Benny Binion, the patriarch of the famous Binion family of Dallas and Las Vegas, opened the Horseshoe Casino in 1951. Shortly thereafter, he was sentenced to and served four years in the federal penitentiary at Leavenworth for tax evasion. Due to his felony conviction, Binion was prohibited from holding a Nevada gambling license; his friend and business partner Joe. W. Brown (not to be confused with the comedian Joe. E. Brown) took over the casino in what Binion called "a kind of a deal" until 1964 when Benny regained control and installed his elder son Jack, 27 at the time, as president and his second son Ted, 21 at the time, as casino manager.
And that’s the way things remained for 25 solid years, during which Binion’s Horseshoe was one of the best run and most profitable casinos in the world.
However, toward the end of that period, things started to unravel. Benny got old and feeble and died in 1989. Ted, meanwhile, was without doubt his father’s son: He was gifted mathematically and could do complex arithmetic in his head; he was extremely generous to gamblers; he was tough as nails and was always getting involved in one scrape or another; and he’d long had a fondness for the fast lane, winding up as a heroin addict and an associate of a criminal element. Finally, in 1986, he was arrested for drug trafficking. He managed to hang onto his casino privileges for another 10 years, but in 1996, he was barred from entering the family casino, pending drug tests; failing those, in 1998 he was stripped of his gaming license and banned for life from Binion’s. At that time, he was forced to sell his 20% interest in the casino to his younger sister, Becky.
By then, Jack Binion had begun distancing himself from the family business by expanding the Horseshoe brand into Mississippi, Louisiana, and Indiana. Due to his absence, Becky Binion Behnen felt that Binion’s wasn’t being run to its maximum potential and entered into a protracted legal battle to acquire a controlling interest so that she (and her husband Nick Behnen) could run the joint. In 1998, for roughly $20 million, Jack sold his interest, minus 1% in order to retain his Nevada gambling license, to Becky, who became president of the Horseshoe, while Nick became the casino manager. (Their son Benny Binion Behnen also got involved in operations.)
Becky was in financial trouble even before she took over the Horseshoe. Then, her belt-tightening policies proved as unpopular as they were public. One highly visible move was selling off the display of a hundred $10,000 bills, which had served as the backdrop for free souvenir photos for nearly 50 years. She also fell short of state bankroll requirements for casinos and became embroiled in a highly publicized controversy when Bob Stupak tried to cash some $5,000 casino checks and Becky refused to redeem them. That, in part, put Binion’s on the radar screen of the Gaming Control Board.
Then, in March 2003, the National Labor Relations Board filed a complaint against the Horseshoe for failing to sign the contract with the Culinary Union to which it had agreed in July 2002. The NLRB also accused the casino of failing to make contributions to the Culinary's health and welfare accounts on behalf of 500 hotel-casino workers.
Though the casino and the union negotiated a settlement, Binion’s never lived up to its terms. It stopped making payments in June 2003 and, after kicking the default can down the road for six months, in December 2003, the culinary- and restaurant-workers unions obtained a court order that was discharged in January 2004 when agents from the Nevada Gaming Control Board and the IRS, accompanied by U.S. marshals, entered Binion’s and seized nearly $1 million in cash from the cage. That left Binion’s far short of minimum bankroll requirements and Gaming shut the joint down.
At that point, the Behnens owed $2 million to union pension and health funds, $7.5 million in taxes to the IRS, $3 million to the Fremont Street Experience, $20 million to Jack Binion (for the original sale of the hotel), and money to landlords, vendors, small creditors, and gamblers.
A week later, Harrah’s announced that it was buying Binion’s Horseshoe and assuming all its liabilities. Though the terms of the purchase weren’t disclosed, it was widely believed Harrah’s paid about $50 million, mostly in the assumption of the Horseshoe’s debt.
A few months earlier, in September ’03, Harrah’s had bought out Jack Binion’s Horseshoe casinos for $1.5 billion, so this was a logical step. Since Harrah’s now owned the Horseshoe brand, it wanted to retire the last Horseshoe name; it also coveted the World Series of Poker, over which it now had full control. Harrah’s ultimate intentions became clear quite quickly; they sold off Binion’s within the year to MTR Gaming, which sold it off to TLC Gaming, which just closed the hotel rooms and coffee shop.
So, to answer your questions. What were the Behnens blamed for? Essentially, they were blamed for running Binion’s right into the ground in a short but tumultuous five-year span.
And how could the Behnens have avoided the fate that ultimately befell them? That’s hard to say, even in retrospect. On the surface, it looked to us at the time like bad business decision after bad business decision on top of bad business decision. But how much of it stemmed from decades-old sibling rivalries, Ted Binion’s lifestyle problems, Jack Binion’s pursuing interests far beyond downtown Las Vegas, and the Behnens’ hubris, perhaps not even any of them know for sure.
