People in the know were truly scared for us. If they didn’t tell us at the time, they admitted it later.
To understand why, you need to know what it’s like to look down on a casino from the eye-in-the-sky.
There’s a huge perception that The House has every single player under constant surveillance. That the casino cameras will catch somebody the instant he steals a chip or counts cards.
That’s simply not true. Thousands of people might be in motion simultaneously on a casino floor. But there are only a few sets of eyes scanning the monitors. The surveillance room couldn’t possibly keep up.
The cameras are in place to verify suspicions—which means you need the right people on the floor to be suspicious. Robert De Niro sums it up pretty well as the guy in charge of the joint in the movie Casino.
In Vegas, everybody’s gotta watch everybody else.
Since the players are looking to beat the casino, the dealers are watching the players.
The box men are watching the dealers.
The floormen are watching the box men.
The pit bosses are watching the floormen.
The shift bosses are watching the pit bosses.
The casino manager is watching the shift bosses.
I’m watching the casino manager.
And the eye in the sky is watching us all…
It’s beautiful, watching De Niro gaze out upon the casino floor through the haze of his own cigarette smoke. In fact, if you asked Tim what it felt like to be in his casino at The Golden Nugget, he’ll point you to that scene, twenty-one minutes and seven seconds into Martin Scorsese’s film. But Tim had it better than De Niro. He wasn’t acting out a few takes and going to a trailer. Tim was living his dream, 24/7. Not only that, but he upped the ante on Scorsese.
The way he was running our casino, he was gambling. In the beginning, even he didn’t realize what could be lost.
His notion of how to run the joint came from a pure and simple place. He treated the players the way he’d like to be treated if he were the player. One of the first things he did was double the amount you could bet on craps.
When we took over The Nugget, the formula behind an initial bet was 3-4-5. That formula was the industry average. It meant that if you put down $1,000 on the pass line and your point became 4, you could bet up to three times your initial wager that you’d roll another 4 and win before you rolled a 7 and crapped out. If you did roll your 4, your payoff is 2-1, which meant a $3,000 wager would win $6,000. Plus, you take in $1,000 on your original bet. So rake in $7,000. That’s what you’d collect up and down The Strip.
When Tim doubled the industry average from 3-4-5 to 6-8-10, you could bet $6,000 behind your initial $1,000 wager in that same situation, and if you rolled your 4 and made your point, you’d win $12,000, plus your initial $1,000 bet. That would give you $13,000. The exact same scenario would unfold if your point were 10. You could bump your $1,000 initial bet to $8,000 if the point was 5 or 9, or to $10,000, if your point was 6 or 8.
Like all bets, you’ve still got to win. But to big-time dice players, 6-8-10 was tasty chum. If you did make your point, you took in twice as much as you did at a corporate casino on The Strip.
The day Tim ramped up that formula, he knew every serious craps player in America would be getting a phone call. He knew that because of a trip he’d once taken to check out a riverboat casino in Tunica, Mississippi. Calling it a riverboat was a stretch. The river looked like a swamp, and the boat was no more than a floating warehouse. It was the worst casino Tim had ever seen. There were steel girders running across the floor. And there was nothing around for miles. Yet the riverboat was so crowded that people actually paid to get onboard and gamble. If you offer the best game around, Tim realized, the true players find you no matter where you are.
A million-dollar player might get flown in on a private jet to a 5,000-square-foot luxury suite on The Strip. He might be feted with $7,000 bottles of Chateau Petrus and be extended complimentary front-row seats to the best shows in town. But Tim was offering the best game in town. We were only twenty minutes from The Strip. We set The Golden Nugget logo on a custom gold Rolls Royce to add a little panache to the trip, picked up players on The Strip, and dropped them back off. At first, other casino execs thought we were crazy to try to lure in their huge players. Who the hell was going to bet millions near signs advertising 99 cent fried Twinkies? But soon that gold Rolls was gleaming all over The Strip. And it wasn’t long before execs on The Strip were coming to The Nugget to see what the buzz was about—and gamble themselves.
