court rules an order to re-bid, then I’ll be in a very strong position to bid and win one of the licenses,” he says with optimism.
The reaction of the city’s African American population and business community to Barden’s denial of a gaming license was one of disappointment. “A lot of folks here felt that Don should have been awarded one of the casinos,” says Dave Bing, CEO of Detroit-based The Bing Group (No. 7 on the BE INDUSTRIAL/SERVICE 100 list with $344 million in sales). “It didn’t happen, and he moved on. [He] has done different things in terms of growing his casino business but it’s not in the city of Detroit. I know that’s where he really wanted to be. If the opportunity presents itself [for him] to get involved here locally, I’m sure he’ll jump on it and he’ll get a lot of support.”
Perhaps the biggest risk of Barden’s career was in 2001 when he anted up $149 million — $14 million of his own money — to acquire three Fitzgeralds casinos that had been operating out of bankruptcy. The properties were profitable, but were dragged into insolvency because of the inability of the former owners to make interest payments on its bond debt. The former Fitzgeralds owners were forced to file for Chapter 11 bankruptcy in U.S. District Court in Nevada on Dec. 5, 2000.
In March 2001, Barden placed the bid for the three properties at the bankruptcy court. To fund the acquisition and its transition costs, he raised nearly $150 million in a high-yield bond offering after a 10-day tour visiting 40 institutional investors in a dozen cities. He used three key selling points to open investors’ wallets: In the Midwestern market, Majestic Star casino has a successful track record competing with national casino firms; the three Fitzgeralds casinos are profitable and have excellent growth prospects; and the casinos are being bought at a discount at four and a half times cash flow.
As Barden was nearing completion of the deal, the horrific events of Sept. 11 took place. Aside from the terrible loss of life, it was apparent that the tourism industry would suffer greatly — including the Las Vegas market. But Barden was hedging his bets with the Fitzgeralds properties in Mississippi and Colorado, which attracted a strong local following and weren’t impacted by consumers with flying jitters. “We knew there would be a negative impact on Las Vegas, but that was more than offset by the positive impact on the other two Fitzgeralds properties.”
By December 2002, Barden would take possession of the casino and achieve what no other African American has to date — own a Las Vegas casino.
Barden was far from done, however. Also in 2002, he formed Barden Entertainment and Barden Technologies divisions to market consumer products — the first of which is a video jukebox he plans to roll out this year. “I partnered with some bright guys who brought this development to me,” explains Barden. After examining their technology and conducting the due diligence,