The Worst Year American businessman Terrance Watanabe is estimated to have lost over $220 million dollars from gambling. In 2007 alone he lost roughly $127 million dollars at Caesars properties in Las Vegas! That gambling run is believed to be one of the biggest losing streaks ever by anyone in Las Vegas history. Terry’s gambling loss for 2007 totaled roughly 5.6% of ALL of Caesar’s Vegas gambling revenue that year! It’s probably safe to say Watanabe was THE biggest whale ever for any casino. Just how did it get to this dire situation for Terry Watanabe? Family Business Let’s first get into how Terry had all that money to lose in the first place. Terry Watanabe inherited Oriental Trading Company, one of the first wholesaling companies established in the US. But this isn’t the classic trust fund kid blowing his inheritance story.
His dad, Harry Watanabe, founded the company in 1932. It initially started out as a gift shop, and over time, the company expanded to 17 stores throughout the Midwest in the US. However, import restrictions during World War II forced his dad’s company to have to shrink back to just one store in their homebase of Omaha, Nebraska. After the second world war was over, the company began to take off again. Oriental Trading company quickly became one of the biggest suppliers in the world for carnival supplies! When Terry was 15, his dad asked him if he wanted to take over the business, something that’s a Japanese tradition for the first-born son.
By the time he was just 20, he was already the CEO of the company. However, Terry was gifted in business. After he took it over, Terry actually built the wholesaling business multiple times bigger than his dad. How did he do it? He shifted the focus of the company from just carnival to party supplies for all sorts of events instead (. Any type of supplies for a party for almost any occasion, Oriental Trading Company sold it. Terry also decided to use direct mail marketing, by targeting schools, teachers, retailers and businesses. He grew the company to over $300 million dollars in revenue annually by the time he decided to sell the company! But that didn’t come without sacrifice. Growing the company took up almost all of Terry’s life. Because of his commitment to growing the company, he would travel for months at a time looking at what suppliers had in Asia. The Oriental Trading Company WAS his life. But in 2000, Terry decided he had enough. He sold off the company his dad had started to Brentwood Associates for an undisclosed sum. Today the company is owned by Berkshire Hathaway. Terry was ready to head off into retirement an extremely rich man, something that it seemed like he was going to be for a long time. A New Life After selling the company, Terry’s plan was to throw himself into his philanthropic work and have more fun. In a newspaper interview in the Omaha World-Herald, he’s quoted as saying “If it’s not fun, it’s not worth doing.” However, philanthropic work only takes up so many hours in a day. And it wasn’t quite the thrill as running a business. He came up with several business ideas, such as opening a restaurant, but all that went nowhere. Terry was getting bored in his early retirement. But he did find one easy way to fill the time back in 2003. This was the way to give him the dopamine hits he lost because of selling off his big business. Terry discovered gambling, and he started playing at Harrah’s casino in Council Bluffs, Iowa. This was just across the river from where he lived in Omaha. With the bankroll he had, he quickly became one of the casino’s top customers. Wynn Discretion Terry’s gambling didn’t get out of control all at once. It was when he began going to Las Vegas beginning in 2005 when the wheels started falling off. His drinking and gambling started getting more intense. When he first went to Vegas, Terry primarily stayed at the Wynn. His heavy betting and the way he played got the attention of founder and then CEO, Steve Wynn. He met with Terry in June of 2007 after hearing all the crazy stories of how Terry would bet. In that meeting, Steve concluded that Terry was a compulsive gambler AND an alcoholic. So he decided to help him in the best way that he could and he banned him from all of Wynn’s properties! Is this something Caesars executives should have considered as well? Because he was kicked out of the Wynn, Terry went to Caesars properties to play instead. Caesars welcomed his business with open arms. Special Formula What Caesars executives discovered was that he gambled like no one else they had ever seen. In fact, according to court documents, they came up with a special algorithm to come up with offers that they would only give to Terry, and no one else! For example, tickets to shows such as the Rolling Stones for big players were normal. A monthly credit for 12 and a half thousand dollars a month for airfare and half a million dollars in credit at the gift stores ISN’T normal. Caesars also offered 15% cash back on table losses greater than half a million! Supposedly it was up to 30% cashback on certain other high-limit games incentives, but Terry claimed that Caesars reneged on their promises. His playing got so big, Caesars actually created his own special status for the first time, called “Chairman”! This was above Caesar’s Seven Stars, which is the highest publicly known tier status someone can get. Terry would always stay for free in the biggest suite available at Caesars Palace. He always had access to his favorite lucky bartender, and he always drank a special brand of vodka called the Jewel of Russia. He was constantly surrounded by assistants who would do practically everything and anything he wanted. Balance Due It all came crashing down when Caesars took Terry to court. He was charged with four counts for intent to defraud and steal from Caesars. But Terry wanted Caesars to take some responsibility too for his losses. But Caesars basically told him to be a big boy and live with the choices that he had made. Terry admitted himself that he was a compulsive gambler. He claimed that Caesars Palace deliberately exploited him and that they kept him at the tables as long as possible. But isn’t that what almost all casinos do? When is the line crossed? According to Terry, casino staff routinely gave him plenty of alcohol and prescription meds as part of their systematic plan to keep him gambling! Terry refused to pay up for roughly $14.7 million that Caesars had extended to him as credit. Of course, Terry had lost all of that credit. But he had had enough. He already lost enough money to the casino. He had already lost over $200 million dollars from gambling, and he was ready to fight back in court. His main argument he had planned to clear his outstanding debt wasn’t only centered on Caesar’s negligence to stop him from playing. But it was also on their supposed encouragement for him to keep playing even though they knew he had enough. Allegedly, employees would see Terry floating in and out of consciousness while gambling at the tables. These allegations only