Station Casinos Inc. Business Information, Profile, and History

Company Perspectives:

Station Casinos Inc. emphasizes attracting and retaining customers, primarily from the local and repeat visitor markets, through innovative promotional programs and focused marketing efforts. To foster repeat business, Station Casinos Inc. is dedicated to ensuring a high level of customer satisfaction and loyalty by providing attentive customer service in a friendly, casual atmosphere. Station Casinos Inc. is committed to providing a quality, entertaining experience for its customers at an affordable price, with particular emphasis on the value offered by its slot and video poker machine play, restaurants and hotel accommodations.

History of Station Casinos Inc.

Station Casinos Inc. is a Las Vegas, Nevada-based, multi-jurisdictional gaming company which owns and/or operates numerous hotel and casino properties throughout the United States. In Las Vegas, the company's facilities include The Palace Station Hotel & Casino, The Boulder Station Hotel & Casino, The Texas Station Gambling Hall & Hotel, and The Wild Wild West Gambling Hall & Hotel. Catering primarily to the locals, most of the company's facilities in Las Vegas are located on the Strip. The company also provides slot machine route management services to numerous food and beverage establishments, commercial businesses, and major hotels and casinos, primarily in southern Nevada, as well as throughout the United States. The company also owns and operates Station Casino St. Charles, a gaming and entertainment riverboat facility in St. Charles, Missouri; Station Casino Kansas City, a gaming and entertainment facility in Kansas City, Missouri; and The Sunset Station Hotel & Casino in Henderson, Nevada, a suburb of Las Vegas. The company additionally owns Southwest Companies Inc. and 50 percent of Barley's Casino & Brewing Company (the other 50 percent is owned by Greenspun Inc.), which operates a microbrewery in the Henderson/Green Valley area of Las Vegas. The company has established itself with a proven track record of growth and profitability in the most competitive gaming environment in the world.

Let the Games Begin, 1976

Incorporated in Las Vegas, Nevada, in 1976, the company had as its first facility and foundation The Casino (now known as The Palace Station Hotel & Casino), which opened initially as a 5,000-square-foot facility with 100 slot machines, six table games (four of them Blackjack), a small bar, and a buffet next door to The Mini-Price Motel. Through incremental additions and significant expansion projects, The Palace Station, located at the intersection of Interstate 15 and Sahara Avenue, grew. The first addition came in July 1977 when a Bingo parlor was added, bringing 15,000 more square feet of space, including an 8,000-square-foot Bingo room, 300 more slot machines, an enlarged buffet, a Keno game, and the property's first full-service restaurant. The facility became The Casino and Bingo Palace.

By April 1978, the facility had tripled in size to 60,000 square feet, including more casino space, a new restaurant and buffet, another new Bingo room, and a sports facility. In 1979, Frank J. Fertitta, Jr., one of the original founders, bought out his three partners, becoming the sole owner. In 1981, a new Bingo room was built, and the facility was a full-scale casino. The name was changed to The Palace Station in 1983.

In April 1984, the property tripled in size again, adding more casino space, along with upgrades of the restaurant and buffet and the addition of banquet/meeting rooms on a second floor. Concurrently, Frank J. Fertitta III joined the company as a vice-president and director. In November 1985, the company bought The Mini-Price Hotel.

The years following brought tremendous growth and development for the facility and, by 1998, it featured 39 acres; a 1,028-room hotel; 3,700 parking spaces; an 84,000-square-foot casino; five full-service restaurants (including the 24-hour Iron Horse Cafe, featuring a Chinese menu in addition to American fare; the all-you-can-eat The Feast Gourmet Buffet; The Broiler, a steak and seafood restaurant; The Pasta Palace, an Italian restaurant; and The Guadalajara Bar & Grille, a Mexican restaurant); several fast-food outlets; a 20,000-square-foot banquet and convention center; two swimming pools; a gift shop; a non-gaming video arcade; over 2,200 slot and video poker machines; 55 gaming tables; two Keno lounges; a Bingo parlor; a poker parlor; a race and sports facility; and over 100,000 square feet of public space.

Explosive Growth in the 1990s

In May 1994, the company introduced riverboat and dockside gaming in Missouri with the opening of its Station Casino St. Charles, located on 52 acres at Interstate 70 and the Missouri River in the city of St. Charles, approximately seven miles from the St. Louis airport. The facility would quickly become the number one tourist attraction in the region. The three-deck, 387-foot riverboat and dockside facility, with over 170,000 cars passing it daily, included all the newest, exciting games, fine dining, and live entertainment, and could handle 2,000 passengers at a time. Including a 150-seat bar and lounge, fast-food outlets, a lobby and ticketing facility, and a gift shop, it was the first dockside gaming facility in Missouri to offer two casinos with fluctuating odd/even hours so that customers would not have to wait to board, revolutionizing gaming in the state and leading to duplication by other Missouri gaming operators. The facility additionally introduced a number of new games to its customers, as well as featured its standard creations such as Reversible Royals Video Poker, Million-Coin Video Poker, and the state's first Red, White and Blue Progressive Slot Machine Game.

