority of casinos mismanage their slots. They believed that this resulted from putting casino managers in charge of slot machines. Bennett once said, “A casino manager is always a person who came from the live gaming end of the business, so he doesn’t usually care very much about slots. Yet it is well known that the slots are one of the more important aspects of the business.”

Circus Circus established a slot department with the manager answering directly to the resort president, and soon found that their slot machines became better located, more popular and more profitable. Bennett also moved the circus acts away from the casino floor to the mezzanine, where they became a hit with families and kept kids out of the gambling area.

William Bennett originally did not enter into the gaming industry with middle-American families as his intended market, but the Circus Circus theme attracted him like a child sneaking under the Big Top. He was hooked. They found out through market research that half the people coming to Vegas didn’t have reservations and more than half were driving. So Bennett and his staff hammered the radio stations that reached people on the freeway. They captured thousands in walk-in trade, which was unheard of at the time. Bennett and his marketing people spent an entire day coming up with the theme: “Rooms available. If not, we’ll place you.” It went on the Circus Circus marquee the same day. They advertised on rock stations, country stations and gospel stations. The competition was after the upper income people, but Bennett just wanted a lot of folks.

The hotel casino sponsored special events, which appealed to the mid-America market. Bennett rode motorcycles and personally owned and flew two of the finest stunt airplanes ever built, and his marketing director had been a stock-car racer. Consequently Circus Circus became a chief name in hydroplane racing and motor sports. By the end of the 1980’s, Circus Circus had become a popular resort for budget travelers. Bargain hotel rooms brought in tourists by the carload, busload and planeload. Campers and motor homes filled the Circus Land RV Park. The sprawling casino buffet served more than ten thousand meals a day at moderate prices.

Bills Bennett and Pennington opened a property in Reno in 1978, and expanded it to 725 rooms. Bill Pennington became its on-site manager, eventually retiring in 1988, while Bill Bennett focused on Las Vegas. They bought the Edgewater Hotel and Casino in February 1983, located at the then emerging Colorado River Resort of Laughlin. Meanwhile back at corporate, the now well-heeled partners took the stock public on October 25, 1983, at $15 a share, and it rose to $16.87 before closing on its first day. The stock performed well because Circus Circus was chiefly able to take advantage of growth opportunities presented in those days. Circus was the first public company to go to Laughlin, during a time when Laughlin was booming. Laughlin was made for Circus Circus demographics. It was a gaming city, patronized mainly by people who traveled by car or RV and it became conducive to combine gaming vacations with camping and water sports. A quick way to grow your earnings is to grow your capacity, and Circus Circus was the fastest expansion of any major gaming company.

It wasn’t long before resort casino competition was in the fast game and in 1990 Circus Circus Enterprises sought to make its resorts outstanding in other ways. They acquired a new site at Tropicana Avenue and the Strip. The company resumed founder Jay Sarno’s practice of establishing exotic themes and carrying it out in such detail that a visit to the resort became a memorable escape from reality… Disneyland on steroids. The theme was the 300-million-dollar Excalibur, the legend was of King Arthur, and it was carried out in a four-thousand-room storybook castle.

By 1993, the year Circus Circus Enterprises opened its $375-million, Egyptian-themed Luxor, the company was Nevada’s largest employer, with over 18,000 employees. Circus also became noted for paying some of the highest executive salaries in the business. Bennett himself was worth $600 million, according to the Forbes list of the 400 richest people in America.

Bill Bennett was a hard taskmaster. Some of his employees reported that he figured that since he gave department heads almost total authority, their main problem would be finding enough time to do all the tasks they would set for themselves.

One of his employees made the mistake of asking Bennett if he had something else for him to do, because he had some free time on his hands. Bennett said, “You can go look for another job, because you don’t have one here.” Bennett believed that if the guy had to ask for work, he didn’t know how to run his department.

Circus Circus’ onetime publicist reminisced that during Bennett’s tenure: “When you met Mr. Pennington, it was almost like you went over and hugged him. But you wouldn’t think of hugging Mr. Bennett. Yet ... I never met a person who worked for him who didn’t worship the ground he

walked on. On the other hand, it has been reported that if you approached a door at the same time Mr. Bennett did, he would reach forward as a gentleman and hold the door for you. It didn’t depend on the employee’s rank. He was seen doing it for a cleaning lady.

William G. Bennett kept his family life private. He was widowed, remarried and had two children, Diana and Bill Jr. The two children, once adults, worked at Circus Circus, where their kinship to the owner reportedly was concealed.

Bennett also found ways to entertain his other passions: aviation and motor sports. He built an airstrip near Sam Boyd Stadium for model planes and also built the Las Vegas Motor Speedway.

