Boyd Gaming Corporation Business Information, Profile, and History

Company Perspectives:

We, as members of Boyd Gaming Corporation, operate with only the highest degree of integrity, and rely on the competence and friendliness of each person in our organization to provide entertainment and service to satisfy our customers' wants. Through teamwork, we strive to maximize shareholder value, to be among the leading companies in our industry and to provide opportunities for all while we support and enhance our communities.

History of Boyd Gaming Corporation

Boyd Gaming Corporation is a multi-jurisdictional gaming company with properties in Nevada, Louisiana, Indiana, Mississippi, and Illinois. In Nevada, Boyd Gaming owns casino and hotel facilities on the Las Vegas Strip, in downtown Las Vegas, and on the Boulder Strip. Properties in the greater Las Vegas area include the Stardust Resort and Casino, Sam's Town Hotel and Gambling Hall, the Eldorado Casino, the Jokers Wild Casino, the California Hotel and Casino, the Fremont Hotel and Casino, and the Main Street Station Casino, Brewery and Hotel. In Louisiana, Boyd Gaming operates the Treasure Chest Casino and Delta Downs Racetrack. In Indiana, the company operates the Blue Chip Casino. In Mississippi, the company operates Sam's Town Hotel and Gambling Hall in Tunica County. In Illinois, the company operates the Par-A-Dice Hotel and Casino. Through a joint venture with MGM Mirage, Boyd Gaming is developing a $1 billion hotel casino in Atlantic City, New Jersey. Named The Borgata, the gaming and entertainment complex is scheduled to open in 2003. Boyd Gaming also owns a travel agency named Vacations-Hawaii, which provides chartered flights to Las Vegas as part of exclusive packages to the company's hotel casinos in Las Vegas.

Origins

The Boyd name in Las Vegas was established by the family's patriarch, Sam Boyd. As a youth during the 1920s, Boyd helped support his mother and siblings by working at the Long Beach Amusement Park in California. Without a father to support the family, the Boyds relied on the income earned by Sam at the amusement park's carnival games to survive. The family's financial prospects improved dramatically after Sam Boyd moved to Las Vegas, but few acquaintances could have guessed that his arrival in Las Vegas marked the beginning of a multibillion-dollar gambling empire bearing the Boyd name.

Boyd moved to Las Vegas in September 1941 with $80 to his name. His modest bankroll—the financial foundation of Boyd Gaming—soon grew, however. Boyd immersed himself in the area's burgeoning gambling scene, gaining the practical experience he would later use to operate his own casinos. He first found employment as a dealer, before rising through the ranks of Las Vegas's employment hierarchy. Boyd was promoted to pit boss, then to shift supervisor, saving his money as he learned the operational aspects of casino management. Eventually, he saved enough money to buy an interest in the Sahara Hotel, giving him the financial leverage to pursue his ambitions. Next, Boyd became a general manager and partner at The Mint located in downtown Las Vegas, his last position before moving into casino ownership outright.

The California Opens in 1975

From the outset, Boyd's fiefdom of casinos involved his son, William Boyd. William Boyd was a practicing attorney in 1962 when he and his father purchased the Eldorado Club in Henderson, Nevada, located southeast of Las Vegas. Although the Eldorado Club represented the first instance that the father-and-son team joined forces in the casino business, the acquisition did not represent the formal beginnings of the Boyds' hotel and gaming enterprise. That moment, according to the company's reckoning, did not arrive until a dozen years later. In 1973, William Boyd quit his law practice to join his father on a full-time basis, two years before the pair unveiled what became regarded as Boyd Gaming's first property. In 1975, The California Hotel and Casino opened in downtown Las Vegas, marking the inaugural year of The Boyd Group, the direct predecessor to Boyd Gaming Corporation.

The California occupied 15.5 acres in downtown Las Vegas. The hotel, after expansion, contained nearly 800 guest rooms, while the casino, comprising 36,000 square feet of gaming space, featured 35 table games and 1,100 slot machines. Included within the hotel and casino complex were five restaurants and a recreational vehicle park capable of serving 95 vehicles, the only such facility in downtown Las Vegas. It was a fitting flagship property for the Boyds, a sizeable anchor for the stable of gaming complexes that would follow in its wake. After registering success with The California, the Boyds moved into largely uncharted territory, helping to create a third major gaming area in the greater Las Vegas region. Construction of Sam's Town Las Vegas began on 13 acres of desert at the intersection of Nellis Boulevard and Boulder Highway. The hotel and casino dwarfed The California, securing the Boyds' presence along what would become known as the Boulder Strip. Sam's Town opened in 1979, comprising a 648-room hotel and an approximately 130,000-square-foot casino with 12 restaurants. It was the first gaming resort to cater to local residents. Like The California, Sam's Town predominantly featured slot machines because slot machine wagering ranked as the most consistently profitable segment of the casino entertainment business.

