Q&A: John Repetti

By Richard N. Velotta

Friday, Feb. 19, 2010 | 3 a.m.

John Repetti has seen downtown Las Vegas’ ups and downs for decades.

Repetti, senior vice president and director of operations for Boyd Gaming’s downtown region that includes the California, Fremont and Main Street Station, first worked for Boyd in the 1970s as a dealer at the California after moving to Las Vegas following a tour in the Army.

Boyd’s downtown properties have had to change the way they vie for customers in the recession, even though the company has a solid grip on the Hawaiian market, thanks to corporate patriarch Sam Boyd pouncing on opportunity as a Hawaii resident 35 years ago.

Repetti saw the transformation of downtown with the Fremont Street Experience when gaming legends Boyd, Steve Wynn and Jackie Gaughan strategized on downtown’s future.

Repetti talked with In Business Las Vegas about the Hawaiian market, downtown’s most recent transformation and the prospects of Boyd acquiring Station Casinos.

IBLV: How has Boyd Gaming changed or stepped up marketing to keep people coming to the downtown casinos?

Repetti: I think the biggest thing we’ve done over the past 12 to 18 months is stepped up our database marketing. We have tripled the amount of direct mailings to our customers.

Besides fewer people visiting hotels and casinos, those visiting are spending less. How much has that amount per visitor declined for Boyd? What are you doing to boost it?

It has been reported widely that that is the one thing that has happened. People who come to Vegas are spending a little bit less than they did before. We try different approaches. We’ve been trying to give people additional complementaries. Maybe we use NASCAR a little bit more than we have in the past. Maybe we use the rodeo that was just in town. We use our box at the Thomas & Mack Center as an incentive to bring people in. The No. 1 thing we do is “slot dollars” (noncashable, nontransferable slot machine credits). We’ve been giving out more slot dollars to customers to bring them in the door. Give them some money to start playing with. We’ve been giving more slot dollars — which is our money — to get them started.

Have you seen or do you anticipate any effect from CityCenter? Construction workers went away, but now 12,000 hotel and casino workers have jobs. What does this mean for Boyd?

Anytime something major opens in town, usually that’s a very, very, very good thing for the whole town, and downtown gets its share of those visitors coming in from places like Kansas, New York and Chicago. As far as us seeing any immediate effect from that, I can’t really say that we’ve seen a tremendous uptick from the last month. But any expansion is good.

When does the company expect a turnaround and a sustained period of rising revenue?

I wish I could say that the calendar turned and all of a sudden 2010 will be a better year. We don’t have a crystal ball. I know I certainly don’t. I’m asked that question a lot. I would hope in the second quarter of ’10 or the third quarter of ’10, we’ll start to see a rebound in Las Vegas. We’re starting to see that in other parts of the country. We’re a little behind and hopefully will start seeing that uptick.

Obviously unemployment and foreclosures locally hit record levels, affecting your results. Were there other economic factors that affected Boyd?

When you talk about unemployment in Nevada, record levels, that affects our local properties. It affects us as well. We do some local business downtown. These challenging times aren’t only affecting Las Vegas. We do a lot of business in Hawaii and there’s been a downturn in that state with its tourism, and its tourism drives our properties. We have customers from Hawaii who work as maids and restaurant employees, so any downturn in Hawaii is going to affect us as well.

Is business down the same across the board or have certain parts of town and certain properties been hurt worse than others?

What I’ve heard is that some of the local properties, Strip properties and some of the marginal properties, are feeling the effects a little bit more than others. Certainly downtown’s numbers haven’t been the greatest over the last reporting periods, but I think it’s across the board.

Have you actually lowered prices to induce more people to visit your casinos? Are food and beverage and entertainment prices down and have the slot payouts been adjusted to give the players a better value?

Let’s start with the slots first. Typically, downtown offers some of the loosest slot machines in Las Vegas. So it’s very difficult to make that more appealing.

When you’re playing a poker machine, that’s a 6/9 program (a payout percentage formula), there’s not a lot you can do to the program to make it looser. You can go 6/10 and basically have a very, very small hold percentage. Slot machines, for the most part, haven’t been touched.

Food and beverage, every meal we serve we basically lose money on. You can get a beer downtown at any of the properties for about $2 for a Corona. When you compare that to a Strip property that is charging $9, $10 or $11 for a beer or $15 for a mixed drink, we already think we have great value.

