Winner Takes All Read online

  Snazzy new casinos had been rising on the Strip since 1941, when the El Rancho Vegas first combined gambling, restaurants, entertainment, and hotel rooms. Some, like the Sands and the Desert Inn, remain landmarks years after being imploded. One incredible year, 1955, saw the grand openings of six new hotels, including the Stardust, the Riviera, the Dunes, and the Hacienda.

  As Mob money and Teamsters pension funds dried up under legal pressures, Howard Hughes conveniently bought the aging Mob associates out before going mad in his Desert Inn suite.

  What with the town’s reputation and all, investing in Las Vegas in the 1970s and 1980s took a strong stomach. From 1969 until 1989, Kirk Kerkorian was just about the only person able and willing to build a major new casino on the Strip.

  When that photo was taken, the 1,568-room International Hotel was going to be the biggest hotel in the world. Its land and construction cost $65 million—a huge sum at the time.

  Kerkorian was convinced that the International’s location east of the Las Vegas Strip, on Paradise Road, would effectively create a second Strip. Howard Hughes feared this, and he set about trying unsuccessfully to get Kerkorian’s financing killed.

  Hughes and Kerkorian shared interests in aerospace, Hollywood, and Las Vegas. But Hughes was well educated, born an heir to a fortune.

  Kerkorian is a self-made eighth-grade dropout. He was born near Fresno, California, on June 6, 1917, the youngest of the four children of Armenian-born Ahron and Lily Kerkorian. The arrival of Kerkor (his given name) was a surprise, and initially an unwelcome one. According to a profile in the Los Angeles Times, his mother tried to abort the baby with hot baths.

  Kerkorian’s father drove a Lincoln and owned farmland around Fresno in an area called Weedpatch. It’s the same place John Steinbeck settled in to research The Grapes of Wrath, only Steinbeck came along years after the Kerkorians had left. When the recession of the early 1920s hit, Ahron Kerkorian tried to save his assets by putting them into his young children’s names, but the banks came after them anyway, even suing four-year-old Kirk as recounted in Dial Torgerson’s 1974 book, Kerkorian, An American Success Story. The family’s holdings were auctioned off, and they moved to a precarious life in Los Angeles.

  In L.A., Kerkor grew up to be something of a juvenile delinquent, albeit a hardworking one. He was expelled from Foshay Junior High for punching a teacher’s son in the throat and was sent to Jacob Riis reform school, but he sold newspapers and hustled odd jobs as a sometime bouncer and golf caddy. He dropped out of school in the eighth grade—a choice that would hound him later when his ill-educated speech and manners would make him reticent in public.

  In order to hit a person, you have to be just a little bit sadistic. After Kerkorian left school, he followed his older brother Nishon’s path into boxing, and as “Rifle Right Kerkorian,” won a welterweight championship. He quit after winning twenty-nine of his thirty-three amateur fights, advised that he was too slight and not aggressive enough to survive as a pro.

  While installing furnaces as an hourly wage worker in Los Angeles, Kerkorian took a flight in a Piper Cub with a friend and caught the flying bug. He would later lie about his education to get into a flight academy and would end up a civilian flight instructor for the U.S. Army. During World War II, he delivered Canadian bombers to the Royal Air Force’s bases in Europe for $1,000 a trip, according to several accounts—a stunt that was akin to a suicide run. Later he traveled around the world buying and selling surplus planes, flying these jalopies himself to deliver them.

  Kerkorian first arrived in Las Vegas as a pilot in 1945, flying gamblers in on a single-engine Cessna. The Strip at the time consisted of an old gambling joint called the 91 Club (formerly the Pair-O-Dice), the El Rancho Vegas (1941), and the Last Frontier (1942). The Flamingo was under construction. Kerkorian’s passengers included gangster Bugsy Siegel.

  Kerkorian worked hard at the airline for twenty years. He sold it and bought it back in a move that would become a habit with his other assets. It may be the best job he ever did of managing a business, for the airline flourished. He took Trans International Airlines public in 1965 with the help of a fellow Armenian stockbroker in Fresno named George Mason. Mason convinced the Armenian community to buy the stock. Three years later, Kerkorian sold the airline again, in the same era that a young Steve Wynn chose to move to Las Vegas from the East Coast.

