Double or Nothing: How Two Friends Risked It All to Buy One of Las Vegas' Legendary Casinos (9 page)

I'd inspected the place down to the boiler room. Tim kept insisting that I had lost sight of the big picture.

Our arguments kept bringing us back to our original game plan. We could comfortably offer $225 million. That's just what we did, and we were rejected. The rejection couldn't have been timed better.

Just as the “no” arrived from the Hilton, we got a “yes” from The Golden Nugget. Its owner, MGM Mirage Corp., was now interested in selling it to focus its energies on its larger properties, pay down debt, and buy back stock. It was perfect timing squared. The overall valuations of casinos in early 2003 had fallen to an unprecedented low due to the slow recovery from the aftershock of 9/11.

The only downside to The Nugget was its location. It was downtown. If you start at The Strip and drive toward down-
town on Las Vegas Boulevard, one of the first things you start to notice is how the prices begin to sag all around you. The $350-a-night room at the Bellagio slowly gives way to a motel with a cactus on the marquee advertising rooms at $29 a night, which descends toward a $19 motel room further down the boulevard. By the time you reach downtown, signs are advertising fried Twinkies for 99 cents.

The mayor, Oscar Goodman, was constantly trying to figure out ways to revitalize downtown. Any man who can go from an attorney who represented mafia figures to the mayor of one of America's fastest-growing cities cannot be counted out. So there was a glimmer of optimism.

On the other hand, as the investor Warren Buffett has cautioned, turnarounds rarely turn around. Downtown Las Vegas certainly was a turnaround. The Golden Nugget wasn't, though. It was making $30 million a year. Tim went to check it out.

We'd been to The Nugget dozens of times to discuss rooms for Travelscape. But this was a different trip. Tim wanted to see if he could imagine owning it. He stood before the iconic arched entranceway flashing neon and stepped inside. There was a painting on the wall in the lobby—a portrait of the casino back when Steve Wynn first ran the place. The brilliant colors make it instantly recognizable as the work of LeRoy Neiman. But if you weren't tipped off, you might not notice the faces at the bottom left hand corner. There was Steve, Kenny Rogers—The Golden Nugget's director of entertainment at the time—and Frank Sinatra. The vibe coming off this painting was exactly what Tim wanted to bring back.

He stopped and recalled the great TV commercial back in the '80s that Wynn did with Sinatra, the one where Frank walks in and Steve heads over to greet him. “Hi, Mr. Sinatra,” he says. “I'm Steve Wynn, and I own this place.” Sinatra tucks some cash
in Wynn's palm and says, “Make sure I have enough towels.”

The thought of owning the same joint where he'd had the buffet breakfast as a kid after Sunday mass made Tim smile. But he had to make sure it felt right in the present.

He passed the sixty-one-pound golden nugget on display that we later found out was a fake, a replica of the real golden nugget that the MGM Mirage had locked away. But the phony was behind glass, and how the hell would anybody know the difference? It sure looked like history. The marble floors in the lobby were buffed. The crystal chandeliers were cleaned by hand. The joint was old, but it was old in the way the Waldorf-Astoria is old. You don't think of the Waldorf as old. You think of it as classic.

The MGM Mirage had put some effort into polishing The Nugget up. The casino floor was small, but that made every trip a short walk. Nobody would have to check in at the front desk, walk way past the casino to reach the elevator to go to the fiftieth floor, stop sixteen times on the way up, then walk a half mile down the hall to get to his or her room. On the way down, the elevators emptied right into the casino. You always felt like you were in the middle of the action. It was comfortable—a four-star hotel with two-star prices and a clientele that had been coming for years. There was a feel to The Nugget, impossible to describe or re-create, that let you know you were in a place like no other.

Tim walked over to a blackjack table and conspicuously pulled out a wad of cash. It was the first time in his life that he wanted to lose money. He wanted to see if a host would come over and offer him a free meal and a player's card, find out where he lived, maybe get a phone number to invite him back. A host did come over. He did ask Tim if he had a player's card. When Tim said no, that he was just messing around, the host left him alone. If we buy the joint, Tim thought, that might be the first guy fired.

