Thursday, February 10, 2005
Copyright © Las Vegas Review-Journal

JANE ANN MORRISON: Golden Nugget sellers have short memories about long-term commitment

These boys have commitment issues.

One year ago, they were smitten with being newbie casino owners and filming a soon-to-be-panned dreadful reality show called "The Casino."

They were committed to revitalizing downtown Las Vegas. After spending $215 million to buy the Golden Nuggets in Las Vegas and Laughlin, they were talking about serious long-term relationships.

They were being compared to Steve Wynn, which is pretty heady stuff for a couple of thirtysomething guys taking their first baby steps at running a casino.

They promised to make the Golden Nugget in Las Vegas hip and cool like in the Rat Pack days (and swiftly sold the unhip Golden Nugget in Laughlin for $31 million).

Now, after just a year, Tim Poster and Tom Breitling are walking out the door, taking anywhere between $110 million to $150 million in profits, depending on who is doing the math.

This isn't their first short but profitable relationship. In 2000, two years after they started their dot.com company Travelscape, they sold it to Microsoft's Expedia for a cool $100 million.

Born to be suspicious, I sought the story behind the one that said Landry's Restaurants "made us an offer too good to refuse."

Had Tim Poster, who was put through the wringer during his gaming licensing process because he liked to gamble and party and associate with tough guys, done something bad? Were gaming regulators on his heels?

Gaming Control Board member Bobby Siller, a man not known for being a regulatory softie, nixed that theory.

"I don't know of any gaming regulatory issues that would cause me concern as to not give them a license," Siller said Tuesday.

In June, Poster playfully dealt 21 to some stars of the "Sopranos," deliberately busting so the stars would win. That wasn't a big offense, Siller said. Poster reported his bad deeds, which had been done in a playful fashion. It wouldn't cause licensing concerns, Siller said.

Since Friday's surprise announcement that Tim and Tom agreed to sell their casino for $295 million, the boys have been on hiatus from talking to the media, surprising for two lads who couldn't stop telling the media all the things they were going to do with the Nugget.

One of their buddies, who shall remain nameless, said Tim and Tom probably won't be re-entering the gaming industry.

"In general, Tim shouldn't be in a regulated industry," The Insider opined. Poster and Breitling both found it frustrating that they couldn't just do as they liked without worrying about rules and regulations. Their license was good for only four years, so they had to keep their noses clean. Gaming regulations blocked them from entering certain business deals.

"They didn't get bored," The Insider insisted.

"They both worked hard, but they wanted to tinker with things, like changing the odds on craps. Tinker the wrong way and it could cost millions."

Actually, it did cost millions.

They lost $5.5 million in the first nine months of operation, partly because by going after the higher rollers they were exposing themselves to more risk. Revenues went up, but so did costs.

"The biggest issue was changing the craps table odds; it goes against conventional thinking," The Insider said. It also went against the recommendations of their experienced management team, holdovers from MGM Mirage.

A downtown gaming guy said the word on Fremont Street was that Tim and Tom didn't always listen to their management team.

"They went in with their own ideas of what they wanted to do," The Downtowner said. "And it was probably more work than they thought. The real world of management is different than dragging high rollers in and getting a TV crew to follow you around. It's customer service. The bottom line here is: A lot of it is kind of a grind."

If success is defined as buying low and selling high, Tim and Tom are successes.

But if success is defined as doing what they promised, then they aren't successes. They haven't made the Golden Nugget profitable.

But if it were easy, the Aladdin wouldn't bounce in and out of bankruptcy and Becky Binion Behnen would still own the Horseshoe.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at jane@reviewjournal.com or call 383-0275.