  Kerkorian bet big sums at the sailors’ game craps—placing a wager and walking away a winner or a loser. It came to light that Kerkorian had once written a check in 1961 to pay off $21,300 in sports bets to Charles “Charlie the Blade” Tourine. Tourine was believed to be a member of the Cosa Nostra Family of Vito Genovese. Casino regulators in 1970 failed to prove that Kerkorian knew who Charlie the Blade was when he wrote that check.

  Kerkorian gambled on Las Vegas with a land-speculation deal when he bought eighty-two acres of flood-prone land across the street from the Flamingo. He did some savvy land trades to expand it, rented it to the folks who were building Caesars Palace, and eventually sold the parcel to Caesars in 1968.

  Over the years he bought and sold the Flamingo, the Desert Inn, and the Sands. He very nearly lost his shirt a few times, but righted himself by selling something. Kerkorian confessed to one early interviewer that he had learned as a child not to be “married” to anything because everything was easily lost.

  Hollywood caught his interest shortly after Kerkorian sold the airline the second time to Transamerica, a conglomerate that also owned the film company United Artists. After sniffing around for an undervalued studio, in 1969 he launched a hostile takeover of the ill-managed Metro-Goldwyn-Mayer, thinking he could turn it around.

  He couldn’t. Over the next thirty-five years, Kerkorian would buy and sell the MGM studio three times, run through a slate of failed studio executives, fail at running it himself, and make a string of forgettables like Buddy Buddy while passing on Jaws and The Sting, which both became big hits for Universal.

  Kerkorian sold the studio to Ted Turner in 1986, then bought part of it back when Turner got strapped for cash. Then he did one of those things that makes people scratch their heads. Kerkorian deliberately passed up an opportunity to wrest control of Turner Broadcasting, which owned the CNN network. Rather than buying back parts of the studio, Kerkorian was advised that he could have forced the struggling Turner to pay him with so much common stock that he would have gained voting control of Turner Broadcasting. He told people he liked Turner and didn’t want to take control of his company.

  Not long after building the International in Las Vegas, Kerkorian became overextended and sold it to Hilton Hotels, whereupon it came to be called the Las Vegas Hilton. Then he built another “biggest hotel” across the street from the Dunes in 1973. He connected his Hollywood and Vegas interests and called it the MGM Grand. This was a stretch, for “grand” it just wasn’t.

  The last major casino to be built on the Strip for seventeen years, the Grand had 2,100 shoddily built rooms. A tragic grease fire spread out of control at the Grand in 1980, killing eighty-seven people. Among the contributing factors, according to authorities, was slapdash construction. Kerkorian settled the lawsuits quickly, paying the victims before his insurers paid him.

  He seemed thereafter to find the place unbearable, and while he rebuilt it, Kerkorian tried to sell the hotel to Henry Gluck, then chairman of Caesars. Gluck says he would have bought the place, but Kerkorian refused to part with the MGM Grand name. “I might do something else someday,” Kerkorian said, according to Gluck.

  So the Grand became Bally’s when Bally’s Manufacturing bought it. Kerkorian’s legacy there, like at the Las Vegas Hilton, is remembered only by the history buffs. The casino gave its new owner the same headaches it’s given every owner it has ever had. It’s only a matter of time until Bally’s is imploded.

  Kerkorian took up tennis during those intervening years in Las Vegas. He liked to play at the Desert Inn, which was as much a country club as a casino. On
e of Kerkorian’s young doubles partners there was a brash, well-connected Jewish kid with jet-black hair named Steve Wynn.

  Chapter Three

  SAY “HAIR-UHS”

  Casino gamblers are more likely than nongamblers to have bought a car new.… Nongamblers are far more likely to drive a car that is five or more years old.

  —2006 HARRAH’S SURVEY

  Bill Harrah had no intention of getting involved in the whole Las Vegas imbroglio. In fact, he’d be dead and gone for a quarter century before his casino company would make its bones in Sin City.

  At eighteen, Harrah got his start in Venice, California, in 1929 working for his father at something that in those days was called a bingo parlor. The place was built on a pier that led off the beach. Venice was a holiday town at the time, with actual canals built to replicate the original Venice in Italy. At the Circle Game bingo parlor, players perched on fold-up stools surrounding a table, a hopper, and a flashing board. They paid a dealer fifty cents for a set of cards, then rolled a ball into the hopper, trying to make the flashboard register a number and suit matching the player’s cards. This was not exactly legal.