surfaced when Caesars took him to court. Line Drawn For Terry, it seems like his allegations were right. Several Caesars employees had said that their managers told them to let him continue betting, even while he was in no shape to play. Casino rules and state law clearly state that anyone who’s clearly drunk isn’t allowed to gamble. And these employees were afraid that they’d be fired if they did anything to stop Terry from playing. Caesar’s company policy at that time was to politely ask any drunk players to stop gambling. Was that a tactic that actually works? Terry’s lawyer said that Caesars “preyed” on his condition, but at the same time, Terry DID want to shoulder his part of the blame. He KNEW that drank too much. But where’s the line on encouraging someone to do something once they’re under the influence? Terry’s situation is the classic relationships casinos have with their whales. But the truth is, the player doesn’t have to be a whale to get a little bit of special treatment. Anyone with a little bit of money can have their own host. Casinos cater to big gamblers by giving out free luxury suites, the use of private jets, and an army of personal assistants to help out any player that plays big enough. But again, the big question is, where is the line drawn? It’s already hard enough to try to control a regular person that drinks too much. It’s extra hard to try to control rich and powerful people who’re not used to hearing the word “no”. There have been plenty of cases where rich gamblers have tried to turn the blame around on casinos in lawsuits, even if none of them are successful. Past Precedents For example, In 1993, the former late owner of the Philadelphia Eagles Leonard Tose failed to get any money back when he sued Hollywood Casino over his gambling losses. His argument was that it was Hollywood employees fault for getting him to drink so much to the point that he didn’t know what he was doing when he gambled away millions of dollars in Atlantic City. How often do casinos have to deal with gamblers that don’t want to pay up? It’s actually a pretty common case. For casinos in Nevada, any unpaid gambling debt is a criminal matter, so it’s a pretty serious charge. It makes sense that this is something casinos would lobby hard for. Clark County, which is the county Las Vegas is a part of, prosecutes hundreds of cases involving gambling debts a month. Of course, most of the cases aren’t in the millions of dollars. But, just like the huge whales, people with unpaid casino debts will sometimes try to get out of criminal charges by claiming that casinos kept them drinking. This kind of defense never works. The rule of courts in all cases is that nobody made anyone drink. But, regulators do fine casinos for letting people gamble who are visibly drunk. Isn’t that almost saying a casino has a part in the losses? And not all casinos are the same though. There ARE casinos out there who’ll stop people from playing if they’re behaving erratically. And they’ll especially stop someone from playing if they suspect they won’t pay their debts. But don’t think that it’s something they’re doing out of the kindness of their hearts. They basically treat it as a cost-benefit decision! This is according to Glenn Christenson, who’s a former Station Casinos Chief Financial officer. Same Treatment Caesars maintained that they treated Terry just like any other player. The only difference was that he was their BIGGEST player. But this is most likely not true. Probably THE biggest reason why Caesars wanted him to play was because he was a bit unusual in his gambling. Well, at least for when it comes to someone who plays so big. Terry didn’t just play the usual whale games of blackjack and baccarat. He often spent hours playing roulette, slots, and keno. These were exactly ALL the worst games to play because they’re clear examples of games where the house has a massive edge. Casino management supposedly referred to him as a “house player” because he always went for the games where they were clearly favored to win. Supposedly, even when he did play the best game to play, Blackjack, he would make such terrible decisions at the table it didn’t matter anyways. Several Caesars employees said in court that Terry would stay at the tables for up to 24 hours a session. They’ve also sometimes seen him lose as much as FIVE million in a single session! Management apparently accelerated his losses by raising the limits for him. For example, they allowed him to play three blackjack hands simultaneously with a $50,000 dollar limit for each hand. Also, Caesars always extended credit for him when he wanted. At one point, his credit at Caesars was a whopping $17 million dollars according to court documents! Prodigal Giving Most of the gambling was done when Terry was drinking. Obviously, there wasn’t an OFFICIAL written out corporate policy to keep him drinking. But staff knew just how much money he was dumping to the casinos because he was literally their #1 customer that year. Supposedly a picture of him was up in the employees’ back rooms! And when he drank too much, no one wanted to be the one to cut him off. It was a lose lose situation for the staff working. They were afraid of what upper management would do if he stopped because they told him to, AND they were in danger of losing out on any big tips! His tips were almost as legendary as his gambling. According to court documents, he regularly handed out to Caesars employees bundles of $100 dollar bills that could total as much as $20 grand! Terry’s personal handlers told the courts that he also had THOUSANDS of Tiffany gift boxes that had $50 to $100 gift cards. He would hand the boxes to any employee that was taking care of him, from bartenders to security guards. Caesar’s Policy As for Caesar’s alcohol policy at that time, the company tells its employees to ask people who have clearly had too much to drink to only refrain from gambling, as required under state regulations. Employees also attend a responsible-gaming class every year where they learn how and when to tell gamblers to leave the casino. Then there’s a phone number that employees can call to anonymously report unethical or improper behavior by other employees. There were no reports that anyone called the number regarding Terrence Watanabe. Aftermath After his record losing year, Terry was back in Las Vegas gambling for a period in 2008. But ever since then he got help that year and hasn’t entered a casino since. For what it’s worth, Caesars was fined $225 grand because they allowed Terry to keep gambling even though it was clear he was drinking too much. Caesars and Terry eventually settled his debt out of court. Unfortunately in 2017, Terry was in need of money for prostate cancer treatment. He had prostate cancer that required surgery that cost roughly $100,000, something he can’t afford. His GoFundMe stopped accepting donations when it hit $28,610. Hopefully, it was because an old friend who had a lot of money saw what was going on and decided to help out. Here’s what’s next!