Dave Schugar steered his riverboat casinos into position in preparation for future growth. Amanda Barber reports.

In December 2005, Majestic Star Casino acquired its neighbor, Trump Indiana Casino and Hotel. The two casino riverboats had operated for nine and a half years separated only by an indoor pier-like barge, their front doors 25 feet from one another. Seven months later, Dave Schugar, vice president and general manager, came aboard with a plan to jumpstart revenues and take charge of the company’s operational expenses.

“One of our strategic advantages is that we control 300 acres on a lake,” said Schugar. “We want to develop those 300 acres, but we didn’t want to spend millions of dollars and have someone else participate in the benefits and not the expense. It made sense for us to acquire our competitor.”

Building a solid base
Because he has 30 years of experience working in jurisdictions such as Nevada, Michigan, and Mississippi, Schugar immediately spotted things that needed to be changed when he came to the company. Although Majestic Star acquired Trump Indiana and changed its name to Majestic Star II, former Trump employees still had a strong sense of identity with the Trump name and brand.

Before Schugar arrived, the employees and management held town meetings to discuss the future of the company and what changes would occur. Schugar put a stop to those and decided instead to take action. “There was a general apprehension about this process working out,” he said. “I knew there would be more value in making changes employees could see, feel, and touch rather than reading to them.”

Although he wanted all employees to associate with one company name and brand, separate union contracts, internal controls, and uniforms posed roadblocks. Employees were still uneasy, despite the fact that they had survived the series of layoffs that occurred at the beginning of the merger. “They went through an acquisition that was supposed to feel like a marriage and felt more like a divorce,” said Schugar. “We lost some capable people, but it also gave us an opportunity to identify overlooked talent while filling some key positions with available expertise.”

A new management team was quickly assembled that included new directors of hotel, food and beverage, slots, tables, marketing, player development, surveillance, and finance. Majestic Star and Trump developed a third entity, Buffington Harbor Resorts, to manage the neutral ground between their vessels, including maintenance of the land facilities and the operation of food and beverage outlets. “Now that our competition is gone, the need for another company to manage our food offering no longer exists. Longer-term capital investment is now in our plan,” said Schugar.

Effective February 2007, Majestic Star will take over the operations of its food and beverage division. Schugar plans to make capital investments in the company’s food outlets and use food as a marketing tool. “Napoleon said that an army travels on its belly. Casino players do the same thing,” Schugar said. “Our food has been in the hands of a party we couldn’t control. Now, we’re in charge.”

Gaming has experienced extreme growth during the past 15 years and, as a result, there is a shortage of talent in the industry. To combat this issue, Schugar and his team began reinvesting in their staff and management by sending them to training classes on general management as well as in their specialized fields, such as culinary artistry, slot management, table game protection and analysis, and casino surveillance.

“Our new management team has the makings of a superior peak performing unit, and we want to keep them motivated and loyal,” he said. “We’re investing in them by sending them to training classes and bringing in a variety of speakers. We have also presented a compelling compensation package that keeps their attention. Word is spreading about our level of employee investment.”

Looking ahead
By increasing employee morale, investing in upgrades to the casino machines and the riverboat facilities, and developing a new management team, Schugar has positioned the company for the future. There are long-term plans for a single-floor gaming vessel that would replace the two riverboats. Right now, Majestic Star uses only about 40 of its available 300 acres. The company’s master plan involves the development of all 300 acres, as well as the possibility of acquiring more acreage.

“This plan is still a few years away,” said Schugar. “We believe this is something that would be difficult for our competitors to readily duplicate because they’re somewhat locked into their location. The land around them is not available and does not lend itself to development. Ours does.”

In addition to converging the two riverboat casinos, the company plans to expand its hotel offerings, developing an entertainment arena and theatre, as well as building additional dining outlets and retail shops. The current land facility is a tent that had a lifespan of 10 years. Now that those 10 years are up, the tent is getting tired.

“We are in discussion with builders, developers, and architects routinely,” said Schugar. “Although these things take years to plan, there are shovels in the dirt, so to speak.”

Since taking on the role of general manager in March 2006, Schugar said things have not slowed down. As the major hurdles that were born as a result of the merger fade into the past, additional challenges will present themselves as Majestic Star Casinos and Hotel begins developing construction plans.

“Business never truly slows down,” said Schugar. “When things are going well, people find they have more energy, and that works well for me.”