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Billionaire Phil Ruffin Adds Las Vegas Icon Circus Circus To His Growing Empire

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Las Vegas has always been known for glitz and glamour. Increasingly, the city specializes in delivering high-end experiences to visitors from all over the world, at luxurious hotels like Bellagio, Wynn, the Venetian, Aria, Four Seasons and Waldorf Astoria Las Vegas.

But one less-known casino mogul insists there is a Las Vegas market for middle-class and family travelers. That’s why Phil Ruffin, who built his fortune in real estate and the unglamorous handcart business, bought the historic Circus Circus casino hotel from MGM for $825 million.

“Circus Circus has anchored the north end of the Las Vegas Strip for over 50 years, and I am excited to add it to my casino portfolio," Ruffin said in October. "I have tremendous respect for Jim Murren and the MGM team, and my relationship with them goes back to my friendship with Kirk Kerkorian and continues to this day.”

Ruffin’s purchase of Circus Circus includes the 3900-room casino hotel, the Adventuredome theme park, a 10-acre RV park, the adjacent Slots-A-Fun Casino and the 37-acre festival grounds. Ruffin also bought Treasure Island (TI), for $775 million from MGM in 2009. The 2900-room hotel, long known for its pirate ship battles, was launched by flamboyant developer Steve Wynn.

Ruffin is not as well-known as fellow Las Vegas moguls Wynn, Sheldon Adelson, and past titans like Howard Hughes or Kirk Kerkorian. And he certainly isn’t as famous as his partner in the Trump International Hotel in Las Vegas, his friend Donald Trump.

Yet Ruffin, currently worth about $3.2 billion, is #319 on the Forbes 400 list of billionaires. Ruffin, the son of a grocer, was a high school wrestler. He dropped out of Wichita State to sell hamburgers, using the profits to buy convenience stores and real estate such as strip malls, office parks, and hotels. In addition to the three Las Vegas properties, Ruffin also recently acquired Casino Miami. Forbes noted, “Donald Trump was the best man at Ruffin's 2008 wedding to his wife Oleksandra, a former Miss Ukraine.”

Ruffin told me that he still gets to work at 5AM at Treasure Island. Later in the day, he heads to Circus Circus, generally knocking off at noon to spend time with his young family.

But at an age when many are retired, Ruffin is adding to his empire. When MGM decided to sell Circus Circus last fall as part of their asset-light strategy, Ruffin was there to snap it up.

“We’d been trying to buy the thing for a long time and someone from MGM came by and said they finally put it on the market,” Ruffin says. “We made an offer we thought was preemptive, and we were high bidder.” Ruffin, who has had a gaming license in Nevada since his 1997 purchase of the old Frontier, added, “We were approved unanimously by the Nevada Gambilng Board.”

Circus Circus, opened in 1968, looks a little tired. But to Ruffin, it’s a bargain. “To build a new casino hotel these days, you can’t do it for less than a million dollars a room.” That would make replacing Circus Circus a $4 billion proposition.

“We plan to remodel slowly so we don’t take too many rooms out of service. We’ll put a theater in with Cirque Du Soleil,” a 2,000-seat addition he estimates at $11 million. “We’ll upgrade Adventuredome, which has 2.5 million visitors a year, currently $30 million volume.”

The deal also includes a separate but attached casino. “Slots A Fun will be redone,” vows Ruffin. “It used to do $1 million a month.”

Perhaps even more important, Ruffin’s purchase included a total of 102 acres of land. “Yes, it’s a big piece of dirt!” he says. The plan is to use some of the land for a water park with sand beaches, a lazy river and a wave pool, like the popular water attraction at Mandalay Bay. “Mandalay Bay is a very different place, a place for mothers to take their children,” Ruffin says. “Circus Circus was started on that basis, as a family-oriented place.” Many people who grew up in Las Vegas went to Circus Circus’ Midway to watch acrobats, play games and win stuffed animals.

To build his new water park in the desert, Ruffin says, “I’m transferring some water rights from my house.”

Ruffin says the cash flow for Circus Circus is $80 million a year. According to MGM, the property reported adjusted property EBITDA of $62 million over the last year. I asked how he thought he could increase it.

“They had $11.7 million in MGM overhead, so there will be addition by subtraction,” Ruffin said. He added that Treasury Island’s management infrastructure is set up to handle up to four hotels, so “We can capture, synergy between the properties, payables, all the IT, etc.”

While Las Vegas has been more focused on entertainment than gambling, Ruffin’s Treasure Island was recently named “best Las Vegas Strip casino for blackjack.”

Ruffin, a successful poker player himself, is well aware the trend is towards electronic gaming. “People love the video games now,” Rufin says. “People don’t want to play with four or five other guys.” But even in an era of slick slot machines (Sex in the City anyone?) Ruffin says, “Circus Circus has old machines that take coins. People like the sound—they don’t always like sophisticated games.”

While competitors have significant convention facilities, Ruffin is focused on the leisure traveler. “We don’t have any convention business, but we do have the Las Vegas Convention Center across the street!” Ruffin says. “Our business doesn’t lend itself it to that. But we will get convention business at the 37 acres we have for temporary exhibitions”

Young people and families still pack Circus Circus, but the property does have something of a low-rent reputation. “Maybe we can change that somewhat,” Ruffin said, “but it takes time to make changes when you’re at one hundred percent occupancy.”

At Treasure Island, Ruffin says, “We remodeled all of our rooms. All will be brand new by August of 2021. We have a new buffet, and a sports bar. We spent $60 million.”

As for Circus Circus, Ruffin says, “There’s always a demand for lower-priced rooms. If we redid everything and had to get $300 a night for our rooms, we’d hurt ourselves.”

Ruffin does have more upscale properties, like his co-ownership of the 64-story luxury Trump International Hotel Las Vegas. Ruffin says “It’s up 25% from last year, and cash flowing.” Asked if he thought the property’s lack of a casino was a drawback, Ruffin felt many guests actually prefer it.

As for getting approval for a gaming license for a possible casino, Ruffin felt his co-owner might be a little too busy. “I can’t see Trump going before the Nevada casino board—I’d like to go see that!”

As for the future, Ruffin has expressed interest in potential acquisitions from companies like MGM and Caesars Entertainment. “They say they’re going to put properties on the market. We’d buy whatever’s available. We’re still building the company. People shoot business at us all the time.”

Asked whether he found growing his business invigorating or taxing at this point, (he will turn 85 in March) Ruffin bristled. “This is what I do—I’m going to die at my desk. That’s what my dad taught me a long time ago—-work your ass off.”