Rooms will probably be the one area where across the board Strip properties lower their prices, forcing local properties to lower their prices, forcing downtown properties to lower their room rates. So that’s the one area where we’ve seen a tremendous value for the consumer when it comes to the room rates in Las Vegas.

Are you doing more with direct mail and your database? Or is more of the budget going to mass media — television, radio, newspapers and billboards?

The downtown properties don’t do a lot of mass media. We don’t do billboards, we don’t do television. We focus our attention on database marketing as well as something called News at the Cal. It’s our own magazine that goes out to about 80,000 people, primarily from Hawaii. We advertise winners in there and what we have to offer downtown over the other people.

What are you doing with social media, such as Twitter and Facebook? Is there much of a future there for Boyd?

There’s probably a tremendous future for social media. For downtown, we’re a little slower than the rest of our company. Borgata (in Atlantic City) and Blue Chip (in Michigan City, Ind.), some of our bigger places, are doing more with it. We have a corporate staff that handles that. For downtown, we’ll be a little behind everybody else.

As the economy rebounds, what advantages does downtown have versus the Strip and locals’ places? How is Boyd positioned to take advantage?

I think Boyd is very well positioned downtown with three properties. We’re the only owner with three properties. In these challenging times, people have been exposed to downtown. People have a little less money in their pockets than they have in years past. They come downtown for a value. Once they see what we have to offer, when the economy starts to rebound, a certain percentage of those people are going to become steady downtown customers. At the end of the day, I think we benefit.

Does the company view its downtown properties as mainly visitor properties for markets like Hawaii or is there a strong local component? About what percentage of your customers are local versus out-of-town visitors?

Each of our properties is set up just a little bit differently. The California Hotel with its 800 rooms is primarily a Hawaii hotel. But each has a mix of three different groups of customers: in-house guests from Hawaii at all of our properties; tourists who stay on the Strip and come downtown; and then we have a very strong local following, especially at Main Street Station.

Why Main Street Station?

It just started that way. Main Street opened up as a locals’ property with what I think is one of the best buffets in Las Vegas. Certainly ambience and food quality is second to none. We know Main Street Station has an appeal to the local population.

You’ve referenced Hawaii numerous times. How did Boyd get to be so strong with Hawaiians?

It started with Sam Boyd 35 years ago. He lived in Hawaii and knew that the people from Hawaii like to gamble. We were able to maintain it for 35 years because we’re dedicated to the market. We believe in the market. The customers there believe in us. We’re not one of the operators that are in Hawaii this month and are out next month. Our food offerings include sticky rice, Spam musubi, butterfish and lau lau. Some of our restaurant décor is set up with a Hawaiian theme. It’s been extremely good for us and we’re proud of the fact that we are No. 1. We know there are people who are always on our tails trying to get that market, but we’re not ready to give it up. One of the benefits for me is that I get to go to Hawaii once in awhile for the company. When I go there, I’m just thankful that Mr. Boyd didn’t decide to live in Montana.

Does Boyd Gaming have any acquisition plans for downtown?

In Boyd Gaming, everybody knows that Mr. Boyd’s a buyer, not a seller. As far as other properties, I can’t tell you from a company standpoint what we may or may not be looking at, so I really don’t know. But I know Mr. Boyd is a strong believer in downtown and I know we’ll continue to look at opportunities as they present themselves.

How about expansions or refurbishments?

I think that’s the difference, our room quality. Every six to seven years, all of our rooms downtown are remodeled, from carpeting to wallpaper and flat-screen TVs, whatever it takes in the room. We may start, for example, maybe the west tower of the California Hotel will be in 2011, and the east tower will be in 2012, and the Main Street Station will be in 2013, and the Fremont will be in 2014. And then we’ll come back and start over again at the property where we left off.

Have you been able to maintain that during the bad economy?

Yes, the last one we did was the Fremont two years ago. So I think in one more year, we’ll be due for the California’s west tower.

How has the competitive environment changed with Binion’s hotel closing? Has it changed as a result of Golden Nugget’s new tower?

Anytime you lose rooms in an environment where rooms are a part of your business, it’s going to affect you. Nobody wanted to see Binion’s rooms close. We’re all excited about the Golden Nugget rooms opening up. More rooms downtown benefit everybody. A visitor to Las Vegas does not normally stay in one building. They tend to go from property to property. So our customers walk downtown. Their customers — the Horseshoe’s, Fitzgeralds — they walk into our buildings.

With some downtown properties struggling, do you think there is too much capacity downtown?

