Rob Goldstein: Inside the Operator Playbook of Iconic Resorts

Don't worry, they're flexible. The summit is wonderful.

You're very kind.

I think it's excellent. It's almost right.

Actually, just to clarify, I've been 30 years just in Las, over 30 years just with the Sands Group. I've been doing this for, I'm 70 years old. I started in the industry when I was 20, 23.

By mistake. So in Las Vegas for 31 years.

Yeah. I didn't want to, I didn't want to age you here.

Always a pleasure. I like coming downtown. Brings back great memories of yesteryear. It's still kind of a fun place to be, isn't it?

We pretend to have all three. Wisdom, insight, and brilliance, but go ahead, Gary.

It was not meant to be. It was not my career path. Without boring the details, I grew up in Philadelphia as you referenced before the show in a small town in Bucks County called Trevose. My dad, who was a very special and I still think about him all the time, he's long gone, he died in 1978. My dad was a typical entrepreneur, small businessman. Not entrepreneur in the sense of the big sense of the word. Small little businesses, diners and roofing companies, anything. He didn't have education or capital. So, we had to survive. And I grew up in that environment. Long story short, my dad had two bad habits he told me. One was a lot of cigarette smoking. The other was gambling. And when I grew up, my dad constantly, they were playing poker. They played golf. They were hosting crap games in our basement. They all gambled. It was all honestly ethnic people, you know, Italians, Jews, Greeks in my neighborhood. And my dad did very well for that time. And when he did well, he wandered over to Las Vegas, which became one of his favorite things in the whole world.

I'm talking 19, I would say my dad started to Las Vegas in the late 60s.

I was a little boy. I was a teenager. I was 12, 13. And my dad got in over his head gambling at the Dunes Hotel like many other rogues of the time and he owed them more money he could afford to pay. And very bluntly, they came to my house as a kid and told my father that he owed money and he couldn't pay the money and they said to him, you know, you would think now it turns ugly into violence. Not whatsoever. It was actually a very pleasant conversation. They offered my father a job, as he put it, helping them recruit other people like him, which was code for other degenerate gamblers. My father became a junket rep in the late 60s. I was a kid. And my neighborhood became somewhat infamous because Las Vegas was known to be less than, you know, clean. There's questions about. And so my dad became a gambling junket rep, which he loved because it now enabled him to go to Las Vegas constantly and gamble more. And like most things my dad touched, he got very good at it. And within a year, he was running a gambling group every month, 150 men from Philadelphia to charter planes to Las Vegas. And I would tag along as a kid in the summers to help my dad, you know, busy work and helping with reservations. I was a kid.

Oh, no. My mother and we were in the neighborhood became legendary because everyone assumed my father was in the mafia because Las Vegas in 1969 was not exactly known to be, you know, right. And long, without boring you because he could go on forever. My dad, I helped him right through college but in my second year of college my dad who smoked a lot and drank a little bit got sick, went to the hospital and he said to me, 'Rob, I have a problem. I have all our money tied up in these charter airplanes all summer.' It was 1974. I was 19 years old. He said, 'So, I need you to run back and forth to Las Vegas and run the gambling junkets.' Which I thought he was kidding because I was not just unqualified. I was even underage.

He was 19. Yeah. And I got very scared. I said, 'I can't, I could never do that.' He said, 'No, you've watched me do it. You've been with me. You know how it works. You can do it.' My mother was appalled. But he said, 'We have no choice. If he doesn't take these trips, we have six charter planes.' I put like in those days, I don't know how much it was, but it was all in those days thousands of dollars long. It could go on forever. I spent the summer in Las Vegas running junkets back and forth and forth and back. In the end of the summer, I succeeded along the way. I made my father, I think, a lot of money. And I went back to college. But it changed my life forever because I realized I stepped into a man's or adult's shoes at a time. I was not qualified already but you mature quickly. My dad passed away. I was in law school. It was 1978 and he passed away from a heart attack. He was not quite 60 and we had no money because my father gambled. So what happened was I picked up the phone. I called people at the Sahara Hotel and said, 'You know who I am. My father is so and so and do you mind if I try to run these? I need to make a living. My mother didn't have a job or anything.'

