The Last Casino Mogul

Key Concepts

• Independent Casino Mogul: Derek Stevens’ business model of owning both the casino operations and the real estate it sits on, contrasting with the REIT model prevalent on the Las Vegas Strip.
• REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-producing real estate. Most major Las Vegas Strip casinos operate under this model, leasing their properties from REITs.
• Fremont Street Experience: The revitalized downtown Las Vegas area, attracting a different demographic than the Strip.
• Circa Resort & Casino: Derek Stevens’ flagship property, a $1 billion investment focused on sports betting and a modern, high-end experience.
• Downtown Vegas Gaming Revenue: The increasing financial performance of casinos in the downtown area, partially attributed to Circa’s success.

The Last of a Dying Breed: Derek Stevens and the Future of Las Vegas Casinos

The Forbes report focuses on Derek Stevens, a 58-year-old billionaire and the owner of the Golden Gate, The D, and Circa casinos in Las Vegas, positioning him as the last independent casino mogul in a landscape dominated by Real Estate Investment Trusts (REITs). Stevens’ unique business model – owning both the casino operations and the underlying real estate – distinguishes him from the vast majority of larger operators like MGM and Caesars, who lease their properties from REITs. Forbes estimates Stevens’ net worth at $1.2 billion, shared with his brother Greg.

The Shift in Las Vegas Ownership Models

Historically, Las Vegas was built by figures like Jay Sarno, Kirk Kerkorian, Benny Binion, Steve Wynn, and Sheldon Adelson, who directly owned both the casinos and the land. However, a significant shift occurred with the rise of REITs. These companies, such as those referenced in the report, purchase the land and buildings of casinos and then lease them back to the operating companies. This allows casino operators to free up capital but relinquishes direct ownership of the physical assets. Stevens’ refusal to adopt this model is presented as a key differentiator.

Downtown Las Vegas: A Resurgence Fueled by Circa

While the Las Vegas Strip has experienced challenges, particularly a decline in international visitors, downtown Las Vegas has seen a resurgence. This is attributed to factors like more affordable hotel rates, the pedestrian-friendly Fremont Street Experience, and the appeal of Circa. The report highlights a 36% growth in downtown gaming revenue between 2019 and 2024, with Circa playing a significant role in this positive trend.

Circa: A Destination in Itself

Circa, opened in 2020 at a cost of $1 billion, is described as the “crown jewel” of Stevens’ portfolio and a major catalyst for downtown’s revitalization. The resort is characterized as a high-end attraction, unlike the more dated or nostalgic offerings of competitors like Boyd’s Fremont Casino, the Golden Nugget (owned by Tilman Fertitta), and Binion’s.

Key features of Circa include:

• World’s Largest Sportsbook: A three-story sportsbook with movie theater-style seating, capable of displaying 19 games simultaneously.
• Stadium Swim: An adults-only pool complex heated to 98°F in colder months, featuring a 143-foot-tall LED screen.
• Aqua Theater: Stevens’ self-described term for Stadium Swim, emphasizing its entertainment value.

Stevens confidently states he built “the best pool in the effing history of the world,” demonstrating his showmanship and commitment to creating a unique experience.

Financial Performance and Market Impact

Forbes estimates Circa generates approximately $280 million in annual gambling revenue, representing 35% of all casino revenue in downtown Las Vegas. This figure surpasses the combined revenue of Boyd’s three Fremont Street properties. The report emphasizes that while the downtown growth isn’t solely attributable to Circa, the resort has demonstrably contributed to Fremont Street’s recovery from pandemic-related lows.

The Golden Gate & The D: Foundations of Success

Stevens’ initial investments in the Golden Gate (acquired in 2006) and The D (acquired in 2012) laid the groundwork for his success. The Golden Gate’s nightly happy hour, offering free drinks and potential cash vouchers (ranging from $5 to $1,000), is presented as a successful attraction, even considering the cost of the free beverages. Stevens believes, quote, “Every casino needs its own attraction, and people are attracted to an open bar.”

Conclusion

Derek Stevens represents a unique and increasingly rare model in the Las Vegas casino industry. By retaining full ownership of his properties, he has been able to create a distinctive and successful brand, particularly with Circa. His focus on attracting American gamblers to downtown Las Vegas, coupled with a commitment to creating a high-end, entertainment-focused experience, has positioned him as a key player in the city’s evolving landscape. The report suggests that Stevens’ approach offers a viable alternative to the REIT-dominated model and highlights the potential for continued growth in downtown Las Vegas.