The island of Maui in Hawaii has been devastated by fire. It is a tragedy of epic proportions. More than 3,000 acres and 2,200 structures were destroyed, causing damage of at least an estimated $5.5 billion; 4,500 people lost their employment and 5,000 their homes. There have been 115 reported deaths and 388 people are still missing.
The fires on Maui attracted international attention and sympathy. The island occupies a special place in the hearts of many people who have spent time enjoying the paradise-like setting and the warm people who live there. Thousands of individuals, celebrities, and corporations donated money, food, housing, and clothing to the victims of the fires. One five-year-old boy in Seattle raised $17,000 selling “Lemonade for Lahaina.”
Las Vegas has also been raising money for Maui with several fundraising campaigns. The city is often called the ninth Hawaiian island because of the close connection between the two. Boyd Gaming is among those donating. The corporation has good reason for its sympathies. Since Boyd’s California Hotel-Casino opened, the property has relied on Hawaiians, especially people from Maui, for its success. The corporate vice president of communications told the press, “Without Hawaii, there is no Boyd.” There might still be a Boyd Gaming without Hawaiian customers, but it certainly would be a smaller and less successful company.
Boyd’s relationship with Maui and the other Hawaiian islands goes back almost 50 years. It began with Sam Boyd and his downtown Vegas property, the California. Tired of dodging the law in other jurisdictions, Boyd moved to Las Vegas in 1941. He worked in the casino industry, moving up in hierarchy, and he saved his money; along the way, he invested in several casinos. In 1962, the family bought the Eldorado in Henderson. By 1975, Sam and his son Bill were ready to build and operate their own casino, the California. In those days, downtown Las Vegas struggled to compete with the more glamorous Strip and an increasing number of neighborhood casinos. The California was no exception. But somewhere along the line, the Boyds hit on a brilliant marketing strategy that in one form or another still exists today.
The California targeted Hawaiians, offering discounts, special flights, fares, junkets, and other enticements. Some junket representatives brought groups of as many as 100 gamblers every week. At the California, Hawaiian food, entertainment, and culture welcomed islanders. Gambling is illegal in Hawaii, but Hawaiians love to gamble. They gambled at home, but still loved to go to Vegas. And Las Vegas loved to have them visit. For Boyd, it was an immensely successful strategy; thousands and thousands of Hawaiians go to Las Vegas every year and the majority stay at Boyd properties downtown. The others visit the hotel-casino during their stay. As a result of the huge number of islanders who visit, a large Hawaiian community has developed in Las Vegas.
When Boyd expanded into other markets, both in Las Vegas and other jurisdictions, it did not try to duplicate its Hawaiian strategy. However, it did serve as a model. In 1979, when Boyd expanded into the Las Vegas neighborhood market with Sam’s Town, it needed a new strategy. The company took the lessons it learned from Hawaii into Sam’s Town. It catered to people who lived within a five-mile radius of the casino. But Boyd did not see those people as being one homogeneous population as it did the Hawaiians. Instead, it divided the market into two segments, daytime gamblers, who were older and more conservative, and nighttime gamblers who were younger and more adventurous. The marketing was completely different for each group, but like its downtown model included food, entertainment, and promotions suited to each group.
There was one common denominator, slot machines. The majority of the machines at Sam’s Town were very loose video pokers games. The daytime senior citizens and the nighttime country and westerners both loved the low hold percentage and liberal payouts. That lesson Boyd Gaming took with it wherever else it went. Generous slot machines are at the core of the corporation’s success. And that too may be a lesson it learned in Maui.
The gamblers who came to downtown Las Vegas from Hawaii were sophisticated gamblers. Thanks to the backroom crap games that flourished on Maui and other islands, the players understood the game and gambling odds. In Las Vegas just as at home, they were willing to take a risk, but they wanted a fair game and odds that gave them a chance of winning. If Boyd was going to build its business around those island gamblers, it needed to give them good odds.
Boyd Gaming has grown far past the California and Sam’s Town. The corporation probably would have done well even without those two properties and the strategies it developed there. However, it would not be as large and profitable without the Hawaiians. The foundations of Boyd Gaming were laid in Maui and it owes the island a great deal.
The California prospered from the Hawaiian business; Boyd Gaming prospered from the principles that Sam and Bill Boyd learned catering to the Maui islanders. It has been a good partnership.
