The last time I experienced a milestone in age was when I turned 40 years old. To celebrate the occasion I jetted to Las Vegas with both my partner and my best friend from high school. On one of our days in the city we walked through downtown on Fremont Street.
Street performers and costumed eccentrics were there, entertaining, and posing for photos. This ran the gamut of a duo who breakdanced to rap music blaring from their boombox, to another pair dressed up as Peter Criss and Ace Frehley of KISS, both in ass-exposing thongs. During our people watching we came across the exterior of a casino called simply “The D“. At one of the entrances was a cardboard standee, with an image of a hefty man in a power-suit, driving a sports car, with a beautiful blonde in the passenger seat. The copy above read “Win Derek’s Vette!”. I thought nothing of it until I walked into the casino, looked to my right, and saw the same guy sitting at the longest bar in Vegas (at least, according to The D). He was surrounded by a gaggle of men that appeared to work for him, smiling at everything he said, laughing at his jokes and basking in his aura. I immediately walked up to him and asked, “Are you the ‘Derek’ that’s pictured on the ad for ‘Win Derek’s Vette’ outside?”
“Yeah, that’s me! I’m the owner of this casino! I also own The Golden Gate down the street.” he replied.
I shook his hand and introduced myself. He did as well. “Derek Stevens! Nice to meet you.”
I then took the opportunity to ask if he’d be up for doing an interview for my site, explaining that I like to learn more about interesting people in different fields of work. He agreed on the spot, gave me his phone number, and asked “What do you like to drink?” I told him I was a beer guy. He then waved the bartender down and directed him to pour a draft of a new citrus ale they had on tap, as well as a featured lager. He couldn’t have been more gracious.
A couple of weeks later we were on the phone, discussing his history of entrepreneurship and the ins-and-outs running casinos in the gambling capital of the world.
Thanks for doing this. I truly appreciate it.
No problem. I’m glad to do it and thanks for getting up early here. I know you being on the West Coast and me being on the East Coast, it causes a little bit of scheduling conflict, but thanks.
Yeah, no problem. I just wanted to have a chance to talk with you and get inside the head of the person that runs a casino, a business owner. My website, I mostly have artists on there, but I met you briefly at The D and I see what you do in a sense. You are an artist, in a way, as a business person. The D is an expression of you. I’d like to talk to you about your career, what got you into the business and what things inspired you to be a businessman. One of the first things I wanted to ask you was where did it all begin for you? When did you know that your path was going to be as a businessman?
I would say I started off at the University of Michigan for my undergrad and then I got a job in downtown Detroit in the automotive parts business and I worked in the heat treat facility. While I was working at a heat treat facility, I got my MBA in night school at a place called Wayne State University, which is in downtown Detroit. Ironically, I happen to live near Joe Lewis Arena where the Detroit Red Wings play. I would leave my work during the day, I would head home, and I was wearing a suit. Oftentimes I had people say “Here take these tickets. You live down by Joe Louis [Arena].”
I’d be wearing a suit and I would head out to around Joe Louis and ending up scalping tickets. I was the only ticket scalper wearing a suit who was in my early twenties and it turned out to be something interesting to say. I had a number of people gravitating towards me about buying and selling tickets so I did that easily for about 45 minutes every night. Then I went off to grad school because the Red Wings games started at about 7:30 and my classes started at 7:30, so I was able to get down there about 6:45, scalp a few tickets and make enough money to justify it.
That started me off as more of a hustler kind of guy. Before that, I was a valet parker for four years and I always noticed that whenever you ran in front of a customer the odds were your tip was going to be better. That was the same thing when I was scalping tickets. I’ve always been more of a hustler kind of a guy and I would say that probably set me on the path between the formal education and the street education that blended together for me.
Where there any specific people who inspired you growing up?
I always had a top ten list of various people that I thought were pretty interesting. Coming from Detroit, I’m maybe a bit more automotive biased, but I was always enamored, if you go way back with Henry Ford and then Henry Ford II. In a more recent day, Lee Iacocca was always one of the top guys that I always was very enamored with, phenomenal businessman and also a phenomenal leader and a marketer as well. He’s really the guy that single-handedly saved Chrysler from going out of business when he did the deal with the US government to keep Chrysler afloat.
