Casino fixer gambling on win in UK

(source: The Sunday Times September 25, 2005)

The Andrew Davidson Interview: Casino fixer gambling on win in UK
Allan Solomons Isle of Capri wants to be the first US casino operator to open a large-scale venue in Britain. But only one will be allowed and competition is fierce

THIS week were doing lunch. Its the pragmatic choice  my interviewee, Allan Solomon, executive vice-president of the American casino operator Isle of Capri, has yet to take an office in Britain, so we meet at LEscargot, in Londons Soho. It seems a casino operator kind of thing to do.

And anyway, Florida-based Solomon, trimly moustached and a dead ringer for Mel Brookss better-dressed, younger brother, looks like he might appreciate a nice meal.

He had hoped to be building a string of American-style casinos here by now, but has found himself stymied by the British governments sudden change of heart over gambling liberalisation. He is not alone. A clutch of American operators are now trundling round Britain, puzzling over what happens next.

Yeah, weve spent a lot of money looking for sites, says Solomon, under the assumption that there would be a number of larger-scale casinos, then we were disappointed when that number was reduced to eight, and really disappointed when that was reduced to one.

He studies his smoked-salmon starter pensively. Solomon, aged 69 but looking 10 years younger  its the Florida climate  has been jetting in and out of Britain for three years now, attempting to establish a beachhead for the Isle of Capri invasion.

His company, which he co-founded with chairman Bernie Goldstein in 1992, is already one of Americas top 10 publicly listed gambling businesses, with a $1 billion (£560m) turnover and a host of Caribbean-themed sites along the Mississippi and elsewhere. He has just had one river boat wiped out by Hurricane Katrina in Biloxi. It never rains but it pours.

Isle of Capris British interests include a £6m investment in the Ricoh Arena, Coventrys new exhibition centre and football stadium, which includes space for a 130,000 sq ft casino. Options on other sites were also taken.

That was before the British government, following a concerted scare campaign during the last general election, changed its mind and announced it would approve only one regional, super-casino  1,250 slot machines, 50 gaming tables, live entertainment  to be run as a pilot.

An advisory panel will pick the site, reporting to the government before next autumn. It will also choose sites for eight medium-sized and eight smaller casinos  all rather bigger than what was allowed before but not enough to excite the overseas operators.

In short, what was going to be a gung-ho liberalisation has slipped into bureaucratic quicksand, leaving Isle of Capri, which prides itself on being first to market in its target localities, desperate to get that pilot-site tag. Solomon had been on Radio 4s Today programme, just hours before we met, banging the drum about his Coventry project.

But he faces fierce competition. Last week Las Vegas Sands, another American operator, announced that it had been given approval by Glasgow city council to develop a £120m entertainment complex, including a Las Vegas-style casino.

Harrahs, which now owns Caesars Palace in Las Vegas, wants to build a £75m casino in the new Wembley stadium. MGM Mirage and others have also been looking around. South African Sol Kerzner wants a casino at the Millennium Dome. Thats before you even start listing the British contenders.

Whos going to get the nod? Right now, says Solomon, making his pitch, Coventry is the only one ready to go. In Glasgow, they have just outlined the planning, they (Las Vegas Sands) have loads of things still to do.

Whereas Coventry, he says, could be up and running before the end of next year. Nobody else could move that fast. Then he lists more reasons why it has to be Coventry: its part of a regeneration scheme, it has easy parking, its not in a residential neighbourhood.

And its jobs. After the car manufacturers laid off people, our casino would re-employ 1,100 in skilled jobs. With other jobs linked in (providing services and supplies) youre talking about some 5,000 jobs created in total.

Once the British get to know the product, theyll find casinos acceptable. There are clear economic benefits, and it doesnt create additional crime and all the other falsehoods that people associate with it.

So why does he think British politicians got cold feet?

I think there was bad publicity about some of the American operators, the image of Las Vegas type of casino. But those are casinos three or four times the size of what would be built in the UK  there is an overemphasis on that type of super-casino. Our product is more about fun and entertainment as well. That type of Las Vegas casino wont work in the UK.

Solomon puts his knife and fork neatly by the side of his plate and sips a glass of Chablis. He makes a convincing advocate  snowy-haired, gently humorous, quietly logical.

Boston-born, he trained as both an accountant and a tax lawyer, and even advised the American government at one stage in a long career that brought him to gambling late on.

As such, he is not what most Brits expect in an American gaming boss. A lot of the UK team thought Allan would be all black shirt and white tie, says Neil Sinclair, Isle of Capris British property adviser, but hes the complete opposite. Give him a chance and hes pulling out pictures of his grandchildren.

Solomon, whose father was a shoe wholesaler, is good at putting people at ease. He spent a lot of his career based in Louisville, Kentucky, and likes to describe himself as just a nice Jewish lawyer from the Midwest.

