The Rise Of Steve Wynn: From Bingo Parlor To Las Vegas Tycoon

Once upon a time, Wayne Newton was the King of Las Vegas. The "Danke Schoen" singer was the physical embodiment of the ritz and glitz that defined the Las Vegas Strip throughout the 1970s and 80s. Today, (and for the last roughly 20 years) the undisputed King of Las Vegas has been casino tycoon Steve Wynn. Wynn's personal and commercial contributions to both the Strip and the city at large have radically improved the fortunes of Las Vegas forever. And his life story is a perfect metaphor for Las Vegas itself: Where else could someone place a $45,000 bet and see it grow into a $3 billion fortune?

Stephen Alan "Steve" Wynn was born on January 27, 1942, in New Haven, Connecticut. His father was an illegal bingo game operator, so gambling truly is in Steve's blood. The Wynn family moved to Las Vegas in 1952 so his father Mike could run his bingo parlor at the Silver Slipper casino on the Strip. However, after six weeks, he was run out of business by the far more popular bingo games at the Golden Nugget in downtown Las Vegas.

After the failure of the bingo parlor, the Wynns moved to Maryland, and Steve enrolled at the University of Pennsylvania. He worked at his father's new bingo parlor on Sundays while in college to make extra income. Wynn had originally intended to go to med school. Unfortunately, his father died suddenly in 1963, just before Steve graduated from college. A death in the family is always a tragedy, but to make matters worse, Steve's father died with $350,000 worth of gambling debt. That's $2.7 million worth of debt in today's dollars. So Steve was forced to cancel his med school plans and instead move back home to take over the family bingo parlor. As they say, a legend was born.

Biography of Steve Wynn

Wynn ran the game, calling the numbers while his wife Elaine handled the cash. Running the parlor allowed Steve to meet many of his dad's old business contacts. These contacts included several long-time gamblers and characters associated with the Mafia. These people he met in the 1960s led him to another one of his father's longtime associates, Maurice Friedman. Friedman, who lived in Las Vegas, was later linked to a branch of the Mafia in Detroit. (It should be noted that Steve Wynn has never been tied to organized crime in any way).

After spending years watching his father and cronies lose money gambling, Steve Wynn came to a very simple conclusion. In his own words: "This showed me at a very early age that if you wanted to make money in a casino, the answer was to own one."

Using Friedman's contacts and a $30,000 loan from a family friend, Steve Wynn bought three percent of the Frontier Hotel on the Las Vegas Strip in 1965. The total cost of this venture was $45,000. He soon borrowed another $30,000 from a Las Vegas bank to acquire an additional two percent stake in the hotel and casino. This amount of shares allowed Steve to qualify for a small portion of the Frontier's gambling profits.

In 1967, Steve and Elaine Wynn moved to Las Vegas. He became the Frontier's slot and casino manager at the age of 25. However, within weeks, Friedman was implicated in a card cheating scheme in California, and his affiliation with the Detroit Mafia came to light. The Frontier's investors quickly sold the hotel-casino to Howard Hughes for $24 million. As a minority investor who was only entitled to gambling profits, Steve did not see anything significant from the sale.

After the Frontier sale, Wynn floated a bit, co-producing lounge acts in casinos. He wanted more, and in 1969, at age 27, he would have a fateful meeting with a Las Vegas banker named E. Parry Thomas. Thomas headed up Valley Bank, which was like the Bank of America of Las Vegas – it was on every corner. Valley Bank was well-known for granting loans to casinos for years when other local banks would not. Thomas got Wynn a job as the Nevada liquor distributor for Best Brands. Wynn bought the company on credit granted to him from Valley Bank.

In 1970, Wynn bought ten acres off the Las Vegas Strip for $154,000. Thomas lent him $400,000 to build a liquor warehouse there. After one year, Wynn sold that warehouse and Best Brands for more than $700,000. His share of that deal was $170,000, which is worth roughly $1 million in today's dollars.

Strategic Moves in the Casino Business

Valley Bank then loaned Wynn $1.2 million so he could buy a narrow, one-acre slice of the Strip next to Caesar's Palace. This being Las Vegas, Wynn then placed a huge gamble: After receiving the loan, Steve took out a full-page newspaper ad that announced his intention to build a competing casino directly across from Caesars Palace. In reality, Wynn had absolutely no intention (or more importantly, funds) to build a competing casino on his new property. He was instead banking on the hope that Caesar wouldn't call his bluff and instead just buy the land from him. They did. For $2.25 million. Wynn's share, after his loan from Valley Bank was paid off, was $687,000, roughly $4.5 million in today's dollars. Nice bluff, Steve!

By the age of 30, Wynn's dreams were growing. He set out to acquire a majority interest in the company that owned the Golden Nugget in downtown Las Vegas, the same casino that ran his father out of town years earlier. Steve had been purchasing shares in the company slowly over the years at that point. In 1973, Wynn owned 5.5% of the company and was granted a state gaming license. This allowed him to become an executive vice president and a board member. He then bought 225,000 more shares, and by 31 years old, he was chairman of the Golden Nugget. This was the beginning of his reign, and he played it right, upgrading the Nugget and making it downtown's ritziest hotel and casino. Profits grew steadily as a result.

In 1980, Wynn opened the Golden Nugget Atlantic City and signed Frank Sinatra to perform at both the Las Vegas and Atlantic City Golden Nugget Casinos. This was a savvy move, as Sinatra brought the whales and high rollers to both casinos, vastly increasing profits.

Unfortunately, Steve soon ran into trouble with the New Jersey Casino Control Commission. In 1984, the commission claimed to have evidence that tied Wynn to the New York mobster Anthony Salerno. The commission alleged that the mob was laundering money through Wynn's Atlantic City property. The charges were never proven, as there was no direct link between Wynn and the mobsters. However, the whole charade left a bad taste in Steve's mouth, and he sold the Atlantic City casino, making a profit of $260 million for the company.

To clear his palate of that negative experience in Atlantic City, Steve subsequently decided to place the biggest bet of his entire career on a little-known, grungy section of Las Vegas called The Strip. In the 1980s, the Las Vegas Strip was pretty gross. The hotels and casinos were old and had seen much better days. It was depressing. Only the MGM Grand (now Bally's) stood out because it was just a few years old. But it was not exactly a noteworthy casino and definitely not a game changer for the Strip itself. Long story short, at the time, The Strip was a world away from what you imagine today. Definitely not a place where the average Vegas visitor would want to stay.

Wynn was able to secure $1 billion in credit, which was at the time completely unheard of. He raised about $160 million of it from junk bond trader Michael Milken. With the funding, Wynn set out to build a new kind of hotel-casino. His casino, The Mirage, cost a then record $620 million to build and open. It opened in 1989 and became an instant success and tourist destination.

Transforming the Las Vegas Strip

The Mirage signaled a new era for the Strip and