How Derek Stevens Helped Vegas, the Airlines, and Gamblers by Flying them Back as he plans for the future
If you are like a lot of us, you might have heard about a Las Vegas promotion where they offered a thousand comped airline flights to get us out of quarantine and back at the slots. If you were one of the lucky people to score one of these flights—congrats and hit me up if you are looking for a travel buddy! URComped CEO Craig Shacklett had the opportunity to talk with the genius behind this crazy and popular promotion, the owner of The D Las Vegas, The Golden Gate Casino in Las Vegas, and the upcoming Circa Las Vegas or Circa Resort and Casino, Mr. Derek Stevens. Click here to listen to the podcast version.
Mr. Stevens says that his idea to fly gamblers back to Sin City evolved during a team meeting back in April (:54). His team was exploring ways to “come up with something to help jump-start Vegas.” He wanted to do something that would help his casino properties while also helping Las Vegas as a whole (1:19). From there, they realized they could also help the airline industry, which has also been affected by the COVID-19 pandemic closures. Stevens acknowledges the importance of the airline industry in bringing clients to the area, so his team began to reach out to the airlines, and ended up working out deals with five of them (1:40). Stevens’ company bought one thousand tickets to fly clients from 24 cities across the United States. They thought it would take “a couple of days” (2:00) for people to claim the tickets—boy, were they wrong!
With so many of us gamblers itching to get back to our happy place, the tickets were snapped up in a matter of a couple of hours, shocking Stevens and his team. Not only were the initial flights booked, but they also had a backup demand for more than 4000 additional tickets (2:15). The team hustled back to work with the airlines, added nine more departure cities, and another thousand tickets went up for grabs. Those tickets were gone in ninety minutes.
How Derek Stevens became integral to the Las Vegas gambling community
URComped CEO Craig Shacklett wanted to know more about Stevens’ background and how he ended up as a Las Vegas casino owner (2:54). Stevens explains that he owned a manufacturing plant in Detroit, and was seeking out investments in publicly traded companies (3:34). At the time, the Rio was a publicly traded, independent company, making it the perfect place for Stevens to place his first bet. Stevens says he always liked the gaming industry. Hence, IGT was next on his investment list, and then he started investing in debt, which led to him becoming involved in the Riviera (4:01). Stevens had never been licensed and never owned more than 5% of a company (4:09), so in 2006, he moved his investment company out to Las Vegas and bought into the Golden Gate.
By this point, investment rules in Las Vegas had changed and required licensing even if you only owned 1 share of a privately held company. Stevens worked out a deal with Mark Brandenburg, who owned the Golden Gate, and was looking to renovate his property. Stevens’ brought his brother, Greg, into the mix, and bought 50% of the Golden Gate (4:42). Stevens then began the licensing process. It wasn’t exactly cut and dry, though. Stevens says that at that time, you had to be asked to apply for a license—and the only way to get asked was to have a pending deal on the table. The final deal with Brandenburg and the Golden Gate was signed off on October 31, (yes, Halloween!) 2006 (5:00). The licensing board then asked Stevens to apply, and the process took a little less than 18 months to complete. He received his gaming license in March of 2008.
Moving into Downtown Las Vegas
Shacklett was interested in how and why Stevens chose to place his chips downtown when he had an ownership interest in the Rivera and Rio (5:32). Stevens explains, “when I’m going up and down the street trying to get into the gaming business, it’s not as if I can walk into Caesars Palace and pick up the house phone, talk to the owner, and see if he’s interested in having a partner.” He says he actually did that. However, success came while walking Fremont street, going from casino to casino, and finally picking up the house phone at the Golden Gate and asking to speak with the owner. Stevens didn’t land on the owner, but got Mark Brandenburg’s assistant on the phone (6:01). Brandenburg ended up inviting Stevens and some of his associates up and Stevens began to lay out his plans. A more formal meeting was scheduled for the next day, where Brandenburg explained that he had been seeking out a partner from a privately-held business (6:31). The Stevens brothers initially came in with a 50% interest in the property, but eventually ended up buying a controlling interest.
Shacklett wanted to know Stevens’ motivator for increasing his reach to Fitzgerald’s. As Stevens explains, he “really came to like downtown” (7:32). In 2008-2009, the country began to feel the full effects of the Recession, which made properties all across the country, including Vegas, much more affordable. He had been coming to Vegas for more than 20 years, and enjoyed the downtown vibe. The downtown area had been seeing an influx of young entrepreneurs, including Zappos CEO Tony Hseih, and Stevens was seeking to fund start-up companies (8:06). He says he “just kind of liked the vibe.” He and the other business owners would often meet up at the Downtown Cocktail Room for drinks and to discuss what was going on in the area. By 2010, Stevens started working to buy Fitzgerald’s and ended up purchasing it in 2011 (8:44).
