The Richest People In America are in Sin City

30.04.2005, Lesen Sie hier den Bericht über «The Richest People In America are in Sin City».

Who needs Renoirs and roller coasters? In Vegas it's all about the simple pleasures

It's a hot, dry night in the Nevada desert, and George Maloof Jr. can scarcely contain his glee. Peering down from his V.I.P. cabana at Skin, the poolside lounge at his family's Palms Hotel & Casino, Maloof smiles at the debauchery unfolding below.

Painted in green and purple lights, a dozen bikini-clad bombshells from two of Las Vegas' biggest strip clubs frolic in the water. Hundreds of young partygoers sip expensive cocktails and dance as a DJ pumps out the latest hip-hop hits.

"Just another night in Sin City," shrugs Maloof, the 39-year-old owner and operator of the Palms. "The true spirit of Las Vegas is in partying. Young people don't want attractions. They want to drink, dance and have a good time."

Under Maloof's guidance, the Palms, which opened in November 2001 about a quarter-mile west of the Las Vegas Strip, has become Party Central for young adults. The Palms exudes sex, from its Playboy- themed slot machines to its "playpen" bachelor party suites. MTV used the hotel to filma season of the Real World, a reality show that chronicled the sins of seven strangers. Frequent visits by pop stars and pro athletes add to the cachet.

But sex appeal is only part of the draw. During the day the Palms caters to a different crowd: retirees who come to the casino for its slot machines, generous player perks and cheap buffets. That simple blend of sex and slots has been a jackpot for Maloof and his family who, with their ownership of the Palms and pro basketball's Sacramento Kings; stakes in Wells Fargo; and a Coors distributorship, are worth at least $1 billion, according to FORBES estimates.

Maloof's timing for the Palms couldn't be more perfect. Vegas is in the midst of an image makeover. In the 1990s casino operators made a concerted effort to sell the city as a family destination. Deeper-pocketed competitors like Steve Wynn and Sheldon Adelson built lavish theme resorts anchored around expensive attractions, from ancient Egypt (the Luxor) and Renaissance Europe (the Venetian) to big art collections (the Bellagio).

But sin never left the desert. City marketers have since abandoned their efforts to portray Vegas as a Disney on Dice, and are once again enticing visitors with hedonistic slogans, such as "Vegas: What happens here, stays here."

All of which plays perfectly into Maloof's hand. Though small by Vegas standards--only 430 rooms, 7 restaurants, 3 nightclubs--the Palms is producing solid returns. Maloof expects to earn $50 million in operating profit from the Palms this year. Unlike its highly leveraged competitors on the Strip, the Palms carries very little debt on its balance sheet, generating a 20% pretax return on Maloof's $265 million investment.

The Palms is just the latest score by the Maloof clan. It all began in 1892, when George's grandfather Joseph Maloof opened a grocery store in New Mexico after emigrating from Lebanon. His father, George Maloof Sr., steered the business into wine and liquor distribution, banking and hotels. By the time George Sr. died in 1980, he had become one of New Mexico's richest men.

In 1985 George moved to Las Vegas to study hotel management and play football at UNLV. The experience wasn't entirely academic. "I'd go to class, play football, eat and then go gamble until two in the morning," he admits. "I played every game in every casino. I learned what it was like to place a bet and lose."

After graduating, Maloof persuaded his family to buy a plot of land in the north end of Las Vegas for a modern casino targeted at local gamblers called the Fiesta. By the late 1990s Maloof had turned the Fiesta into a locals' favorite. The key: programming his slot machines to give players better odds of winning.

"George knows his customer," says Anthony Curtis, a former pro gambler and publisher of the newsletter Las Vegas Advisor. "He knows he has to give local gamblers a feeling of entitlement if he expects them to play his machines."

Slots make up 70% of the Palms' gambling revenues (for casinos on the Strip, it's much lower), and at least 60%of the property's profits (for public Strip casino hotels, it's about 30%). Though frowned upon as downscale, the machines are less susceptible to foul play, are cheaper to operate and provide a more predictable revenue stream than table games like blackjack and craps. They also serve as a hedge against high rollers who can win six figures in just a few hours at the tables.

"I'm obsessed with slots," Maloof confesses. So obsessed, his cell phone receives hourly updates on how many people are playing his 2,000 machines.

Maloof sold the Fiesta in 2001 to gaming conglomerate Station Casinos for $180 million. He used the proceeds to build the Palms. His dream: creating a casino that would attract locals and indulge his other passion--the bachelor life.

Both markets are ripe. Las Vegas has become one of America's fastest-growing cities, with more than 60,000 people moving to the city and its suburbs each year. More than 11 million people under the age of 40 visit Las Vegas every year.

On a recent Wednesday afternoon the west side of the Palms casino floor looks more like a senior center than a gambling hangout. Amid flashing lights, gray-haired gamblers--most of whom live within 5 miles of the Palms--feed dollars into game-show-themed slot machines. Just off the casino floor, several patrons are lining up to play bingo and keno. Others are cashing in bonus points from their frequent-player cards.

On the east side, things get racier. Across from the Playboy slots looms the "wheel of fortune." This summer a flaxen-haired siren named Amanda lured gamblers to place bets on whether the wheel would stop on a blonde, brunette or redhead (at most casinos the wheel stops on various dollar-bill denominations). On weekends, when Amanda spun the wheel, the game's drop--industry jargon for money wagered--increased 500%.

Just off the casino floor at Rain, the hotel's cavernous dance club, girls in skimpy outfits descend from the ceiling. A flame-thrower spews fire above the pulsating mass dancing on the floor below. High up on the 55th floor, in a Palms lounge, cocktail waitresses ply the floor in tight white miniskirts, their every movement accented by black light. A glass-floor balcony allows revelers to gaze straight down on the action at Skin, below.

When he persuaded MTV to film its Real World reality show at the Palms in early 2002, Maloof spent $1 million converting six rooms into an oversize luxury suite. It was money well spent: The Palms was beamed into millions of homes for six months. Today the Real World suite, which can go for up to $10,000 a night, is enjoyed by high rollers and rock stars alike.

Celebrities play a big part in Maloof's marketing scheme. Their mere appearance in the hotel brings in the guests. "Seeing Pink or Britney Spears or Shaq makes their whole trip," he says. Maloof offers the Real World suite, along with other perks, to encourage celebrities to stay at the Palms. To entice athletes, Maloof outfitted special NBA suites with extra-long beds and high showerheads.

As for George Maloof, he may be as Jekyll-and-Hyde as his hotel. Though he insists he leads a "boring" life, it is often fodder for tabloids. He dates Playboy Playmates, but spends Sundays in the office after church. "What I'm most proud of is the fact that my casinos have been responsible for 2,500 jobs," he says. "That in itself is enough to motivate me to not screw up."

Provided he doesn't screw up, Maloof will have another thing to be proud of: membership in The Forbes 400.

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