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Best of Howard Stutz

Gaming Guru

Howard Stutz

Boyd Exec Goes Out on Top

29 March 2005

LAS VEGAS -- When Boyd Gaming Corp. in 1996 named as its president a one-time banker whose only hands-on relationship with the gaming industry was steering development of the Fremont Street Experience, it was unusual.

At the time, Boyd Gaming consisted of a handful of downtown casinos, struggling properties in the Midwest, Sam's Town and the Stardust.

The company, having gone public a few years before, didn't rank as one of Wall Street's foremost casino operators.

"We weren't one of the most highly valued companies in the industry," Don Snyder recalled recently as he nears the end of a nine-year run as president of Boyd Gaming.

Snyder replaced Chuck Ruthe, Boyd's long-standing president, bringing some corporate structure, but adding an outsider's perspective to one of Las Vegas' historical casino operators.

"We put into place a vision of how we would like to become a broad-based and geographically diverse gaming operator," Snyder said. "We were doing things to create value, but the value wasn't reflected in the price of our stock. Today, it is. This is an incredibly different company from where it was nine years ago."

Snyder, 57, is leaving Boyd Gaming at a time when the company, with 18 gaming operations in six states, is at an apex.

Revenues of $1.73 billion in 2004 placed the company in the upper tier of casino operators. Boyd's stock, valued in single digits a few years ago, has traded in the mid to high $50s for much of March.

Boyd Gaming now has a market capitalization of more than $5 billion with $4 billion in assets.

The progress gratifies Snyder.

"I feel very good about having been part of this process," Snyder said. "We put a strategic framework in place and the market understood that we did something to create value for our shareholders.

"Gaming is a very entrepreneurial business. I think I was able to add corporate structure and discipline to the planning process. "

Snyder, who had spent 22 years in banking and four years overseeing the Fremont Street Experience before joining Boyd, announced in April that he would leave the company at the end of this month.

Keith Smith, the company's chief operating officer, was immediately named as replacement and will assume Boyd Gaming's leadership on Thursday. He is also expected to take Snyder's seat on the company's board of directors.

Snyder said it's time for him to go.

"I think it's very important that when it's time to turn the page, you get out of the way," he said. "Keith is an operator and the company is at a stage where it needs an operational person in charge."

Company Chairman Bill Boyd said Snyder may have been a banker by trade, but he gained a tremendous understanding of the gaming industry.

"Don certainly knows how to pick his exits," Boyd said. "He leaves Boyd Gaming at a time when our company has never looked better, firing on all cylinders, as he likes to say.

"We are optimistic about the future and remain thankful that Don helped provide us with the firm foundation for the growth that the company is yet to enjoy."

Snyder is stepping aside after directing two of the company's transforming events: the construction and opening of Borgata in Atlantic City in 2003 and last year's purchase of Coast Casinos, which gave Boyd Gaming, one of the industry's pioneering neighborhood casino operators, an even larger stake in the Las Vegas locals market.

Also during Snyder's tenure, Boyd became a buyer, purchasing five gaming operations over a seven-year period to give the company a geographically diverse mix of riverboats, land-based casinos and a racetrack.

Borgata, Atlantic City's first new resort in nearly a decade, is credited with jump-starting the New Jersey gaming market's transformation from a day tripper destination to a true resort destination.

The $1.3 billion Coast acquisition helped give Boyd a larger diversified gaming mix in Las Vegas.

"Coast is a classic example of one plus one equaling three," Snyder said. "The total is more than the sum of the parts in looking at these two companies. Acquiring Coast was a very strategic move because it was the last leg we needed in the transformation of the company."

The 2,000-room Borgata, which initially cost $1.1 billion, is a joint venture between Boyd Gaming and MGM Mirage. It took four years to master-plan and develop.

The property, which is undergoing a $200 million expansion, helped to change the company's image in Wall Street analysts' mind-sets: Boyd became a player.

This perception, Snyder said, will continue to help Boyd Gaming as it moves toward master-planning the redevelopment of the 63-acre site housing the aging Stardust.

"This company was not seen as a developer of megaproperties," Snyder said. "Borgata changed that perception in a very significant way. Six, seven, eight years ago, people would not have though about us having the ability financially or the capabilities to build out a 63-acre site.

"Today, Boyd Gaming has a much broader financial base, but we also have shown our capabilities in doing a very major market changing project."

Snyder came to Las Vegas in 1987 with First Interstate Bank and stayed with the company for four years. He left a year before the bank was merged into Wells Fargo.

While with First Interstate, he became acquainted with some of the gaming industry's leadership, including Boyd.

He had begun exploring entrepreneurial opportunities in Las Vegas when he got close with members of the Downtown Progress Association, a group of business representatives planning for what would eventually become the $70 million Fremont Street Experience light and sound show.

Snyder was asked to oversee the downtown attraction's development. During its building, Snyder's familiarity with casino industry power players paid off; he was able to navigate between differing downtown casino owners, which at the time included Steve Wynn, Jackie Gaughan, Jack Binion and Boyd.

Although he'll remain as chairman of the Fremont Street Experience board after leaving Boyd, Snyder continues to unabashedly support downtown and the Fremont Street Experience.

Last year, approximately 21.3 million visitors, or 57 percent of the valley's nearly 37.4 million guests, said their stay included a stop downtown. That was well more than the previous year's 18.1 million downtown visitors, or 51 percent of 2003's citywide total of nearly 35.6 million guests.

Although gaming win was off in January by 8.58 percent, Snyder said the attraction is fulfilling its mission and bringing people downtown.

"I have some emotional equity in downtown and some institutional memory that is useful," Snyder said.

"If you go back to the original planning process, the Fremont Street Experience was to get people downtown and bring them back again. It needed to the beginning not the end of the redevelopment activities in downtown."

His next downtown project is steering development of a performing arts center to be built as part of a 61-acre redevelopment site.

The center, which will receive between of $85 million and $100 million of funding through a rental-car tax, received a boost recently when the Donald W. Reynolds Foundation donated $50 million to the efforts.

Snyder, who is chairman of the performing arts center's board, said he hopes to raise up to $200 million, which will not only pay the design and building costs, but help give it a sustainable operating endowment.