KVIG Informative

A fire that tore through the MGM Grand casino floor in six minutes in 1980 left the hotel’s owner facing well over a hundred million dollars in legal liability. Kirk Kerkorian sold the property to a publicly traded conglomerate before the decade was out, a transaction that previewed the layered corporate ownership structure running the Las Vegas Strip today, in which an operating company and a separate landlord corporation increasingly divide what a single owner once controlled outright.

Fire broke out on the casino level of the MGM Grand Hotel in Las Vegas on Nov. 21, 1980, according to the Clark County Fire Department’s own account of the incident. Investigators traced the primary source of ignition to an electrical ground fault inside a wall soffit at a delicatessen’s side stand on the casino floor, the fire department’s account states. The fire spread through the casino at a rate of roughly 15 to 19 feet per second, engulfing the entire casino level within six minutes, the same account says.

The fire killed 85 people and injured more than 700 others, according to the Clark County Fire Department, making it the second-largest life-loss hotel fire in United States history at the time. Firefighters responding to the scene activated the department’s High Rise Preplan, a protocol developed for fires in the city’s growing number of high-rise hotel towers, the department’s account says.

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The fire produced a wave of lawsuits consolidated into a single multidistrict proceeding in federal court, according to the U.S. District Court for the District of Nevada’s own published opinion in the case, In re MGM Grand Hotel Fire Litigation. The litigation drew 1,357 claimants, including 67 wrongful-death claims and 1,021 personal-injury claims, against 118 defendants: nine MGM entities, 105 non-MGM defendants that included architects, contractors, suppliers and inspectors, and four companies within the Kemper Insurance Group, the opinion states. U.S. District Judge Lewis C. Bechtle, presiding over the consolidated case, approved settlements totaling more than $138 million by 1983, with MGM entities contributing $75 million and the remaining defendants contributing the balance, according to the court’s opinion, which found the settlements were negotiated in good faith under Nevada law.

Two years after the settlements were approved, MGM Grand Hotels’ owner sold the property outright. A Nevada Gaming Commission action on Dec. 19, 1985, authorized Bally Manufacturing Corp. to proceed with financing for its roughly $440 million purchase of the MGM Grand hotel-casinos in both Las Vegas and Reno, with the sale targeted for completion by the end of February 1986. Kirk Kerkorian, the businessman who had built and owned MGM Grand Hotels, exited ownership of the Las Vegas property in the deal, transferring it from an individual owner-operator to a publicly traded conglomerate — a structure gaming regulators had only permitted since the 1969 Corporate Gaming Act amendment, Senate Bill 353, shifted regulatory scrutiny away from investigating every individual shareholder and onto the corporation and its management instead, according to the Nevada Legislature’s own Legislative Counsel Bureau research division.

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Bally Manufacturing operated the property as Bally’s Las Vegas for decades, a name that stayed on the building through the company’s later merger into Caesars Entertainment. On Jan. 26, 2022, Caesars Entertainment announced it was retiring the Bally’s name at the Strip property and reviving the Horseshoe brand instead, according to the company’s own investor announcement. Sean McBurney, Caesars’ regional president for the property, described the move as a chance to celebrate the casino’s history while building toward its future, and Ty Stewart, the World Series of Poker’s executive director, said the rebrand let the tournament return to the Horseshoe name where it began, ahead of the tournament’s first move onto the Strip itself that same summer, according to the same announcement.

Caesars Entertainment continues to own and directly operate Horseshoe Las Vegas today. VICI Properties, the real estate investment trust Caesars spun off in 2017, holds only a right of first refusal on the property rather than an ownership stake, under the terms of the companies’ 2020 merger completion agreement. That arrangement — an operating company running the casino floor while a separate landlord corporation holds, or waits to hold, the ground beneath it — is the modern version of the same question Kerkorian’s 1986 sale first forced onto the Strip: not whether a casino can be owned by a corporation instead of a person, but how many corporations it now takes to own one building, and which of them answers when something goes wrong inside it.