VEGAS MYTHS BUSTED: Casinos Have Closed As a result of They Could not Pay Winners
What was the title of that on line casino that shut its doorways as a result of it couldn’t repay an enormous jackpot? You already know the one we’re speaking about, proper? It’s, oh yeah…
AI’s rendering of a on line casino closed attributable to a jackpot. (Picture: Chat GPT)
NO CASINO EVER.
Essentially the most generally cited instance of this fable is the Thunderbird On line casino, which was positioned throughout the Las Vegas Strip from El Rancho Vegas.
It did go bust on Sept. 2, 1948, when its homeowners (LA constructing developer Marion Hicks and Nevada Lt. Gov. Clifford Jones) didn’t have adequate money readily available to cowl a successful streak of $145,000 on the craps tables.
The Thunderbird Lodge went bust on opening night time, however remained open. (Picture: The Mob Museum)
That actually made for, by far, the worst opening night time in on line casino historical past.
Nevertheless, simply because a on line casino goes bust doesn’t imply it should shut. And that’s as a result of a on line casino continues to be often a worthwhile enterprise — particularly a model new one — even when its present homeowners can’t sufficiently bankroll its losses.
“What many individuals don’t perceive about randomness is that it consists of each cold and hot streaks,” Anthony Lucas, a professor of on line casino administration at UNLV, informed On line casino.org.
“Within the quick time period, gamers can seem to play each fortunate and unfortunate. But when they proceed to play, the on line casino’s long-term benefit will ultimately be realized.
“There’ll all the time be huge winners and massive losers. However the long-term internet impact will favor the home.”
Right now, measures are in play to stop casinos from going bust. (We’ll get to these later.) However even again then, it was all the time simple to seek out somebody prepared that will help you save your completely good on line casino operation. That somebody was incessantly a person sporting an costly swimsuit and fedora hat, and the assistance he provided was virtually all the time money.
Solely Meyer Lansky’s money wasn’t a mortgage. The New York crime boss provided an funding within the Thunderbird. And, in change, he took majority possession, leaving Hicks and Jones with simply 20% between them.
Casinos can and do shut for good, like companies in each different discipline, however not simply because a number of folks occur to win huge one night time.
The Hen Cage, on the nook of Fremont and 1st streets downtown, sported a 10-foot excessive birdcage with three-foot pink cube hanging inside it. (Picture: nevadagaminghistory.com)
The Hen Cage
One other Las Vegas on line casino generally reported to have completely shut its doorways attributable to a run of unhealthy luck was the Hen Cage, which opened at 100 E. Fremont St. downtown on Jan. 1, 1958.
In response to the Twitter/X account @HistoryNevada, it was “pressured to shut” after a couple of 12 months “when it was unable to pay its jackpot winners.”
Once more, not the case.
The Hen Cage closed, on April 30, 1959, as a result of it by no means discovered monetary success. After failing to persuade the Gaming Fee to permit the on line casino to put in extra Keno machines to draw new clients, co-owner Maurice Fortney informed the Reno Night Gazette {that a} lack of enterprise didn’t warrant maintaining it open.
Any on line casino that goes out of enterprise does so attributable to a sequence of unhealthy choices and/or unfavorable market circumstances,” Lucas mentioned.
This may be troublesome to wrap the mind round. In spite of everything, the very phrase “break the financial institution” was coined to explain what occurred in 1881, when English roulette participant Joseph Jagger gained $350K on the On line casino de Monte-Carlo — greater than it had readily available — due to a sequence of inconceivable wins.
However whereas Jagger certainly broke that on line casino’s financial institution, it was not due to random good luck. He occurred to be a genius who found that some roulette wheels of the day featured slight imperfections that favored some numbers greater than others.
The On line casino de Monte-Carlo didn’t shut after its financial institution was damaged, both. It’s nonetheless open to at the present time.
Wynn Wins Shuttered Desert Inn
In response to Kerry Packer’s Wikipedia web page, the late Australian media tycoon closed down the Desert Inn “by successful 52 million {dollars} in at some point and insisting they pay him in money.” Wikipedia cites as a supply an interview with former PGA golf professional John Daly on the Full Ship YouTube podcast.
As soon as once more, not true.
In 1998, when Starwood Resorts bought ITT Sheraton, Desert Inn’s proprietor since 1993, its first order of enterprise was placing the on line casino resort up on the market. The Desert Inn had been bleeding cash for years attributable to a sequence of unlucky enterprise choices, not as a result of anyone gambler gained an excessive amount of.
Steve Wynn purchased the Desert Inn for $270 million in April 2000 simply to shutter it 4 months later, however solely as a result of he had already deliberate to construct the $2.7 billion Wynn Las Vegas with a portion of the $4.4 billion he had simply constituted of promoting The Mirage and Treasure Island to the corporate that turned MGM Resorts.
Different accounts of Packer’s huge Desert Inn win state solely that it closed down the on line casino “that night time,” which is totally attainable.
Why Can’t it Occur Right now?
Trendy measures are in place to isolate casinos from the consequences of catastrophic playing losses, and none of these measures wears a swimsuit and fedora. They embody:
- Most Guess Limits:
These make breaking the financial institution unlikely or unattainable. - Backing Winners Off:
Although a on line casino should by regulation pay winners each single cent they’ve gained, they’ve the appropriate to name it quits on anybody at any explicit time. In 1997, Australian media magnate Kerry Packer gained someplace between $20M-$40M on the MGM Grand in Las Vegas, most of it whereas enjoying blackjack.On line casino executives backed him off the sport, fearing he was extra capitalized than they had been. “You need as many gamers as attainable to wager as a lot as they’ll,” Lucas mentioned. “However you don’t need a few gamers to wager far more than everybody else. These outliers can wreck the on line casino’s revenues and/or earnings, as their outcomes outline the on line casino’s efficiency.” - Different Reserves:
It has typically occurred that the gamers win all the cash a on line casino has readily available. On this unlikely state of affairs, the on line casino covers its loss with reserve money saved elsewhere, or outdoors lenders who would shortly fork up the money, realizing they’ll be paid again for the reason that on line casino would shortly return to earning profits once more. - Insurance coverage:
As a result of there’s nonetheless some astonishingly small probability {that a} catastrophic playing loss can happen, virtually all casinos carry insurance coverage in opposition to it.
By the best way, Lansky and his associates skimmed a lot of the Thunderbird’s take that it didn’t make a revenue or pay a dividend till the mobsters had been pressured out in 1956. However even then, the Thunderbird continued working.
It turned the Silverbird within the late ’70s, then El Rancho (not the unique) within the ’80s earlier than closing in 1992 — attributable to an absence of enterprise, once more, to not a catastrophic playing loss.
And the plot of land the place the Thunderbird as soon as sat now hosts a brand new on line casino resort whose monetary future is, not too dissimilarly, the topic of rampant hypothesis.
Its occupant is the Fontainebleau Las Vegas.
Search for “Vegas Myths Busted” each Monday on On line casino.org. Click on right here to learn beforehand busted Vegas myths. Acquired a suggestion for a Vegas fable that wants busting? Electronic mail corey@on line casino.org.