The benefits of a privately held company
Stevens noted on several occasions that he enjoyed being a privately held company. Craig wanted to know some of the ways that being privately held afforded him flexibility in achieving his Las Vegas goals (9:12). Stevens says that he enjoys “being around people that are creative,” and “fun,” and “that are pretty good at math” (9:18). He admits that sometimes these creative ideas “don’t work out all that well, but some do” (9:37). He cites Long Bar, which received a lot of comments about how the bar was “too long.” But it became serendipitous when they needed to come up with a name and had no money for an outside consulting agency—thus Long Bar was born. The genius was shown when they later discovered the “too long bar” was the longest bar west of the Mississippi.
Stevens is known for his accessibility. Shacklett wondered if the fact that Stevens could be found sitting at one of his own bars, “watching Michigan games” (10:28) made it easier for him to gauge the pulse of casino patrons. According to Stevens, that’s exactly right. Talking to and receiving feedback from customers in a real-time situation is “absolutely critical” (10:43). He says there are a lot of good ideas discussed at his casino bars, and he loves being there with the customers to engage with them. Stevens adds that a lot of great ideas also originate in the blogs and podcasts, as well. He says he “loves soaking it in” because he was “always the biggest customer first” (11:17).
The biggest project in Las Vegas history
Shacklett turned his attention to what very well might be the biggest project ever in downtown Las Vegas: the Circa. What has the experience been like for Stevens to build his first resort from the ground up? Stevens explains that Circa is “a combination of some of the ideas” that he had, coming to Vegas 20 years ago, as well as a combination of ideas gained since working in the industry (12:06). In addition, he says it’s also a combination of ideas from all of the creative people he gets to work with every day—and obviously, he is very excited about the possibilities.
Craig wanted to know what exciting amenities we, as customers, could look forward to once the Circa is complete. Stevens explains that Circa would not have been created as it is, had the location been different from the Fremont area. Fremont Street is now the second most visited tourist destination in America (13:38). The amount of walk-by traffic became an important consideration when designing the Circa. At completion, the Circa will boast “the world’s largest sportsbook” and a to-be-named-later outdoor pool amphitheater (13:52). Stevens also wants to take advantage of the 335 days of sunshine that Vegas receives each year by building the “greatest pool in the history of the world” (14:09). When complete, the pool will be multi-tiered! He says he expects about 4000 people a day to utilize this incredible pool! Stevens’ vision is that Circa will be filled with enough attractions “to make people that want to come by even if they’re staying somewhere else.” Luckily for Stevens, Nevada’s governor declared construction to be an “essential business,” so the coronavirus will not hamper their December 2020 opening.
Craig wanted to know if there was anything that Mr. Stevens wanted to share with all of us here on the URComped sites…and there was. Stevens recommends his football contest, which boasts a $1,000,000 prize. He says, “all you’ve got to do is pick one team a week at the beginning of the season” (16:06). Granted, he explains, “you probably got to go undefeated all the way” in order to claim the big prize—but he says, “it’s a lot of fun.” Shacklett wanted to know if those of us outside of Nevada could partake in the contest, and Stevens assured him that “it’s all legal.” He says you “have a proxy. And then you just fill out your pick online and go to the proxy.” So, “you can be anywhere in the country.” You “just put your pick in” (16:37).
Be sure to check out Derek Stevens’ amazing property, the D, in beautiful downtown Las Vegas—and don’t be afraid to strike up a conversation with the guy sitting next to you during the Michigan games airing on the screens. After all, he just might be the owner, himself!
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Full transcript below
(0:00- 0:32) Craig Shacklett: Hi everybody Craig from URComped here. I’ve got such a special guests. This is such an honor for me. I hope I don’t get too tongue tied or giddy interviewing him. But we got Derek Stevens, owner of The D Las Vegas, The Golden Gate Casino in Las Vegas, and the upcoming Circa Las Vegas or Circa Resort and Casino. Mr. Stevens, thank you so much for being here.
(0:32– 0:36) Derek Stevens: Hey Craig. Thanks for having me. I appreciate it.
(0:36– 0:45) CS: So a lot of people may have heard of you in the news recently.You had a giant free flight promotion. So smart.How did you come up with that?
