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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Nevadan at work: Exec aims to pump vibrancy into Westin Casuarina's casino

4 June 2012

Real estate investor Rory Bedore tried to buy the Maxim Hotel and Casino in 2002, but he was outbid by Kentucky-based Columbia Sussex Corp., which paid $38 million for the off-Strip resort.

Columbia spent another $40 million on changing the Maxim into The Westin Casuarina.

Fast forward 10 years and Bedore, who since developed 777 Gaming, is now in charge of the resort.

The 795-room property was in receivership when Bedore's gaming management company was approached to take over the casino portion. His company signed a four-year lease, was approved in April by Nevada gaming regulators, and took over the casino on May 1.

"We feel like we can bring some excitement back to the property," Bedore said. "There are some draws and we think there are some new ways to market it. We're only a block-and-a-half away from some of the most prestigious properties in the world."

Bedore's company spent a year managing six rural Nevada casinos that had been in bankruptcy until new ownership was licensed and took over.

Last summer, his company acquired the Carson Station in Carson City for $2.8 million. Bedore spent the past 10 months overseeing a renovation of the property's 91 hotel rooms, which are part of the Best Western chain, and the 12,700-square-foot casino, which has 265 slot machines and four table games.

Bedore's management deal with The Westin Casuarina's lenders and Pyramid Hotel Group allows 777 to concentrate on the 32,000-square-foot casino, which has 268 slot machines and eight table games. The agreement calls for a flat lease payment. 777 keeps any profit from the gaming revenues, but the company is financially responsible for any capital improvements and payroll for the Casuarina casino's 60 employees. The hotel is part of the Westin hotel chain.

Bedore said the company plans to improve the casino by upgrading slot machines and revising the gaming floor's layout.

"It certainly feels like ownership," Bedore said.

Besides The Westin Casuarina and Carson Station, 777 Gaming operates Silver State Gaming, a slot machine route company with about 300 games in bars, taverns, restaurants and small grocery stores.

Question: How long have you wanted to operate a casino on or near the Strip?

Answer: I came to Las Vegas in 1991 and I just knew when I stepped into this place that I was going to own properties on the Strip. I didn't know how it would happen. I actually looked at the property when it was the Maxim. Columbia came and paid substantially more than I was going to pay. They put a lot of money into it and Westin is a nice brand.

We heard through our accountants it was going back to the lender and they recommended to the group that we come in and look at the property.

Question: How do you plan to improve The Westin Casuarina?

Answer: We're off-Strip, right across from Bally and with Project Linq (Caesars Entertainment Corp.'s $550 million retail, dining and entertainment development) there's a great synergy going on around this property. Hotel occupancy averaged about 85 percent so there are a lot of people coming through here. I'm not sure if it's been marketed in the right capacity.

We definitely plan to add more slot machines and the change the location of the pit. We think we can improve traffic flow on the gaming floor. We want to make it exciting. I think we'll find a niche for ourselves and carve it out. At some point, we would like to grow the gaming floor to about 450 to 500 slot machines.

Question: What is your relationship with other business areas of The Westin Casuarina?

Answer: It's our discretion to do what we need to with the casino. However, we are totally cognizant of the Westin brand and what it represents. We would never do anything to disrespect that brand. We have comping rights to the restaurant, the Starbucks, the gift shop, hotel rooms and shows. We're certainly working hand in hand with the hotel and restaurant.

Question: Are you planning more changes to the Carson Station?

Answer: We modernized the hotel rooms and redid the casino floor. We need to start on the outside now, such as the parking lot and the exterior. It was a good property, but it was dated. At the end of the day, it's about giving people good value and having a property you can be proud of.

Question: With two casinos in different ends of the state, how is your time spent?

Answer: I spend about 75 percent of my time at The Westin and about 25 percent in Carson City. I spend the majority of my time here in Las Vegas because I want our team to give this property the attention it needs in order to insure its success.

Question: Do you foresee possibly joint-marketing The Westin Casuarina and Carson Station?

Answer: I don't believe a Best Western customer is necessarily a Westin customer, not that there is anything wrong with either one. I think they are different clients. However, we are looking to see if there is any synergy. We have players cards in both properties and maybe they can be joined in some way. We don't know yet. As we take on more properties, I love the idea of using multiple properties to leverage advertising.

Question: Is 777 looking for other casino management deals?

Answer: There are certainly more opportunities out there that we plan on exploring. We feel comfortable that we can perform. I'm one of those guys that likes being an owner, but I love the opportunity of management yields, especially going into a new place to see what can be done with that property. That might turn into ownership at some point.

Question: What challenges do you face in the slot machine route business?

Answer: I know Blake (Sartini) and his group (Golden Gaming) are the big guys now, but I think there is some opportunity in the slot route business. I don't think we'll ever be 8,000 machines, but we're holding our own and growing. It's one of those tight businesses where the margins are slim. You have to be careful and cut the right deals.