The Tamares Group acquired a handful of properties; Landry's, a Texas company headed by Tilman Fertitta, purchased the Golden Nugget; and Derek and Gregory Stevens and their Desert Rock Enterprises LLC partnered with Mark Brandenburg to buy into the Golden Gate.

And then, there's Terry Caudill.

Caudill, who started his gaming career as a keno writer and craps dealer at Harrah's Reno, joined Circus Circus Enterprises' internal audit department. In 1989, while at Circus Circus, he invested in a 33 percent interest in a neighborhood tavern called Magoo's Bar and Grill.

By 1994, Caudill decided to go all in with Magoo's and left Circus Circus, where he had risen to corporate treasurer.

It turned out to be a wise move.

Magoo's grew into a chain of 14 properties under three brand names - Magoo's, Loose Caboose and Chicago Brewing Co. - and a corporation called TLC Casino Enterprises. The success of that operation gave Caudill the stake he needed to purchase the Four Queens in 2003 in downtown Las Vegas. Last month, he added another downtown property, Binion's.

Caudill talked with In Business Las Vegas about the future of the Four Queens and Binion's, downtown's future and the state of the economy.

Answer: I think what we're most proud of at the Four Queens is the fact that we were looking for a casino that was sizable, that had all the elements to acquire. We thought this was the right property and I think we're proud of the fact that this was the correct property. It's a very nice property - has a great history to it. We were able to come in and do the things that we thought we were going to be able to do. We thought we could accomplish certain things, and we have been very fortunate in being able to do those things. We've been able to improve the operations, we've been able to improve the look and the feel of the property. We've made it a very comfortable property where people enjoy spending time. It was our intention to make this a property that the employees could be proud of, and I think we've accomplished that. Along the way, we were kind of hoping all those actions would be profitable, which also has come to bear.

This property, through a change of owners over the years, really hadn't had any capital spent on it in quite awhile. If something was broken, it was fixed, but there wasn't any really new capital expenditures. Even though this is a smaller property off the Strip, we believe that a significant marketing element here is to make it very competitive in terms of technology and make it feel current and up to date. So a big part of that was to go 100 percent ticket in, ticket out. At the time we did that, we were the first casino and the only casino to be 100 percent ticket in, ticket out in the downtown market. There was a little bit of a learning curve for our customers, but I believe that has paid off. It's allowed us to operate more efficiently, and it's given our customers a better experience. We have remodeled all the restaurants, including Hugo's (Cellar), but still retain the same feel, the ambience, the old-fashioned value-oriented feel this property has always had. So it was really a face-lift more than anything else.

As you know, we've added the Canyon Club as an (entertainment) venue. We're still kind of experimenting with that and trying to figure out what it wants to be when it grows up. That's something that we think has some potential to experiment with. We hope to someday be able to add rooms to some of the properties in the downtown market, including the Four Queens. That might be a possibility. But because of the layout and the physical constraints of the property, it's hard to do certain things here, which is one of the reasons that led us to have an interest in Binion's and decide that the time was right. We've looked into having poker here. We really don't have a place for it. We've looked at having broader entertainment, but we really don't have the facilities here to do some of those things. So that's one of the great appeals of Binion's. We can do some things there. It already has some things that complement this property. It has a pool, we don't. It has poker, we don't. But we also believe Binion's has a lot of potential to bring in entertainment venues and specialty restaurants.

We've actually had an interest in that property for some time. I've looked at a number of them. But being in Las Vegas for about 25 years, I know the story of that property, I followed it through the years. So we've had a pretty strong interest in it since probably 1998. I thought it was something that fit our criteria of something we'd like to acquire. But for various reasons - price or timing or whatever - the opportunity just wasn't right until recently. And now, the stars have aligned, and it was a good time, and the right price at the right time, for us to acquire the property. We think there's a lot of upside potential. So there's a lot of history and lot of brand quality over there and just nowhere to go but up.

Let me give you a Phase I, Phase II, Phase III. What we're doing is moving some elements around, creating some areas and trying to create a better flow and a better energy level at the property. We're going to clean up all the public areas. We're going to remodel all of the bathrooms. We're going to move and remodel the poker area and enhance that, make it more of an experience for people instead of just coming in and playing poker. They'll actually get more of a feel of the history of the poker room at that property. We're going to remodel, renovate all the rooms. Then, for Phase II, we're looking at potential entertainment venues and specialty restaurants and those types of things that we think will really add some value to the property and give people an additional reason to come in there other than the friendliness and the good gamble. We've already liberalized some of the odds for gaming. We've gone to 3-to-2 payoffs on the 21, we've increased the limits on some of the tables, and we've restored the 10-to-1 odds on the craps table. We're trying to give our customers a better gamble and restore some of the feel that the Binion family created back in the heyday. Probably down the road - Phase III, maybe in a couple of years - we're hoping to be able to make sense of adding rooms to that property.

