Vegas a comfortable fit for Phil Ruffin's billions
Among elite casino owners, Wichita man stands alone
12/27/2010 4:14 PM
12/27/2010 4:14 PM
LAS VEGAS — The wealth inside his casino office surrounds him like the scent of cologne: A photo of him with Mike Tyson. A Chinese carved mammoth tusk from the Ming Dynasty. A chess set made of gold.
But nothing evokes money more than the copy of a check hung on his wall.
It’s a personal check from his Wichita Bank of America account, written to pay his 2008 federal income taxes.
The man who wrote that check, Phil Ruffin, reclines in his office chair with a phone perched at his ear. On the line is America’s icon of wealth, Donald Trump, who tells Ruffin that his businesses are going well and that filming of the latest episodes of Trump’s show “The Apprentice” is going just fine.
“Good,” Ruffin tells him. “Maybe you should jack up your prices.”
Behind Ruffin, scrolling by on a computer monitor, are the day’s stock quotes. Ruffin keeps a close eye on it.
Ruffin, 75, grew up in Wichita and started his career in the 1950s with 28 cents in his pocket. He’s got well over $2 billion now, and by 10:34 this morning, in this other city that never sleeps, Ruffin’s computer shows that he’s already made another $700,000.
Recession? He grins.
“When I hear ‘recession,’ I ask, ‘What have you got for sale?’ ”
What Ruffin said
Ruffin talked about Las Vegas, Wichita, government bailouts, greed and his plan for his billions after he’s gone.
His office is on the Strip at the Treasure Island Hotel and Casino, which he bought last year for $755 million and renovated for $20 million. In a few minutes, he would take visitors on a tour of the place, as well as the gold-plated Trump Tower up the street, of which he owns half.
His wife is a former Ukrainian beauty queen. His latest joy is his fourth child, Richard William Ruffin, three weeks old on this day. He’s feeling good about that, “and I’m not above changing the occasional diaper.”
He has homes on the beach in California and Florida, an apartment in New York and a home in Wichita. In Vegas he drives a $500,000 black, 12-cylinder Rolls Royce convertible, a $500,000 two-seat, custom-built silver Mercedes-Benz SLR McLaren 722.
And a Lexus.
He flies in his new Boeing 737 jetliner, an upgrade from his business jet because the 737 can reach Europe without refueling.
Business in Vegas means billions at stake and staring at cold-eyed casino magnates across the table to make deals. None of this intimidates him, he says. He’s been a major player on the Strip since 1997, when he bought the Frontier casino.
“I don’t have enemies here,’’ he said. “The other operators are my friends.
“All my detractors are in Wichita.”
Gods of the Strip
Las Vegas casino owners are an elite tribe, earning or losing tens of millions, running one of the most famous streets in the world.
Ruffin says Vegas draws 38 million people to the airport every year, “and that’s not counting all the people who drive in from California.”
On the Strip you hear the accents of New York, the South, China, France, Russia, the Caribbean, Latin America. One of the families who watched Treasure Island’s pirate ship fireworks that night was a golden-blond group of five speaking a tongue from Scandinavia.
The Strip chieftains who drew them all here tout Vegas as a place of fortune, fun and low inhibitions: On street corners, visitors brush past peddlers thrusting escort service business cards at passing hands. At Gilley’s, on the day Ruffin opened it at Treasure Island, the Gilley’s Girls wore black bikinis, black cowboy hats and black leather chaps to ride the mechanical bull.
But many of the new casinos are richly designed; the casino bosses hire the best architects, sculptors, artists and show business people in the world. The inside of the Venetian, across the street from Treasure Island, looks like an Italian palace, with painted ceilings, canals and gondolas manned by tenor-voiced sailors singing love songs in Italian as they pole passengers around.
Joan Rivers, Rita Rudner, Donny and Marie — all play Vegas; comedian Carrot Top, between shows at the black pyramid Luxor, sometimes mugs playfully on the street for tourists bearing cameras. Bill Cosby plays Treasure Island sometimes and eats chili dogs with Ruffin in his office.
Tyson sat with Ruffin not long ago and asked whether he’d pay Tyson’s bills to train for another fight.
“He needed to lose 100 pounds,” Ruffin said. “I said no, which is too bad; he’s the best attraction Vegas ever had.”
Vegas is all business to the bosses, and not gangster business as portrayed in the “Godfather” movies.
“All that is Hollywood and never really existed, or is long gone,” Ruffin said. “The Bellagio, the Venetian, MGM Grand, Caesar’s Palace, the Wynn Las Vegas are owned by corporations, run by corporate boards.
“I’m the only private owner left.”
He and Trump built the 64-story Trump Tower in 2007, before the recession. They invested $42 million in the $560 million project.
Ruffin sold the Frontier in fall 2007; the economy collapsed a year later.
Businesses collapsed all over Vegas, made worse by the other owners building another 10,000 rooms in the good times. Owners tasted loss. Ruffin saw dollar signs.
He and Trump have been business partners for years. They call each other every day. Their wives talk babies; both men became fathers again recently.
