Gaughan family’s LV gaming ties stretch to ‘46

Wednesday, Sept. 13, 2000 | 11:59 a.m.

The Gaughan family's involvement in gaming stretches over four generations -- three in Las Vegas. Jackie and his son Michael have owned more local casinos than any other father-son duo in the city's history.

That number stands at eight -- nine with Tuesday's opening of Michael's Suncoast. Jackie owns or co-owns the El Cortez, Plaza, Gold Spike, Las Vegas Club and the Western, while Michael's Coast Resorts owns or co-owns the Barbary Coast, Gold Coast and the Orleans hotel-casinos.

Jackie Gaughan also, at one time or another, had an interest in the Showboats in Las Vegas and Atlantic City, the Flamingo, Golden Nugget, Pioneer Club, Boulder Club and the Royal Inn, which Michael also owned.

"Looking back, I wouldn't change a thing about my life," said Jackie Gaughan, 79, who lives in the penthouse atop the El Cortez. "I'd do everything just the same, and I don't plan to retire. I've got no place to go."

Jackie at one time owned as many local casinos -- six -- as the late billionaire Howard Hughes, who was credited with bringing Las Vegas into the corporate age.

The only other father-son combo to come close to equaling the Gaughans in the number of local resorts owned was the late Sam Boyd and Bill Boyd, who today is chairman of Boyd Gaming Corp., which owns Sam's Town, the Stardust, Fremont, California and Main Street Station. At the time Sam was alive, the Boyd family owned five resorts, but one of them was Sam's Gold River in Laughlin, which later was sold. They didn't own Main Street back then.

The Gaughan family business has been passed down from generation to generation. Jackie learned about the bookmaking business from his dad, who worked in legal casinos at Carter Lake, Neb. Michael learned a good deal of the business from Jackie, starting as a 13-year-old pool boy at the Flamingo. Michael's brother Jackie "John" Gaughan Jr. at one time co-owned the El Cortez and Gold Spike with his father. And Michael, in turn, taught his son, John Gaughan, who is a horse race disseminator, providing live horse race broadcasts to race books.

But the Gaughan family gaming empire was built mainly on the glittering successes of Jackie and Michael.

Jackie Gaughan made an art of marketing to locals with giveaways like candy and jackets that feature advertisements of his casinos. He makes no apologies to critics who say that gaming should not actively seek the money of area residents because it hurts the economy when they lose and they cannot buy food, goods and other products.

"Locals are going to gamble, and the locals who work on the Strip will go downtown to gamble," Jackie said. "I've always liked to do giveaways, and locals like them, too."

Jackie was raised in Omaha, Neb. As a senior in college, he was drafted into the Army Air Corps. He was assigned to Tonopah in 1943 and later to Nellis Air Force Base.

While in Las Vegas, Gaughan stayed at the El Cortez, then in its second year of operation. On the advice of a friend, he bought 3 percent interest in the Boulder Club in 1946 with money he had made as a bookmaker prior to joining the service.

"I liked where I saw Las Vegas was going, so I made the investment," Gaughan said.

After his service years Gaughan returned to Nebraska and completed a bachelor's degree in business administration at Creighton University. After graduation, he worked as a bookmaker for legal gaming properties.

However, with passage in the late 1940s of a gambling tax that crippled bookmaking in that state, Gaughan pulled up stakes and moved to Las Vegas.

"The 10 percent tax ruined the industry, and a lot of people in Omaha were heading to Las Vegas," Gaughan said.

Gaughan moved his family to Las Vegas in 1950 and the next year bought an interest in the Flamingo hotel-casino that was founded four years earlier by mobster Bugsy Siegel. Gaughan also operated the Saratoga and Derby sports books from 1953 to 1959.

Gaughan later sold his shares in the Flamingo and concentrated his efforts on the downtown area, where he had been buying hotels, including the Las Vegas Club in 1961 and the El Cortez in 1963 -- both with his good friend Mel Exber. Gaughan made the El Cortez the flagship of his operations.

"I bought the El Cortez for $4.3 million with just $200,000 down," Gaughan recalled. "(The late J.) Kell Houssels (Sr.) gave me the hotel free and clear and I paid him over 15 years. It was the first and only time someone took my personal note for a hotel purchase."

In 1970 Gaughan bought the Western, where he promoted penny slots and low-limit table games and bingo. Three years later Gaughan bought the Union Plaza, which is now called the Plaza.

Gaughan bought the Hotel Nevada in 1975, sold it, bought it back and later sold it again. Today it is a nongaming property operated by Ann Meyers, city records show. In 1985 Gaughan bought the Gold Spike.

Michael Gaughan, 57, learned the industry from the ground up, working at the El Cortez as a busboy, dishwasher and maintenance engineer. Jackie would joke with El Cortez employees, telling them they could go far when a dishwasher at his place could become a casino owner.

"One of Michael's secrets to success was that he had a dealer's school downtown, and a lot of the dealers he trained became his workers and players," Jackie said. "When he would open a new place, they would follow him."

Michael went to Bishop Gorman High School, a private Catholic school that his father had long supported. Michael also graduated from Creighton University and earned a master's degree in business from USC.

At age 30 he became the town's youngest casino owner when he purchased the Royal Inn. After making a success of that off-Strip resort by promoting strong blackjack action and serving good food as a loss-leader -- tricks he learned from his dad -- he invested his profits in the Golden Nugget.

At one point he was second in stock holdings to Steve Wynn, who also had learned much about the industry working with Jackie Gaughan. Michael sold his interest in the Golden Nugget for $1 million and used the money to open the Barbary Coast.

In 1985 Michael was licensed to operate the lucrative slot concession at McCarran International Airport. Michael's Gold Coast opened just before Christmas in 1987. By the end of its first year, it had turned a $2.5 million profit.

In the early 1990s he bought an interest in Mississippi River gambling boats. In 1996 Michael opened the Orleans, which like the Gold Coast is an off-Strip attraction in the southwest end of town.

Much of the Gaughans' success can be attributed to one simple factor -- hard work.

"I've always put in 12-hour days, seven days a week because I just love being around this business -- you have to," Jackie said. "I never pushed my sons into the business. They did it on their own and they also worked hard."

Another of Jackie's philosophies about hotel-casino ownership is that nothing is forever. He has bought and sold casinos as the market has allowed him.

"All of my places are up for sale every day -- I'll sell them all if anyone is willing to pay my price," Jackie said.

Jackie also has been a civic leader, supporting numerous causes and charities. In 1987 Gaughan was named Humanitarian of the Year by the Clark County Chapter of the National Conference of Christians and Jews, now called the National Conference for Community and Justice.

In 1996 Jackie's wife of 54 years, Roberta Mae "Bertie" Gaughan, died at age 75. She and Jackie were high school sweethearts and she was long active in the operations of the El Cortez, overseeing the operation of the coin-counting room.

"It was a tough, but you go on," Jackie said. "I had my sons to help me through."

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