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John Wang, center, deals blackjack to Jon Edwards, left, of Corona, Calif., and Michael Perk of San Diego at Buffalo Bill’s in Primm.
Thursday, July 2, 2009 | 2 a.m.
Sun Archives
- Herbst Gaming files for bankruptcy protection (3-22-2009)
- Betting it all on bankruptcy? (3-17-2009)
- Reports: Gaming revenue down, casino debt climbing (1-30-2009)
- Herbst misses debt payment, again (12-4-2008)
Beyond the Sun
On a recent Monday afternoon, Buffalo Bill’s — a Western-themed casino about 45 miles from the Strip at the California border — offers a glimpse of Las Vegas’ past.
The place is hopping.
A line to sign up for the players club snakes through the casino and toward the lobby. Nearby, people in shorts and flip-flops play slowly, pausing to gulp sodas and take in the crowd. In the food court, families and young couples take up most of the available seats, eating on the cheap amid kiddie rides and arcade games.
Next door, the more understated Primm Valley casino is busy with customers, many favoring polo shirts over well-worn T-shirts. Across the freeway, long-haul trucks are gathering at Whiskey Pete’s, which welcomes the Wrangler crowd with its giant parking lot, $9 rooms and free breakfasts for truckers.
With hotel rooms on the Strip at more than half their pre-recession rates, the three Primm casinos — marketed as a cheaper, no-frills alternative — have been forced to slash prices even deeper.
And still, the properties are making money from people clamoring for $2 beers, $7 prime rib dinners and $25 shows.
“It’s hard to pass up these kinds of deals in tough times,” said Michael Starr, who oversees the properties as executive vice president and general manager of Terrible’s Primm Valley Resorts. “People are appreciative.”
And it’s helping make money for Herbst Gaming, which owns the casinos and is struggling under more than $1 billion in debt.
Herbst filed for Chapter 11 bankruptcy protection in March, in part because of debts the company accumulated to purchase the Primm casinos in 2007 from MGM Mirage at about the worst possible time.
While other Herbst business segments founder, the Primm casinos in May — the most recent month for which figures are available — generated a $127,372 profit, helping to offset recent losses. The question is whether the sister casinos can continue to make money for their new owners when the bankruptcy dust settles.
The Herbst family will lose the casinos to lenders in bankruptcy. After wiping out $330 million in bond debt and a big chunk of $847 million in bank debt in bankruptcy, the lender-owners are hoping to make a profit on the three casinos after they get regulators’ approval to take ownership of them.
Starr, a gaming veteran who was brought in by Herbst last year, doesn’t know what his role might be when the lenders take over. In the meantime, he has more work to do.
“It would be too easy to give up,” Starr said in his upstairs office at Buffalo Bill’s, distinguished for its desk of tooled leather and a cowboy mannequin that comically yet inconspicuously wears a yarmulke atop his wide-brimmed hat. “We’re not going to surrender. You’ve got to hustle every day and not be afraid to try some things that don’t work.”
His strategy includes:
• Operating the three hotels as separate wings of one hotel — and on slow nights, diverting guests to Buffalo Bill’s, the largest of the three. It not only saves money but, by consolidating customers in one casino, triggers more spending.
• Marketing more to locals with aggressive discounting. This summer, the properties offer “freecations” for locals, including two free nights, $50 in slot play, two-for-one buffets and golf rounds, free passes to attractions and two free alcoholic drinks. Locals now make up at least 30 percent of the casinos’ business, compared with only 10 percent a year ago, Starr says.
• More frequent headliners and bigger names such as Reba McEntire, Aretha Franklin and Snoop Dogg, as well as niche entertainment such as boxing, mixed martial arts and lucha libre, or Mexican wrestling. Buffalo Bill’s can book big acts for midweek appearances before or after Strip shows, at a significant discount. The goal is to attract a more diverse crowd than the typical Strip hotel.
Whiskey Pete’s, the first of the three state-line casinos, opened in 1977 as businessman Ernest Primm’s way of capturing money headed for Las Vegas. He passed on the business to his son Gary, who opened Primm Valley in 1990 and Buffalo Bill’s in 1994 — at the time of a major resort expansion on the Strip. Isolated in the desert, the properties were always known to undercut Strip prices with big deals.
Freebies and discounts are as old as the casino business. But they aren’t for the faint of heart, nor are they entirely embraced by the industry.
“It’s a risk, sure,” Starr says. But the strategy pays off, he says, because people spend money elsewhere in the casino — and make return visits. The lower the prices, it seems, the more frequent those visits tend to be.
“People like free,” he said. “We’re introducing new people to the property. Getting them to come back is easy.”
Because of the large fixed costs involved in running a gaming hotel — and a desire to keep as many of the casinos’ 1,000 workers employed as possible – it’s better, Starr said, to fill a room for a few bucks than not at all. Unlike Strip resorts, the Primm properties have no hang-ups about pricing — and no upscale image to protect.
“I have yet to make money on a vacant room in this business,” Starr said.
The various marketing gimmicks and an ambitious radio and print advertising blitz may explain Buffalo Bill’s 98 percent occupancy rate Sunday, as well as the property’s hundreds of same-day Sunday reservations — many from tourists who canceled reservations on the Strip when they heard the deals.
Even in bankruptcy, Herbst is spending a few million dollars on strategic upgrades, including a new reception area, remodeled rooms and a spa with 13 treatment rooms at Primm Valley.