Tim blew about three grand at the blackjack table and felt good when nobody approached him to comp his dinner. If a host had done everything that Tim thought he should've done, we might've felt that there was little to improve upon. But there was plenty. The Nugget was bringing in $30 million a year. Maybe we could get it up to $40 million.

Tim stepped outside, wandered through some of the other casinos, and then along Fremont Street. It was sad that a jewel like The Nugget was glittering across the street from a jail. But there were more people walking on Fremont Street than there were in front of Treasure Island on The Strip. They were much more likely to pass through the doors of The Nugget because The Nugget was the grand dame of downtown. People didn't come downtown to play at Fitzgerald's. If you were strolling downtown, sooner or later you'd wind up at The Nugget.

When I drove over with Tim not long afterward, I saw many of the same images. It was busy, not bustling. Polite, but not overly friendly. Good, but not great. It wasn't exactly a turnaround job, but there was a huge upside.

We were lucky that the MGM Mirage execs didn't want to sell to just anyone. They didn't want to see The Nugget in the hands of one of their corporate competitors. They liked the idea of handing it over to young guys with energy and fresh ideas.

We offered $190 million.

They asked for $225 million.

After several rounds of negotiations that got down to the real sixty-one-pound golden nugget that was locked away in a vault, we settled at $215 million. We still had to get financing and a gaming license. But if everything worked out, we'd get The Golden Nugget property downtown, a sister hotel-casino in Laughlin, and the real golden nugget that was locked away. We made the announcement and met the staff. It felt great
when Bobby Baldwin, an MGM executive and a legend at The Nugget for decades, joined us to assure everyone working at the hotel that they were in good hands.

Not long afterward, we went to Andre's home to celebrate the completion of the first stage. It was one of those meals that you never forget. Andre's kids were running around, his son hitting a ball dangling from the ceiling with a baseball bat, while his wife, Steffi Graf, tried to keep up with them. Andre had a large barbecue fork in his hand. Steaks were marinating. Andre wouldn't let anybody see his marinade. It was top secret.

“How do you want your steaks?” he asked. “
Exactly
how?” We tried to go outside to see him working by the grill, but he said, “No, no, you guys stay inside.”

When he put a steak down on my plate, he threw his hands up in the air and said, “Now, tell me that's not the best steak you've ever had!”

It
was
the best steak I'd ever tasted. Sure as hell beat the one I'd had in the first-class section of Northwest Airlines as a kid.

But the beauty of the moment was seeing how hard Andre was working at being a host. There were no chefs around. He was doing all the work, and nothing was beneath him. Tim and I had been talking for a long time about hosting, how we wanted to treat people once they entered The Golden Nugget—and the best model for what we wanted to do was right in front us.

We all paused for a moment around the table and said grace, thankful for the food and the friendship.

Some people might have suspected that we wanted Andre along for his name. Extra cachet, as they say in Vegas. They didn't understand. Andre has the chance to do dozens of deals, and he and Perry are very careful about the ones they select. Substance is everything to Andre and Perry—and it was one of the keys to our partnership.

The substance of our travel business enabled us to attract a seventy-year-old industry icon named Chuck Mathewson as an additional investor. It lured Mark Burnett and Fox to offer us the chance to star in our own reality TV show. When you're putting up a lot of your own money, when you've got folks like Andre Agassi and Perry Rogers on your team, you get trust in return. We crisscrossed the country to raise money for the deal and landed in Las Vegas ten days later with all we needed at an interest rate lower than we'd anticipated.

The power of substance became even more apparent when another of our investors, in for $2.5 million, got cold feet. As soon as Andre heard, he volunteered to go in for more money.

“You know what I'm gonna bet on every time?” Andre told Perry. “I'm gonna bet on us and the people who we grew up with.”

“I'm with you,” Perry said. “But there are a lot of other deals we're looking at.”

“Don't worry about the money,” Andre said. “Just make the bet. I know them. I trust them. And I'm throwing it down on them.”