No, I don’t think capacity is an issue. Consumers downtown just have a few less dollars in their pocket. For example, on New Year’s Eve, we had about 25,000 people on the street. On any given weekend, we have 10,000 to 15,000 people wandering on Fremont Street. There are people out there who just have a few less dollars to spend.

What is the redevelopment of the city’s 61 acres doing for business downtown? What will the medical facilities and the Smith Center for the Performing Arts do for downtown?

For the downtown area, those last two you mentioned, the Smith Center and the medical facilities, will help make us a greater city. The furniture market (World Market Center) opened first. When that show is in town twice a year, our rooms at Main Street Station are sold out. I think the Golden Nugget and Main Street are the two properties that those consumers really like. So that’s good for downtown. Plus it’s a new tax base that we haven’t seen. Any kind of redevelopment downtown is good for all of us.

What’s the next big thing for downtown? Is downtown still holding out hope for sports arena?

I don’t think any of us are holding out hope or that we have to have that to succeed. If it were here, we would love it, we would embrace it. Our customers would embrace it. So again, the mayor has done a wonderful job. The mayor is a big supporter of downtown. I personally like Oscar Goodman a lot. He does a good job. I’m sorry he’s term-limited here. If a baseball team were to come downtown, that would be great for downtown. Or, a basketball team.

What’s the biggest thing that downtown lacks? How can that be fixed?

I’m not sure that we’re lacking in too much. We’ve got nice properties. We have great restaurants, Zagat award-winning restaurants — the Second Street (Grill) and the Redwood (Bar and Grill). Hugo’s Cellar is well known. We have good food. We have a safe, clean environment. And we offer people an affordable experience, a fun experience. So I’m not sure we’re lacking anything.

Is there really a market for the proposed city hall-Forest City hotel and casino downtown?

At his State of the City address, the mayor mentioned that casino for one of the first times on that site. Again, anything new — more employees downtown, more tax base — should help. Will it happen? I don’t know. It remains to be seen.

How has the Fremont Street Experience changed the landscape?

The Fremont Street Experience has done a tremendous job changing the landscape. I was fortunate, years ago, to be a part of the Downtown Progress Association when ownership — Mr. Boyd, Steve Wynn, Jack Binion, Brady Exber, Mel Exber, Jackie Gaughan — would sit around a table and they would talk about what we could do for downtown. How could we make this better for all of us? How could we grow this?

At one point, Steve (Wynn) had a proposal to have canals. He was visionary. I think he even flew people to Kauai to see the canals at a hotel there. That idea didn’t float — literally — but what did come about was the Fremont Street Experience and VivaVision, a tremendous addition to downtown.

It’s safe. It’s clean. That’s what the surveys said we weren’t before, that people were afraid to come down here because it wasn’t safe, it wasn’t clean. It’s now safe and clean and you can watch a free show — I think the best free show in Las Vegas. On any given night, there are six or seven different shows being presented every hour. So the Fremont Street Experience has done a tremendous job of bringing people downtown.

Does the company like the Fremont Street Experience the way it is or would it like to see some changes to the attraction to bring more business downtown?

I think we continue to make changes. The light show was upgraded, the addition of Jeff Victor to the team. His ability to produce these shows — better shows than we had before. We would like to see more people getting to come downtown and to see what we have. During these challenging times we are seeing people coming down. People may not have as much money as they had with them before to spend, so they have more time on their hands. They’re coming downtown and they’re seeing what we have to offer.

It’s well known that Boyd Gaming is interested in acquiring Station Casinos. What would Boyd Gaming look like if such a transaction occurs?

I’m not a corporate officer, I don’t have information with regard to the proposed Station acquisition. But if we were to purchase Station Casinos, we would have properties in all parts of the city. We certainly have the ability to run those properties. I’m sure they have very good people in there right now. The addition of Station to our portfolio would make Boyd a bigger player in the locals’ market.

Would a Station or Fiesta-branded casino fit downtown?

Hard to say. The Golden Nugget is a Fertitta property, but not a Station property. And we do own Main Street Station, and people come in all the time thinking we are a Station Casinos property. Station is a very good brand. We’ll have to see what happens.

Would you expect to blend Station properties into the company or do you think it would be a similar structure to when Boyd acquired the Coast Casinos?

Again, hard to say. But what Boyd is, is culture. That’s what Boyd brings to the table. If it were to happen, the Boyd culture would become part of Station Casinos and it would improve on an already good brand.