Actually the baseball team was in Las Vegas. What happened was in 2006, I decided to get into the casino business. My brother and I purchased 50% of The Golden Gate from the owner at that time, 100% owner, Mark Brandenburg. Mark is still my partner at The Golden Gate to this day, a real smart guy, and has certainly been a mentor to me in my foray into Vegas. While I was getting licensed because it’s interesting that you just don’t apply for a casino license. You have to be requested to apply for a casino license, and you’re only requested if you have a pending transaction.
On Wikipedia it says you used to own a baseball team in Detroit and then you transitioned to owning the Golden Gate Casino with your brother and then The D as well. How did that all come about? How did you go from owning a baseball team to owning a casino in Las Vegas?
After I reached agreement to buy 50%, it was only at that point in time did my licensing process start. It took me about 18 months, which is about standard I would say these days for your first casino license. While I was going through the process of licensing, the Las Vegas Triple A baseball team came up for sale. After talking through it and thinking through it, we decided to move forward with that transaction. I actually owned the Triple A team in Vegas for six seasons. We covered three affiliates.
My first year, we were the Triple-A team for the Los Angeles Dodgers. Then we were four years as the Triple-A team for the Toronto Blue Jays. Then we’ve been the New York Mets Triple-A team since then. I just sold the team last year.
I’ve been going to Vegas since I was a kid. One thing I’ve noticed about Downtown is the transformation it’s had over the years, especially Fremont Street. Your casino embodies this too–it seems to have more of a younger vibe to it. What was the whole art direction, the look and the feel of that casino? How much influence do you have over that?
Let me go back to Golden Gate. This was an interesting story. I’m big into differentiation and creating something that can theoretically create a long-term competitive advantage and the one thing about The Golden Gate that I loved was the fact that it’s located on the corner of Main Street and Fremont. The address is One Fremont Street. It’s the oldest building in Vegas. Those are things you can’t really replicate. That was really my attraction to Golden Gate.
When I bought it, there really wasn’t a whole lot of action in the place after 9 PM. It was more of a slot crowd. We had a piano player during the day and early into the evening. The volume really wasn’t tremendous. The table game limits were $200. I thought that the ability to bring in some additional table play and come up with another concept would enhance the value of Golden Gate. To a great degree, I sat there at the end of the bar, and the Prohibition Bar, and I’d sit, and I did it multiple times.
I sat there with some Starbucks Coffee for a 24-hour period just trying to watch the ebb and flow of people coming in, people going out, how the hotel impacted the tables and whatnot. After doing a few 24-hour around-the-clock stents, sitting at the end of the bar on various days of the week, sometimes on the weekend, sometimes during the weekday, it really didn’t take me very long to figure out–and this is not rocket science by the way, this was just something simple– that the demographic at Golden Gate was of an age that they really weren’t out past 9 PM.
For me, I wanted to try to enhance the business from let’s say 7 PM till 3:00 in the morning. I figured I had a great opportunity because I had nothing to lose, which is a huge advantage. When you’ve got nothing to lose, you’re willing to try a few different things. That’s how we came up with the idea of playing the music a little bit louder, bringing in some of the more sexy dancing dealers and playing a music genre that was more oriented towards some younger people. Frankly, I just needed to have people that were awake at that time.
I needed to make sure I had to attract people that going to be awake at 11 PM on a Thursday night, or a Saturday night, or something like that. That’s really what happened was just simply trying to address, trying to think who’s awake at 11 PM. Let’s try to go get them.
What have been the greatest obstacles in your career?
Career-wise, I would say just the importance of developing the right management teams. I’ve been fortunate. I really try to surround myself with some great people with that are willing to work, and work extraordinarily hard, and I would say just making sure that we always got the right management team with the right amount of energy and focus. I would definitely say my businesses would be orientated around guys and women that are high energy, high focus, and aren’t watching their watch. I’d say for me that’s the most important thing.
What have you learned from your experience operating casinos?