  Young Bill eventually bought the place from his dad for $500. He fixed it up, buying new chairs and adding curtains. Business was good, but he lacked sway with the district attorney: He got shut down every year around Christmas when the Santa Anita Racetrack opened for betting.

  It took Harrah longer than some to see the benefit when Nevada legalized gambling again in 1931. Six years later, in 1937, Harrah bought a bingo parlor in Reno, Nevada, and moved there. He struggled for four years, going in and out of several bingo businesses with various partners.

  In a stroke of luck for him, though, the Japanese bombed Pearl Harbor in 1941. The ensuing persecution of Japanese Americans forced many to sell their businesses cheaply. A week after Pearl Harbor, Bill Harrah offered to buy one of the town’s most successful bingo parlors, the Reno Club, from a gentleman named Freddie Aoyama and his silent Japanese partners. Harrah renamed it Harrah’s Reno Club.

  He opened his first casino four years later and called it Harrah’s Club. From his perch in Reno, and later when he expanded to Lake Tahoe, Bill Harrah brought all sorts of innovations to the casino business. His consultants set up models for keeping track of the doings in “count rooms”—the highly guarded rooms in casinos where cash is counted. He created daily accounting reports called the “daily report” and the “daybook” to inform himself and his management of the operations of each casino over the previous twenty-four hours. In those days, that was real science.

  To raise money for expansion, Bill Harrah listed his company on the over-the-counter exchange in 1971, raising $4 million and selling off 13 percent of the holdings. A few years later, Harrah’s became the first casino company to trade on the New York Stock Exchange. But Harrah didn’t spend his new wealth building a place in Las Vegas. Quite the opposite, he pledged never to do business there, where he believed he would have had to deal with the Mob.

  Harrah’s northern Nevada location made it difficult to entice entertainers, though, so Harrah started treating performers like high rollers. He loaned Sammy Davis Jr. the use of a Rolls-Royce, gave a custom Jeep with a Ferrari engine to Bobby Darin, and housed performers in a pair of Lake Tahoe mansions or special sprawling hotel suites. Those were glory days for Las Vegas entertainment, and Harrah’s rode its coattails, drawing regular appearances from stars like Bill Cosby, Frank Sinatra, Don Rickles, and Bob Hope.

  Naturally, Bill Harrah had a lot of fun at his places. He was a drinker (until he quit) and a womanizer—married seven times, to six women. He was also obsessive about keeping his places top-notch. Sinatra used to say Bill Harrah ran the nicest hotel around, and Sammy Davis Jr. agreed. According to an account in Jackpot!, a book by Robert L. Shook, Harrah wouldn’t allow notes to be taped to any surface in his properties. Pictures had to be hung from two nails to be sure they hung straight; leather upholstery was preferred and vinyl was banned as tacky. Flowers and plants had to be real. When he opened his Lake Tahoe hotel in 1973, each room had his-and-her bathrooms with a television and a phone in each one. Bill Harrah wore Brioni suits when you still had to fly to Rome to get them.

  One wonders how Harrah would have felt about the smoky, vinyl-cushioned, honky-tonk casinos that would, by the 1990s, populate the country and bear his name. But he died in 1978, so he never knew about that.

  It turned out that Bill Harrah wasn’t much for estate planning. To pay off his debts and estate taxes upon his death, his company had to be sold. It was acquired by Holiday Inns Incorporated, which operated only 1,600 hotels at the time. Holiday Inns was a morally upright company based in Memphis, Tennessee. Two of its board members resigned over moral objections to the Harrah’s purchase. This did not stop the remaining hotel bigwigs at Holiday Inns from expanding the casinos into Atlantic City with the help of a young attorney named Phil Satre, who had coincidentally once done legal work for Bill Harrah.

  For the next fifteen years, Harrah’s was tossed around the markets like so much flotsam: purchased by Bass PLC along with Holiday Inns, spun off into the Promus Companies, which would eventually spin off the hotels in 1995, leaving Harrah’s—finally—on its own as a casino company once again.

