Bill Boyd built an empire of budget casinos and became one of Vegas's original godfathers. But as the city transformed into a luxury gambling mecca, he tried to reinvent himself and nearly lost it all. Now he is doubling down on his low-stakes roots
Bill Boyd, Co-founder and executive chairman, Boyd Gaming
Image: Tim Pannell for Forbes
Summer usually quiets Las Vegas. But on a 101 0F day in June, gamblers stream into the downtown California Hotel, the original property of publicly traded Boyd Gaming. Bill Boyd, the company’s co-founder and executive chairman, is walking the casino floor, winding up a routine he’s been honing for 40 years.
He passes the blackjack tables, nodding to his veteran dealers, then ambles past the video-poker machines and the Buffalo Stampede slots. Like all Boyd properties, the California caters to budget-conscious gamblers, mostly locals and middle-class out-of-towners. So it packs in slots and low-limit table games. “The atmosphere here is different,” Boyd says. “If I was at the Wynn”—the shard-shaped luxury casino on the Strip created by his former business partner, the billionaire Steve Wynn—“I’d be busy looking around.” The California is not where Diana Ross comes to play. Or where you dine on a $100 steak.
Near the front entrance, Boyd, 87, pauses next to a six-foot koa-wood statue of a grinning, twirling Buddha, a gift several decades ago from a group of happy customers. “That’s for good luck,” he says, rubbing the Buddha’s well-worn belly and completing a long-standing ritual at the California.
A little good fortune goes a long way in Vegas. So do cool-headed decisions when luck runs out. When Boyd took his company public in 1993, it owned six strongly profitable casinos, which generated over $430 million in revenue. All fit the same mould as the California. They were inexpensive places to gamble. Over the next 15 years, a rising stock price made Boyd a billionaire and emboldened him to roll the dice by building higher-end casinos: The Borgata in Atlantic City in 2003 and Echelon Place on the Strip three years later.
The moves suffered from exceptionally poor timing. Both Atlantic City and Las Vegas had become increasingly saturated markets. And then the Great Recession hit. In 17 months, Boyd Gaming’s stock lost 94 percent of its value, falling to nearly $3 a share in November 2008.
To stave off bankruptcy, Boyd was forced to make a number of humbling decisions. He shelved plans for luxury casinos, instead doubling down on adding budget ones across rural America. And since his actions had gotten the company into this mess, he reasoned, maybe he could use some advice on getting out of it. With that in mind, he elevated the company president, Keith Smith, to CEO, giving himself a partner for the first time since the death of his father—the other co-founder of Boyd Gaming—in 1993. “At the beginning of our existence, my dad and I were risk-takers, and you needed that,” says Boyd, a white-haired man with a gold, diamond-studded pinkie ring. “We didn’t need that anymore. We needed somebody that was more conservative than I was.”
“The biggest change for the company over the past decade is that they’ve become quite a bite more disciplined,” says David Katz, an analyst at Jefferies, an investment bank. “I don’t want to say ‘risk averse’. … They’ve become a bit more ‘risk appropriate.’”
Since November 2008, Boyd Gaming stock has risen over 700 percent, almost triple the S&P 500’s increase. Boyd himself is nearly a billionaire again (estimated net worth: $700 million-plus), and his company has swung from a $223 million loss in 2008 to nearly $200 million in profit last year. Revenue sits at $2.4 billion. “When the Great Recession hit, it was very difficult,” Smith says. “We made some very tough decisions to shut down projects, refine our business and work our way through.”
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Boyd sinks into a cushioned banquette at the California’s Redwood Steakhouse, positioning himself comfortably to recount the origins of his company, which started here with the California. Tens of thousands of dollars could be won and lost on the California’s blackjack tables in the time it takes Boyd to tell his story, one that dates to the mob-connected Vegas of Bugsy Siegel in the 1940s. “Incidentally,” he says, “the movie Bugsy said the Flamingo was the first hotel on the Strip. It was actually the third.”
The Boyds have put some good financial rigour around what they’re doing.
(This story appears in the 01 February, 2019 issue of Forbes India. To visit our Archives, click here.)