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Best of Howard Stutz
Howard Stutz

Old-style focus, modern success: Customer-centric bent helps Arizona Charlie's casinos thrive

4 September 2012

There is something to be said for a casino operation that markets to locals, but lacks movie theaters, bowling centers and high-priced restaurants.

Focusing on the gambler is what helped the two Arizona Charlie's casinos survive a crippling recession.

And, said the general managers of the casinos -- who combined have almost 33 years of experience with their respective hotel-casinos -- nothing will change as the economy recovers and the local gaming market stages a comeback.

"Our competition has probably been scratching their heads, wondering how Charlie's still survived through all these tough economic times," said Ron Lurie, general manager of Arizona Charlie's Decatur, who has overseen the hotel-casino for 22 years.

"I can recognize the fact when we do something right here because the other guys are in here trying to see what we're doing," Lurie said.

The "other guys" are managers from Station Casinos LLC and Boyd Gaming Corp., operators that dominate the locals market. Station Casinos operates 17 properties throughout Southern Nevada. Boyd Gaming has seven properties in Southern Nevada through its Coast Casinos brand and its three downtown resorts. Each has large multimedia advertising budgets and extensive promotional opportunities.


The locals market is experiencing a bit of a comeback. According to the Gaming Control Board, gaming revenues for areas outside the Strip that market predominately to residents are up 2.24 percent through June, despite relatively flat numbers coming from the Strip.

For Arizona Charlie's Decatur, which is in a large strip mall near the Charleston Heights area, and Arizona Charlie's Boulder, one of four casinos along the Boulder Highway, it's business as usual.

The focus for the casinos continues to be on the customer looking for value. The Arizona Charlie's patrons skew a bit older -- they're primarily in their mid-50s -- and aren't seeking bowling lanes, movies or an afternoon at the spa.

Both Lurie and Arizona Charlie's Boulder general manager Mark Majetich tout the service their casinos provide to individual guests, as well as the safety of the property.

"Because of our size, we can't be everything to everybody," said Majetich, who has been with the property for 11 years. "And we really don't want to be. We're focused on gaming. These are the guests that kept us alive and these are the guests that will keep us going."

Both properties took different routes to cut costs during the recession. Lurie said he didn't lay off any workers, but didn't fill positions if employees left. Majetich said he sought various efficiencies in running the business.

The two Arizona Charlie's were originally built by the Becker family, who developed real estate throughout Las Vegas. The casinos are owned by American Casino and Entertainment Properties, which for the past four years has been controlled by Whitehall Street Real Estate Funds and Goldman Sachs.

The company, which also owns the Stratosphere and the Aquarius in Laughlin, said it lost $2.8 million in the second quarter, which ended June 30, while revenues from Arizona Charlie's fell 6.1 percent.

Having corporate ties with the Stratosphere and a property in Laughlin gives Arizona Charlie's staff other avenues to reward loyal customers, such as dinners at the Stratosphere's Top of the World restaurant, or trips to the Colorado River casino.

This summer, each Arizona Charlie's casino bused 50 customers to the Aquarius for a concert by the legendary rock group the Beach Boys.

Players enrolled in the casinos' AcePlay rewards program can use their points at any of the American Casino and Entertainment properties.

"Even the Laughlin guests want to come up to Las Vegas to go shopping," Majetich said. "So it works both ways."

The casinos also share in advertising and marketing dollars and efforts. They don't have the hundreds of thousands of dollars in promotional budgets that the "other guys" have.

If billboard advertising is purchased, both the Decatur and Boulder properties are mentioned. Lurie hopes the casinos can return to television advertising next year.


Ironically, Arizona Charlie's Decatur began as a bowling center.

The lanes were torn down to make way for the casino, which celebrates its 25th anniversary next year.

Arizona Charlie's Decatur is the larger of the two casinos. After several expansions, the property now has 258 hotel rooms and a 58,000-square-foot casino with 1,150 slot machines, 12 table games and a 24-hour bingo parlor.

