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LAS VEGA REVIEW JOURNAL - September 2005

Landry's Restaurants' first venture into gaming approved
by Nevada Gaming Commission

The Las Vegas Golden Nugget roared off to a strong start under Landry’s, whose Chairman Tilman Fertitta is displaying a very hands-on approach to management.

One month does not tell the whole story, but a good start is a good start. October, the first full month with Landry’s execs at the helm, was the most profitable month for the downtown casino in the last five years.

Fertitta admitted the casino “played lucky.” But luck or the lack of it is always a factor in casino operation relying on something other than slots.

The Nugget’s employee roster has been trimmed (by about 14 percent according to internal sources) and a roughly two-year schedule of improvements has been launched with the first focus of work being the lobby and main entrance.

Those remaining on the job are being schooled in the Landry’s approach to profitability. The process has been an interesting one, according to the chairman. “Of the 24 vice presidents (in the Nugget organization), I would say that 80 percent of them did not know what EBITDA was,” Fertitta said.

Could he be kidding? It didn’t sound like it. In any case, everyone should know that EBITDA stands for “earnings before interest, taxes, depreciation, and amortization.”

Fertitta has said he’s aiming the Las Vegas Nugget at “the masses” rather than the more upscale gamblers who were the marketing targets of its prior owners.

He concedes construction will produce periods of disruption during the months ahead. For instance, there will be a new porte conchere which means the familiar front entrance on the Casino Center has, for the moment, vanished behind construction barriers. This will be complete before Super Bowl weekend.

It’s hard to say what the impact will be as crews move throughout the property installing new features and giving others a new look. But Fertitta’s point: The end result will be worth it.

The city has closed part of Carson to aid in the hotel’s expansion, and Fertitta has an option that could lead to the purchase of other nearby but unidentified real estate. It’s all a part of creating a larger footprint.

The expansion plan includes the addition of more rooms, but the number will remain an unknown until things get priced. The post-Katrina effect relative to the higher prices of all kinds of building materials is hard to determine at this point.

Landry’s core business is the operation of 307 casual dining restaurants across more than 30 states under brands such as Landry’s, Joe’s Crab Shack and Rainforest Café. Sixty-eight of them along the Gulf Coast from Houston to Biloxi were closed for at least several days because of the hurricanes.

One of its Biloxi restaurants was a total loss, another New Orleans sustained little damage but was still closed last week because its employees and customer base have not returned.

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