G
etting a gaming license in Nevada is a little different from getting a driver's license—and a lot more expensive.

In Nevada, you have to pay to be investigated no matter how long it takes or how much it costs. Back in 2003 it cost more than $100,000 for each of us to be investigated and pay our legal fees.

Even though you know you're being investigated, it's still a shock when State Gaming Control officials show up at your door and say, “Good morning. We're going to spend the day on your computer.”

They go through your e-mails, your bank accounts, your phone records. By the time they're through, they know everything about you and the guy who washes your car.

Fair enough. It's their job to keep the industry clean. But the investigation turned into something out of a spy film one sunny day when my cell phone rang as I was driving with Perry.

“The FBI is in the office,” my assistant said, “and they have some questions for you.”

The
FBI
? About the only time I'd ever broken the law was when I rode an unauthorized motorbike down the streets of Barnsville in seventh grade. Even then I must've looked both ways about ten times as I approached each corner—making certain I didn't turn straight into a paddy wagon.

“Should we call our gaming lawyer?” I asked Perry.

“We've got nothing to hide,” Perry said. “Tell 'em we'll go right now.”

As we drove over, I couldn't help wondering if I'd done something wrong that I didn't even know about.

After a number of questions, the FBI agent came right out and put his cards on the table. “I know you're going to tell me the truth,” he said. “Does Rick Rizzolo or any of his associates have a hidden piece of The Golden Nugget?”

That
was it? I actually started laughing. I just couldn't help myself. The tension drained right out of me.

Rick Rizzolo was the owner of one of Vegas's strip clubs: Crazy Horse Too. The club had been around so long it was a Vegas institution. So was Rizzolo. He's one of the most sought-after gamblers in town. The Hard Rock kept a table on reserve for him twenty-four hours a day. Nobody else could play on it. Rizzolo often promoted charity causes, and he was a fixture at political fund-raisers. It would be hard for anybody who's anybody in Las Vegas not to have crossed paths with Rick Rizzolo at some point.

Besides, he's a very friendly guy and a lot of fun to be around. In the days after Tim and I sold Travelscape, we occasionally went to Rick's club to smoke a cigar and have a drink. There weren't even strippers soliciting lap dances in the VIP lounge where we drank. The VIP lounge was a place where celebri
ties could unwind without a hassle, and where friends of Rick's could get together. Sometimes we had dinner and gambled with Rick. But that was the extent of the relationship.

I'd been traveling to Europe frequently for Expedia so I saw a lot less of Rick than Tim did. But the FBI had been tapping Rizzolo's phone in an investigation dubbed “Operation G-Sting” that had lasted more than a decade. There were allegations that employees at Crazy Horse Too had beaten patrons with baseball bats and that customers were being forced to sign inflated credit card receipts. Our experiences at the club had always been friendly, and our only exposure to baseball bats or inflated bills came on the pages of the newspaper.

But suddenly, we were somehow being linked to the investigation like many others who'd walked into that VIP lounge—Robert De Niro, Joe Pesci, and George Clooney included. It's true, logs showed that I'd phoned Rizzolo eleven times. But anybody who listened to those calls could tell they were simply about the timing of dinner reservations.

“No way,” I told the agent, “Rick Rizzolo is not involved in The Golden Nugget in any way, shape, or form.”

Would Tim and I, asked a gaming agent present, come to Carson City to look at a few photos?

Next thing you know we're at the Gaming Control Board offices in the capital getting barraged with questions. Did we know this guy? This guy? This guy?

There were about four or five photographs of guys we'd seen before. One guy who worked for Rizzolo, it turned out, was the brother of a member of a Chicago crime family named Joey “the Clown” Lombardo. During the interview, a gaming agent said ominously, “We know about Naked Twister.”

What the—?

