It’s not a casino that makes a resort successful, but the nongaming amenities and the people running the property, casino industry leader Steve Wynn told more than 600 people gathered in Las Vegas for a major gaming conference.
Wynn kicked off the 16th International Conference on Gambling and Risk Taking on Tuesday at The Mirage, the property he opened more than 25 years ago under a cloud of industry skepticism.
Wynn discussed the inspirations that led to the development of The Mirage, how his formula of focussing on nongaming amenities kept breaking revenue records with each development he built and he also spent time skewering the millennial generation for being too absorbed with technology, yet spend freely in his nightclubs.
Wynn spoke for nearly an hour and took questions from conference attendees, a blend of industry professionals, regulators but mostly academics who will present papers and debate industry issues through Friday at the event that is scheduled every three years.
UNLV is collaborating with the University of Nevada, Reno, where the conference’s founder, economics professor Bill Eadington, taught and came up with the idea of bringing scholars together to discuss issues related to the gambling industry.
In his keynote, Wynn said he drew inspiration from family visits to the Fontainebleau resort in Miami when he was growing up and from Jay Sarno, the executive behind the development of Caesars Palace and Circus Circus, to come up with the Mirage concept.
Wynn said he learned at an early age that people would gather to play bingo, not because they expected to win money but to socialize and have fun.
“They know how to play bingo and the reason they get so excited when they yell, ‘Bingo,’ is because they’re surprised,” Wynn said. “What they’re here for is to have a good time. This is their entertainment, their recreation. They’re here for the excitement and to have fun.”
When growing up, Wynn and his family were frequent guests at Miami’s Fontainbleau resort, a property that didn’t even have a sign or a name on the building.
“Fontainbleau had restaurants, gardens, a showroom, and restaurants and shops. People came from all over the world to go to the Fontainebleau,” Wynn said.
“Fontainbleau represented a departure from everything that had ever been done in the hotel business in Miami or anywhere else. It became a destination and the hotel itself became a show.
“My parents spent their evenings in the coffee shop and ate at the Fontainebleau and all of their friends marveled at being in this world that was better than the outside world. Fontainbleau was an emotional and intellectual experience that profoundly affected the way I thought.
“I said, ‘What fun it must be to make a place better than it is outside, an idyllic place, romantic in a literary sense.’ It combined the romance of a movie with the solidity of a bank.
“It seemed like Las Vegas was a perfect place and so it beckoned to me. But the Fontainebleau was the controlling image of my youth. It was there that I formed the basic ideas that I’ve kept through today.”
DRAWING INSPIRATION FOR THE MIRAGE
When Wynn began his gaming career at the Golden Nugget in downtown Las Vegas, he said it generated more revenue than all of Fremont Street combined because of the quality of the experience it offered.
He said while sitting in his car at the Sands hotel and gazing across the street where The Mirage would eventually be built he thought about “Bali Hai,” a song from the Rodgers and Hammerstein musical “South Pacific” and considered how incredible it would be to bring a piece of Polynesia to the coarse Nevada desert.
He said the idea to build a volcano came from a colleague, but he concurred that it was one of the landmark moves in making The Mirage a success.
Once on the Strip, Wynn’s properties developed a pattern of generating more annual revenue than any previous property — and in every case, the noncasino revenue was greater than from the casino.
At The Mirage, the annual revenue for the first year was $500 million while noncasino revenue was $600 million.
At the Bellagio, the casino generated $600 million while amenities brought in $800 million.
At the Wynn, which had fewer rooms than The Mirage or the Bellagio, casino revenue was $700 million and noncasino features brought in $900 million because the focus was on restaurants and convention facilities.
When Encore was added, the first year of casino revenue was $840 million while noncasino revenue was $1.1 billion.
“There seems to be a pattern here,” Wynn said. “The pattern is this: Gaming is a passive activity. It has no value. One roulette table is exactly the same as every other damn roulette table.
“The driver of our business is the noncasino activity. The driver of our business is the experiential value,” he said.
‘NOT A BIG FAN OF TWITTER OR FACEBOOK’
No stranger to controversy, Wynn had some attendees squirming when he expressed his frustration with millennial customers, but then remarked how his nightclubs generate $40 million in revenue a year.
“Technology has improved our ability to track our customers and our employees,” he said. “I’m not sure that technology and social media are making young people any smarter. They seem to be living in a virtual world.
“So I’m not a big fan of Twitter or Facebook. I think probably more time is wasted, more dimwitted time spent on those devices. But then, I’m one of those old white guys,” he said.
“They (millennials) get older later so maybe when they’re about 60, we’ll have a chance to get some common sense out of them. In the meantime, we’re doing well with the little darlings in our nightclubs. It’s probably the only part of my business where I talk at a distance.
“I walk into the clubs and I say to myself, ‘Either we’ve attracted every moron in the world or there’s something about the sound that allows normal people to check their human sensibilities.’ Maybe it’s a combination of both.”
Contact Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Find him on Twitter: @RickVelotta.