When the downturn came, Ruffin had full pockets and big ideas. He and Trump converted the Trump Tower, which was supposed to be mostly condos, to mostly hotel rooms.
“It’s doing fine,” he said.
Buying Treasure Island last year, as the recession deepened, was also a good bet.
“The previous owners needed cash,” Ruffin said. “I had cash.”
He also had a hankering to get back into casinos. He got out in 2007, took time off.
“But entrepreneurs get up in the morning and we do things,” he said. “That’s what we do. I look how to make something happen.”
He watched companies collapse worldwide and saw opportunity: There stood Treasure Island, owned by the MGM Grand corporation, a company in debt. There stood Ruffin, with pockets full of cash.
One day, Ruffin said, he talked with officers of the MGM Grand board. In Ruffin’s telling, he made the following transaction sound as simple as buying a used pickup:
“I had said I would give $700 million. They had said $850 million."
They said they’d have to check with CEO Kirk Kerkorian, who is not only one of the most important players in Vegas but one of the country’s richest men.
“I said I would take a tour of the place but did not think I’d pay 850,” Ruffin said. “During the tour, I got a call on my cell phone that Kirk was already in town and wanted to see me.
“I knew right there I had a deal.” They met. Kerkorian pitched $850, Ruffin $700. “I said, ‘Let’s just split the difference. $750 million,’ ” Ruffin said. “That’s not splitting the difference,” Kerkorian said. “Fine. $775 million,” Ruffin countered. Sold. Later, MGM, needing cash, offered a $20 million discount if Ruffin could close early. Which he did. Sold, for $755 million. He spent $20 million renovating it; took out the Italian restaurant, which made low profits, and installed a pizza slice place, which made better profits, including $62,000 last month.
He installed art. He owns a fine collection, including huge jade vases and five mammoth tusks, 35,000 years old, with intricate carvings done by Chinese artists hundreds of years ago.
He cut prices, made detailed suggestions. He noticed the hotel, taking thousands of calls from customers, was losing 10 to 15 percent of them. They’ve cut that to under five. “Details matter,” he said.
So does service, he said.
“Running Treasure Island with its 3,000 rooms, which means more like 6,000 people, is like running a town of 6,000. Just as in a small town, someone wants this, someone wants that.”
Ruffin gave a long tour of the TI, as it is called here: the gambling rooms, the pool. He pointed across the blue water to a row of cabanas.
“For whales.” High rollers.
He walked past store after store, restaurant after restaurant, quoting exact figures about how much each had made in the previous month, and how little some previous occupants had earned before. As he walked past, employees recognized him; he touched hands or laid a hand on a shoulder in a warmer manner than he’d used in questioning his top bosses a few minutes earlier. In his Asian restaurant, the Khotan, a worker cleaning the floor quickly moved to stop his machine and pull it out of Ruffin’s path. “No, no,” Ruffin said lightly. “Anyone working in here is my friend.” It will take only seven years to earn back his investment, he said.
His staff captains, when they interrupt him with business, keep conversations to two or three hurried sentences.
He controls all operations, sometimes with micro-attention. An employee brought him a menu from the hotel’s new Gilley’s, which would open that weekend. He made a notation with a look of irritability and sent it back.
“They wanted a menu with no prices. That’s no good. They need to show prices.”
Business is down in Vegas the last year. Part of the reason for his micro-supervision is that he’s lowering prices and trying to lure people who, among other things, would want to ride Ruffin’s new mechanical bull at Gilley’s.
“And no, I won’t be riding that bull,” he said. “That would be embarrassing.”
His meeting with his top supervisors was a brisk huddle around a table with nine men and one woman all dressed in black suits.
Ruffin wore a lavender sweater over a white shirt, no necktie. He was the only one to lean back in his chair; the others all propped elbows on the table, as though sitting at attention.
The substance of the meeting was that gambling at TI is not bringing in as much income as he’d like; he wanted to know what minor tweaks they could recommend for gaming tables.
He said there were places like the Bellagio, just up the Strip, that cater to what Ruffin called “whales,” high-end gamblers.
“That’s not what we’re about,” he said.
How could they attract more middle-class clientele?
As with the menu, he was detailed; he asked whether they could attract more visitors by offering “pirate weddings” on his pirate ship, where the TI puts on an explosive sea battledance-fireworks show every night.
“There are places in town where they make a million in revenue just from offering weddings. We are not anywhere near that. Could we offer something cute, like pirate weddings, you know, give them pirate hats?” Ruffin asked.
At the meeting most of his captains called him “sir” and answered his pointed questions with quick, sometimes nervous, answers.
“Those are good guys,” he said later. “Some of the top people in the field.”
He thought a moment.
“They get paid a lot; some of them around $250,000. So if they sound a little nervous, it’s because they know they need to produce.”
Ruffin has never been especially interested in heritage, or image or charitable crusading. He says he donates to charities, including cancer and diabetes causes.
In Wichita there are families among the wealthy who are known not only for their wealth but for their public charitable giving. Among them, in contrast, Ruffin is known as a guy who stays mostly to himself, a guy with a sharp mind, a guy with a 12-hour workday ethic devoted almost entirely to acquisition, followed by more acquisition.
