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Best of Liz Benston

Gaming Guru

Liz Benston

Binion Eyeing Other Opportunities

4 February 2005

LAS VEGAS -- Jack Binion, the former manager of Binion's Horseshoe who sold his high-rolling casino empire to Harrah's Entertainment Inc. last year, is considering re-entering the casino business on the Las Vegas Strip or abroad, he said.

"Flush with about a billion in cash after selling his riverboat casino empire to Harrah's Entertainment, the wily operator is eyeballing his return.

"He said he has been managing the net proceeds from the deal and hasn't ruled out the opportunity to run his own resort on the Strip or even a locals casino in town someday.

""I'd probably lean more towards the Strip than a locals casino but as I say, I'm just looking for opportunity," Binion said. "I have no preconceived biases or preferences."

"Binion's personal share of the $1 billion is worth about $400 million and the rest is managed for grandchildren and other relatives.

"Binion, who turns 68 this month, began his gaming industry career in 1958 at age 21 dealing blackjack at his father's downtown casino. He ran Binion's Horseshoe for several decades before selling his stake in the casino to his sister Becky Binion Behnen in 1998 and turning his attention to Horseshoe casinos in Tunica, Miss. and Bossier City, La.

"He exited the gaming business in July when he sold the two Horseshoe casinos and a third in Hammond, Ind., to Harrah's for $1.45 billion.

"Binion signed a four-year noncompete agreement with Harrah's preventing him from pursuing a casino project anywhere in the continental United States except for Las Vegas, which was specifically excluded from the deal.

"Binion declined to specify specific projects he might be looking at but said he has already passed on a potential deal with Phil Ruffin, the owner of the New Frontier hotel and casino. Ruffin is developing a condominium tower with Donald Trump near the aging property and has discussed a partnership to redevelop the rest of the site. Binion said he is no longer in talks with Ruffin.

"Gaming analysts said Binion left behind a stellar track record that would enable him to run a major resort should he decide to take that step.

""I think he's capable of doing just about anything," said Eric Hausler, an analyst with Susquehanna Financial Group. "He's certainly run Las Vegas properties and regional properties and run them just about better than anybody."

""One reason Harrah's bought the properties is that they were so well run," Hausler said. "They were Class A assets in every market in which they operated."

"Deutsche Bank Securities analyst Marc Falcone said wouldn't be surprised if Binion eventually made a name for himself on the Strip.

""It would be a great addition of someone with his vision and caliber to the Strip," Falcone said. "He's one of the greatest operators in the gaming business. He has a tremendous track record and he certainly knows how to run a high-quality facility with tremendous customer service."

"To help along the sale the sale of his riverboat casino company, Binion has agreed to make public appearances for the company at Harrah's poker tournaments nationwide. It's an informal arrangement without pay that allows him to make a few appearances in his free time.

"Binion ran the World Series of Poker at Binion's Horseshoe before Harrah's purchased the legendary event and is considered one of the fathers of the modern poker tournament. He is also a well-known face in an industry that has thrived on secrecy and mystique.

"He often appeared in television and print ads for his riverboat casino company, Horseshoe Gaming Holding Corp., welcoming gamblers with high table limits and the tagline, "If you don't believe it, then 'You don't know Jack."'

"Binion said he had to be convinced to appear in front of the cameras but said the advertising campaign became a success.

"Binion also said he's interested in exploring casino opportunities abroad, including in Asia, but hasn't yet struck any development or consulting deals.

""The market potential is huge," he said. The Chinese province of Macau, where three Las Vegas gaming companies are involved in deals to build major resorts, is the biggest potential opportunity in the gaming industry, he said.

""I made a decision not to go there," Binion said of Macau. "It was a mistake."

"Binion said Harrah's has done a fairly good job keeping gamblers coming back to the Horseshoe properties.

""For the most part the management has stayed and so far I think it's worked fairly well," he said.

"Harrah's is known for cultivating slot players but dislikes the uncertainties of the high-roller table game business. The company will be thrust deeper into the high-end table business with the purchase of Caesars Entertainment Inc., which is expected to be complete by July.

""I think Harrah's wants to be a complete casino company," Binion said. "Whether they want them or not they're there. Obviously this is part of their plan."

"Binion also praised two of his fellow casino owner-operators for their contributions to Las Vegas and the resort business.

""By far the most dynamic guy in Las Vegas over the years is Steve Wynn."

"Sheldon Adelson's success at the Venetian also has wowed the industry, particularly the astronomical value of the stock he owns in his newly public company.

""He recognized the convention business much earlier than everybody else did," Binion said. "There's an old gambling expression that you can tell a trapper by his pelts. The dollars speak for themselves."