Several months later, in August, the company opened The Boulder Station Hotel & Casino at the intersections of Interstate 515 and Boulder Highway in Nevada. The facility featured 337,000 square feet of main facility area in a low-rise complex; a 15-story hotel tower; 4,350 parking spaces; an 83,000-square-foot casino; 300 hotel rooms; five full-service restaurants with a total of over 1,400 seats (including The Iron Horse Cafe; The Feast Gourmet Buffet; The Broiler; The Pasta Palace, with an adjacent 24-seat pizza bar; and The Guadalajara Bar & Grille); a number of quick-service food outlets; a 280-seat entertainment lounge; eight additional bars; a swimming pool; a non-gaming video arcade; a gift shop; over 3,000 slot and video poker machines; 54 table games; a Keno lounge; a poker room; and a race and sports facility. Total revenue for 1994 climbed to $169.5 million, with net income of $9.4 million.

In July 1995, the company opened The Texas Station Gambling Hall & Hotel at the corner of Lake Mead Boulevard and Tonopah Highway in North Las Vegas. Offering a fully integrated, "down-home" Texas atmosphere throughout, the property is located on 47 acres, featuring over 198,000 square feet of public space, with 67,800 square feet of casino space; 200 hotel rooms; five full-service restaurants with over 1,400 seats (including the 24-hour Yellow Rose Cafe coffee shop; The Stockyard Steakhouse; The Laredo Cantina and Cafe Mexican restaurant; The San Lorenzo Italian restaurant; and The Feast Around the World Buffet, featuring authentic Texas-style barbecue); three bars (including The Whiskey Bar, with its seven-foot-high bronco rider which rotates on a pedestal; The Garage Bar, with its 1976 fire-engine-red Cadillac Eldorado featuring seven-foot Texas Longhorns on the hood; and The Armadillo, with its 3,000-piece cut-glass armadillo in the dance hall); several quick-food outlets; 1,840 slot and video poker machines; 35 table games; a 165-seat race and sports facility; parking for 3,000 vehicles; and a 12-screen movie complex, which opened in August, operated by Portland, Oregon-based Act III Theatres.

In November of that year, the company added to its Boulder Station facility Boulder Cinemas, an 11-theater movie complex operated by Act III, and a "Kids Quest" child care center, the first such facility in a gaming entertainment complex in Las Vegas, and planned a 500-room expansion of its hotel facilities in 1999. Total revenue for 1995 jumped to $290.3 million, with a net loss of $7.9 million.

In 1996, the company introduced two of its most successful Las Vegas dining concepts, The Feast "Action" Buffet and The Broiler Steak and Seafood Restaurant, into the Midwest at the Station St. Charles facility. The Feast, which copied the Japanese restaurant style of having food prepared right before the customers, was the largest buffet dining room in the St. Louis area with over 800 seats. Business was so successful that only three months after it opened the restaurant was expanded with an additional 140 seats. Like its Las Vegas and Kansas City counterparts, the Station St. Charles restaurant offered breakfast, lunch, and dinner, ranging in price from $3.95-$9.95, seven days a week, featuring Mexican, Chinese, Italian, barbecue, and American fare. The Broiler's gourmet dining selections quickly earned it many five-star reviews from the St. Louis Post-Dispatch, the St. Louis Business Journal, and the Riverfront Times, the region's leading daily and weekly newspapers. Following traditional menu guidelines beta-tested in Las Vegas at Palace Station and Boulder Station, broiler chefs at the Station St. Charles developed fare consisting of steak, seafood, and veal specialties which were soon major hits in the Midwest, complete with a gourmet wine list.

In May, the company opened a 10,000-square-foot Bingo parlor on the south side of The Texas Station complex, with space for 85 additional slot and video poker machines, and a snack bar. The following month, the company expanded its buffet into space previously used by The Galveston Bay Seafood Co. restaurant, renaming the facility The Feast. Total revenue for 1996 jumped again, this time to $466.9 million, with a net income of $25.5 million.

The company started off 1997 by opening The Station Casino Kansas City. It would become one of the nation's largest casinos and Missouri's largest gaming and entertainment complex. The facility featured 730,000 square feet of gaming and entertainment space, with twin, 70,000-square-foot floating casinos that held 3,000 slot machines and 190 gaming tables; a 200-room hotel; six full-service restaurants; six quick-serve and specialty restaurants; 11 bars and lounges; the 1,400-seat, state-of-the-art Grand Pavilion; parking for 5,000 vehicles; a "Kids Quest" child care facility; The Phoenix Piano Bar & Grill; and Arthur Bryant's Barbecue.