Bennett was a hard man to work for, but believed in sharing the hotel-casino’s financial success with the lower-level employees. While he was running the Big Top, Circus Circus agreed up front to pay whatever wages were negotiated in a town-wide union contract. Following a 1984 labor dispute that resulted in work stoppages at several Strip properties, Bennett continued to pay Circus Circus employees a higher wage than was offered at many competing hotel-casinos. In the days when the Frontier Hotel held out for a contract more favorable to management, Bennett was feeding pickets from the Circus Circus Enterprises kitchens. His compassion led him to supply a catering truck that provided free meals to union workers as they picketed outside the Frontier. He gave the strikers three hot meals a day for several years. One observer said, “Mr. Bennett provided more than food; he provided faith in humankind.” He kept doing it to the bitter end, when the Frontier owners sold the hotel in the strike’s seventh year. By then, Bennett had spent nearly one million dollars feeding pickets.

When the mid-1990’s rolled around, stockholders began to question Bill Bennett’s leadership. At a stockholder’s meeting, shareholders peppered the 69-year-old Bennett with pointed questions about everything from the exodus of top executives to the quality of the stage show at the pyramid-shaped Luxor. The preceding fiscal year had been the first in their history as a public corporation in which the net income had declined. The stock price had dropped from $49 3/4 a share to $22 3/8. William Bennett pointed a finger at the decline in earnings on the grand opening costs for the massive Luxor Hotel Casino, as well as the Grand Slam Canyon theme park at the original Circus Circus.

Even though Bennett predicted a quick financial turnaround, before the year was out, he stepped down as chairman. Nevertheless, that did not quiet the criticism. Bennett became embroiled in a dispute over his attempt to purchase the site of the old Hacienda Hotel. He endeavored to buy the property personally; since Circus Circus was also interested as a potential buyer. Bill Bennett’s critics charged that he had violated his responsibilities as a board member. In due course, it led to a lawsuit, and a settlement in 1995. As a result, Bennett relinquished all claim to the property and resigned from Circus Circus Enterprises. The old Hacienda Hotel property became the site of Circus Circus’ most luxurious holdings, Mandalay Bay. The new resort hotel casino aimed at a more upscale patronage, but again relied on their time-tested exotic theme. The company then renamed itself for the fashionable and expensive property.

Bennett, despite suffering a heart attack in 1996 at the age of 71, sold his stock in Circus Circus for $230 million and bought the ailing Sahara for $193 million. He remodeled it in a heavily Moroccan theme, greatly enlarging the casino and adding a variety of virtual-reality family attractions related to his beloved motor sports. Old patrons of Circus Circus and veteran casino workers accepted the old gaming visionary’s offer of benefits and pay to work for him once more. They had bet on Bennett before and believed.

The Sahara, one of the Strip’s first and finest resorts when it opened in 1952, was reinvented as a bargain destination to compete with the more luxurious megaresorts to the south. The property attracted old-timers with some flair of vintage Las Vegas, alongside a rollercoaster, a NASCAR-themed cafe and a video game arcade for younger customers. New Sahara comedy and musical shows, seasoned with high-tech magic acts, attracted people of all ages. The Sahara made good profits even after the Sept. 11 terrorist attacks. Other hotels responded by lowering room rates, but the Sahara’s ongoing “blackjack for a buck” promotion attracted a steady stream of customers and profits.

After a lengthy illness, William G. Bennett, at the age of 78, died in his sleep at Desert Springs Hospital in Las Vegas on December 22, 2002. In a town famous for giving people second chances, nobody made more of that chance than Bill Bennett. He was arguably the most successful gaming executive of the 1960’s and 1970’s.

Bill Bennett was also part of a pantheon of gaming visionaries in Las Vegas’ post Howard Hughes corporate era, who helped change the Sin City’s outlaw image by operating resorts that attracted families and a value-conscious crowd. One gaming expert claimed the reason major casino operators such as Bennett and others like him were so successful was because they were never satisfied with their past glories and were constantly searching for new worlds to conquer.

Near the beginning of their careers in Vegas, Bill Bennett and Steve Wynn discussed their futures, sitting in the dark confines of The Mint’s Zodiac Bar. There, Wynn saw in Bennett a man who wanted more for Las Vegas. “Bill Bennett’s greatest contribution was in marketing our town to a broader range of customers,” Wynn said. “Bill gave the largest segment of our population the visual excitement and the fantasy show of Las Vegas. He built 10,000 to 14,000 rooms for a population that otherwise would not have been able to afford to come here.”

The Men Who Made Las Vegas is a series by Byron Craft chronicling the growth of Sin City and the men who made it possible.

 

 

 

 

 

 

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