Tim lured in the biggest players—the whales—by bringing in some of the best hosts. Steve Cyr had seventy players in his database who’d throw $100,000 on a craps table as casually as if paying for dinner—and fourteen who’d play up to $5 million. The swimming pool and tiki hut in Cyr’s backyard were tips from his players. Richie Wilk was buddies with the cast of The Sopranos. Marsha Hartman was a screenplay waiting to be written—call it Princess of Whales. And Johnny D.? Our master of marketing. Everybody knew Johnny D. Michael Jordan knew Johnny D. Nicole Kidman knew Johnny D. When Wall Street guys couldn’t get into a restaurant at home, they called Johnny D. out in Vegas to get them a table in New York!
It wasn’t long before we had the buzz going. But that created a problem.
Tim thought that once we got the big-money players, the math would work itself out and the games would take care of themselves. Sure, smashing the corporate formulas would open us up to some volatile swings. But the rules of the games still stacked every deck of cards in our favor. There were just a couple of variables Tim hadn’t factored in: the dealers—and the people watching them.
Think about it. Where does a dealer get started? Does he or she learn at a $1,000 table at the Bellagio?
No, a dealer starts out at a $2 table. At the $2 table, The House doesn’t blow a gasket if a rookie makes a mistake. And where are the $2 tables? You won’t find many at a hotel on The Strip that has dancing water fountains on a man-made lake, that’s for sure. Many of the $2 tables are downtown. Downtown was for grooming. Downtown was the minor leagues for The Strip.
The dealers work for tips, so naturally they don’t want to hang around long at $2 tables. As they get more experience, they move from the $3 table at the El Cortez to the $25 table at The Golden Nugget. Long before we took over, there was a natural progression from The Nugget to the major leagues—Treasure Island, the Mirage, and, ultimately, the Bellagio.
Some of the dealers we inherited were inexperienced. Others had been around for a long time, which made you wonder why. Either way, inexperience and complacency are not what you want on the floor after you’ve rolled out the red carpet for every shark and whale in the country.
We didn’t realize the effect the new clientele would have on our dealers, but it was like handing competent school bus drivers the keys to a Formula One race car. There were bound to be some crack-ups.
Even the keenest minds in the industry with billions in corporate backing and the sharpest dealers at their disposal could have problems in their casinos. Soon after the Bellagio opened, a player dobbed the deck with a dot of grease from his hair and used the marked cards to take the casino for $100,000. When this ruse at the blackjack table was discovered, management decided no longer to deal cards to players faced down. As long as every card was set on the table faced up, their thinking was, the players would have no need to even touch them.
Which was fine, except one particular blackjack pit was very close to the poker room. The poker players are the savviest card players around. They’d step outside of their own games for a break, stand behind the blackjack pit, and count the cards down. As soon as the deck was rich with cards favorable to the players, they’d jump in the game, make an easy score, and then walk away when the count turned or the cards were shuffled.
Poker players can track exactly which cards have been played. They understand the possibilities that exist with the cards in their hands and the cards remaining in the deck. And they understand the percentage of chance they’re taking relative to what they’ve bet. They have to be that good. If they’re not, they don’t eat.
These are the sorts of minds we were inviting into our home. When you extend that kind of invitation, your people have to be as adept at catching the counters as the counters are at counting. Your dealers have to be as comfortable handling chips worth $100,000 as the players putting them on the table. The odds may be on your side when the game starts. But if your dealers are inexperienced, if they get nervous, if they screw up, then it’s a different game—a game with odds tilted toward the players.
Later on, we could see how this problem flew by us. The Nugget was making $30 million a year when we took over. Its business plan was working well. The dealers on the floor looked professional. So there didn’t appear to be a problem.
