How Rivers Casino was created
When he entered into negotiations with financier J. P. Morgan, the banker asked the industrialist to write down what he thought his company was worth. Carnegie took out a pencil and scribbled “$480 million.”
When Morgan looked at the piece of paper he simply said, “Mr. Carnegie, congratulations on becoming the richest man in the world.”
Fast forward more than a century, to the year 2005. Carnegie’s $480 million would barely be enough to cover the anticipated cost of the Majestic Star Casino entertainment complex that was scheduled to be built on a 17-acre sliver of Pittsburgh land that once housed a Carnegie Steel rolling mill and warehouse.
Led by Don H. Barden, the country’s only African American casino owner, Majestic Star had prevailed in a three-way fight for the Steel City’s only casino license. The announcement came on Barden’s 63rd birthday. But before he could get started on his planned $455 million gambling palace, Barden had to endure a challenge in the Pennsylvania courts.
The Majestic Star slots license was the most unpopular of the Gaming Control Board’s decisions. One of the other applicants, Isle of Capri, had partnered with Pittsburgh’s National Hockey League team, the Penguins, and their bid included picking up the entire $280 million tab for a new hockey arena.
While Barden would be putting some of his company’s gaming revenue towards a hockey arena, as well as other Pittsburgh community projects, the cost for the new Penguins’ home would ultimately come from the people’s tax dollars under his plan. Eventually the Pennsylvania Supreme court upheld the Majestic Star license by a six to one vote.
The one-time Carnegie Steel site was selected for its convenience to major highways on Pittsburgh’s North Shore and prominence at the confluence of the Allegheny and Monongahela rivers where they come together to form the Ohio River. It was a brownfield, contaminated with tar and petroleum but clean-up was easier and less costly than anyone anticipated.
Barden hired Bergman Walls & Associates of Las Vegas to design his Majestic Star Casino and Pittsburgh-based Strada Architecture to sculpt the landscape and work on the building’s exterior. The two-story casino made generous use of materials from three of Pittsburgh’s foundation industries – steel, aluminum and glass. Acres of glass front the half-million square foot building to bathe the interior in natural light and punctuate views of the city skyline and its rivers.
But before the Majestic Star could open, Barden ran out of money. He was unable to secure bridge loans and construction ground to a halt for eight weeks.
Only after Chicago billionaire Neil Bluhm, who also owned Philadelphia’s SugarHouse Casino, agreed to buy in did construction resume. Majestic Star was out completely but Barden retained a 25% minority stake backed by his personal fortune. The re-christened Rivers Casino owned by Holdings Acquisitions Company opened on August 9, 2009.
Rivers Casino target market: Pittsburgh’s only casino and Ohio
Rivers Casino is Pittsburgh’s only casino; it taps not only the local market but tourists and conventioneers who frequent the increasingly vibrant downtown area.
Traditionally the casino has drawn from not only western Pennsylvania but Ohio as well. In 2011 the Ohio Legislature granted its first slots licenses for four stand-alone casinos and seven racetracks. Although none was closer to Rivers than in Cleveland 133 miles away, there are rumblings that gaming action will move closer to the Ohio-Pennsylvania border in the near future.
Already it is estimated that the share of Rivers Casino revenue pulled from the wallets of Ohioans has dipped from 8% to 5%.
One of the largest in PA (in both size and revenue)
In the run-up to the opening of Rivers Casino company officials rosily projected $427.8 million in gross terminal revenues; the Gaming Control Board expected $362 million in annual money.
In 2010, its first full year of operation, Rivers pulled in just $241 million and only recently has begun to inch towards the Board’s predicted business levels.
With 116 table games and 2939 slots, Rivers is in the quartet of Pennsylvania’s largest gaming facilities. Its $353 million in revenues in fiscal year 2012 are the second largest of any stand-alone casino, behind only Sands Bethlehem.
Run by Holdings Acquisition Company and Bluhm
Holdings Acquisition Company was organized solely to operate Rivers Casino and owns no other properties.
Majestic Star filed for bankruptcy in 2009, the same year Rivers opened. Its reorganization plan ousted Don Barden from the company; he died in 2011. The jewel of Neil Bluhm’s casino empire is the identically-named Rivers Casino in Des Plaines, Illinois, outside of his hometown of Chicago. In addition to SugarHouse he also runs Casino Niagara in New York.
Large poker room means large tournaments and exposure
The poker room at Rivers Casino is one of Pennsylvania’s most expansive, featuring 30 tables. There is a meaty line-up of tournament play highlighted by the Three Rivers Poker Challenge series.
In late November the most recent Pittsburgh Poker Open was a stop on Poker Night in America making it the first major televised tournament ever staged in the Pittsburgh area. The ten-day festival featured 28 events culminating in a $75,000 guaranteed final.
Walking Distance to Big Name Attractions
Unlike its fellow big-Pennsylvania city casino, SugarHouse in Philadelphia, Rivers Casino is situated within easy walking distance of the town’s prime attractions.
Heinz Field, stomping grounds of football’s Pittsburgh Steelers and the University of Pittsburgh Panthers, is right next door. PNC Park, home of baseball’s Pittsburgh Pirates, is a block away. A short stroll across the Roberto Clemente Bridge is the town’s Cultural District. On the Rivers Casino grounds is a 1,000-seat outdoor amphitheater that flows down to the Ohio River and a waterside promenade.