In June 1997, the company opened The Sunset Station Hotel & Casino in the Henderson/Grass Valley area, near Las Vegas, the first full-service gaming and entertainment facility in that area, one of the fastest-growing communities in the country. The facility featured a Spanish/Mediterranean theme, with 350,000 square feet of entertainment space, including an 80,000-square-foot casino; a 20-story hotel with 450 rooms; a 13-screen Act III movie theater complex; 12 world-class, full-service restaurants; over 2,700 slot and video machines; 41 table games; a poker parlor; a Keno lounge; a race and sports facility; and over 5,000 parking spaces all located on 100 acres at the intersection of Interstate 515 and Sunset Road.

In October 1997, the Station St. Charles introduced Silicon Gaming Inc.'s new Odyssey Interactive Slot Machine game, featuring five games in one machine, an exclusive in the state of Missouri and in the St. Louis market until the fall of 1998. Total revenue for 1997 soared to $583.5 million, with a net income of $13.8 million.

In January 1998, Crescent Real Estate Equities Company announced its plans to merge with Station Casinos Inc. in a stock swap and debt assumption transaction valued at a total of approximately $1.7 billion, which would give the former a total market capitalization of nearly $8.5 billion. Crescent Real Estate was a fully integrated real estate company owning, through its various subsidiaries, a portfolio of real estate assets consisting of 88 office and seven retail properties totaling 32 million square feet; a 38 percent interest in 94 refrigerated warehouse facilities; 89 behavioral healthcare facilities; six hotel and casino properties; seven full-service hotels totaling 2,276 rooms; two destination health and fitness resorts; and economic interests in five residential development corporations, all in 21 metropolitan submarkets in the states of Texas and Colorado.

Crescent Real Estate also announced plans to contribute substantially all of the real estate assets it would acquire from Station Casinos to a new Casino Partnership, owned initially in full by Crescent Real Estate, which would invest primarily in casinos, other gaming properties, and other real estate properties in the Las Vegas area. The hotel and casino properties were leased to an operating company, with the profits being shared equally by Crescent Operating Inc. and Station Casino's management team. Frank J. Fertitta III, president and CEO, and the over 10,000 employees of Station Casino continued to operate the properties as the tenants.

In April, expansion began at the company's Sunset Station facility. The $45 million master-plan expansion featured 11 new movie screens with THX sound and stadium-style seating to complement the existing 13-screen multiplex movie theaters operated by Act III, which resulted in the largest movie theater complex to date in the Las Vegas area; a 2,000-space covered parking garage adjacent to the theater; a 20,000-square-foot expansion of the casino; The Wayne Gretzky Roller Hockey Center and Ice Skating Arena, a dual-rink, state-of-the-art complex featuring in-line roller hockey and ice skating surfaces for a wide range of league activities, public skating, clinics, instruction, and other events; a steakhouse restaurant; a food court area; and expanded and improved conference facilities.

Phase II expansion on The Texas Station Gambling Hall & Hotel began in May of that year. The $51 million project, designed to enhance Texas Station's reputation for quality entertainment, included six additional movie screens with THX sound and stadium-style seating being added to the existing 12-screen multiplex movie theater operated by Act III; a 2,000-space covered parking garage adjacent to a new theater entrance, designed to provide maximum convenience for customers and featuring a valet; a 10,000-square-foot "Kids Quest" child care facility; a new bar and lounge similar in nature to the popular Gaudi Bar at Sunset Station, only featuring a Texas motif; a food court with several brand-name tenants; an expanded arcade; and a 21,000-square-foot expansion of the casino.

In July of that year, the company announced that it had received approval from The Nevada Gaming Control Board to lease and operate a property known as The King 8 Hotel & Gambling Hall, located on Tropicana Avenue and Industrial Road, just west of Interstate 15 in Las Vegas. Following a five-day closing from July 1-5, the property was reopened on July 6 and renamed The Wild Wild West Gambling Hall & Hotel. Also in July, the company announced that the proposed merger with Crescent Real Estate had been stalled but was still pending.

As Las Vegas continued to thrive as one of the fastest-growing communities in the United States, with the population expected to double over the course of nine years, the new ownership and management of Station Casino planned to move forward confidently into the 21st century.

Principal Subsidiaries: Barley's Casino & Brewing Company (50%); Boulder Station Hotel & Casino; Palace Station Hotel & Casino; Southwest Companies Inc.; Station Casino Kansas City; Station Casino St. Charles; Sunset Station Hotel & Casino; Texas Station Gambling Hall & Hotel.