Plus, our minds were in a lot of other places. Tim was negotiating to bring Larry Flynt to The Nugget. Would The House give Larry $50,000 to make his first bet? How much of a discount would Larry get if he lost? And I was trying to bring Tony Bennett to our showroom. We were doing our best to meet every employee and greet as many customers as we could. Super Bowl madness was upon us the week after we took over. Then we were getting set for Valentine’s Day. We were always running off to a meeting, talking with the press, feeding the reality TV cameras. There were so many demands on our time that our lives began to feel like a ball on a spinning roulette wheel. Only one night, when the wheel stopped, the ball happened to land next to the dealers at a private craps table.
It happened after Tim flew to Reno to have dinner with a million-dollar player in the hope of bringing him to The Nugget. The guy took a liking to Tim right away. Tim didn’t even wait until the evening ended to extend an invitation. He invited the guy to hop on the jet with him and check out The Nugget while the night was still young. What the hell, the guy decided, let’s go. Tim got on the phone during the plane ride and took care of all the particulars. He asked for a top-of-the-line suite, a private craps table, and our best dealers.
Craps is a tough game to keep up with. There are more than a hundred different bets that have different odds. If a player puts down $3,284 of chips and wins at 6-5, the dealer’s got about four seconds to figure out the correct payoff. There are mental tricks that the dealers use to convert large numbers. They sure need them at a table where twenty people are going nuts at once. But that didn’t seem to matter in the case of the guy who flew down from Reno. At a private table, he’d be rolling alone.
Well, the guy who flew down from Reno started firing bets all over the table. Problem was, the dealers couldn’t keep up with him. They were getting confused and delaying the game while Tim stood behind them with his arms crossed—which had to make the dealers even more jittery and hesitant.
The guy who flew down from Reno was drinking. After a while, he started getting fidgety, and demanding the dice.
“Just pay him!” Tim hissed in a whisper. He was more concerned about not pissing off the guy who flew down from Reno than putting out the right payoffs. If we pissed the guy off, Tim was sure, we’d never get him back. If we made mistakes and overpaid him by $100,000, then at least we had a chance of taking it back the next time.
It was as if Tim’s eyelids had been sprung open by a wake-up call that was two hours late. The casino manager got fired over that one and more. If Tim’s eyes were opened by moments like that, you can imagine how the behind-the-curtain realities of running a casino struck me. You’d never think it from the outside looking in, but a single, innocent mistake by a dealer could cost a casino millions.
It’s like the time one of our players came to the table with a million-dollar credit limit. He was having a rough go of it, and, after awhile, got down to his last $25,000 chip. With that single chip, he rallied, won all his money back, and then took a million of ours. Now, we didn’t know if the dealer made a mistake in this particular case. But let’s say the dealer had made an error. Let’s say he made a payout that was more than it should’ve been while the player was spiraling down to that last chip. That one error would be responsible for placing that last chip in his hand. Without that last chip, the player never would’ve had a chance to win his money back—not to mention a million of ours.
You can be sure that if a dealer makes a mistake against the player, the player is going to catch it and ask for the correct amount. But if the dealer makes a mistake in the player’s favor, how many times do you think the player’s going to say a word? And these are just honest mistakes. What about when things get a little shady? One low-cut blouse can compromise a game. Let’s say a woman with a nice set of melons sits at the blackjack table and draws a couple of 8s. She splits them right underneath her melons. The dealer pulls up a 7 and places it on top of the first 8. That gives her 15. Hit me again, she says, hoping for a card that will land her at—or keep her just under—21.
The dealer draws a 10, which bumps her over. But…
Instead of placing that 10 over the 8 and 7 and busting her, the dealer casually sets the 10 over the other 8. Now, she’s got two hands in play—one of them with an 18. It looks legit in the surveillance room. Unless the guys watching the monitors are honed in on every move of that particular dealer, they’ll never catch it. And who knows? Maybe they’re staring at the melons, too.