The tenth anniversary of The California's grand opening was marked by the addition of two more Boyd hotel and gaming properties. In 1985, the company added its first casino on the Las Vegas Strip, the Stardust Resort and Casino, a hotel with more than 1,500 rooms and a gaming area measuring roughly 75,000 square feet. The Boyd Group also acquired the Fremont Hotel and Casino in 1985. Located in downtown Las Vegas, the Fremont consisted of a 450-room hotel and a 36,000-square-foot casino.

Aggressive Expansion During the 1990s

The addition of the Stardust and the Fremont gave the Boyds a total of four properties—the size of their company until the early 1990s. The pace of expansion accelerated during the 1990s, as the number of Boyd-operated properties nearly tripled during a six-year period. The beginning of this new, more ambitious era coincided with the end of another era. In 1993, Sam Boyd passed away, leaving behind a company set to record substantial physical growth. William Boyd, serving as chairman and chief executive officer, spearheaded the expansion, greatly increasing the company's geographic scope as state gambling restrictions eased.

Before shaping his company into a multi-jurisdictional operator, Boyd fleshed out the company's presence in Nevada. On the Boulder Strip, where the company's western-theme Sam's Town Hotel and Gambling Hall had helped establish a new major gaming area in Nevada, Boyd added two new properties, the Eldorado Casino and the Joker's Wild Casino. Neither of the two additions to the Boyd Group's portfolio included hotel operations, a first for the company. The Eldorado Casino, situated on four acres in downtown Henderson, was the smallest of the company properties, a distinction it would hold for the remainder of the 1990s. The gaming space measured 16,000 square feet, filled with 600 slot machines and 11 table games. As with the original Eldorado Club acquired in 1962, the Eldorado Casino drew its business primarily from Henderson residents. The Joker's Wild, situated on 13 acres of company-owned land on the Boulder Strip, contained 22,500 square feet of gaming space, featuring 625 slot machines, 11 table games, a restaurant, a sports bar, and an entertainment lounge. The facility drew the bulk of its business from local residents and from visitors to Las Vegas arriving via the Boulder Highway.

The third facility acquired in 1993 joined the company's fold in December. For $16.5 million, the company purchased the Main Street Station Casino, Brewery and Hotel, located in downtown Las Vegas. Closed at the time of its acquisition by the Boyd Group, the Main Street property underwent two years of renovation and expansion before opening in November 1996. At the property's grand opening, guests found a 406-room hotel, a restaurant, a café, a brew pub, and 28,500 square feet of gaming space, featuring 905 slot machines and 22 table games.

Moving Beyond Nevada: 1994

In 1994, the Boyd Group, renamed Boyd Gaming Corporation, took its first steps outside Nevada. In May, the company exported its western-theme hotel casino concept to Mississippi, opening a Sam's Town in Tunica County, Mississippi, roughly 25 miles south of Memphis, Tennessee. Featuring a 200-room hotel, a 92,000-square-foot casino, and four restaurants in its original incarnation, the property was within a 200-mile radius of a population of roughly three million adults, including residents of Nashville, Tennessee; Jackson, Mississippi; and Little Rock, Arkansas. A little more than six months after the hotel casino opened, an $18 million expansion project added 308 guest rooms, a swimming pool, and a recreational area, testifying to the property's success in Mississippi's dockside gambling market. Less than two years later, in 1996, the property was expanded again. A 350-room hotel tower was constructed, a 1,000-space parking garage was added, and the facility's gaming space was increased to 75,000 square feet.

Boyd Gaming moved into another market in 1994, investing in Treasure Chest Casino, a riverboat operation located on Lake Pontchartrain in Kenner, Louisiana, near the New Orleans International Airport. Boyd Gaming acquired a 15 percent interest in Treasure Chest and managed the property, which was modeled after an 18th-century Victorian-era, paddle-wheel riverboat. Capable of serving 1,750 customers, the Treasure Chest housed 24,000 square feet of gaming space and, after an $11 million expansion project in January 1996, featured an entertainment complex. In October 1997, Boyd Gaming assumed full ownership over the property, purchasing the 85 percent interest it did not already own. Also in 1994, the company signed a management agreement to manage the Silver Star Resort and Casino, a casino located on tribal lands owned by the Mississippi Band of Choctaw Indians. Boyd Gaming began managing the Silver Star when the facility opened in July 1994, signing a seven-year agreement with the Choctaw. An expansion project completed during the late 1990s added a 505-room hotel to the property, which contained 90,000 square feet of gaming space. Boyd Gaming terminated its management contract before it was set to expire, ending its association with the Silver Star in January 2000.