Yes, I think it's a natural thing. It's all about giving your customers more options and more choices. So I'd say the answer is absolutely yes, we will cross-market.

We're looking at that right now to see what makes sense in terms of creating a loyalty card for both properties, and I would say most likely that's where we're going to end up. So, you could play at Binion's and redeem your points at the Four Queens and vice versa.

Yes, we've seen an increase. We've seen a significant increase in our room rates each year, even before we remodeled the rooms. We cater, still, to a very value-oriented customer. So we're not going to give them sticker shock, but to have some upward pressure to offset some of the additional costs. Yes, that's part of our plan to increase room rates downtown. I think downtown is a tremendous value right now compared to the Strip, and I think we have some running room that we can increase rates and still be a tremendous value in relation to the Strip. Maybe right now on the Strip there's some temporary price reductions in some of the rooms. We like to price our rooms and gear our property toward a long-term solution and not a knee-jerk reaction to what may be going on in the financial markets from a month-to-month perspective. We think that we're going to offer a great value, not just in our rooms, but the quality of room you get for the price, the quality of food and beverage you get for the price and the entertainment. Fremont Street still offers tremendous free entertainment.

At the Four Queens, staffing has not changed significantly. In general, since acquiring the property, the back-of-the-house staff has been reduced, offset by an increase in front-of-the-house staff - those positions with direct impact on the customers and customer service. In terms of Binion's, it's still early, and we are still evaluating.

Well, we're very interested in the downtown market. I'll say that. Obviously, we've got our hands full at the moment, but if opportunities present themselves, we would always like to explore those opportunities to see if they make sense to us because we're very committed to the downtown market, and we plan on being here for a long time.

I think downtown is being rediscovered. The friendliness, the fact that it's a casual atmosphere, and you can go to multiple properties in less time than it takes to walk across the Bellagio. I think there's some nostalgia for the entertainment. The Strip has done phenomenally well, but I think there's a segment of the population that's kind of getting ignored, the value-conscious customer who really can't afford the kind of pricing the Strip offers these days. So, I think there's an opportunity to take care of those people and create a very loyal customer base among that group of clientele.

We've looked at a lot of things, and we always look at things. I think our primary focus right now is downtown. We've looked at some things outside of ... Nevada, but I think we're the most comfortable staying within the state ... Part of our whole philosophy in running a gaming property is to be able to touch it, feel it, walk the floor, see what's going on. We're very hands-on. Obviously, the farther away you get from your home base, the harder that is to do.

Rooms. I think downtown needs more rooms. There's a lot of discussion about how the gaming revenue downtown has been flat over the last several years, but if you look, the room base has been flat and actually declining with the Lady Luck rooms being temporarily out of the market. I believe the downtown market could absorb 3,000 to 5,000 more rooms. We run a very high occupancy percentage on the weekends and generally a pretty high occupancy percentage year-round. It's really hard to extend an invitation to a new customer and say, "Come down and see me," if you don't have a room to offer him.

The way I've always viewed the Fremont Street Experience is that it's an extension of the marketing department for each of the properties downtown that allows us to do things collectively that we probably couldn't afford to do individually. As far as how it's working out, I think we have a wonderful relationship. I think they have a really good group of people over there doing things right now. I think the entertainment value they're bringing to the street - they're always looking for new and varied types of entertainment and always trying to figure out what's working, what's not working - I think they've brought some really outstanding free entertainment acts to Fremont Street.

We try to get along with everybody. Our philosophy from the very beginning - and we said this at a Gaming Control Board meeting before we even took over this property - we believe that we're marketing downtown. We don't have to specifically market the Four Queens, per se. Anything that's good for downtown is good for the Four Queens, and it's good for Binion's. So I think the answer is, yes, we actually look forward to working with everyone else downtown. It's kind of like the individual properties are a destination within a destination down here. The individual properties are a destination within the destination of downtown, so I think all of us working together to get more people to come downtown, to check it out, to try out the experience works. Our surveys show that it's about a 99 percent success rate that people who come down here actually enjoy it.