Meanwhile, who’s getting screwed? Not some billion-dollar corporation. The money is coming right out of Tim and Tom’s pockets.
So the pit boss has to catch a play like that. Of course, the dealer will throw up his hands. “Oh, jeez, sorry, that was a mistake.” That’s when we can have surveillance hone in on the dealer. Or go back over the tapes to see how many times the dealer has made that same “mistake.” If he’s made it eighteen times in front of eighteen sets of melons, you know he’s full of shit.
The owner has got to trust the dealers and the pit bosses to protect the integrity of the game. Most of our people did just that. But you don’t know everyone’s situation. Some have gambling problems. Some have drug problems. The dealers dress up nice and pitch the cards, but the truth is they may be vulnerable. When your inventory is cash, then you become vulnerable.
There’s a story the bookmaker Bob Martin once told Tim that gets to the naked lure of Las Vegas. Bob had about $30,000 in cash stacked on his desk one day when he had to leave his home in a hurry. A cleaning lady was in the house. After he left, Bob realized that he’d left the money out in full view. “I’ll bet,” he said to himself, “she’s gonna take it.”
When Bob got back home, the money was gone. There was nobody else in the house and he’d only been out for a few hours. It had to have been the cleaning lady.
The next day, Bob confronted her. “Hey, I had a bunch of cash in here.”
She immediately admitted to taking it.
And that’s how Bob Martin let the story end.
“Wait a minute! Wait a minute!” Tim said. “Did you call the police? Did you fire her? What did you do?”
“I just told her to give me the money back.”
“That’s it?” Tim said. “You let her keep her job after she tried to steal 30 grand from you? You let her stay in your house?”
“Tim, listen, she had to take the money,” Bob said. “The bait was too strong.”
So you have to come to grips with those five words. You have to understand that honest people who’d never knock off a truckload of televisions or hold up a convenience store will be tempted to think that your cash is theirs when it’s in their hands. You also have to understand that your employees will be watching how you respond after somebody has made a grab for it.
The first time it happened, our president brought it to us in the most professional manner. “We have a situation,” Maurice Wooden said in the calmest voice.
Maurice loaded a videotape, and we watched a young guy in a baseball cap walk over to the cashier and turn in a winning slot machine ticket. The ticket valued $40. But the cashier took the ticket, counted out $3,000, gave it to the kid in the baseball cap and put the ticket aside. It wasn’t a bright idea. The camera caught it all. Maurice had the details in no time. Mother and son. Mom was the cashier.
Tim is the kind of guy who—if the mother had come to him and explained that she had a problem and needed the money—might have given her a loan. He comes off as a tough guy. But the sign hanging in his office that read NO ACT OF KINDNESS SHALL GO UNPUNISHED was really there to protect him from the goodness of his own heart.
Maybe if you’re running a large corporation, you can be detached. But he wasn’t a corporation. He was a guy getting robbed. The videotape hit Tim in the belly like a mugger’s baseball bat. Even worse, the robbery made him wonder if everyone who worked for us took the new guys for dupes.
“Arrest her!” Tim said. “Arrest her while she’s working, and have her led out in handcuffs in full view of everyone in the casino!”
That wasn’t necessary. The police were already on the case. Maurice later told us the woman had apologized. She’d asked if she could return the money. She’d asked if we could forget the whole thing. She was hoping for the kindness that Tim might have extended had she asked him for a loan.
There’s a time for kindness. The only reason Steve Wynn had been able to learn about the stealing at The Nugget when he took over was because he’d been benevolent to that bar owner. But there are times when it’s foolish to be kind. No, we told the women who’d stolen from us, no.
The next time a situation unfolded, it became less personal and more of a technical issue. You realize the bait is always large enough to make someone think they can grab it without the trap clamping down. So you need to study and adjust your traps.
But if you have to spend this much energy watching people on your team who simply can’t help themselves, think of the precautions you need against people who come through your doors with the sole purpose of robbing you blind.
