Thursday, September 18, 2003

Jack Binion Sells Horseshoe

The man with the friendly "aw-shucks" expression is just another billionaire.

Posted By on Thu, Sep 18, 2003 at 4:00 AM

This is what Jack Binion, who sold Horseshoe Gaming to Harrah's Entertainment last week for $1.45 billion, taught the competition:

First, notwithstanding Horseshoe's corporate name, it's gambling, not gaming. Monopoly and Chutes and Ladders are games. What goes on inside a casino is gambling.

Second, Tunica, Bossier City, and Hammond can be just as profitable as Las Vegas, New Orleans, or Atlantic City for a smart casino operator.

Third, gambling is sport, and a poker tournament can be presented to a mass audience and sponsors as televised entertainment just like boxing, football, or horseracing. Poker and dice games are good marketing and support the perception that gamblers control their own fate even if all most of them ever do is feed coins into slot machines.

Finally, a casino owner need not look like a movie star or have a full head of black, slicked-back hair. Instead, he can be unabashedly bald, look like your favorite good-natured uncle, make fun of himself in commercials, and customers will love him.

The commercial says, "You don't know Jack," but thousands of customers think they do. Memphian G.A. "Bert" Robinson III sold Binion his Tunica site and has been his friend and partner for 10 years.

"He walks into that casino and everyone speaks to him and he talks to everyone," said Robinson. "One time we were going to dinner, and it took us an hour just to go a hundred yards. You can't put a name with a face at any other casino. On opening night, I saw Jack on several occasions just helping people having problems. A security guard came up and said somebody had spilled red wine on a customer's dress. He said, well, get it cleaned. She said, 'That is not what I want. I want a hug from Jack Binion.'"

Robinson played a small part in acquiring the classic red Cadillac limousine with a set of longhorns on the hood that sits outside the main entrance to the Horseshoe. Nine years ago, a friend in Memphis told Robinson he had something Horseshoe needed. A couple of weeks later, pictures of the Cadillac, which was in Dallas, arrived in the mail. Robinson took them to the casino manager.

"He went crazy and said we've gotta have it," Robinson said. "So we called Jack, and he said go buy it. They put the longhorns on it later. Jack paid about $50,000 for it."

Binion opened the Horseshoe in Robinsonville in February 1995, nearly two and a half years after Splash Casino opened the Tunica market in October 1992 at Mhoon Landing 20 miles south. At the time, Harrah's Entertainment was still headquartered in Memphis and generally considered the most knowledgeable casino operator in the market. In 1993, Harrah's opened, by today's standards, a very modest casino with a restaurant that was little more than a cafeteria. A few years later, Harrah's moved to its current location, formerly the home of the now-defunct Southern Belle.

With a favorable ruling from the Mississippi Gaming Commission on how far casinos could be from the river, Binion raised the stakes.

"At first, it was like they gave a party and nobody came," he told Memphis magazine in 1996.

But the competition took notice when Horseshoe began earning more than $200 million a year while many of them were barely clearing $100 million. Circus Circus, one of Horseshoe's two neighbors, took down the pink big-top and morphed into Gold Strike, with a 30-story golden glass tower. Treasure Bay, frozen out of a deal with Horseshoe, Circus Circus, and Sheraton, found itself on the wrong side of the parking-lot fence one day, and pretty soon its pirate ship set sail for the Gulf Coast.

Anyone who has ever been in a casino knows that most of the differences between them are a matter of perception. Tethered to a slot machine with a frequent-player card, a customer stands about the same chance of winning regardless of whether the prevailing theme is Egypt, the jungle, or NASCAR. In a conference call last week, even Horseshoe executives admitted that the percentage of profit that comes from slots versus table games is "higher than you might think." He revealed no number, but industrywide the standard is about 80 percent.

Binion, however, made sure that Horseshoe, unlike Harrah's, wasn't known as a slot house. He nurtured the legend of the no-limit bet, the biggest employee tips, and the best leveraged odds for players at the craps table. He put the poker tables near the front of the casino. While Harrah's' annual contribution to the industry is a number-crunching survey of players and their habits, Horseshoe's is the World Series of Poker.

Benny Binion, Jack's father, started that with a cult following in 1970. Thirty-three years later, it's a fixture on ESPN. Benny Binion left Texas in 1946 with a rough reputation and celebrated his 83rd birthday at the University of Las Vegas. When he died in 1989, the city put up a statue of him in a prominent square. Someday Jack may get his in Tunica.

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