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April 21, 2014

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Signs of slump all over homey family-run casino

Smaller paychecks, bigger overhead hurt bottom line

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Sam Morris

Jim Hafner, left, and Harry Bagan enjoy the Klondike Sunset’s 99-cent breakfast special Friday. Skyrocketing food costs are making it difficult to offer such promotions.

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Klondike Sunset owner John Woodrum dresses up a 99-cent hamburger special Thursday, July 10, 2008.

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Mike Woodrum, the man behind the bar at the Klondike Sunset, the locals joint just off the beaten path that is the Boulder Strip, knows a thing or two about the state of the economy.

The signs of this downturn are all around him. He sees it in the beer bottles and garnish tray.

Not to mention over at the smoky cashiers cage, where the construction workers used to cash their $2,500 weekly checks. Today those same blue collar guys cash checks of about $600.

The wholesale cost of beer is up about 30 cents a bottle. The cost of lemons — the simple citrus tossed into drinks — has jumped nearly 100 percent, from $20 a case a year ago to $39 a case last week.

The dozen eggs that used to cost 60 cents are now $3.85. A loaf of bread? It’s gone from 98 cents to $3.

And so the Klondike trudges on in Henderson’s industrial corridor, providing a lesson in economic realities along with 99-cent breakfasts.

But the Klondike’s customers are still paying basement prices.

There’s the breakfast special and the 99-cent burger with steak fries. That’s hard to beat in Las Vegas, where the recent loss of the Golden Gate’s 99-cent shrimp cocktail has been mourned in the way most places lament the demise of historic buildings. (Though the old price is still offered to players club members.)

The good deals are coming at a price for Woodrum and his family, who run the place with old carpets and down-home atmosphere. Woodrum figures that with every meal special he sells, he’s losing a buck.

Two years ago the tiny casino grossed $7.5 million. This year it will be lucky to take in $5 million.

The slump — or maybe just the passing of the era of small casinos — has forced the Woodrum family to pour $1 million into the business just to keep it afloat.

Mike runs the joint. But it’s his father, John, who owns the casino, with all of 300 machines and eight tables. He’s the guy who ran the 153-room Klondike Inn on the Strip for 31 years before it closed in 2006.

The family is feeling the economic pinch in various ways, though they’re still driving luxury cars and living in upscale communities. And they sold their Strip property, 5.2 acres, for $24 million to Royal Palm Las Vegas, keeping a small stake in a future major casino project.

But Mike Woodrum, 36, says his wife has curtailed her shopping trips and ordering out has become a special treat.

“Sure, we’re feeling it,” he says. “We all have.”

The Klondike might not be that special in most people’s eyes — just another place on another corner in the saturated market. It doesn’t have any crazy promotions, rock concerts or a ladies night.

The Woodrums keep it simple. They know the regulars on a first-name basis — the garbage men from the nearby transfer station and the bartenders coming off long nights.

“It’s like ‘Cheers’ all over again,” John Woodrum, 69, says. “People can just be themselves.”

It’s easy to let your inner self show when a bucket of six beers runs $9. Mike regrets to inform the public that price will probably go up a couple of dollars in the next week or so.

For all the struggles, it will be almost impossible for the Woodrums to go broke as long as they own the property.

The Klondike’s 2.3 acres sit on the cusp of the future and the edge of the past.

It keeps the Vegas tradition of cheap eats, loose slots and easy gambling alive — $2 blackjack, 10-cent roulette spins. Well, that’s a little deceiving, because you must have five chips in play.

Across from the Klondike on Sunset Road, the Alystra has been shuttered for nearly a decade and was recently torched. Across Boulder Highway is the abandoned Roadhouse Casino.

Though that’s today’s reality, there are plans for Boulder Highway, the hard-luck road leading from downtown Las Vegas, past pawn shops, strip clubs and used car dealers, and into the heart of Henderson.

A faster bus route is planned for the next five years, and everyone hopes it will deliver people to a reborn retail corridor in Henderson.

More competition is coming this year when the Eastside Cannery opens on the lot that used to be Nevada Palace.

In a decade, the Woodrums acknowledge, there probably won’t be a Klondike. When the right offer comes they’ll sell. The property is worth millions of dollars for the simple reason that it’s zoned for gaming.

Just as the father and son chat about the future and what will eventually come, an announcement says a customer won $20 in the bi-hourly giveaway.

“We keep giving that money away,” John Woodrum says, waiting for the 99-cent burger he just ordered. “Hopefully they give it right back.”

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