The house always wins: Don Barden rolled the dice when he anted up millions for a Las Vegas casino. It turned out to be a sure bet - B.E. Company Of The Year - Barden Companies Inc

Black Enterprise, June, 2003 by Alan Hughes

Sounds of electronic bells, buzzes, pings, and zaps fill the air as Don H. Barden strides along the Fitzgeralds' casino floor. The cacophony is music to his ears as he surveys his surroundings, packed with guests--something Barden likes to see.

Amid row after row of slot machines promising the luck of the Irish and brilliant flashing lights that create an almost kaleidoscopic effect, he encounters a manager and gets an update on casino activity before moving on.

"I hope I can get to the driving range before I have to fly out of here," Barden says as he lights a stogie. His tone, however, suggests he knows he'll be far too busy to tee off. Barden has business to take care of. He's just emerged from a planning meeting in one of the Las Vegas hotel-casino's conference rooms, discussing expansion for the company's Black Hawk, Colorado, operation with engineers and city officials. The proposed project will take 22 months to complete--at an estimated cost of $11 million--and includes expanding the 18,000 square-foot casino by an additional 12,800 square feet, and possibly building a 300-room hotel and 50,000-square-foot convention center (the property currently offers no lodging or convention areas). When completed, Barden expects these expansions to result in a 20% revenue growth at Fitz Black Hawk.

Over the past three decades, Barden has built a multimillion-dollar real estate portfolio, a cable business that ranked among the nation's largest black-owned businesses, and, more recently, created a gaming powerhouse. Barden is the first and only African American to own a casino in the gaming capital of America: Las Vegas. This puts him in three of the top five U.S. markets--he owns establishments in Tunica, Mississippi, and Gary, Indiana. The strength of these operations earned Barden Companies Inc. (No. 6 on the BE INDUSTRIAL /SERVICE 100 list with $347 million in sales) a 6.44% increase in sales despite a brutal business climate in which established firms, as well as upstart companies, have been decimated. Because of its solid financial performance and ground-breaking thrust, Barden Companies has been selected the 2003 BE Company of the Year.

Growth is the name of the game for Barden, and last year it was partly achieved thanks to the inherent economic resiliency of the gaming industry--even when times are tough, consumers will spend money to be entertained. Though gaming's overall growth has slowed somewhat post Sept. 11, the local markets (basically anywhere in the U.S. that allows gambling outside of Atlantic City and Las Vegas) have been holding steady as casino-goers, jittery about flying, simply drive to nearby locations. "During difficult and not-so-difficult times, people like to be entertained," maintains Robert R. Russell, a senior gaming analyst for Fraser Trebilcock Davis & Dunlap P.C., a Detroit-based firm that specializes in gaming law.

This virtually recession-proof industry has encouraged several states to consider legalizing gambling as a means of eliminating budget shortfalls. These moves will further stoke the industry's growth potential. Currently, commercial casino gaming is authorized in 11 states.

Consumer spending on commercial casino gaming in 2001 (the latest figures available, which don't include Native American operations) totaled $25.7 billion, compared with $24.3 billion in 2000 and $22.2 billion in 1999. "So we've seen a dramatic growth in the industry and a lot of that has to do with the proliferation of gaming, which is going to continue," Russell predicts.

Barden is fully prepared to cash in on that growth. He sees his decision to expand and renovate his operations as a wise investment. Already, he's experiencing a greater rate of growth in 2003 than in previous years. "So far this year, we're trending upwards toward double-digit growth, so we want to be able to absorb that growth," he says, noting that his properties must expand to handle the demand. "Essentially, we're turning away people on weekends [at the Black Hawk location] because of capacity."

These moves are also evident at the flagship 34-story, 638-room Las Vegas property where about $2.5 million worth of improvements have been made. "The vision that I have for this property is what I call positioning," explains Mike Darley, vice president and general manager of the Las Vegas casino. "We could lay back and not do anything with this property, but what we're trying to do is build the skill set of our employees, the morale, and the physical property so that when the economy turns around, we're positioned to take advantage of [it]."

Not only is Barden Companies upping the ante to meet the market's demand, but it's also looking at ways to ensure continued interest with stepped-up marketing efforts, including a campaign targeted at African American consumers. "A lot of people don't know my casinos are African American-owned," asserts Barden, who intends to spend at least $1 million on the effort. "I want to change that. The plan is to initiate an advertising campaign in local and national black publications as well as market directly to African American organizations, such as fraternities, sororities, or professional groups."