Anytime you bring more attention to the downtown area in general, that's a good thing. I think the type of projects that he's pursuing over there are good for downtown. And again, what is good for downtown is good for us. I think ultimately how we benefit from that depends on whether that area gets developed in isolation from downtown or whether it's connected a little better. One of the things, obviously, is that if it could be physically connected ... to make it easier to go back and forth, then I think that's a real plus. In any regard, what they do over there is going to be a real benefit for us. The furniture mart (the World Market Center) is giving us more customers every year, more and more people staying here when they come for conventions or meetings over there. So I think as that area grows and pulls more people downtown, I think we'll benefit.

I'm still very much involved in the theory, philosophy and direction of the company, but I don't get involved in the day-to-day operations of those individual properties any longer. I have very, very strong management teams at those properties. We have a director of operations who oversees the entire bar operations. I stay in contact with those people all the time - with my top managers. Most of them have been with me for a number of years, so they know how I like to operate. We know what we like to do, and we know what we are in the marketplace. So, as far as day in and day out, no, I'm not that involved. But when we have something that affects us all, like the legislation for the smoking ban, then obviously I jump in and get involved with that, and we come up with a resolution on how we're going to deal with those kinds of things.

Where I get the most satisfaction is seeing our customers have a good time and have a good experience and just enjoy themselves. And I think that's equally true in the local pubs and the downtown market. We believe in just being in very close contact with our customers, understanding who they are, what do they want, how can we give it to them and creating customer loyalty and customer satisfaction. I think that's the most enjoyable part.

We've actually weathered it very well, partly through strategic initiative and partly through luck. But we jumped in right away and tried to figure out what we could do to live with it. We weren't very happy about the situation, but rather than fight it or argue, we decided to try to work with it and make the best of it and see what we could do. We were fortunate enough that in most of our locations it was relatively easy to separate the food operation from the bar operations, so that's what we did in most of our locations.

I really wouldn't be qualified to say that. It obviously affected some entities more than others.

A lot of its contracts - and again, I'm not qualified to speak for it - are with convenience stores and grocery stores and that's what was hit the hardest because you can't create that kind of separation in a grocery store or a convenience store. You just can't create that kind of ambience, so I think it had a completely different scenario than we did.

Well, I don't want to sound flip by saying none, but we really designed our customer philosophy and our approach to the business so that we don't have to overreact to anything in the short term. We do things that we think are the best value for our customers and are the best things to do long term. We're fortunate here that we have spent the money we have in the past few years on capital improvements so if we had to, we could hunker down and not have to spend a lot of money on capital improvements. But as far as the experience to our customers, we have no intention of altering that in any way, shape or form.

No, because along with working with the Fremont Street Experience and (its) marketing programs and trying to provide that entertainment and that experience that people enjoy downtown, our marketing is really almost word-of-mouth. Our customers are satisfied, and even now, our occupancy rates remain very, very high. Our occupancy rates for the last three months are ahead of the prior year. The people are still coming. We have a little philosophy, a little saying that there's only two times that people drink and gamble: that's good times and bad times. We believe that right now in this economic environment that our value-oriented concept is probably more significant than ever.

The funny thing is, I just attended a luncheon where there was an expert talking on that and he said, historically, they usually determine whether something was or wasn't a recession about eight months after it started. I think if you're affected by it - if you're one of the people who lost your job or your business is hurting - than in your opinion there's a recession. If you're one of the people who's not directly affected through the loss of your home or the loss of your job, then you probably say, "Well, gee, I didn't see any recession." But there absolutely is an economic slowdown. At what point does it statistically become a recession? Economists have argued over that for years. But there's a slowdown and it's obviously felt a lot more by some sectors and some people than it is by others. But generally, this country has shown a lot of resiliency, so the worst downturns don't last too long - a few months.

Yes, it has. A part of that is that we still have new people coming in here all the time. So if housing prices are temporarily depressed - the fact that you have 5,000 or 6,000 people a month still coming to town - those people still have to live somewhere. So eventually, those housing prices are going to recover. It'll recover a lot faster than some city that's not growing, that doesn't have the same influx of people coming in.

I actually taught school for one year, and I'm very sympathetic to teachers. I absolutely believe they are underpaid and that they need more funding, but I don't believe that's the correct way of going about it. I think it needs to be done in more of a broad-based way. I'm not a politician, but I guess those are my feelings in a nutshell.