May 03–James Allen opened the Southern Gaming Summit on Wednesday telling about his days in Atlantic City as part of the Trump organization and praising Steve Wynn for building the Beau Rivage Resort & Casino.
The Beau is the leader in the Mississippi casino industry for one reason, he said: "Because Steve Wynn built a hell of a product."
Allen, who is now chief executive officer of Seminole Gaming and chairman of Hard Rock International, said entertainment is the future of the casino industry, but it all starts with a great building and amenities.
If casinos build the right product, finance it properly and make sure it is not over-leveraged, "we will be fine in this industry," he told the audience of casino operators and others at the Coast Convention Center.
Allen worked in the Trump organization in Atlantic City at a time when he said they considered themselves "invincible."
It's not that the company didn't do well with revenue, he said. The money was flowing in from the casinos on the Atlantic City boardwalk, but he said the company was over-leveraged and paying $180 million a year in interest, at 14 percent and higher. It was a recipe for disaster, he said.
Atlantic City made some catastrophic mistakes, Allen said, and he is optimistic casinos and Wall street learned valuable lessons.
In 2001, he became CEO of Seminole Gaming. In 2015, Native American casinos for the first time surpassed the revenue of commercial casinos in the United States.
"Who would have thought that would ever happen?" he asked. "It started with the Seminole tribe in Florida," which opened the first tribal casino in Hollywood, Florida, in 1979.
Allen said every naysayer told him the Seminoles shouldn't buy the Hard Rock brand. But they did, in 2008, just before the near-global financial meltdown, and he said since then the brand and company have nearly tripled in size.
The biggest problem Hard Rock has today is too many deals on new properties, he said. A Hard Rock is being built on the site of the Berlin Wall in Germany and in Times Square, he said, and Hard Rock International has just completed the purchase of Donald Trump's Taj Mahal Casino in Atlantic City. Allen said the power of the Hard Rock brand is what will draw people.
Hard Rock Biloxi is owned by Twin River Management Group. Allen said the entire Hard Rock brand is now controlled by one group. The brand had 74 billion mentions last year in media reports worldwide, he said, and is always listed as one of the top 10 most-recognized brands.
He and other speakers talked about competition in Florida and areas throughout the Southeast, and Allen said, "If they want to legalize gaming in Cuba we're all for it."
He showed a map of all the potential casino sites in Florida if legislation is passed to expand beyond the Seminole casinos. Four are on the Florida Panhandle and others are spread throughout the state.
The Florida legislature decided again this week to do nothing about allowing commercial casinos, he said, "specifically because of this map."
Mary Perez: 228-896-2354, @MaryPerezSH
