Meet Terrance Watanabe, The Man Who Blew His Family's Entire $127 Million Fortune Gambling In Las Vegas (WSJ Profile)
LAS VEGAS -- During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million.
The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history. It devoured much of Mr. Watanabe's personal fortune, he says, which he built up over more than two decades running his family's party-favor import business in Omaha, Neb. It also benefitted the two casinos' parent company, Harrah's Entertainment Inc., which derived about 5.6% of its Las Vegas gambling revenue from Mr. Watanabe that year.
Today, Mr. Watanabe and Harrah's are fighting over another issue: whether the casino company bears some of the responsibility for his losses.
In a civil suit filed in Clark County District Court last month, Mr. Watanabe, 52 years old, says casino staff routinely plied him with liquor and pain medication as part of a systematic plan to keep him gambling.
Nevada's Gaming Control Board has opened a separate investigation into whether Harrah's violated gambling regulations, based on allegations made by Mr. Watanabe.
In April, the Clark County District Attorney's office charged Mr. Watanabe with four felony counts in district court for intent to defraud and steal from Harrah's, stemming from $14.7 million that the casino says it extended to him as credit, and that he lost. Although Mr. Watanabe has paid nearly $112 million to Harrah's, he has refused to pay the rest. He denies the charges, alleging that the casino reneged on promises to give him cash back on some losses, and encouraged him to gamble while intoxicated. If convicted, Mr. Watanabe faces up to 28 years in prison.
A native of Omaha, Neb., Mr. Watanabe built his fortune on plastic trinkets, the kind given away at carnivals and church fund-raisers: batons filled with tinsel, magic wands that light up, plastic spider rings that cost $1 for a bag of more than 100.
His father, Harry Watanabe, founded the import business, Oriental Trading Co., in 1932, after immigrating to the U.S. from Japan. As children, Mr. Watanabe and his younger sister and brother worked with their father after school. His mother, Fern, a Nebraska native, was a secretary there.
When Terrance Watanabe was 15, his father asked him if he wanted to take over the business, as is Japanese tradition for the first-born son, says his sister, Pam Watanabe-Gerdes. By the time he was 20, he was chief executive.
Some who knew Mr. Watanabe in Omaha describe him as guarded and shy. But he was also savvy at both marketing and selecting merchandise, says Bob Thomas, a chief operating officer at the company. It was those skills that helped Mr. Watanabe grow a modest toy business into a catalog empire that raked in $300 million in revenue by the time of its sale in 2000, Mr. Thomas says.
One reason Mr. Watanabe was seen as so valuable to Harrah's, say Messrs. Deleon and Kunder, two of his handlers, is that he gravitated toward games with low odds, including roulette and slots. "He was considered a 'house' player because slots and roulette are house games -- they have terrible odds for the player," says Mr. Kunder. "And the way he played blackjack, he made it a house game. He made such bad decisions on the blackjack table."
Ms. Jones disputes this interpretation. "I don't put a lot of credibility" in that, she says.
Several employees say Mr. Watanabe would stay at the tables for up to 24 hours, sometimes losing as much as $5 million in a single binge. He was allowed to play three blackjack hands simultaneously with a $50,000 limit for each hand. At one point, the casino raised his credit to $17 million, according to court documents.
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Dec 6, 2009 at 10:11 PM
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