{"id":308149,"date":"2024-03-04T08:05:39","date_gmt":"2024-03-04T14:05:39","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=308149"},"modified":"2024-03-04T14:47:07","modified_gmt":"2024-03-04T20:47:07","slug":"vegas-myths-busted-casinos-close-because-they-cant-pay-winners","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/vegas-myths-busted-casinos-close-because-they-cant-pay-winners\/","title":{"rendered":"VEGAS MYTHS BUSTED: Casinos Have Closed Because They Couldn’t Pay Winners"},"content":{"rendered":"

What was the name of that casino that shut its doors because it couldn\u2019t pay off a huge jackpot? You know the one we’re talking about, right? It\u2019s, oh yeah…<\/p>\n

\"A.I.'s
AI’s rendering of a casino closed due to a jackpot. (Image: Chat GPT)<\/figcaption><\/figure>\n

NO CASINO EVER.<\/em><\/p>\n

The most commonly cited example of this myth is the Thunderbird Casino, which was located across the Las Vegas Strip from El Rancho Vegas.<\/p>\n

It did<\/em> go bust on Sept. 2, 1948, when its owners (LA building developer Marion Hicks and Nevada Lt. Gov. Clifford Jones) didn\u2019t have sufficient cash on hand to cover a winning streak of $145,000 on the craps tables.<\/p>\n

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The Thunderbird Hotel went bust on opening night, but remained open. (Image: The Mob Museum)<\/figcaption><\/figure>\n

That certainly made for, by far, the worst opening night in casino history.<\/p>\n

However, just because a casino goes bust doesn\u2019t mean it must close. And that\u2019s because a casino is still usually a profitable business — especially a brand new one — even if its current owners can\u2019t sufficiently bankroll its losses.<\/strong><\/p>\n

“What many people don\u2019t understand about randomness is that it includes both hot and cold streaks,” Anthony Lucas, a professor of casino management at UNLV, told Casino.org<\/em>.<\/p>\n

“In the short term, players can appear to play both lucky and unlucky. But if they continue to play, the casino’s long-term advantage will eventually be realized.<\/p>\n

\u201cThere will always be big winners and big losers. But the long-term net effect will favor the house.”<\/p>\n

\n

Today, measures are in play to prevent casinos from going bust. (We’ll get to those later.) But even back then, it was always easy to find someone willing to help you save your perfectly good casino operation. That someone was frequently a man wearing an expensive suit and fedora hat, and the help he offered was almost always cash.<\/p>\n<\/div>\n

Only Meyer Lansky’s cash wasn’t a loan. The New York crime boss offered an investment in the Thunderbird. And, in exchange, he took majority ownership, leaving Hicks and Jones with just 20% between them.<\/p>\n

Casinos can and do close for good, like businesses in every other field, but not just<\/em> because<\/em> one or more people happen to win big one night.<\/p>\n

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The Bird Cage, on the corner of Fremont and 1st streets downtown, sported a 10-foot high birdcage with three-foot red dice hanging inside of it. (Image: nevadagaminghistory.com)<\/figcaption><\/figure>\n

The Bird Cage<\/h2>\n

Another Las Vegas casino commonly reported to have permanently shut its doors due to a run of bad luck was the Bird Cage, which opened at 100 E. Fremont St. downtown on Jan. 1, 1958.<\/p>\n

According to the Twitter\/X account @HistoryNevada, it was \u201cforced to close\u201d after about a year \u201cwhen it was unable to pay its jackpot winners.\u201d<\/p>\n

Again, not the case.<\/p>\n

The Bird Cage closed, on April 30, 1959, because it never found financial success. After failing to convince the Gaming Commission to allow the casino to install more Keno machines to attract new customers, co-owner Maurice Fortney told the Reno Evening Gazette <\/em>that a lack of business didn’t warrant keeping it open.<\/p>\n

Any casino that goes out of business does so due to a series of bad decisions and\/or unfavorable market conditions,\u201d Lucas said.<\/p><\/blockquote>\n

This can be difficult to wrap the brain around. After all, the very phrase \u201cbreak the bank\u201d was coined to describe what happened in 1881, when English roulette player Joseph Jagger won $350K at the Casino de Monte-Carlo — more than it had on hand — because of a series of improbable wins.<\/p>\n

But while Jagger indeed broke that casino’s bank, it was not because of random good luck. He happened to be a genius who discovered that some roulette wheels of the day featured slight imperfections that favored some numbers more than others.<\/p>\n

The Casino de Monte-Carlo didn\u2019t close after its bank was broken, either. It\u2019s still open to this day.<\/p>\n

Wynn Wins Shuttered Desert Inn<\/h2>\n

According to Kerry Packer’s Wikipedia page, the late Australian media tycoon closed down the Desert Inn “by winning 52 million dollars in one day and insisting they pay him in cash.” Wikipedia cites as a source an interview with former PGA golf pro John Daly on the Full Send<\/em> YouTube podcast.<\/p>\n

Once again, not true.<\/p>\n

In 1998, when Starwood Hotels purchased ITT Sheraton, Desert Inn’s owner since 1993, its first order of business was putting the casino resort up for sale. The Desert Inn had been bleeding money for years due to a series of unfortunate business decisions, not because any one gambler won too much.<\/p>\n

Steve Wynn bought the Desert Inn for $270 million in April 2000 just to shutter it four months later, but only because he had already planned to build the $2.7 billion Wynn Las Vegas with a portion of the $4.4 billion he had just made from selling The Mirage and Treasure Island to the company that became MGM Resorts.<\/p>\n

Other accounts of Packer’s big Desert Inn win state only that it closed down the casino “that night,”<\/em> which is entirely possible.<\/p>\n

Why Can\u2019t it Happen Today?<\/strong><\/h2>\n

Modern measures are in place to isolate casinos from the effects of catastrophic gambling losses, and none of those measures wears a suit and fedora. They include:
\n<\/strong><\/p>\n