  The Holiday Inn years had an unintended impact on Harrah’s. The move to Memphis removed its leaders from clubby, competitive Nevada. This helped Harrah’s separate from the pack—something Phil Satre later said was the key to the company’s success.

  When riverboat gambling began to spread in the early 1990s, the Harrah’s fellows didn’t come across as flashy Vegas operators. They weren’t fancy-pants, and they didn’t scoff at small casinos that catered to people who couldn’t afford to fly to Las Vegas. Their Wal-Mart reputation was just fine with them.

  Chapter Four

  1989

  It was always Steve’s fantasy to have a place on the Strip.

  —ELAINE WYNN

  By now, people know Las Vegas as a frivolous place, rife with fakery and unabashed silliness. So it’s worth envisioning Sin City in 1989, when the New Las Vegas story really begins.

  George Herbert Walker Bush was inaugurated president of the United States that January. The Berlin Wall came down and Rain Man won the Oscar for best picture. Las Vegas was known for gambling and sex. It had no medieval castle, no pyramid, no imitation Venice, Paris, or New York—not even a pirate ship.

  Mormons controlled the county’s politics, creating a peculiar balance of power between the morally relaxed and the decently uptight. Mormons were the first white guys to settle in the Las Vegas Valley—so named because springs burbled from the ground there, creating grassy meadows: las vegas in Spanish. Nevada became a United States territory in 1861. Las Vegas, down south in the desert, wasn’t a metropolis at the time. The Nevadans preferred to be up north in places like Virginia City, where twenty-six-year-old Samuel Clemens once took a job at the Territorial Enterprise and began writing under the pseudonym Mark Twain.

  Despite our Protestant leanings, gambling has been an American pastime since at least 1612, when the first lottery in America raised £29,000 for the Virginia Company. Lotteries—a form of gambling with generally far worse odds than a slot machine—also helped pay for some of the first buildings at Harvard, Princeton, and Dartmouth. Revolutionary soldiers gambled at Valley Forge, much to George Washington’s consternation. Later, the streets and back rooms of New York, Philadelphia, Chicago, and other big cities served as training grounds for future casino operators who would flee to Nevada to get the law off their backs.

  Gambling was legal in Nevada for most of the nineteenth century until a moral majority got it banned. It was a mining and railroad–inspired land rush that created the town of Las Vegas, which was incorporated in 1911. Twenty years later, with the Great Depression pressuring the state’s coffers, gambling was again legalized in Nevada.

  Of course, there were plenty of gambling joints in Las Vegas even when they
were illegal. One pioneering place was called the Pair-O-Dice, whose operators were reputedly connected to Al Capone. It was located south of the town on Highway 91, a road that rolled and rumbled another three hundred arid miles to Southern California.

  That was the Strip in utero.

  By 1989, the Strip was more famous than the town. On prom nights, casino floors bubbled with pimply kids in tuxedos and evening gowns. In summers, it was a sport for local youngsters to infiltrate the resorts’ swimming pools, starting with the Tropicana and sneaking northward up the Strip in a pool-by-pool race.

  As for tourists, unless one was headed to Las Vegas to gamble, one was unlikely to be headed to Las Vegas at all in 1989. Fine dining amounted to a single decision: steak or Italian. The entertainment was literally a bad joke. With the Rat Pack long gone and Elvis buried, washed-up or short-lived stars tried to rekindle their careers there. Barbara Mandrell and Jimmie Walker—remember them?—were playing in Las Vegas when the Mirage was opening.

  Having lost the Mob, the Teamsters, and Howard Hughes, Las Vegas had been starving for investment capital for two decades. The general view on Wall Street was that the casino industry wasn’t nice. Investors would rather buy tobacco stocks.

  After all, the dicey past wasn’t so long gone. Aged Mafia barons were still dining on the osso buco at Piero’s Italian restaurant, their canes hanging from their chairs. Meyer Lansky’s friend Moe Dalitz, who sold the Desert Inn to Howard Hughes, died that September, beloved for his contributions to schools and parks and for buzzing around town in a canary yellow Volkswagen Bug. In 1989, it had been only three years since the pulpy body of Tony “The Ant” Spilotro, one of the city’s most notorious residents, was discovered several feet deep in an Indiana cornfield.