I’d listen in amazement to Pete Kaufman, who for years worked at the Barbary Coast and the Bellagio trying to catch the cheats, as he talked about the diligence the guys on the floor needed to flush out the teams of scam artists that constantly attacked the casinos.
Pete is the son of a cardiologist, and he approached his job with the intensity of a surgeon. Still, it took him hours to catch on to a player sitting at third base on a blackjack table who always seemed to make the correct play based on a card he wasn’t supposed to know—the dealer’s hole card. Even when this player lost a hand, he’d made exactly the right move based on the percentages.
A monitor in surveillance would barely register anything suspicious about the guy on third base. The camera was taking in the layout of the table, the cards, and the variation in bets. The only indicator that the guy on third base was cheating was his growing pile of chips. If you were looking at only the deck, his hand, and his chips—like the guys in surveillance—it would be almost impossible to sniff out his operation.
Pete smelled something wrong, though, from the casino floor and changed the deck. When that didn’t work, he changed the dealer. That didn’t make a difference, either. The guy’s pile of chips just kept growing. So Pete kept studying the guy from afar. Finally, he noticed the guy on third base glance off in the direction of the bar. Then, after awhile, he saw a guy at the bar nodding. So he followed the head rotations of the guy at the bar. The guy at the bar was occasionally turning toward the slot machines. So Pete studied the slot machines. There was a guy playing one machine who didn’t really seem to be focused on cherries and lemons. He was putting money into the machine. But what he really was doing was using his position to get a direct angle on the dealer’s hole card from behind. Every time the dealer lifted his hole card to check if he had blackjack, the guy at the slot machines scoped it. As soon as he did, he signaled the hole card to the guy at the bar, who signaled it to the guy on third base.
Pete needed proof. So he got a long computer printout and positioned himself between the guy at the bar and the guy on third base. He opened the printout, spread it like the wings of a bird, and pretended to read. The printout was perfectly positioned to block the view. Then Pete waited to see what would happen. In no time at all, the guy at the bar changed seats to reestablish the connection.
As soon as he did, Pete walked over to the guy on third base.
“You can’t play here anymore,” he said.
“What are you talking about?”
“I’m going to give you ten seconds to get out of here,” Pete said. “If you don’t—”
Meanwhile, the guy at the slot machine was already running out the side door.
The casino can distribute pictures of these guys all over the country. It can rig up an electronics system to determine if the dealer’s hole card gives The House blackjack—so there’s no need for the dealer to lift that hole card until all the players have gone through their hands. But there’s no end to the scam artists, and no end to the ways they can sting you.
It took hours of Pete’s time to figure out the ruse. And how can you know that your guy on duty is going to be as smart and focused as Pete? Bottom line is, when you hear a story like that, it makes you realize you never truly know what’s going on right under your nose.
It’s hard to fight when you don’t know what you’re fighting against. But over time, the sheer force of Tim’s strategy was overwhelming the problems that previously existed or that the strategy had created. So many more people were coming in to play that we had to hire more dealers. So much more money was on the tables that the volume of tips shot way up. The Internet sites used by dealers to track the average weekly tips by casino showed us climbing in the rankings. We began to attract experienced dealers from The Strip who wanted to get in on the action. One young woman working at our tables was making more than her mom—and her mom was dealing at the Mirage.
In a place where even the cameras couldn’t tell you everything that was going on, we at least knew one thing: Money was pouring in.
Once, Tim watched a high roller go through half-a-million-dollar swings in minutes on a monitor in his office, knowing that one of our interest payments was due the next day. As the tension ramped up, he had to turn away. Tim and Steve Cyr left The Nugget and headed down the street to the Dairy Queen. It was exactly this sort of scenario that some of the smartest guys in Vegas anticipated. They thought we’d be overwhelmed and out of business in no time.
Tim called in twenty minutes later to see how the high roller was doing. He found out we’d made millions in about the time it took him to down a Peanut Buster Parfait.