The funny thing is people ask “You’re in the auto parts business, now you’re in the casino. Isn’t that really risky?” Realistically, the auto parts business is far riskier than the casino business. I would say both are tough businesses. Casino business is, I’d say, a uniquely tough business. It’s definitely a business where I think maybe there’s somewhat of a misconception that all casinos just rake in the money and all that. But what people don’t understand is you’ve got 1,000 employees; you’ve got to put a paycheck out.
There’s an awful lot of payroll that goes out and there’s a lot of maintenance that goes out. I’ve got to spend hundreds of thousands of dollars every 6 months just on changing carpets. You’ve got to spend hundreds of thousands of dollars every month on new slot machines and the light bill is amazingly high. The cost to put air-conditioning in a property that’s 34 stories–it’s pretty significant when you’re running five thousand dollars a day in air-conditioning costs. There are a lot of costs in running a casino, and you’ve got to balance the way you market, and you’ve got to get the volume of people in, but there’s an awful lot of expenses with a casino too.
If you could go back in a time machine and give advice to your younger self, what would it be?
I would just say I’m a big fan of environments where you learn through doing, you learn how to hustle. You’ve got to be smart about what you’re doing. I would say I was thinking about not going back and getting my MBA. In retrospect, I’m real glad I did it. I actually learned enough that helped me in my career, so you’ve got the formal element covered, but I would say all these MBAs and all these guys with these great degrees, you’ve got to be able to be a hustler. You’ve got to be able to figure out what’s going to sell.
You have to be able to adapt to the times. Hell, when I started my career there weren’t even cell phones. I guess that tells you how hold I am. Then you go with the cell phone and then you have smart phones and now everything is so different that you’ve just got to be able to adapt with the times. If you get stuck in one place at one point in time, you really get locked in. You just don’t ever want to lock yourself in. Stay adaptable. Stay up with technology. Stay up with pop culture. Stay up with politics and adapt to a changing environment.
When I first met you on the casino floor it looked like you were doing all of your meetings from the long bar, from a machine at the corner. Is that how you run your day usually? Do you do all your meetings and stuff basically in the line of sight of customers?
Really what it is, is all the regular business meetings and the scheduled meetings, they all happen during the day and they all happen in the conference rooms or in the offices. But come 5:00 PM on a Thursday, Friday, Saturday, I end up heading down. I try to let everybody know I’ll be at the end of the long bar and come down and see me and we’ll have a drink, that type of thing.
The reality is is that with all my staff, I really don’t have the ability to get with them all the time, so I’ll send out six, eight, ten texts saying I’m down at long bar, meet up with me, just if we’ve got a five minute thing we’ve got to talk about here and there. Scheduled once-a-week meetings are OK, but the problem is that they’re scheduled and things change all the time. You’ve got to be quick about it.
You’ve got to be able to make calls whether it’s about an entertainment deal or whether it’s about a, we’ve got this group coming in, they want to reserve some seats or we’ve got to get a crap table going for these guys, they’re going to be here in an hour, there’s a lot of last minute stuff. I like texting my guys and the fact that they’re always around is good. On any given Thursday or Friday or Saturday, yeah, I’ll have 30 two-to-five minute meetings or something like that in a given night with our crew.
What are your dreams or visions for the future of your stake in Vegas?
The great thing about Vegas is if you do well, and make a few bucks, you get the red carpet rolled out for you. If you make some bad decisions, you could maybe hang on for a while, and if you make some horrible decisions, then you’ve got to walk out of town with your tail between your legs. For me, I didn’t really come to Las Vegas to own a portion of The Golden Gate or get a second casino. I’m interested in growing the business. I’m very accustomed to growing my businesses.
I like it because that’s the environment I’m more comfortable in and it’s an environment where it gives me an opportunity to provide upward movement for a lot of my staff, giving them more responsibility, and obviously compensation goes along with it. I’m very interested in trying to grow my business.
It’s been years since I conducted this interview; so long now that I’m edging the age of 50. I’ll likely go to Vegas for that birthday as well. If so, I’ll be looking for Derek at The D.