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Howard Stutz

For a Gaughan, buying a hotel-casino is child's play

7 July 2014

LAS VEGAS -- The fourth generation of the Gaughan family is already making its mark in the gaming business.

John Gaughan — son of South Point owner Michael Gaughan and grandson of the late downtown gaming pioneer Jackie Gaughan — was seeking potential casino management and investment opportunities in Nevada.

Thanks to his 10-year-old daughter, Gwenyth, the historic Hotel Nevada and Gambling Hall in Ely came to his attention.

Gwenyth is friends with the daughter of Las Vegas businessman Paul Kellogg, who owns half of the aging building. Thanks to that friendship, Gaughan learned that Ely businessman Bert Woywood owned the hotel’s other half, but was looking to sell his stake.

Maybe the girls deserve a finder’s fee.

John Gaughan, through his Las Vegas-based Gaughan Gaming casino management company, acquired a 50 percent stake in Hotel Nevada in February and assumed operations of the 67-room hotel, casino and restaurant in the heart of the central Nevada city’s downtown.

“We did our due diligence and saw the opportunity with this casino,” Gaughan said. “We had turned down some other management deals because they didn’t seem right. Hotel Nevada has that historical feel to it, which really attracted us.”

The first time John Gaughan walked into the property, he flashed back some 30-plus years.

The six-story, 85-year-old building — once the state’s tallest structure — reminded him of the El Cortez.

Jackie Gaughan owned and operated nearly a half dozen downtown Las Vegas hotel-casinos, but was best known for the El Cortez.

The property doubled as a hangout for the Gaughan children and grandchildren and a school where they learned the gaming business.

“I just remembered walking into the El Cortez as a little kid holding Grandpa’s hand,” Gaughan, 47, said. “That was the first image I had when I saw the Hotel Nevada. I knew a little about its history, but the El Cortez came to mind.”

The Hotel Nevada needed new investment.

Since Gaughan took over, the carpet has been replaced and the casino’s 185 slot machines were upgraded with new technology and a modern casino management system. The four gaming tables, which offer poker and $3 blackjack, remain.

“We felt we could do more with the casino,” Gaughan said.

He also installed former Hard Rock Las Vegas and Bally’s Las Vegas gaming executive Rick Richards as the property’s president. The private purchase — the sales price was not disclosed — includes several small motels and a tavern operation, all in Ely.

“It looks great and we’ve really seen some improvement already,” said Ed Spear, executive director of the White Pine County Tourism and Recreation Board. “It’s really positive for the community and they kept the integrity of the historic hotel intact. They have really embraced the community.”

Ely Mayor Melody VanCamp said the Hotel Nevada investment offered the community a much-needed lift.

“It’s given downtown Ely a little bit of a spark,” VanCamp said.

Gaughan raves about the Hotel Nevada’s coffee shop, which he says has “the best food within 200 miles, in my opinion.”

The acquisition offered Gaughan a trip down memory lane.

Gaughan learned ways to operate older downtown hotels from his grandfather, who died in March at age 93. Jackie Gaughan also briefly ran another aging rural Nevada hotel-casino, the Mizpah Hotel in Tonopah.

“Knowing the history of the property was important,” said Gaughan, who said he stayed a few times at the Hotel Nevada when he raced off-road vehicles and Ely was a stopover in the Nevada 1000. “We wanted to keep it a real nice place.”

He also discussed the purchase with his father, South Point owner Michael Gaughan.

South Point provided some unused casino equipment and furniture and will soon operate a race and sports book in the Hotel Nevada.

“My dad is the go-to person for advice,” Gaughan said. “He also gave me some nice equipment at a good price.”

The advice included buying good spots for signs on highways into and out of Ely.

prohibition roots

The Hotel Nevada was built amid the central Nevada mining boom in 1929, during Prohibition.

The hotel was deemed the state’s tallest structure in the 1940s. Ely, about 250 miles north of Las Vegas at the conjunction of U.S. Highways 93, 6 and 50, counts on the Hotel Nevada as its only full-service casino. Many of its rooms are named for celebrities who may have spent a night there.

Gaughan said the rooms “were remodeled recently and are in nice shape.”

Gaming isn’t only draw for the old hotel. Ely is the gateway to the Great Basin National Park, 45 minutes to the east. And Spear said all of White Pine County benefits from travel through the region when Las Vegas hosts big events.

The Hotel Nevada also houses a small recreational vehicle park and has some small convention and meeting space.

Nevada gaming regulators signed off on the deal in February.

multifaceted interests

Beyond his role with Gaughan Gaming, John Gaughan is also CEO of Las Vegas Dissemination Co., which provides telecasts and pari-mutuel wagering services to the state’s race and sports books.

Gaughan Gaming briefly managed a pair of Indian casinos in Oklahoma, and still operates slot machines for several Las Vegas-area taverns.

Gaughan said the casino management business continues to look for other opportunities in the state.

VanCamp, appointed Ely’s mayor earlier this year, is happy for the focus on her city.

“There is already a world of difference with the property,” she said.