According to Dick Odessky, a long-time Las Vegas insider and author of the memoir Fly on the Wall: Recollections of Las Vegas’ Good Old Bad Old Days, it all goes back to 1963, when Wynn was all of 21 years old.
In that year, a large amount of vacant acreage on the northwest corner of the Strip and Flamingo Road, directly across from the Flamingo and the Dunes, went up for sale. The property at that time was as good as useless, since a dry wash ran right through the middle of it; it flooded after a heavy rain. It was a rare occurrence, but it could and did flood, so even though the price was extremely reasonable and the operators of the Flamingo were sorely tempted to buy it, the parcel remained unsold.
Enter Kirk Kerkorian. Hearing the property was available, he bought it for a very low price.
A couple of years later, Jay Sarno was looking for a suitably sized property to build his Caesars Palace and leased the land from Kerkorian. After Kerkorian explained about the dry wash, Sarno altered the building plans so the hotel would be built on the edge of the wash.
"All went well until some time after Caesars Palace opened," Odessky writes in Fly on the Wall. "Steve Wynn, the young owner of a liquor distributorship, called a press conference to unveil an artist's rendering of a small motel, slot machine arcade, and newsstand to be built on a tiny parcel of land directly alongside Caesars Palace.
"The Caesars Palace developers went running to their landlord, Kirk Kerkorian, wanting to know why this piece of land wasn't included in what they were leasing. Kerkorian, like most everyone else in Las Vegas, had no idea where [Wynn’s] parcel had come from. It turned out that the 40-foot-wide parcel was in the extreme northern corner of a piece of land the Dunes Hotel had given the state of Nevada to use for an off-ramp for the impending interstate highway. The parcel was in excess of what was needed for the ramp, so the Dunes sold the small plot to Howard Hughes' Summa Corporation.
"It's been said that Jerry Zarowitz, one of Caesars Palace's owners at that time (and the man some have cited as one of Steve Wynn's mentors), learned about the property and suggested his young protégé buy it. Wynn bought the parcel and immediately announced his project.
"At the time, few believed that Wynn ever intended to go ahead with the development. But the owners of Caesars Palace were in no position to risk having a grind joint attached like a tumor to the their ultimate pleasure palace. They bought the land from Wynn for what was said to be a profit of at least a million dollars for the young entrepreneur, who used the money to begin buying up stock in the downtown Golden Nugget, the first building block in his casino empire.
"As a result, Kerkorian was subjected to a lot of ridicule by the Caesars Palace operators, who reportedly used Kirk's error of omission to work out a lower purchase price when they eventually bought the Caesars Palace land from him. Ever since that time, some of us have believed that Kerkorian would one day repay Wynn."
