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September 1, 2014

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Wayne Newton recalls resort’s troubled past

Entertainer Wayne Newton marvels at the pending grand reopening of the Aladdin hotel-casino, a property he once owned, because he believes if Nevada gaming authorities of the late 1970s had their way, it would have vanished forever.

"I told the Nevada Gaming Commission -- and it is part of the record -- please do not close the property," Newton said, recalling events of 20 years ago. "But they were so dogmatic about closing it. I felt that they were just flexing their muscles."

Newton, one of the top-drawing stars in Las Vegas Strip history, recalled that the Aladdin had become an embarrassment to gaming officials who had to act fast to preserve the integrity of gaming laws in Nevada.

That integrity was called into question during the March 1979 sentencing of four Aladdin officials convicted in Detroit of allowing Detroit mobsters to run the resort. While doling out prison terms, U.S. District Judge John Feikens said:

"The state of Nevada seems to be reluctant to prosecute offenses committed under its own laws."

Feikens noted there was a lack of case references on any similar offenses. In effect, he was saying Nevada was not doing its job to keep the mob out of the gaming industry.

"I was working hard to close the deal to buy the Aladdin because I didn't want to see the employees out on the street," Newton said last week backstage after a performance at the Stardust hotel's Wayne Newton Showroom.

"It was so irritating. They (the Gaming Commission) gave us 30 days to meet their requirements. When we did, they put in new ones. They wanted the Aladdin closed."

Sen. Harry Reid, D-Nev., then-chairman of the Nevada Gaming Commission, says Newton is correct about the board's overall feelings at the time.

"We also wanted the employees to remain working, but there was nothing we could do because the place was being run by a bunch of gangsters and the whole world was watching," Reid said. "We really felt compelled to do something drastic."

Reid said that at one point, the gaming commission created the post of receiver to run the resort and keep the employees working, even though there was nothing in the state law to provide for receivership.

In August 1979, the state closed the Aladdin, but federal Judge Harry Claiborne ordered it reopened immediately. Eleven months later, gaming officials again closed it. That September, Newton and Ed Torres, the former chief executive officer of the Riviera, bought the resort for $85 million and reopened it the next month.

But it almost did not happen that way as another world-famous entertainer had a big jump on gaining ownership of the Aladdin.

"Mr. (Johnny) Carson and (gaming veteran) Mr. (Ed) Nigro all but had the Aladdin," Newton said. "The previous stockholders had gotten into trouble and had to sell the place, and they were being squeezed. Every time a deal was made, they (the buyers) would change the terms.

"I was coming off stage at the Sands at 2 o'clock one morning and a friend called and said, 'Is your ($105 million) offer still on the table?' I said it is, and he said to meet him and the Aladdin stockholders at 8 a.m. at the Aladdin.

"I met (then-Aladdin legal counsel) Sorkis Webbe that morning, and he said, 'Kid, we want you to have the Aladdin.' But it was not so much that they wanted me to own the Aladdin. It was that they were frustrated and wanted anyone but them (Carson and Nigro) to own it. I wanted the Aladdin because I thought I could put a face on it."

Newton said he was at a time in his life when he needed a change. He had worked for the Summa Corp. -- the gaming arm of the Howard Hughes empire -- for 14 years. Also at that time, famed theatrical booking agent Walter Kane, "who was like a father to me, passed away. There was a void in my life," Newton said.

"And I opened my big mouth and said I wanted to own a casino -- not operate one. I didn't want people coming to me because the toilets are backed up. I wanted owner status. I saw the changes going on in this town with many places doing away with dinner shows. It was different from when I first performed here when I was 15."

Newton had looked around. He provided seed money for the Shenandoah Casino that never got off the ground, toured the Edgewater in Laughlin, discussed building a casino in Carson City and considered the Riviera before targeting the Aladdin.

To come up with the purchase price, Newton needed a partner. Torres, who at the time had just sold his interest in the Riviera, fit the bill.

"I was in New York working on getting financing when I got a call informing me that Ed wanted to be my partner," Newton said. "He was my first boss when I came to town and worked at the Fremont. Boy, had I come full circle."

In December, 1979, the Nevada Gaming Commission had voted unanimously to deny a gaming license for Torres and veteran gaming executive Delbert Coleman to purchase the Aladdin. Torres found in Newton a popular individual who had prestige and political clout to make acquisition of the Aladdin possible.

But after 21 months together, Torres and Newton split.

