Question of the Day - 25 April 2021

Kirk Kerkorian

This casino mogul was never accused of thinking small or lacking faith in Las Vegas. The long-lived (1917-2015) tycoon built the world’s largest hotel three times in Vegas: the International (now Westgate) in 1969, the original MGM Grand (now Bally’s) in 1973, and the current MGM Grand 20 years later.

His beginnings were humble: The son of Armenian immigrants, he grew up in Fresno and dropped out of school in eighth grade. He graduated to being a gym rat, earning a name for himself in the boxing ring as “Rifle Right Kerkorian.” Not wanting to be a foot soldier in World War II (but wanting to serve), Kerkorian earned his wings at the legendary Happy Bottom Riding Club, a dude ranch, restaurant, and hotel operated by aviator Florence "Pancho" Barnes near Edwards Air Force Base. He milked Pancho Barnes’ cows and she taught him to fly.

Within a few months, the fledgling aviator was ferrying de Havilland Mosquitos from Canada to Great Britain in the war effort. During one flight, he ran out of fuel and told his crew they were ditching in the Atlantic; the navigator convinced him to keep flying and Kerkorian landed the plane safely at his destination on, literally, a wing and a prayer. The money he earned, a reported $1,000 per flight, helped set Kerkorian up after the war, buying him a Cessna that he used for freelance piloting.

He flew to Las Vegas for the first time in 1944 and it was kismet. Although it took him a few years to kick the gambling habit, Kerkorian used his savings to purchase Trans International Airlines in 1947, setting up charter service between Los Angeles and Las Vegas, a business that lasted until Kerkorian sold it in 1968 (at a whopping markup).

Kerkorian rolled his aviation profits into Sin City real estate, buying acreage across from the Flamingo in 1962 for $960K, sitting on it, then selling to Jay Sarno for $9 million in 1968, whereupon it became Caesars Palace. By that time, he was hard at work on opening the International, to which he would sign Elvis Presley for a record-setting residency. In keeping with his acquisition of the MGM film studio in 1969, Kerkorian next set about building the first MGM Grand.

Hanging onto both the Las Vegas and Reno MGM Grands for another six years, Kerkorian eventually sold them to Bally Manufacturing for $594 million. He returned to the Strip in 1990 to build the current MGM Grand with 5,005 rooms. Some initial missteps included an Emerald City theme and amusement park that didn’t last, an unsuccessful attempt to install Mob-tainted Clifford Perlman atop the resort, and a doomed effort to run the Grand as a non-union property. After a couple of rocky years, it found its footing.

Kerkorian proceeded to preside over a company that gobbled up Mirage Resorts and Mandalay Resort Group, becoming a dominant force on the Strip. There was never any doubt as to who was boss: Kerkorian personally approved CityCenter, an experiment in New Urbanism. In the wake of Kerkorian’s death, his company continues to run smoothly, thanks to the talented and long-tenured management team he put in place. Kerkorian is without a doubt the "father of the megaresort." 

Bob Martin

Bob Martin is probably the most influential Las Vegan (in our humble opinion) of whom you’ve probably never heard.

The Brooklyn native is known to some as “the Babe Ruth of the bookmaking industry” (even though Martin was a Dodgers fan). By high school, he was booking prop bets on The Bums, sharpening his skills during his World War II service; he demobilized with $30,000 made off GIs less savvy than he. With those startup funds, Martin became an illegal bookie in New York City, then Washington, D.C.; he made his reputation as a handicapper at Churchill Downs, the Vatican of horse racing. Finally, like many other gamblers of his ilk, he migrated to the legal sports-betting promised land of Las Vegas in 1963.

Here, Martin set up the town’s first race and sports book in a casino at the Union Plaza downtown in the mid-1970s. He lent his talents to a cable-TV startup called HBO, providing the opening lines for NFL games. He also quickly became the Plaza's resident oddsmaker, establishing what is known as “the Las Vegas line.”

“Nowadays, you hear about the opening number, but whose opening number? Some Las Vegas sports book? Some offshore gambling operation? Sure, any one of those could be legit. But back in the day, the opening line meant one thing: Bob Martin’s opening number. No one else’s mattered,” writes Chris Andrews in our book Then One Day ...

Also nowadays, every casino worth its name (and a few that aren’t) has its own sports book. Bookmakers like Chris Andrews, Art Manteris, Jimmy Vacarro, Nick Bogdonavich, Vic Salerno, and Johnny Avello, along with oddsmaker Roxy Roxborough, have become legends in the field and their names have eclipsed Bob Martin’s. But he was here first and can be said to have made Vegas sports betting the drawing card that it is today.

This deeper dive into how Kerkorian got his start in business was provided by a friend of a friend of LVA/QoD who worked directly for Kirk for many years. He graciously allowed us to post it. 

So the story is largely correct, except for the trans international airline part. After the war, KK used his savings and some borrowed money to buy parked/abandoned aircraft from the US government for basically pennies. Some aircraft were located on remote islands which required repair and then had to be loaded with oil drums of gas and a hand pump to cover the distance to bring them back to the mainland, and others were bought in bulk from their desert graveyard parking locations. He calculated that the remaining gas in the tanks of the desert aircraft could be sold to largely offset the purchase price. After selling most of the aircraft and/or parting them out to the newly forming cargo airline companies, he kept enough aircraft to start an airline called LAAS (Los Angeles air service) and began transporting tourists to the new gambling mecca of Las Vegas in 1948. That airline eventually grew to Trans International Airlines, and was relocated to San Francisco.

On a side note, he sold TIA to Studebaker corporation which provided enough millions to buy a stake in MGM Studios, but Studebaker could not run TIA properly, and so KK bought it back at a fire sale price, and then resold it again for another huge profit.  

More funds were poured into MGM studios to acquire a controlling share, and then he sold off the back lot acreage and leveraged the studio to get into the hotel business in LV.