But he has worked both in law firms and public companies, and clearly has found his groove in Isle of Capri. Having moved to Boca Raton, Florida  I liked the lifestyle  he started the company with fellow incomer Goldstein, an entrepreneur who had been a client in Louisville.

Goldstein had riverside property and a barge business in the southern states, and a hunch that gambling  which Mississippi allows offshore  might work. It needed considerable legal fixing.

So Solomon threw in his lot with Goldstein, and Isle of Capri was born. The move is not unusual. American gaming operates under such tight regulation  the legacy of its early links with Mafia crime bosses  that lawyers frequently call the shots.

Hence Solomon handles the political lobbying, the approvals to open up, the permissions to operate, and the strategy for expansion. I deal with anything which is outside the four corners of the casinos, he smiles.

Others describe Solomon as key to Isle of Capris success.

Allan is the strategic glue  hes tireless, he does every deal for them and hes a shrewd negotiator, says Mark Harms, chief executive of Global Leisure Partners, another long-term adviser. Behind that exterior he is incredibly tough.

Solomons eye for a deal means Isle of Capri now has 14 casino and hotel sites stretching from Mississippi to Colorado, as well as a golf resort in the Bahamas and a racetrack in Florida.

The group has developed a reputation for sharp marketing to local customers, and good community relations. In Biloxi, where it hopes to rebuild its river-barge casino on land  whos going to insure a river barge now?  its housing homeless employees in its hotel, and has given $500,000 to the local relief fund.

Britain, Solomon hoped, would provide easier pickings, especially if he moved early  an initiative that now is in danger of backfiring. A lot of time, money and effort could have been wasted.

Solomon nods at the irony, as he picks through a slice of sea bream. He is too diplomatic to say it, but you can sense that he thinks we Brits are a bit mixed up about gambling.

Its just this idea that you dont want the proliferation of gaming, even though the UK has gaming everywhere: betting shops, bingo, bars with slot machines. You dont have that in the US.

He makes a face, and tidies up his plate. The point about Isle of Capri is that its not a glitzy, Las Vegas-based operation, he says. Its casinos offer a fun night out, no different to going bowling or seeing a movie. All the stuff about the supposedly seamy side of gaming is way off the mark. His core customers are middle-aged women, not mobsters or priapic youths or vulnerable gambling addicts.

Weve got the tropical theme, so if you come to our casinos you really feel like you are somewhere else. We want people to leave and think, boy, we had a good time, and we want them to come back, because a lot of our business is dependent on people coming back. Its open to everyone, you can have a nice buffet and a drink, you dont even have to gamble.

He sighs, wrapping it up. The bill is coming. He says he is on for the photo shoot the next day  the happy-go-lucky fixer in his tux at the roulette wheel.

But you get the sense that the British flip-flop over gambling is straining even his practised patience. It has all become too much a game of chance.

And that, funnily enough, makes most casino operators anxious.

ALLAN SOLOMONS WORKING DAY

THE Isle of Capris executive vice-president rises at 6am at his home outside Boca Raton, Florida. Its a country- club setting, closed community, with a health club, says Allan Solomon. Two mornings a week he works out with a female personal trainer. Very pretty  as my wife says, you should see her! He drives to his office seven miles away in Boca Raton, arriving by 8.30am. He works through e-mails and paperwork. A lot of the time he is out on the road sorting out projects, or talking to politicians about legislation and tax rates. Im pretty involved in the legislative process in Florida so I spend a lot of time in Tallahassee. We hire lobbyists but its important to tell your own story. For lunch he will usually eat at his desk, or visit a diner. He goes home after 6pm, but often eats out. He is asleep before midnight.

WORKING SPACE

ALLAN SOLOMON works from a suite of offices he shares with Isle of Capris chairman, Bernie Goldstein, in Boca Raton, north of Miami. The Isle of Capri founders are on the third floor of a modern, four-storey building.

Theres just Bernie and me and a secretary  its an outpost for founders, says Solomon. The companys main office is in Biloxi, now under repair after Hurricane Katrina. Solomons office measures 15 feet square and looks out over a tree-lined road and a small park. He has a dark, modern desk and three armchairs. There are photos of family and politicians on display depending on who is coming to visit me at the time.

A clutch of deal mementos  a clock, paperweights  are dotted round the room. His papers are neatly stacked. Im a tidy person, he says.

VITAL STATISTICS

Born: February 7, 1936

Marital status: married, four children

School: Brookline High School, near Boston

University: Wharton

First job: accountant

Salary: $423,000

Home: Boca Raton, Florida

Car: grey Lexus GS430

Favourite author: Wilbur Smith

Favourite music: FourFreshmen

Favourite film: Groundhog Day

Favourite gadget: Pronto infrared control

Last holiday: Vermont

Interests: family, golf, eating out

Date Posted: 25-Sep-2005