In those days, a guy named Donnie Rowan who was sweet and kind offered to help me. He said, 'Come on out, kid.' And he was incredibly helpful to me. I think Johnny's passed away, but he could have been nicer and I spent during law school in 1978 running my own gambling junkets for myself. My dad passed away and I made a lot of money and I was able to help my mother a lot and it was great. I was grateful and I figured, okay, law school, I graduate '80. I figured now I move on to the real world. No more gambling. I didn't have an appetite for it because in those days you dealt with some tough people. Yeah. And Donnie and some guys were great, but others weren't so great. And in '81, I was making the transition. I passed the bar to be a lawyer. And the phone rang here in Las Vegas. I was at the Sahara studying for another bar exam. And a guy named Neil Smith said, 'You have time for a coffee.' I met Neil Smith. Now, in those days, you couldn't pick up your phone and Google who Neil Smith was, but he was very well known as a big executive at Caesars. I went there, I'll never forget, I still laugh. I walked into Caesars. I walked in the coffee shop, jacket and tie, and sat down and he said, 'Who are you?' I said, 'I'm Rob Goldstein.' 'No, no, I'm looking for a guy probably close to 70. He's a junket guy from Philly. You're not.' I said, 'That's me.' I explained my... He goes, 'Oh, your dad.' And he said, 'So, he listened.' He said, 'Oh, I was going to offer you a job working for me in Philadelphia, working for us at the what will soon be the Sands Hotel?' I said, 'You mean not a junket?' He said, 'No, I want you to work for us.' And I started laughing. I said, 'That's not for me. That's not my career path. I intend to finish law school, pass the bar.' And he smiled. He says, 'Son, can I give you some advice?' And I'll never forget it. And he said to me, 'Do you know who Michael Milken is?' I said, 'No idea.' He said, 'He's a finance, very important man. He's going to finance Steve Wynn.' And you know Steve Wynn, I said, 'I saw you.' He said, 'So the world's going to change and all these guys that you don't, you feel like you're uncomfortable with are going to disappear and the world become very hostile to them because these guys want people licensable in the new world, the new guy and you're perfect. You're what are you, 24, you never been arrested.' And he said, 'You'd be perfect.' I said, 'Perfect for what?' He said, 'To be involved, you'd be running one of these places in 10 years.' And I thought he's out of his mind. I went back to my room. I flew home. I started thinking about what do you say? I thought why don't I ask him. So I called and he said, you know, give me a guy's number. He gave me a phone number, Bill Weidner and Steve Hyde. I drove to Atlantic City and interviewed with those guys and same reaction. They said, 'You're not, we thought this guy was like an old guy. You're...' And that day changed my life because I said to myself they offered me I think it was 60,000 or $70,000. Law school jobs were coming out 12 to 15 thou in that range. Wow. And I was making more than that with junkets, but they said, 'This is a career path.' They gave me the same pitch and that was 44 years ago. I've never stopped.

That's the whole story.

There was no, no, it was simply you brought the junket. It was such a simple business. You'd charge, you make money three ways. You charge a service charge to the customer in those days was $35. The casino would pay you a commission. I think the commissions ranged from a hundred to a thousand paying the gambler. In those days, a big gambler was 5, 10,000. And then you'd make money on planes because you mark up the plane. You're able to buy the planes then resell them to the casino. And it was a very simple but very lucrative business.

Well, I don't think so. I don't think anyone's, that was a different era. That was when Las Vegas felt they had to solicit to bring people from the east coast and by it was a very, very different world. It was 150 or so men only, no women. You posted front money. Those days the minimum was $2,500 and up to 10, I mean some players were a $20,000 gamble was like a whale in those days and it was a very, you come home, it was a very hard business because you were always collecting money, soliciting for the next group. It was enormous amount of detail. The detail was unbelievable to get it right. And I did it till, and then in '81 I moved to Atlantic City and that's how I started this business with the Sands of Bill Weidner and Steve Hyde.