He has asked, in past interviews, whether there is anything wrong with this. And he pointed out in a 2007 interview that his businesses in Wichita and elsewhere have accounted for a great deal of public good.
He provides about 5,000 jobs to people in Kansas, Nevada and elsewhere. He says he pays about $2 million annually in property taxes in Sedgwick County.
His daughter Michelle runs the Wichita Marriott, which he owns; his son Chris runs his real estate properties, which generate those millions in taxes; his son Phil Jr. runs Harper Trucks Inc., the hand truck factory.
He said in Vegas that he hopes that the $172 million he paid in federal income taxes in 2008 did some good somewhere.
On the day he said this, he was scheduled to be honored by luminaries in Las Vegas as one of the “Vegas Dozen 2010: The Men We Love and Why We Love Them” — 12 people honored every year at a charity event for contributions to Las Vegas.
Bob Miller, a former governor of Nevada, was another honoree that night. Lon Kruger, the basketball coach at UNLV and a former Kansas State University player and coach, is a former honoree.
One cause in Wichita
There is one cause for the public good that he cared about deeply, and it died. It still rankles him.
That’s Wichita Greyhound Park, which he closed in 2007, right after his bid to install slots lost in Sedgwick County by 200 votes. When he refers to his detractors in Wichita, he means those who campaigned against the plan.
“We were ahead on that vote all night,’’ he said. “Then the vote from Bel Aire came in and killed us.”
He’d spent most of his life in Wichita; he lived here when he started his family, when his pockets were empty. He lived here when he worked for other men.
He lived here when one day, working at a W.T. Grant store, he saw a man drive by in a Cadillac with a beautiful redhead at his side.
By his own account, in his company biographical sketch, Ruffin said to himself, “That is who I want to be.”
And so it was.
He lived in Wichita when he bought a convenience store and turned it into a chain of 65 stores. He turned that into a fortune that tops more than $2 billion. He’s got so much money that he uses what he calls his “loose change” — the cash not invested in Treasure Island or elsewhere — to dabble in the stock market. So far, he said, he’s made $80.5 million this year from his loose change.
Had the slots vote gone the other way, he and Trump would have installed a Tower and a Gilley’s in Wichita. He would have earned millions for the state, he said.
“That slots vote was a jobs bill, that’s all it ever was,” he said. “People were crying, people who worked for me for a long time. The only reason I pushed for it was I wanted them to keep their jobs.”
He does not live in Wichita anymore; he visits, every two weeks, for a day or two.
He’s not sentimental about Wichita. North High School, where he was a wrestling champ and a 1953 graduate, has tried for years to honor him in person at its annual gathering for “Hall of Fame” alums, which include National Football League Hall of Famer Barry Sanders and Nobel Prize winner Vernon Smith.
Ruffin has never come.
Loss in Wichita
He says, without rancor, that the election loss in Sedgwick County in 2007 on whether to let him put slots at his racetrack cost him little, but cost 250 jobs at his track in Wichita and cost the state $50 million to $70 million in gaming revenue every year since.
Keith Kocher, director of Gaming Facilities for the Kansas Lottery, does not know whether that much might have come in — the economy has tanked since 2007, so gamblers had less money. Also, Oklahoma has more than doubled its number of casinos since 2007, another variable.
But while no one will ever know exactly how much, there’s no doubt Ruffin would have made tens of millions annually for Kansas, Kocher said.
Ruffin said he wonders what Kansans think now, with Wichitans gambling in Oklahoma while millions of dollars get cut from schools.
“Maybe instead of laying off teachers they could hire a few teachers,” he said.
He’s been married to his second wife, Oleksandra Nikolayenko-Ruffin (Miss Ukraine 2001) since January 2008. Three years ago, when she was his fiancee, she refused to drive the McLaren, scared that she’d dent a half-milliondollar sports car.
“You know how that goes,’’ he said. “After she married me she decided she could drive whatever she wanted whenever she wanted.”
He gave her the money she used to revamp the spa in Treasure Island. He likes what she did.
He seems happy with his wife, his child and his life. In 2007, asked about his flaws, he said his workaholism had short-changed his first three children and his first wife, and that he regretted it deeply.
He said he’s trying harder now. He comforts his newborn son when he cries. He flies to Wichita every two weeks to see kids and grandkids.
After he’s gone, his three older children will come to Vegas, but not to take his chair.
They will remember him as a father who built a big business from nothing and passed it on to his heirs, but they will not take over.
Day-to-day leadership will pass to the men in dark suits. Ruffin loves his kids, but some of those guys in the suits have 20 years of experience doing business on the Strip.
Then there’s Richard William Ruffin, the newborn son.
“He’s going to keep the family involved until the year 2100,” Ruffin said.
Ruffin himself will leave this earthly travail someday, but his exit might not be soon. He works out every day in a weight room at home. He looks tanned and fit. He runs his life and his business the same now as always.
“The only difference between me now and me 20 years ago,” he says, “is that I have more money.” He sees silver linings everywhere, even in a recession. In a recession, he says, you pay less in taxes. You buy other people’s stuff. You make more money.