Since Arizona Charlie's opened in 1988, the company saw its market share challenged by new properties to the north, from the Fiesta and Texas Station in North Las Vegas; the Suncoast, Rampart Casino and Red Rock Resort to the west; and The Orleans to the south.

The closest rival is about three miles away. Still, Arizona Charlie's patrons remained loyal.

"We have that boutique, 'Cheers'-type atmosphere," said Lurie, who spent 14 years as a Las Vegas city councilman and was Las Vegas mayor between 1987 and 1991.

"We have employees that have been here since opening day. Many of our employees live near the casino," Lurie said. "Most of our customers live within five miles of the property. Our employees focus on service and they know our players."

The neighborhood along Decatur Boulevard has changed dramatically. The recession killed off the neighboring Bill Heard Chevrolet and other auto dealerships to the south. To the north, several businesses closed, including the Mervyn's department store, which anchored a retail center west of the Meadows Mall.

Last year, Cardenas Market took over a large segment of the Mervyn's building and other retail businesses moved into the space. Also, a Super Pawn store replaced a closed Sizzler's restaurant.

"The car dealerships that closed hurt because those businesses were our customers," Lurie said. "I do believe we are seeing some recovery, especially when you see the new businesses (Cardenas) that have moved into the area."

Another plus, Lurie said, is that the city placed the area surrounding Arizona Charlie's into its redevelopment district, which could provide added incentives to lure new businesses near the casino.

In the meantime, Lurie said Arizona Charlie's will listen to its customers' needs.

Management removed a pool area, enclosed the location and converted it into a nonsmoking slot machine casino with more than 100 games.

"If a customer is looking for a particular machine, we can move it into the area," Lurie said.

Last year, the casino closed down its Outback Steakhouse, moved the 24-hour coffee shop into the space and converted the former coffee shop into Ron's, an upscale steakhouse fashioned after the Strip's eateries of the 1970s and 1980s.

Recently, Arizona Charlie's Decatur changed out casino carpeting, added tile floors to all the entrances and spruced up some of the public areas.

"We've done the things necessary to refresh our property," Lurie said. "We're ready for when the economy turns around."

Arizona Charlie's Decatur plans to renovate hotel rooms next year.


Unlike its sister property, Arizona Charlie's Boulder is not situated on an island.

The casino stands along the Boulder Strip. Station Casinos' Boulder Station is a mile north and Boyd's Sam's Town is a mile south. The Eastside Cannery is just south of Sam's Town.

"These are four really strong properties," Majetich said. "A third of our customers have to drive by Boulder Station or Sam's Town to get to us."

The close proximity means customers of Arizona Charlie's Boulder also frequent the neighboring casinos.

"We really believe our guest has player cards at completion," Majetich said. "We're too close for that not to happen. But we have a loyal group of people who have supported us since we opened the property."

Arizona Charlie's Boulder has 300 hotel rooms and a 200-space, 12-acre recreational vehicle facility that features a swimming pool, private clubhouse and exercise room. The recreational vehicle park serves almost like a hotel addition.

"The same customers have been coming every year," Majetich said. "They spend three, four or five months and become their own community. They do like to use the casino."

The 47,000-square-foot gaming space has 950 slot machines, 12 table games and a 24-hour bingo parlor. The emphasis, Majetich said, is on video poker.

Like Arizona Charlie's Decatur, the Boulder casino has seen car dealerships to the north shuttered during the recession. But to stay competitive despite the lost business, casino focused on its core customers.

"We do a lot of direct mail to our core customers. It's smaller and more personable," Majetich said.

He said the Boulder casino is putting together a budget that would allow it to remodel hotel rooms and other public areas next year, including the restaurants.

Unlike the competition, the Arizona Charlie's properties don't give away houses or cars.

"We know who we are and what we need to give our guests a great experience," Majetich said.