From Billionaire To Broke And Back Again
Bill Boyd, one of Las Vegas’ first and biggest casino owners, has seen ups and down over his career. We look into this casino tycoon’s rise and fall and subsequent comeback as well as the changing landscape of gambling.
Bill Boyd is executive chairman of Boyd Gaming Corporation, the company he co-founded with his father Sam A. Boyd. Sam Boyd started as a dealer in Las Vegas in 1941, before owning shares in a few casinos, including the Mint. Bill partnered with his father in the Union Plaza and the Eldorado Casinos until 1973, when they decided to open their own corporation. Their first property, the California Hotel and Casino, opened in January 1975. Bill, who was a lawyer, then moved to full-time in the gambling industry. Bill became CEO of Boyd Gaming Corporation in January 1993 upon the death of his father and drove the company’s initial expansion across the US. He stepped down as CEO in January 2008 but remains as executive chairman. His three children are also heavily involved in the corporation.
Sam and Bill began by opening the California, with a second property, Sam’s Town opening at the end of the 1970s. Contrary to the California which is in downtown, Sam’s Town was built much farther out to attract gamblers on their way in or out of the city. This property served as the basis for the development of Vegas’ “Boulder Strip” (Boulder Highway). After helping the Nevada Gaming Commission with an investigation into skimming at the Stardust and Fremont casinos in the mid-1980s, the reputable company was asked to take over operation of the Stardust in 1984. Boyd Gaming purchased Stardust a year later.
The same year that Sam Boyd died, the company went public. At this time, the corporation owned six highly-profitable casinos, generating over $430 million a year in revenue. All were inexpensive places for locals and out-of-towners. Boyd Gaming continued to acquire and open casinos in Nevada, Mississippi, Louisiana, Missouri, Illinois, and Indiana.
As stock prices went up over 15 years, Boyd became a billionaire, and he decided to expand by moving into the higher-end side of things. He opened the Borgata in Atlantic City in 2003 as part of a joint venture with MGM Resorts International, the hotel and casino being luxurious, but also adding yet another casino to the city. Meanwhile, back in Vegas, Bill decided to demolish and rebuild on the site of the Stardust. His Echelon Palace resort complex was to become the largest project in the corporation’s history, however construction was quickly suspended.
Boyd’s timing for these expansions was off. Las Vegas and Atlantic City were saturated, and the Great Recession hit. Over the stretch of 17 months, Boyd Gaming’s stock prices plummeted 94%, down to a mere $3 per share in November 2008.
Bill Boyd was now facing bankruptcy. He reversed his plans for moving further into the luxury casino market and instead focused on spreading his budget casinos across the country. He also decided to bring in a partner, promoting Kevin Smith, the company president, to CEO. Bill had developed the company with his father with the mindset of taking risks. With Smith at his side, Bill gained a more conservative balance, bringing risks down to a more appropriate level. With the decisions to shut down project and refine their business, they were able to bring Boyd Gaming back.
Boyd Gaming decided to step back from its luxury market plans and instead focus on what brought success originally: properties catering to budget-conscious gamblers rather than the high-rollers. The California, for example, mostly has slot machines and low-limit games. The new casinos were not built, but rather acquired, cutting costs.
Since hitting almost rock bottom in the stock market in November 2008, Boyd Gaming’s stock has risen over 700%! Over ten years, the company saw their profit go from an almost $223 million loss to around $200 million profit, with a revenue of $2.4 billion. Boyd is almost back to being a billionaire, with his latest estimated net worth at over $700 million.
The Changing Landscape of Casinos
It will be interesting to see how Boyd Gaming does going forward. Will their focus on budget casinos across the country be enough to keep them going and growing when the industry is seeing an increasing number of players heading to online casinos? Land-based casinos have been experiencing a drop overall as more and more people prefer the convenience of online casinos. With live dealer games, online casinos are approaching the interactive experience provided in land-based casinos. And playing online and particularly at a mobile casino means one can play their favourite pokies, blackjack, roulette, and more any and everywhere, whether it might be at any time of the day or night. Time will tell whether the large casino resorts will continue to bring in as many profits or if they will lose their places to the growing online casino industry.