(0:45– 2:52) DS: This was something that my team and I were talking about probably end of March, beginning of April. And we always thought at some point we’re going to get a date. We thought maybe it would have been May 15th or that on Memorial Day weekend or June 1st. Finally we got this June 4th date. But back, probably six-seven weeks ago, we were thinking, ”Let’s come up with something to help jump-start Las Vegas.” And what I wanted to do is I wanted to do something to help our properties.But that could also potentially help Las Vegas. And then kind of focused in on the airline industry because Las Vegas is so dependent upon airlines. Obviously, driving is important, but the airlines are critical. And that industry’s been pretty decimated with what’s happened in the last few months.So we thought, “Let’s reach out to some airlines.” So we did and we work deals out with five US airlines. And we decided we were going to buy a thousand free tickets to Vegas on five airlines who was twenty four cities. And we kind of mixed up the cities a little bit. And we thought, ”Maybe it’ll take a couple days to fill them up.” But what happened was, in the first two hours the demand went through the roof, the thousand flights were gone.And then I was sitting in our operations meeting and our director hotel said, ”Hey, not only are all the flights gone but there’s demand for four thousand.”We’re like, “Oh my God. This is crazy.” We had all our team there and I said, “Well, what’s the chance we can reach back out to the airlines real quickly. See if you could buy some more and then maybe add a few more cities and stuff like that.” So they did. Took them a few hours and we ended up getting a hold of another thousand flights. We added nine more cities. So we ended up with a total thirty three cities. And we put those thousand flights up on our site and those were gone in ninety minutes. So we thought, “Man, this is kind of crazy.” But we always thought that there’s going to be a lot of demand for Vegas.I just didn’t realize it was going to be that instant.
(2:52– 3:32) CS: Well, it’s very exciting. And doing some research on you… You realize the appeal of Vegas early on. It was a road trip when you’re twenty years old from University of Michigan when I read coming down. And then sixteen years later, you moved out to Vegas. And so when you moved out, did you already have a deal with the casinos? I see that you were investing Riviera and Golden Gate. And so you come out you already had a deal with Vegas? Or did you come here looking for a deal? How did you actually get into your first Casino deal?
(3:32– 5:20) DS: I have manufacturing company in Detroit.And I also run an investment portfolio. So I would say, in the late 90’s early 2000, I was investing in publicly traded companies. And I always like the gaming industry. So this goes back to when Rio Hotel was a publicly traded independent company. So I invested in Rio. I invested in IGT And then I started investing in debt and that’s kind of how I got into Riviera a little bit. But I’d never been licensed. I never owned five percent of a company. So what ended up happening was in 2006, I decided to move our investment company out to Las Vegas. And for some business reasons. The tax reasons and things like that. And then we bought into the Golden Gate. And in 2006, the rules were a little bit different. And it was, “If you owned even one share of a privately held company, you had to get licensed.” In 2006, I work a deal with Mark Brandenburg. My brother and I bought fifty percent of the Golden Gate. And then at that time, we started the licensing process. Maybe a lot of people don’t know this. You can’t apply for a gaming license.You have to be asked to apply. And the only way you get asked to apply is if you have a pending deal. So I signed a deal with Mark to buy fifty percent of the Golden Gate It was October 31st, 2006. And once we reach the deal on that, then the Gaming Control Board came back and asked us to go through the licensing process. And for me, that was my first one. And it took about a little less than eighteen months. And then I got my license in March ‘08.
(5:20– 5:30) CS: So you were partial investor Riviera sounds like Rio at the time.What was it about downtown? So you’re like, “You know what? This is the spot. This is where I’m going all in.”
(5:30– 6:51) DS: Remember when I’m going up and down the street trying to get into the gaming business. It’s not as if I can walk into Caesars Palace and pick up the house phone, talk to the owner, and see if he’s interested in having a partner.So we did that. And actually I walked up and down Fremont Street. I looked at a few other areas in Las Vegas. And I got to the Golden Gate.And I truly did pick up the house phone and asked to talk to the owner. And on that particular day in early 2006, his assistant was, often he picked- up the phone.And I said, ”Hey. We’d like to talk.” And ironically, Mark invited myself and a couple of my buddies up. And we talked through it with them. He was interested enough. He said, “Let’s set up a formal meeting tomorrow.” And I think in the time frame, he maybe called around a little bit. And we went back. Showered up. And shaved up. Suited up. Came in the next day and we kind of talked a little about what we wanted to do. Mark, he said he was looking for a partner, actually. And he wanted to do it with someone from a privately-held company business. And one thing led to the next. We hit it off and went from there. The next few months we ended up striking the deal. Like I said on Halloween in 2006.
(6:51– 6:59) CS: You came in. You’re fifty percent within a couple of years. You bought enough to be a majority owner, is that right?
(6:59– 7:00) DS: Yes, correct.