No. No. I think it predates, Cleveland was and Youngstown and certain towns had illegal gambling and I think it just the east coast was a hotbed for people to learn the industry illegally. Philadelphia in those days. The truth is Atlantic City was the end of my business because my business was predicated on people coming to Las Vegas to gamble. And to be honest with you, it was a shock to me when Atlantic City opened that people would go there because I thought of gambling as a kind of a business for a certain type of person. I think most people gambled. Most of you would think it was mostly ethnics, mostly male. And you had to come to Las Vegas with, you know, warm weather, palm trees, you know, movie stars. It was part of the allure. When Atlantic City opened in the deep ghetto. It was a ghetto. It was terrible. When it opened, I was shocked to see that all kinds of old people, women, everyone gambled. I didn't think it was, I was embarrassed by as a kid. It was kind of an odd, erratic, aberrational behavior. And when Atlantic City opened and it was jammed like Steven once said to me, it was like New Year's Eve every night. Yeah. We didn't understand because I thought Las Vegas was where gambling. It was the only, keep in mind, Las Vegas was the only place in the US for since the inception of the United States that had gambling legalized. It was the only state. Today, you guys don't realize how weird it was, but in those days when Atlantic City happened, people were shocked. And most people thought it would remain east coast, west coast for decades, right? The evolution of gambling all across the US shocked people. In those days, the entire, I think Nevada GGR was probably a billion US dollars, the entire state. And that was an incredible amount of money in 1970. And then Atlantic City opened and people realized gambling isn't just for a certain, it's for everybody, just people love to gamble.

Yeah, I knew Barry very well. We worked together. I knew Barry very well. No more. I just saw him for, he brought some a deal to look at and Barry was at the Nugget. Barry's like my age and he was, yeah, it was terrific.

What really happened was, try to make sure I, I could just go on forever but the thing with Sheldon happened is really simple. In the early 90s we had the company I work for, Sands Group in Atlantic City wanted to develop a riverboat, the second one in Illinois and we couldn't raise the capital. We were running the Sands, we had a place in Puerto Rico and I was sent, I was running the Caribbean division with that for them. I was sent to meet a guy in New York at a meeting at the Plaza Hotel and pitched him on a management contract to run his hotel. He wanted to build a $50 million hotel in Aruba. I went to this meeting with a big room at the Oakland of the Plaza Hotel. And I shot my mouth off. I was sitting next to this young guy. He looked like younger than me. And I said, 'Who is this guy who's going to spend $50 million for Aruba?' He said, 'Why?' I said, 'Because it's a bad place to invest that much money. It's seasonal.'

It's so difficult. And the guy said, 'Why?' I said, 'It's very hard. It's very unionized. It's very, the tropics are hard. The seasons are hard. The hurricanes are hard. It's not a good, it's not a great place.' He said, 'Where'd you put it?' I said, 'We have a deal in Aurora, Illinois. That's, it's not glamorous, but it's riverboats.' I told him about it. He said, 'Fascinating.' He stood up. He goes, 'I'm going to cancel the meeting now. I want to talk to this guy.' I said, 'Who are you?' He said, 'I'm the guy.' I was, I said, 'I have to apologize. I shot my...' He said, 'No, don't apologize.' He took me in a little, I think it was a Falcon. I flew over Aurora, Illinois. Show him the site. He flew back. He said, 'I'm in. What do you need?' So, we need 50 million. He said, 'Give me the guy who worked for it.' I gave him Jack Pratt and Bill Weidner. The deal happened, but before we opened the building, the boat. He panicked and wanted a Las Vegas brand name. So, we came to Las Vegas. We tried to get someone, Terry Lanni, Steve Wynn. No one was interested. The Sahara, Paul Lowden, but no one had any appetite for riverboats. There was no respect for that business. So he came back and we met Sheldon. Bill met Sheldon during that time and Sheldon was just, no way I'd ever put.

He was in the Sands. Oh, was he here? Right. You're in the Sands. He had the Sands. He had bought it for the purpose of developing it. The meeting went very poorly. But we met Sheldon through it. And then I guess a year or two later, it was very funny. Bill came to me and said, 'Remember Sheldon Adelson?' Sure. He goes, 'Tough guy.' I said, 'Yeah.' He wants to talk to us about tearing the Sands down and building a hotel. And Bill had a great line. Said, 'How badly do you want to be rich because this got to be tough.' I said, 'Yeah, I'd like to do it.' And I met Sheldon, but then I wasn't sure I was going to come. I was ambivalent about it, but Sheldon, to his credit, called me and said, 'Invest in yourself. Come to Boston and have dinner with me.' And I flew up. I met Sheldon. We spent the night. He talked for two hours straight, Chinese food and he said, 'Look, I just think you and I have a good, I have a good feeling about you. I think you'd be helpful.' And I end up working for him. I took the chance. I moved my family here in '95. Scott was a baby. My daughter was a, they were kids, you know.

No, Scott's my son.