One of the recordings the FBI must've picked up from Rick's
conversations had some mention of the game Naked Twister. It was mentioned over the phone as part of some joke. But I guess the FBI was casting it out like a fishing net to see what it might haul in. Okay, I've been to the Crazy Horse. I'd go as far as to say that when I was in my twenties and early thirties it was part of the young, single guy's circuit in Vegas. When friends came in from out of town, you took them to dinner, hit the Hard Rock to throw the dice, and then capped the night off at the Crazy Horse. It was a damn good time, I might add. But just because you have dinner at Piero's with the owner of a strip club and smoke a cigar in his joint, that doesn't mean you've been contorted on a Twister game board with the limbs of six naked women wrapped around you.

It was hard to tell if they were trying to build a case against Rick Rizzolo and the guys in the pictures, or if our knowledge of the people in the photos was going to be used against us when we stood before the state's Gaming Control Board.

We already knew that our appearance before the Gaming Control Board wasn't going to be a picnic. But now we quickly began to get the drift of two different cases that might be brought against us.

Here we have Mr. Tom Breitling, the bumpkin from Barnsville, who'd never even seen
The Godfather
when he went off to college. Who came to Las Vegas thinking that the VIG (the vigorish percentage) advertised atop taxis by casinos to attract gamblers to their baccarat tables stood for Very Important Gambler. Who thought the signs in front of hotels that said Valet Full
really meant
the valet was full, when everybody else in Las Vegas knew the sign meant you needed to grease the palm of the attendant in order to get your car parked. This is the same Mr. Breitling who was repeatedly outfoxed in the game of cribbage as a young man by his Grandma Johnson.
Could there be an easier mark in this city of 1.8 million for the mob?

And here we have Tim Poster. Could the Gaming Control Board members even begin to count the number of incidents in Mr. Poster's past that might raise an eyebrow?

There was that night as a very young man when he got cut off in his Lumina near the intersection of Flamingo and Las Vegas Boulevard, when he jumped out of his car and reached through the window of the offending vehicle with the intention of pulling the offending driver out, causing the offending driver's wife to race out the passenger door and start smashing the high heel of her shoe on the back of Tim's Lumina, distracting Tim enough to allow the offending driver to hit a switch and power the window up, causing Tim to grab the offending driver's hair as the window closed. The next thing Tim knew the offending driver's wife was back in the passenger seat, the offending driver was hitting the gas, and he, Tim Poster, was standing alone on Las Vegas Boulevard with a toupee in his hand.

Oh, yes, and what about that night Mr. Poster and his business partner enjoyed stogies and Sambuca at Morton's steak house? The night when a diner whom they passed on the way out said, “Thanks for ruining my dinner with your fucking cigars!” And Mr. Poster responded, “Excuse me, sir, but this is a cigar-friendly restaurant and we were simply enjoying ourselves—and maybe you should watch your mouth in front of the lady.” To which the guy shot back: “Well, you should know you're a fucking asshole!” To which Tim grabbed the guy's coffee cup, splashed the beverage in the guy's lap, set the cup back down, straightened his jacket, and walked out. At which point the guy with the puddle of coffee in his lap picked up the cup and hurled it at Tim, who turned the corner just in time for
the cup to sail by and smash into the forehead of a diner at the table just beyond, drawing blood and sending the poor guy to the hospital.

These were scenes that could've come straight out of a Martin Scorsese film. And I've got to admit, the images might well create a certain impression in the mind of somebody who didn't really know Tim.

When I first arrived in Vegas, we'd go to see Sinatra without a ticket, receive a hug from Nicky the maitre d', pass the legion of Frank's adoring fans, and get escorted to a seat at a front table. “How the hell did you do that?” I'd ask. And Tim would bend his nose with a finger to imply that we were “dialed in.” It was a friend and two Benjamin Franklins that got us those seats—not any link to the mob. Favors are currency in Las Vegas. You get me in here, and I'll get you in there. To Tim, being a wise guy means figuring out the angles in order to get what you want. That's what makes a wise guy “wise.”

But the Gaming Control Board had a very different definition of the word “wise.” Even after our trip to Carson City, we had no idea what kind of grilling we were in for when we stepped into that first hearing. We should have known the moment we arrived. The toughest cases are always scheduled for early in the day. Ours was first on the docket.