(7:00– 7:23) CS: And then it sounds like… Or maybe you can walk me through it. But it sounds like you proved to yourself. You had a knack for it. You gained more confidence. And then Fitzgerald came available. And that sounds like an actual… I don’t know. Was it a bigger investment? What led up… What happened with the Golden Gate over those couple years that you said, ”Alright, here’s another property. Let’s do it. We can we can go bigger.”
(7:23– 8:49) DS: Yeah. So really what happened was, during my licensing process, so let’s say 2007 and beginning of 2008. I really came to like downtown. And then 2008-2009, there was this big recession. So a lot of things around downtown Vegas, a lot of things all over the country became a little less expensive. I’d been coming to Vegas for quite a while. It’s probably twenty years before that. And I really like the vibe that I was getting in downtown Vegas. There’s a lot of young entrepreneurs during that time frame. I met a guy by the name of Tony Hsieh who owns Zappos. Sold that to Amazon. He moved Zappos headquarters downtown and then he was going to fund a lot of new start-ups. So for me, it was pretty invigorating to see all these new entrepreneurs showing upon Fremont East and stuff like that. And I just kind of like the vibe where when I came in there’s a number of other businesses.And business owners that were around pretty regularly. Often times we would meet up for cocktails. That’s really… The first new bar was the Downtown Cocktail Room. We’d meet up for drinks every now and then. And just talk about how things are going. And the vibe was pretty good. In 2010, I started trying to work on Fitzgerald’s. And then in 2011, we were able to purchase Fitzgerald. Because I knew I wanted to be downtown.
(8:49– 9:17) CS: And then you said before that you enjoy being a private company. Cause it gives you some flexibility that maybe a public company doesn’t have. Have you… How is that come about? I mean, is that something that… I mean, you built the longest bar in Nevada, The Long Bar. You’ve done so many things like… What are some ways that you just love having the flexibility that maybe a private or a public company wouldn’t have?
(9:17– 10:11) DS: I like being around people that are creative. I like being around people that like to have fun. And I like being around people that are pretty good at math and we can come up with ideas. Sometimes they don’t work out all that well. But some, they do. Some just try to do something and then see how it grows. You don’t know if it’s going to grow on these. When we built Long Bar a lot of people said, “Well, that’s a little crazy.” I mean, maybe the bar is too long? Well, who knows? We had to come up with a name. And we didn’t have any money to have a consulting company. So we called it “Long Bar.” I visited a bar in Shanghai one time. It was a long bar.But it was kind of a cool name. This is a pretty long bar, so okay, we’ll call it “Long Bar” see what happens. Then we found out afterward it was the longest bar west of the Mississippi. So there was no planning on that. Just happened to be that way.
(10:11– 10:42) CS: One thing that you’ve got a great reputation for is being accessible.And one thing that sparked my memory right there where you mentioned, we didn’t have money to hire a consultant. But it seems like you being so accessible. You sitting at the Long Bar watching Michigan games.You probably have your finger on the pulse of customers more than any other casino owner. So I mean, how do you feel like that’s played out? Well maybe you’re saving on consultants because you’re able to get real-time feedback from customers.
(10:42– 11:32) DS: Yeah. I mean, real-time feedback from customers is absolutely critical. So I’ve had a great opportunity to meet a lot of people over the years sitting at the end of the Bar Prohibition over at the Golden Gate or at the Long Bar. So there’s a lot of good ideas out there. I love being with customers and I love hearing what their thoughts and concepts are. A lot of thoughts and ideas come from blogs and then podcast and things like that. I love soaking that in because…The thing about me is I was always the biggest customer first. I love betting on sports. I love coming out to events. I love Vegas as a customer before I ever got into the business. So listening to people with some different thoughts and ideas has always been great.
(11:32– 11:57) CS: So with Golden Gate, with The D, you had an existing box that you remodeled. And then seems like every step, you’ve gotten more creative license to do more. And now Circa by far your biggest project and the biggest product maybe ever in downtown Las Vegas. So what is that been like? How much fun has it been for you to design a new resort from the ground up?
(11:57– 12:49) DS: Yeah. I mean, I would tell you like Circa’s really a combination of some of the ideas I probably had twenty years ago. Some ideas kind of gained from working at the Golden Gate. And some ideas came from how The D’s evolved a little bit. And then when you throw it into where you’re located.
Geography being downtown and lot of the positives about it. So it was something where at all these little things we try to come together. And always thought like, “Yeah, we could do this. This would be pretty cool. We can do that. That’d be pretty cool.” So kind of a combination of almost a lifetime of ideas. A combination of all these creative people I get to put around me and get to work with. So it’s something that we’re pretty excited about as far as how it’s developed so far.