Sheldon said, 'Look, Rob, you come...' I'll never forget it. I said, 'But I'm making this much. You want to pay me half?' He said, 'Yes, I'll give you equity. You'll be a partner of mine and you'll get rich off equity.' I said, 'Well, how rich will I get?' He said, 'What do you think rich is?' I said, 'If I can make 10 or 20 million,' he goes, '10, 20 million, no problem.' And I laughed thinking, 'Boy, he's really, yeah, quite a salesman.' But I found Sheldon to be incredibly interesting, hard, fair, smart, and very prophetic. He saw Las Vegas much differently than Las Vegas saw Las Vegas. He saw a different Las Vegas.

I think he just had a comfort level with me. I don't have an answer to that because he unfortunately of course he's passed away but there's something that we during the meetings he enjoyed, he might hit it off. Yeah. I've always had a, I've always been gregarious. I think Sheldon just, Bill Weidner and Brad Stone were more rigid. I think they're very great, great guys, both great friends and brilliant people. But Sheldon and I just had a, there's some kind of chemistry. Maybe because we're both East Coast Jews or something. I don't know.

No, no, no, no. It was very simple. The deal was Bill, Brad and I, Bill came in as the president of the company. I became the president of Venetian. Brad was in charge of all development and we were a team and we owned a chunk of the business. We owned I think five or six percent of the Venetian and we all got points in it and the first was sitting in the room day after day planning the Venetian for two years. We planned it.

No, it was the Sands, right, was there and Sheldon had the convention center. He wanted to tear it all down and the old Sands was there and that's how we started. We started nothing but four guys in a room with a blueprint and Sheldon had a vision for non-gaming focus. He said Vegas's problem is they're leaving so much money on the table. They look at gambling, that's gambling centric. The non-gambling is equally if not more important to make money. He was so ahead of his time. He was really a visionary and people would say what's he talking about? the money's in the gambling. And the only guy I can remember back in those days, Jack Binion, we had lunch one day and Jack said, 'This guy, there's something about him,' Jack was very, he still owned Binion's back then. Yeah, Jack was here in town and Jack and I we're friends and he said to me, 'There's something about this guy that really,' he was the only person actually who said, 'This guy Sheldon, there's something going on. He might be on to something. He got something. He's very...'

I did not.

No, no, there's two people I think in this town that there should be, they should erect very large statues. And I know it's not Steve Wynn. People get upset about things, but Steve Wynn flat out, no holds barred, no questions asked, was a visionary and this town owes him. I read some recent negative comment by somebody about him. You don't have to like Steve in some respects, but you have to have deep respect and deep admiration for the vision and the design sense. This guy was so far ahead of his time that everybody else just stood there in awe. And he and people who weren't here didn't see when the Mirage opened up in whatever late 80s. This town was flat on its ass. Atlantic City had superseded this town. Everyone thought the future was Atlantic City. Steve went single-handedly said, 'I'm betting on Las Vegas.' He took the money from the Nugget sale in Jersey. He plumped down here. People fell down laughing. Thought Steve was crazy. He single-handedly lit the fuse in the 90s which made the whole town come alive. You're absolutely right. Anybody doesn't say that is silly. Just silly. The second guy, that same group, Sheldon was the guy that said, 'Wait, Wynn's a visionary. I respect it.' But there's a whole another dimension of rooms, food and beverage, entertainment, retail that I can do. And that was Sheldon. Sheldon had the vision that and anybody doesn't see that, it's simply either silly or not very smart. Oh, by the way, Steve was so good that the place he built 25 years ago is still the best. The people that have spent money recently still can't compete with what was.

It's very true. I was there. You were there for that dinner when they agreed to... It started with me because I get a call from somebody. But I don't initiate it. Someone said, 'You have to meet Larry Ruvo.' So Larry came in my office and I liked wine and Larry is, you know, obviously controlled a lot of wine and we talked about wine and he look, I own the name Venetian. You know, I own it. I said, 'Really?' He said, 'Yeah.' He explained to his mother and I went, 'Cool. It's a problem.' And so he said, 'No, it's not a problem. Larry is very confident, very, Larry was terrific.' And I walked him to Sheldon and he told Sheldon the story and Sheldon right away his back went up. What do you want for it? What? What do you... Sheldon started negotiating? Larry said, 'No, I have a tough trade, but I think we'll make a deal.' He said, 'No, I got to know how much you want because I like the name.' And Larry, I'll never forget said, 'I want a dollar, but I want it right now in cash, no financing, and you can own the name.' And Sheldon was just, he broke out laughing. It was a very, it was a lovely recollection. And I was right there in the room and they shook hands. And Larry said, 'It's good for Las Vegas. I'm a Las Vegas. I'm about growth and development. I will not hold you back. I want a dollar in cash. No financing right now.' And that's how that happened. And I was there when it happened.

