Forbes India 15th Anniversary Special

Billionaire, bust and back

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

Published: Jan 23, 2019 02:40:16 PM IST
Updated: Jan 23, 2019 02:54:16 PM IST

Billionaire, bust and backBill 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.”


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.”

Billionaire, bust and backSam Boyd’s California hotel and casino
Image: George Rose / Getty Images

Boyd moved to Vegas when he was in elementary school. “As I’m growing up, my mom and dad would always to say me, ‘Billy, you don’t want to grow up to be a dealer like your dad, so get an education.’ ” After serving in Korea, he received a law degree from the University of Utah and worked as a lawyer for several decades; by that point, his father, Sam, had become an established casino manager. In the early 1970s they pooled their money to buy a piece of land on Fremont Street and then built and opened the California there. All told, it probably cost them $11 million (over $50 million in current dollars), the funds coming from the Boyds, outside investors (many of them the California’s employees) and a Bank of Las Vegas loan. In 1979 they opened Sam’s Town on a 13-acre lot on Boulder Highway, far from downtown and designed to lure gamblers coming to or leaving the city. The Stardust, an aging gem on the Strip whose mob history would inspire Martin Scorsese’s Casino, was bought for $115 million (about $280 million today) in 1985.   

His father’s death left Boyd to guide the company alone, and he took it in a different direction: Atlantic City, which was already long into a boom. The number of casinos there had grown from zero in 1976, the year gambling became legal, to a dozen 20 years later. And before legalised gambling spread throughout the East Coast, the so-called “casino win”—the revenue generated from gambling—across Atlantic City casinos neared $4 billion.  

AC beckoned Boyd in the form of a 1997 phone call from Steve Wynn. The two had joined forces a decade earlier to spruce up part of Fremont Street in downtown Vegas. Now Wynn had a different idea: A 50-50 partnership in a new casino he wanted to put up in New Jersey. The 2,000-room Borgata would ultimately cost $1.1 billion. It was nice—stocked with 300-thread-count sheets, gold-tinted windows and 13 Dale Chihuly glass chandeliers—but still just another casino in an increasingly crowded city.

Back in Vegas, Boyd soon envisioned something even grander than the Borgata and readied plans to redevelop the Stardust, drawing up a blueprint for four hotels, a casino and a spa on a 63-acre lot that would be rechristened Echelon Place.

Like the Borgata, the Echelon faced a slew of established competitors. The Mirage had opened in 1989, and since then the city added a number of upscale casinos, including the Luxor (1993), MGM Grand, (1993), the New York-New York (1996), the Bellagio (1998), the Venetian (1999) and the Wynn (2005).

Nevertheless, the Stardust was torn down, and by the time Boyd Gaming halted construction on the Echelon in 2008, it had already spent $1 billion. Estimates showed that completing it could cost at least five times that amount.

The Boyds have put some good financial rigour around what they’re doing.

Boyd and Smith thought work on the Echelon could resume within a year. It never did. “It was worse than we thought it could be,” Smith says. “Three years later, we finally said, ‘Okay, it’s not three or four quarters. This thing isn’t getting any better.’ ” In 2013, the Malaysia-based casino company Genting Group bought the Echelon property for $350 million. “It was very disappointing. It was going to be the crown jewel of the company,” Boyd says. “As much as we didn’t want to stop construction, as much as we didn’t want to sell it, we knew that we had to in order to survive.”

Things were grim in Atlantic City, too. By 2013, more than a dozen states beyond Nevada and New Jersey had casino-style gambling, and total gaming revenue in AC had fallen from a record high of $5.2 billion in 2006 to under $3 billion. By one measure, the number of out-of-towners visiting AC fell by more than 20 percent in that same period. The Borgata wasn’t immune. Since 2006, its revenue had declined by almost a third, to roughly $700 million. Boyd and Smith decided to walk away, dealing its 50 percent stake to MGM Resorts for $900 million in 2016.

With the luxury plans gone, Boyd returned to what had made his company successful in the first place: Cheap casinos serving low-stakes gamblers. Rather than expand in crowded Vegas, Boyd cast his eye around America. Building new casinos would require a level of risk he no longer wanted to stomach; besides, he had Smith at his side emphasising new construction’s drain on their barely recovered cash flow. Better to grow through acquisitions.

In the last six years, Boyd Gaming has purchased 13 casinos, spending $2.9 billion. To make those deals, Smith studied the numbers on prospective purchases and targeted casinos with $10 million to $15 million in Ebitda, eventually moving on to ones closer to $20 million—basically pinpointing places that dominated their local area. “If there are five competitors in the market, we don’t want to buy the fifth [best] asset or the fourth [best] asset,” he says.

The little gambling empire now stretches from Pennsylvania (the Valley Forge Casino Resort) to Illinois (the Par-a-Dice) to Louisiana (Sam’s Town Shreveport). In October, Boyd Gaming completed its latest deal, a $575 million purchase of four casinos in Missouri, Indiana and Ohio from Pinnacle Entertainment.

“They’ve put some good financial rigour around what they’re doing,” says David Katz, the Jefferies analyst. Wall Street is upbeat on Boyd Gaming; a majority of analysts suggest buying the stock. Observers see the rural casinos as less susceptible to broad changes in consumer spending. Vegas, on the other hand, proved vulnerable in the 2008 recession—the economy there shrank for three years straight, a year longer than the country as a whole.

Boyd and Smith now meet several times a week, frequently on the floor of one of the Vegas casinos. They find an empty card table and light up cigars, usually long, fat Churchills. “That’s where we go over all of our business,” Boyd says.


Despite his advancing age, much of Boyd’s life is unchanged. He still drives a Mercedes sedan that has ECHELON spelled out on its vanity plates. “I always ask, ‘Dad, why don’t you take those off?’” his daughter Marianne says. “He says, ‘It just reminds me that everything doesn’t always go perfect.’” Boyd has never sold a share of Boyd Gaming since it went public, and he lived in the same house for 40 years before recently moving closer to Boyd Gaming’s offices. “I’ve had friends ask, ‘That’s your grandfather?’” recalls his 31-year-old grandson Sam Boyd Jr, an HR executive at the company. “They’re expecting something super-elaborate, like bodyguards.”

Higher up in the company are two more Boyds, Marianne and her brother Willie. She is vice chairman, he is a vice president, and both sit on the board with their father. Those three Boyds control a sizable portion of Boyd Gaming stock, about 26 percent of the firm. Neither Marianne nor Willie sees a time when a Boyd isn’t leading the business. “Willie and I will probably try our best to carry on that sort of family feeling within the company,” Marianne says. 

And they have plenty of their dad in them.

“I think it would really, really help the company a lot if we had a property on the Strip,” Marianne says. “Because people—that’s what they want to do when they’re in these smaller towns and they like to gamble. They want to come to the big city, and I think they would like to be on the Strip.” 

The thought is almost impossible for her to shake once she brings it up. “I’d love to just have a property on the Strip one day,” she repeats.

“I would too,” Willie says.

Then, as if suddenly reminded of her father’s travails, she adds, “If the price is right.”

(This story appears in the 01 February, 2019 issue of Forbes India. To visit our Archives, click here.)