A spa may seem counter to the no-frills image of the Primm casinos, but Starr says it’s the amenity most requested by customers and will be another revenue source.
“This is a pretty easy business to figure out,” Starr said. “Customers will tell you what they want.”
The bankruptcy courts work and so does competition. They should have done the same with the auto companies. Instead they were stolen and giver to the UAW.
Free or inexpensive rooms, free or inexpensive food - what a concept! I'm surprised casinos haven't tried this before. Add some friendlier slots and I think this business model may be a winner.
"Customers will tell you what they want." Obviously this Michael Starr guy doesn't work for MGM or Harrahs. Nice work, Michael. You are right on!
Right on Primm!! Good Job!!
I especially like to hear that you are not laying off your 1000 employees and you still cleared $120K in May after expenses!
Congo-rats to all!!
My family just took advantage of this last weekend. WHAT A DEAL!
Primm has a lot to offer and this deal just made it all worth while.
While we left behind $50 or so it was 50 bucks they wouldn't have typically got out of us.
Go Primm.
"The bankruptcy courts work and so does competition. They should have done the same with the auto companies. Instead they were stolen and giver to the UAW."
Don't worry. The UAW won't be able to operate them profitably either. Then there will be a second bankruptcy where they labor agreements will really be torn up and the system will be set right.
Cheap prices and gambling are one thing. You can get that in North Las Vegas along with the Fremont St. Experience. Along with dozens of hotels to walk around in.
When I first saw the Primm properties I thought they would have an exceptional challenge to turn a profit. Will they be able to pull themselves out of bankruptcy? Who knows? But one thing I do know is if there is one person who could meet that challenge, it is Michael Starr. I first met Mr. Starr when he was at the Luxor just after it opened and have not forgotten the impression he made on me. He was a dynamo of energy and smart too. But contrary to the image of many high-powered executives, he is one of the nicest people you will ever meet. Good luck to you Michael!
these places can also take a lot of money from the strip by doing "niche conventions and shows" that don't work economically in the larger venues like guitar collector shows, hot sauce tastings, orchid growers, etc.
they might only bring in 100 people, but 100 people in primm is a lot of people and they spend money!
When I was there in May I noticed that the ambiente and atmosphere inside of the shopping center adjacent to one of the properties remdinded me of a cemetery. A few stores were already closed or going out of business, so nobody really knows what it will looks like in 1 year from now. It would be sad if this entire casino "village" would have to shut down some day. After all it's always a nice trip out there and doing the roller coaster is always a new challenge for me.
The casino with the roller coaster is definetely the most important and best casino of all the 3. I was a bit disappointed because right on the day when I went there (it must have been a mid week day), the roller coaster was closed and there was hardly anybody in the casinos. It was really frighteting if you think that they also have to survive somewhat. But how if there are no gamblers?
Super cheap rooms or rooms for free plus free slot play and free food is fine as long as the people who are invited also come to play at least a little bit. If they only get there to collect the freebies, all promotions will only increase the debt load and will force to shut down the doors for good some day.
From Switzerland
sounds like goingbust wants everyone to be busted. another corporate lacky. race to the bottom with these folks.
casino on strip have high price alcohol
I discovered the 95 cent "Jackpot Special" breakfast just after Primm opened for business and have made it a point to at least visit the properties every trip. It always amazed me how quickly the employees recognized repeat customers by name. Your business was obviously greatly appreciated. One well known standout was "Mo" Bill Mosley, a long time employee from Primm's Gardena card room days.
After the California gaming law passed, share prices in Nevada gaming took a nose dive, especially Primadonna. But based on what I saw, the negativity was unwarranted. The properties were often sold out.
Desert Horseback outings, chili cook-off contests, camel and ostrich races, the Desperado, and other fun things to do kept people coming back. Along with the truckers, dozens of tour buses made Primm their destination.
The investment opportunity was too good to pass up and I loaded up on shares. Apparently Captain Kirk at MGM had the same outlook and bought out Primm's interest.
MGM management of the three casinos was a disaster. The neglect was obvious. Poor food quality and dirty rooms, stingy slots, less favorable odds on table games. I sold while the getting out was still good.
The Herbst management didn't seem to be doing much better.
I was there this week for the slot tournament. 622 player showed up for the freebee chance at the $5k first prize. That meant over 1,000 customers eating and gambling during the three night stay. I also sensed that something had changed regarding the management.
Thanks to the article, I now know why. The difference is Michael Starr's management style of having employees interact in a more positive way with customers. Make customers feel appreciated. That's the "old school" that built the industry and the casino operators would do well to not forget that.
Primm, you might want to work on improving your food and service at the Primm Valley location. We went to your cafe and we won't be back.
Is there a lesson to be learned here ?
Over the years, We've made many stops at the Primm Casinos. (Remenber Kactus Kate's?) Sometimes staying on the first night of a trip to Vegas from California to take advantage of the less expensive room rate. Other times staying for several nights and driving in to Las Vegas for the day. Many times just stopping in for a meal or to see the Bonnie and Clyde car. They've always been a goos place to stop. The Jean casinos also offered great value. It is nice to hear abour a gaming business turning a profit (Although a tiny one)this day in age. Of course, if millions in debt were wiped out by bankruptcy can it really be called a profit? Regardless, We'll be stopping in soon for a visit.