To be fair, I should point out that it's a damn good thing Nevada's got a Gaming Control Board. The Strip was put on the map thanks to a man by the name of Bugsy Siegel, who opened the Flamingo in 1946 with $6 million of the mob's money. Even though Siegel was whacked with a hailstorm of bullets, one of which pierced his cheek, the legend of his murder inspired the shot-through-the-eyeball-while-getting-a-massage scene in
The Godfather
.

For years, the mob and the teamsters were rooted in the casino industry in Vegas. The Gaming Control Board is partly responsible for that no longer being the case. The cleansing of the casino industry, in fact, could be cited as one of the catalysts that drove the boom in Las Vegas. Every nickel is accounted for in the casino industry. It's exactly this sort of scrutiny that makes it easy for hotel-casinos to attract billions from Wall Street. It may seem strange, but Wall Street can trust a casino in Las Vegas a lot more than it can many other businesses because of the layers of accountability and the stringent monitors the state government has set in place.

On the other hand, the rigor of a Gaming Control Board investigation is said to have kept many high profile people from owning a hotel-casino. Nobody likes a trip to the proctologist unless it's absolutely necessary.

Owning a casino was Tim's dream. We wanted the license. The rubber glove was necessary.

Our first appointment was scheduled for 9:00
AM
on January 7, 2004. After the initial pleasantries, one of the Gaming Control Board's three members, Bobby Siller, began to bring up a lot of the information that the FBI had asked us about—in a very ominous tone.

“Do you know a Mr. Rocky Lombardo?”

“Do you know a Mr. Vinny Faraci?”

We stated for the record that these were guys we might have eaten dinner with at a table of twenty. But whatever we said seemed to get twisted against us. Reasonable responses began to sound like admissions of guilt.

When the board members asked Tim if he'd ever loaned or taken money from Rick Rizzolo, Tim remembered a time that he had. His explanation was perfectly understandable. They were at a casino where Tim didn't have a credit line and Rick did. So Tim
accepted a loan from Rick, and they hit the tables. This is commonplace among high rollers in Vegas. You could almost call it professional courtesy. Tim often lent money to people he trusted from his credit lines. But the back-and-forth triggered by the discussion of that one loan made it seem like Rick's hand was already in Tim's pocket.

Siller, one of the three members on the board, had a background in law enforcement, and he focused on the nights we'd spent at the Crazy Horse Too. He pointed out that the surveillance cameras at these clubs could also be used in ways that we might not anticipate—to capture moments that would prove embarrassing to patrons in the future. Such images, he added, are a red carpet to extortion.

He let everybody know that the results of the FBI's investigation of Rizzolo would be over shortly, and that some bad things were going to come out. “It's been my experience that you would definitely have been a mark,” he told us—along with every media outlet in the state. “Something would have happened to both of you, make no mistake about that.”

Siller's tone suggested we were doomed to wake up with a bloody horse head under our bed sheets any day now. It seemed absurd to us. But what could we do? Again and again, Tim admitted his bad judgment in continuing to speak with Rizzolo after our lawyer had advised him to cut off all communication. How could Tim make the world understand that he
had
backed away from Rizzolo? It just wasn't his way to completely ignore somebody he'd been friendly with, somebody who'd never done him any harm.

It was hard for anybody who didn't really know Tim to understand. Years earlier, while picking up business around town for LVRS, Tim would occasionally check into a hotel room, then check out less than an hour later. It was assumed by many that
Tim was using the room with a hooker. But in fact, Tim had paid the entire day's rate simply to make sure he had a clean restroom. But who'd believe that in Vegas?

Well, the worst was yet to come. Soon the name Jack Franzi came up. Tim's great uncle. Our beloved Uncle Jack.

“Mr. Poster, are you aware that Mr. Franzi is a denied applicant?”

“Yes, sir, I am.”

“Are you aware that one of the concerns was his association with organized crime figures, illegal bookmakers?”

Suddenly, it sounded to Tim as if they were asking him to sever all ties with his uncle, the man who had helped put him through college, who was a father figure during a time when his own father wasn't there for him. As they looked at Tim, friends who'd come to the hearing were actually squirming in their seats.