(12:49– 13:16) CS: Now, most of our customers are cruisers. I know a lot of them head-out to Vegas as well. And so The D got the longest bar. West of the Mississippi. Two-story casino. It’s amazing. I’ve been there several times to have drinks. And Circa… Just reading about… You the Garage Mahal. You got a three-story sports book. I’ve heard the pool is going to be amazing. What are some things that customers can look forward to it at the new property?
(13:16– 14:55) DS: Yeah. I mean, the one thing we tried to do if our location was different. Say like we were in a regional market. Or even if we were on The Strip. I don’t think I would have built Circa the way we did. I mean, Circa’s really something that’s a function of what I thought was a great location, right on Fremont Street. And Fremont Street’s now become the second most visited tourist destination in America. So huge amount of walk by traffic. So what we want to do is we wanted to create something that have a number of very unique attractions. So like the world’s largest sports book. Three-story sports book. This outdoor pool amphitheater, which we’re going to announce the name shortly. Just not quite yet. We put that out there. I’ve been joking around but then I started using this the last few months. We’re trying to create the greatest pool in the history of the world. So it’s not just downtown or in all of Las Vegas. But it’s in the right environment. Three Hundred Thirty Five days of sunshine in Las Vegas. And now we’re building this multi-tiered pool here at Circa’s. So there’s a lot of unique attractions that the hotel I’m excited about. But the hotel’s not gonna house everybody in the pool. I mean, we expect to do four thousand people a day at the pool and the sports book. I mean, this is going to be over the top. This is really an attraction-based resort that whether you stay at Circa or you stay at The D or the Golden Gate, that’s one thing. But there’s gonna be enough attractions to make people that want to come by even if they’re staying somewhere else.
(14:55– 15:11) CS: Well it sounds amazing. December, Are you optimistic about December being the start date or the opening day for Circa? Or have the recent developments may be slowed things down. And how you feeling on opening time?
(15:11– 15:44) DS: Yeah, what was kind of interesting was that the governor of Nevada deems construction to be essential in this state. So we were able to continue to work all through the pandemic and that was pretty helpful. They stagger a lot of schedules. Not anybody can show up at the same time. Some people a little earlier. Some people a little later. Spreading out schedules, a little more work on Saturdays and Sundays. But the great thing is we announced it year and a half ago. And I said December 2020. We’re going to open up this year. So we’re still on time. We’re getting close.
(15:44– 15:54) CS: That is so exciting Derek. I know we have to be respectful of your time. You’re busy man. Is there anything that we didn’t cover I should have asked you about?
(15:54– 17:15) DS: Well, I would tell you for potentially some of your clients here. One thing I would tell you would be if you’ve never played in a football contest, I do highly recommend the Circa Sports Million or the Circa Survivor. So our football contest. We’ve only been doing this for a year. And Circa Sports is our sports brand. But I would tell you, like Circa Survivor, it’s an awful lot of fun. And I think a lot of people have actually played in some of these maybe in an office pool or something like that. But all you got to do is pick one-on-one team a week at the beginning of the season. You probably got to go undefeated all the way
through. And we’re guaranteeing a million dollars to the winner. Now the trick is, here’s the tricky part, you can only pick one each team, one-time all year. So if you happen to pick the Dallas Cowboys on the opening week,you can’t play them the rest of the year. So you got to pick one team a week. And you got to get through the season. So that’s how Circa Survivor works and I do highly recommend everybody checking out. Our Circa Sports Book is here at the Golden Gate or here behind me at the D. So we’ve been in the sports business for a year before the Circa Resort and the Big Sports Book opens up.
(17:15– 17:26) CS: Quick question on that. For customers that maybe don’t live in Nevada. Would they be able to participate in that? I mean, can they show up once and enter and then they can make picks remotely? Or how would that work?
(17:26– 17:53) DS: Yeah. That’s exactly how it works. You don’t have to live in Nevada. You don’t have to be in Nevada to register. Just to sign up. But it’s all legal. And what you have is you have a proxy. And then you just fill out your pick online and go to the proxy. The proxy puts the pick and so. Proxies have been in business for football contest for almost three decades now. So yeah, you can be anywhere you want in the country. Just put your pick in.
(17:53– 18:06) CS: That sounds amazing. I highly encourage URComped customers to check out The D. Maybe we can get some offers for The D up so you guys can take advantage of.And Derek thank you again so much for your time there.I really appreciate it.
(18:06– 18:20) DS: I appreciate it. Hope to see you here downtown Las Vegas. Not too not far down the road. Let me know when you’re coming in town. And yeah, I’d love to do something with some of your customers.