"All of those reports that we were fighting were not true," Newton said. "We never had fights -- we had philosophical differences."

The disagreements, Newton said, ranged from reducing the size of shot glasses in the showroom to firing longtime employees -- things Newton opposed.

But what turned out to be a real big problem, he said, was a disagreement over buying a service station on Las Vegas Boulevard that they would have leveled to give the Aladdin better access to and from the Strip.

"The service station owner wanted $6 million," Newton said, noting that he thought the price was OK. "But Ed wouldn't go over $4 million. As a result, it was never bought. It was a mistake.

"Another problem was that people would call the Aladdin 'Wayne's place,' and I know that bothered Ed. But, like I said, I wanted the Aladdin to have a face."

During ownership of the Aladdin, the pair also had other interests. Torres, who served as the Aladdin's general manager, bought the old Silverbird, now the defunct El Rancho, while Newton was licensed in May 1982 as partner in the Tropicana TraveLodge.

In July 1982, Torres bought out Newton for $8.5 million.

Newton said he loved owning the Aladdin: "It was one of the great learning experiences of my life. And I'm one of the few people who owned the Aladdin who can say we made money those years."

The darkest part of his casino ownership days came when reports surfaced that Newton allegedly had ties to the mob. Years earlier, Newton had known Guido Penosi, a reputed member of the Carlo Gambino mafia crime family of New York. Newton testified several times that he did not know about Penosi's alleged mob ties.

"I was most upset with the allegations because my parents were alive, and when my mother saw the report on NBC (in October 1980, linking Newton to organized crime figures), she started crying," Newton said. "I was angry.

"After that, the stories started coming out that I was a front for the mob at the Aladdin. Later the reports said I was providing authorities information about the Mafia. It was ridiculous. I'm an Indian boy from Virginia, What do I know about the Mafia?"

It got so bad that Newton's life was threatened because, he said, "the mobsters didn't know that I didn't know anything about them.

"I was in Los Angeles and got a call from the FBI telling me they would meet me at the (McCarran International) airport to tell me something they couldn't discuss over the phone. They showed me a hit list they had received from an informant. It had five names on it -- mine and the names of four guys who already had been killed."

Newton sued NBC and won a $19 million defamation judgment. Later the appeals court ruled that while the NBC report about Newton was inaccurate, there was no malice. Newton, a public figure, had to prove malice to get damages. He got none.

"It was not about money, it was about clearing my name," Newton said. "And I did."

Newton believes the new Aladdin will succeed where the old Aladdin did not.

"I see a tremendous future," he said. "It has a great mystique. It is a great property. A funny thing is that when I was trying to buy back the Aladdin (in 1984-85), I had picked Richard Goeglein (the current Aladdin Gaming chief executive officer) to run it. But then Ginji Yasuda bought the Aladdin and that ended it (Newton's attempted return).

"I was honored recently when Aladdin officials asked me to attend the opening, but I will be out of town on (a nationwide) tour and cannot be there."

Fred Lewis, spokesman for the Aladdin, acknowledges that the current operators have a lot more going for them than Newton and the late Yasuda had.

"This is not the same hotel and it is not the same location even though it is the Aladdin and it is in the same place, he said. "Ginji and Wayne didn't have the Bellagio across the street and the Paris next door. By virtue of not moving, our location has improved."

Lynn Holt, another Aladdin spokesman, said the new Aladdin is not ashamed of its colorful past. To the contrary, he is encouraged by management to compare the old to the new because it wasn't all bad.

"It's a fabled history, with Elvis getting married here," Holt said. "This is a rebirth with a brighter future."

The Aladdin was bought in 1994 by Jack Sommer, developer of the 630-acre Mountain Spa resort community in northwest Las Vegas. Today, the Sommer Family Trust is the principal shareholder in Aladdin Gaming, which built the new $1.4 billion Aladdin.

It is the only Las Vegas hotel-casino ever to be imploded and keep its old name. The Dunes went down in October 1993 and today is the Bellagio. The Landmark came down in November 1995 and today is a parking lot. The Sands was blasted in 1996 and today is the Venetian.

Newton said he would some day like to own another casino: "Sure, I would love to do it again, but in this day of publicly held companies and megaresorts, it is very unlikely that I will.

"When I owned the Aladdin, I didn't know what impact I had on people. But years later, a woman came up to me and said, 'I worked for you at the Aladdin and I will always be grateful for what you did for us employees.' That kind of support means a lot."

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