Could you please go into detail about Steve Wynn's early career in Vegas when he purchased a small piece of land next to Caesars Palace and threatened to build a motel and slot joint on the land? Caesars, building a first-class resort, couldn’t have that and bowed to Wynn's price of $2 million, thus earning a hefty profit. Was Wynn visited late at night by any of Caesars “advisors” who sternly warned him to play ball?
As far as we and history know, no, Steve Wynn wasn't threatened by Caesars Palace "advisors," but of course, we're not exactly privvy to what happened behind closed doors.
We can say that there’s no evidence he was, at least in that episode, which occupies fewer than four pages in Steve Wynn’s unauthorized biography, Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn, by John L. Smith. The book minces few words about Mob involvement in any Wynn enterprise.
For one thing, Caesars Palace was already built and a going concern (it opened on August 5, 1966) by the time Wynn came down the pike. Also, Wynn said he was planning something other than a “motel and slot joint.” But perhaps a bit of backstory is in order.
Finding himself in between casinos after Howard Hughes bought out the scandal-plagued Last Frontier, Steve Wynn needed a new vocation. He tried his hand as an impresario of lounge acts. He then decided to take a flyer into the liquor business, a potentially lucrative concession in booze-happy Las Vegas. Wynn became the Nevada distributor for Schenley Industries, synonymous with Dewar’s scotch. He secured the necessary loan to buy Schenley subsidiary Best Brands from all-powerful Valley Bank and its founder, E. Parry Thomas (the man who brought Teamsters Union pension money to Vegas casinos).
Schenley had a dark past, having at one time been owned by mobster Lewis Rosenstiel. By assiduously cultivating politicians and then-FBI Director J. Edgar Hoover, Rosenstiel was able to keep Schenley in the clear. By the time Wynn bought into it, ownership had passed to Riviera owner Meshulam Riklis, husband of starlet Pia Zadora.
From 1968 to 1971, Wynn distributed Best Brands’ liquor in both Las Vegas and Reno, with clients who included the Desert Inn's Moe Dalitz. “I wrote almost every wine list on the Strip,” Wynn boasted. Dalitz recalled things, differently telling John L. Smith, “It wasn’t long before he lost interest. Casinos go through a tremendous amount of liquor. You could see he didn’t want to be there.”
While dabbling in booze, Wynn purchased 10 acres of Flamingo Road real estate for $154,000 on May 15, 1970. Thomas loaned him $400,000 to construct a warehouse and railroad spur line, the better to facilitate the movement of Best Brands’ product. That wasn’t enough and Valley Bank had to pony up another $200,000 to finish the job.
Astutely, Wynn leased the acreage to Best Brands for $7,500 a month, also collecting an $87,000 security deposit against his own company. In 1971, Wynn flipped the warehouse for $700,000, neatly covering the Valley Bank loan. He kept $121,000 and somehow managed to persuade Schenley to not only forgive $363,000 he owed it, but to buy Best Brands.
In November of that year, Wynn was focusing on 1.1 acres of Flamingo Road land adjoining the Strip — and Caesars Palace. The latter was leasing it from Howard Hughes for parking space. Parry Thomas came to Wynn’s rescue and helped him perform what Smith called “gentlemanly extortion.” Between Thomas, Wynn, and guarantor Abraham Rosenberg (another acquaintance from the liquor industry), a 100-foot-by-1,500-foot sliver of Strip-facing land was acquired from Hughes for $1.2 million.
That sat badly with Caesars CEO Bill Weinberger. He was under the impression that Hughes Tool Co. had given Caesars first dibs on the site. But Hughes speedily liquidated the parcel to Wynn, thwarting Weinberger’s plan to offer the young Wynn $250,000 to go away and stop being a nuisance.
“So we were going to build one of those smallish kind of hotel casinos; the Barbary Coast is a perfect example,” Wynn later recalled. “The Barbary Coast [now The Cromwell] is sort of a takeoff on what we wanted to do.” And yet … “I don’t think we wanted to do it. It was the kind of site that didn’t give you a chance to fix it if you made a mistake.”
On October 27, 1972, Wynn parted with his parcel at a handsome markup to $2.25 million, giving him $687,000 in profits. Considering the magnitude of the flip, it’s highly and extremely improbable that “the boys” persuaded Wynn to sell. True, Caesars World boss Clifford Perlman was as mobbed up as they come (which cost him his New Jersey gaming license). However, with heavy hitters like Thomas and Dalitz in his corner, Wynn could bluff Perlman — which he did. Caesars folded its hand.