Boyd Gaming's accelerated pace of expansion continued into 1995, resulting in one strategic acquisition and one miscue. The company's efforts to expand its gaming empire rarely failed, but in 1995 the company recorded a notable mistake. In September, the $70 million Sam's Town Kansas City opened, but after further investment, the property failed to meet expectations. Roughly three years later, in July 1998, the casino was closed. On a more positive note, the company added a new subsidiary in 1995, acquiring Vacations-Hawaii, a 43-year-old travel agency located on the Hawaiian Islands. Within six months of its affiliation with Boyd Gaming, Vacations-Hawaii began offering discounted nonstop charter service to Las Vegas that included exclusive vacation packages to Boyd Gaming's hotel casinos in the Las Vegas area. Initially, the charter service was offered twice per week, but in 1996 the schedule was increased to include six nonstop flights per week.

During the latter half of the 1990s, Boyd Gaming pursued expansion at a more leisurely pace, but the additions to the company's portfolio of properties were significant, nevertheless. In December 1996, another riverboat casino was acquired, the Par-A-Dice Riverboat Casino in East Peoria, Illinois. Located along the Illinois River, the casino, which originally opened in 1991, contained 33,000 square feet of gaming space and sat adjacent to the Par-A-Dice Hotel, a 208-room, full-service hotel.

The company's next significant move occurred in July 1998, when it signed a joint venture agreement with Mirage Resorts, Incorporated (which merged with MGM Grand in 2000 to become MGM Mirage). The two companies agreed to jointly develop and own a casino hotel entertainment complex in Atlantic City, New Jersey. The project—later named The Borgata—was enormous, evolving into a 40-story, $1 billion hotel casino with 2,010 guest rooms and 120,000 square feet of gaming space. The groundbreaking ceremony for the development was held in September 2000, with construction expected to be completed in time for The Borgata's grand opening in 2003.

The preparatory work required to turn The Borgata development into a reality was immense, but Boyd and his executive management team did not shy from pursuing other acquisition candidates. In November 1999, the company added its 12th property by acquiring the Blue Chip Casino, a riverboat casino in Michigan City, Indiana. Opened in 1997, the three-deck Blue Chip contained 37,000 square feet of gaming space and two restaurants, existing as one of five casino riverboats authorized to operate in Indiana along Lake Michigan.

The expected completion of The Borgata in 2003 promised to conclude a remarkable ten-year period of growth for Boyd Gaming. The company had entered 1993 with four properties to its name before embarking on an aggressive expansion campaign that tripled the number of its holdings by the decade's conclusion and increased its annual revenues to more than $2 billion by 2000. As the completion of The Borgata neared, the company continued to demonstrate a willingness to expand further. In May 2001, Boyd Gaming acquired the Delta Downs Racetrack, adding a new dimension to the company's gaming operations. Located near Vinton, Louisiana, Delta Downs was eligible under Louisiana law to operate slot machines, prompting Boyd Gaming to file for licenses to begin casino operations at the racetrack. With further acquisitions expected, the company pressed ahead, intent on making Boyd Gaming a national leader in the gaming industry.

Principal Subsidiaries:California Hotel and Casino Inc.; Boyd Tunica, Inc.; Boyd Kenner, Inc.; Boyd Louisiana L.L.C.; Boyd Mississippi, Inc.; Par-A-Dice Gaming Corporation; East Peoria Hotel, Inc.; Vacations-Hawaii; Boyd Atlantic City, Inc.

Principal Competitors:MGM Mirage; Mandalay Resort Group; Park Place Entertainment Corporation; Harrah's Entertainment, Inc.

Chronology

• Key Dates:
• 1941: Sam Boyd moves to Las Vegas.
• 1962: Boyd and his son William acquire the Eldorado Club.
• 1975: Boyd Gaming's first property, The California Hotel and Casino, opens.
• 1979: Sam's Town Hotel and Gambling Hall opens on the Boulder Strip.
• 1985: The Stardust Resort and Casino and the Fremont Hotel and Casino become Boyd Gaming properties.
• 1994: Boyd Gaming opens a hotel casino in Mississippi, its first property outside of Nevada.
• 1998: Company signs a joint venture agreement with Mirage Resorts (later MGM Mirage) to develop and own The Borgata, an Atlantic City hotel casino complex scheduled for completion in 2003.
• 2001: Delta Downs Racetrack is acquired.