He wanted to sell liquor. But no, that was not Larry. Truly was gracious. Wow. And Larry is, he's charitable. That's old Vegas. And he was old Vegas. It was Larry's finest because if Larry said, 'Give me $10 million,' no problem. I think he should have given him $20 million. It wouldn't have been an issue. And I think Larry knew that, but Larry truly said, 'This is good for Las Vegas. You're spending a billion.' In those days, a billion dollars. They build restaurants for that. But those days a billion dollars was a big deal. And he walked out. He said to me, 'I like that guy.' He said, 'That's a real guy.' And Sheldon, he said, 'That's a mensch.' Yeah. And Larry, I've been friends with Larry forever and he is, you know him and Camille, look what they've done. I mean Larry obviously made his fortune in the industry he was in but his real, Larry and Camille, their legacy is their incredible, incredible, around the corner, what they built here, what they've done to Las Vegas, the Alzheimer research center which we talked about on the podcast.

Well, there was a real belief that you need, I'm just laughing because at the old, what's the, Stratosphere, they were building it in those days. We had a, there was a conference when they just opened it. There's a conference there and a young Wall Street guy. We were still wrestling with the theme. Well, because everyone had a theme. Alex is right. In those days, you had to have a theme. Okay. That was the thinking. Not true anymore, but in that moment in time because Steve had this Polynesian theme, Mirage, and then he had always themes. New York, New York.

So, I'll never forget this youngster. We're having dinner and Sheldon was in a bad mood. And he said to Sheldon, 'What is your theme?' And we were wrestling with the theme. We'd been all over the world. What is your theme? And Sheldon turned looking. He goes, 'My theme's making money.' And the kid walked out like shaking. I said, 'Sheldon.' Yeah. He says, 'I'm tired of these people with their questions. We figure out the theme.' And we finally after looking at a million options, end as important as the execution. Look at the Wynn hotel. It's not a theme. What's really in the end was Bellagio. It's a name. It's a luxury. It's, as you said earlier, Steve's design skills transcend time almost. They're still one of the best things in town is still Wynn properties. And I'm not sure the theme is important as the execution. You can have a very good theme and bad execution.

I'm not sure.

Knocking Resorts World, Fountain Blue, but if you go into those places, you could be anywhere in the world. You could be in Europe, you could be East Coast, Asia. You walk when you came to Vegas in those earliest and maybe it's just because there wasn't the development everywhere else.

But this goes back to Vegas's infancy in the 60s with the greatest themed hotel was Caesar's Palace.

It was. I came here as a kid. Caesar's Palace seemed like, what the hell is this? I mean, the women in the Bacchanal room and it was so bizarre that to your point, it was unique. And Vegas prided itself on uniqueness. And I think that goes back to the 60s and Jay Sarno and then resurrected in the 90s when Steve brought the Mirage in and themes became sacrosanct once again. But for a long time, the hotels all looked and sounded quite a bit the same. How important is a theme? I think the execution is more important. I really do.

The other one that I reference, you guys, all the Venetian Palazzo a lot on, which isn't you anymore, but the idea of outsourcing food and beverage, was that a conscious decision? What really happened was we came to town in the mid-90s. Sheldon loved to eat out late. I had young kids and so Bill and Brad every night for months, maybe for a year, we'd go out for dinner every night at Spago. We'd go to Palms or we'd go to Michael Mina had the Coyote Cafe. There's three or four restaurants of quality in the early 90s. It wasn't like today. And we ate the same every goddamn night. It was like, I mean, I ate in Spago, I could have cooked the menu. It was so good. Four Seasons. I mean, there was nothing there but these three or four. So Michelle and I would talk about food. Sheldon was obsessed with how much better these places were versus the non-themed restaurants. And at first he said, let's build like six of them. And he said, let's build. And one night he said, Rob, let's do all what he called celebrity chef. Let's do all top tier. I thought that was unique at a time when every hotel had one or two. All of them, he said, including the steakhouse, including the car. Let's do it all third-party. And the thinking was third-party capital, third-party resource. And honestly, branded, elevated names. And that was Sheldon.