Question of the Day - 11 July 2021

This Las Vegas dynasty had its roots in Carter Lake, Nebraska, where Jackie Gaughan’s father worked in what were then legal casinos. Jackie was born in Omaha in 1920 and was drafted into the Army Air Corps in 1943. He was posted to Tonopah and later, fatefully, to Nellis Air Force Base. 

While off-base, he visited the El Cortez, which he would later come to own and, after demobilization, bought a three percent stake in the Boulder Club. Where did Jackie come up with the earnest money on an airman’s pay? Seems he’d put in a little —or a lot of— time as a bookie prior to joining the service.

"I liked where I saw Las Vegas was going, so I made the investment," Gaughan said of his move.

That didn’t keep him from returning to Nebraska to finish his degree in business administration from Creighton University. He also continued to learn from the School of Hard Knocks, supplementing his education with work as a bookmaker, albeit in legal joints. When taxation of gambling became too onerous for Nebraskans to sustain, Jackie packed his bags and moved back to Las Vegas.

By 1952, he’d also relocated his family to Sin City and bought shares in the Flamingo, although his principal activity was running the Derby and Saratoga sports books. Unlike many operators who aspire to be on the Strip, Jackie perspicaciously saw downtown as his opportunity. It may have had something to do with a run-in with mobster Davie Berman, who mistakenly dismissed Jackie as a “dime-a-dozen punk” for daring to ask a favor. He liquidated his Flamingo stake and began agglomerating downtown real estate in tandem with Mel Exber, who would be Jackie’s business partner for the rest of his life. He secured the Las Vegas Club (since demolished) in 1961 and the El Cortez two years later.

"I bought the El Cortez for $4.3 million with just $200,000 down," the patriarch told Rolling Good Times Online. "Kell Houssels gave me the hotel free and clear and I paid him over 15 years. It was the first and only time someone took my personal note for a hotel purchase.”

Jackie steadily built his casino empire, adding the Western in 1970 and the brand-new Union Plaza in 1973, followed by the Gold Spike in 1985. (Today, only the El Cortez and Plaza still operate as casinos.)

It wasn’t the shiniest empire in town, but Jackie and Exber maintained it until 2004, when Jackie sold out to Lichtenstein-based multinational Tamares Group for $82 million. In one fell swoop, Tamares acquired a fourth of downtown, including 20 undeveloped acres. Jackie subsequently unloaded the El Cortez to Kenny Epstein and retired to its penthouse, where he died in 2014. A regular fixture of the El Cortez poker room until Epstein closed it, Jackie didn't long outlive his card games.

Michael Gaughan, Jackie’s more famous son, was born in 1943 and broke into the casino business at age 13 by working as a pool attendant at the Flamingo. As he grew older, he began working up through the ranks at the El Cortez, starting as a busboy and dishwasher. But his ambitions couldn't be confined and he opened a dealer’s school, then another, then another. By 1973, he figured he was ready for casino operations, purchasing the Royal Inn, making him the youngest casino owner in Las Vegas. He rolled the profits from the Royal Inn (famous for its blackjack play) into buying a stake in the Golden Nugget.

Eventually, Michael was second in ownership only to Steve Wynn. Sensing another opportunity, he sold out to Wynn for $1 million, which provided the seed money for the Barbary Coast (those were the days, right?).

A further source of investment capital was obtained in 1985 when Michael won the lucrative McCarran International Airport slot concession (which he holds to this day).

Going from success to success, he opened the Gold Coast two years later. When Mississippi River casino boats were all the rage in the early 1990s, Michael dabbled in those, apparently with success. However, he had his eyes on a bigger and better off-Strip casino, which he opened in 1996: The Orleans (one of the first themed casinos for locals).

Never one to think small, Michael showed his stuff in 2001 when Las Vegas was reeling in the wake of the 9/11 attacks and their deleterious effect on tourism. At a time when other casinos were slashing jobs by the thousands, Michael Gaughan increased staffing. He also began brainstorming a signature resort, South Coast, which would combine gambling, dining, and hotel rooms with an unusual amenity, an equestrian center.

The maverick success of Michael’s Coast Resorts caught the attention of Boyd Gaming, which bought the company in 2004 and folded it into Boyd as a separate division. However, Gaughan was used to calling the shots and chafed at the Boyd corporate structure. Before too long — July of 2006, to be specific — he was asking to be released from his contract and left Boyd, taking the renamed South Point (only three letters had to be changed in the big signs) with him. It debuted to great acclaim in 2007 and has grown considerably since then, so successful that Station Casinos abandoned plans to build its own casino nearby.

Less-famous scions of the Gaughan dynasty include Michael’s brother, Jackie Jr., former co-owner of the Gold Spike (he died in 2002), and Michael’s son John, who broke into the family business by calling horse races from local sports books. A third son, Brendan, recently retired as a NASCAR race driver.