Phil Ruffin: 1 Store -> $5bn Casino

Billionaire’s path from owning one convenience store to owning a $5 billion casino + many other assets

Feb 07, 2025

Summary

Phil Ruffin’s life story is one of the more remarkable I have come across. It reminds me of the red paperclip story, where a guy traded his way from a single paperclip to a house, over 14 transactions. Phil Ruffin is that story but on a much larger scale.

In the early 1980’s, Phil Ruffin started with buying one small convenience store. Today, he 100% owns the Las Vegas casinos Treasure Island and Circus Circus, and a variety of other business and real estate assets. In 2025, he stated Circus Circus is worth $5bn.

To achieve this extreme outcome, Ruffin used a combination of (1) a strict focus on a select few industries with good long term futures / economics, (2) intelligent buying and selling of assets, likely aided by #1, and (3) borrowed money that was well-structured.

Beginnings - The Convenience Store + Gas Business

Phil Ruffin, then a college dropout, realized he did not enjoy working for anyone else and decided to buy a small grocery/convenience store in Wichita, Kansas. His dad was in the grocery business and helped him find one for sale. Ruffin says he bought it “cheap” and borrowed from a local bank to complete the purchase.

Shortly thereafter, a very fortunate stoke of luck happened to Ruffin. Wichita passed a law saying if your store was greater than 1,200 square feet you had to be closed on Sundays. Ruffin’s store was just under 1,200 square feet and being one of the few open convenience stores on Sundays created lots of demand. He had close to a Sunday monopoly.

“We had more business on Sunday than you would [normally] have in two weeks...”

With this store’s profits, he began building additional convenience stores. Then, Ruffin seized an opportunity when Tenneco Oil asked if they could put self-service gas pumps on his properties. This was in the era when an attendant still pumped gas for customers, thinking men in suits and women would not be willing to self-pump.

“…eventually I got a call from Tenneco Oil Company. They said, “Your convenience store in Blackwell, Oklahoma is doing great, can we put some self-service gasoline in there? Let the customers pump their own gas.” I said, “Yeah, let's give it a shot.” It was very successful. Then I wanted to put self-service gasoline in Wichita, Kansas, but was illegal at the time. We had to go to court, and we legalized self-service gasoline in Kansas in 1972. My lawsuit allowed us to start putting self-service gasoline at our convenience stores in Kansas. It was a very successful deal. We ended up putting in eighty-one stores over the years. And I always bought the ground—I never leased the ground.”

Turning a 20-year Lease into a Few Billion Dollars

With the success of his convenience store / gas business, Ruffin began to acquire/build other assets. In 1987, he built his first hotel, a Marriott in Wichita. Over time, much of his strategy was: “…[purchasing] distressed [real estate] in prime locations, spruce them up, and make them profitable again”. He also acquired an oil distribution business and hand truck manufacturer but his larger investments all ended up in real estate with a hotel specialty.

But, before all that, he was still primarily a convenience store owner. However, in 1994, Total Petroleum approached Ruffin for a leasing deal of his stores.

“They had a refinery that needed some gasoline sales, and I was doing a lot of gasoline sales at the time. They wanted to lease the stores for twenty years. I took the deal.”

The deal was a 20-year lease that paid $2.2mm a year [Note: Ruffin states that it was a $50mm lease, so there might have been an additional payment, since the math does not work otherwise].

Then the following series of events plays out that turns Ruffin into a billionaire:

1995 - Ruffin buys Bahamas hotel with $0 of his own capital at close.
1. Ruffin hears a Bahamas hotel/casino, named Crystal Palace is up for sale.
2. The owner, Carnival Cruise Lines, wants $80mm total.
3. Ruffin goes to a bank and they agree to lend him $20mm, against his $50mm lease as collateral. He then gets Carnival to issue him seller-financing for the remaining $60mm.
4. The deal is very successful for Ruffin and eventually pays-off all the debt.
1997 - Ruffin buys Las Vegas casino with $0 of his own capital at close.
1. Ruffin hears the New Frontier Hotel in Las Vegas is up for sale. The owner, Margaret Elardi, wanted out after a long feud with a group of its unionized employees.
2. She wants $110mm for the New Frontier.
3. Ruffin uses the same playbook, but as owner of what is a nearly debt-free Crystal Palace, uses that asset as collateral for $50mm of financing. Elardi agrees to seller financing for the remaining $60mm (payable over five years).
4. The Frontier was an older casino, at one time even owned by Howard Hughes. Ruffin did not necessarily buy for the casino itself, he bought for the value of the land on the Las Vegas strip.
5. In 2007, an Israeli company offered Ruffin ~$1.2bn for the land/property. Their plan was to tear down the hotel and build a duplicate of the Plaza Hotel in New York on Ruffin’s land on the Las Vegas strip.
6. In the deal, Ruffin sold 34 acres of the property to the company and retained 7 acres for himself.
  1. Half of that retained land ultimately became the Trump International Hotel & Tower that is 50%/50% owned by Donald Trump and Ruffin.
2008 - Ruffin buys Treasure Island Casino.
1. Shortly after his 2007 sale, the 2008-2009 Financial Crisis occurs and the Vegas economy declines substantially. MGM looks for ways to raise capital and decides to sell one of their older properties, the Treasure Island.
2. In December 2008, Ruffin and MGM agree to deal for Treasure Island at $600mm upfront cash + $175mm in secured note = $775mm total
3. From a 2009 article:
  1. “[Ruffin] prizes Treasure Island’s location, history, and 3,000 rooms. Ruffin says business is slow and room rates are down “substantially”, but 2010 looks better. He’s let go 500 of the 3,000 employees, but no more layoffs are planned. “Even with the worst scenarios, it’s about a 10 percent return on my money...and it’ll probably go to 20 percent in the next 24 months.” [Note: I assume the return calculation he is referring to is cash-on-cash return since he spoke similarly about other deals.]
4. In 2025, Ruffin still owns Treasure Island and had the following thoughts in 2020:
  1. “I will encourage [my children] not to sell the properties because of the construction costs. For instance, to recreate Treasure Island, it would cost $3 billion…James Packer bought my old location [of the New Frontier in Vegas] from our Israeli associates, and he was going to put a hotel there, with only 1,000 rooms. The price came to $2.2 billion, so about $2 million a room. It just didn’t pencil out for him or the banks. It’s very expensive to rebuild these things. Fortunately, Genting has money to build what they're building now—Resorts World Las Vegas. They have other assets, or the hotel simply would never be built. At $4 billion, it’s just hard to get a return. The lesson is to hang on to your assets, especially when you know they just can’t be replaced. You wouldn't build Treasure Island again for $3 billion because you’re going to have to make $350 million a year, and you can't do that, it's just too much. These hotels are irreplaceable.”
  2. “And the dirt, it’s just so valuable. It’s like Fifth Avenue in New York—you
    never sell it. You could lease it, but you’re never supposed to sell it. Had I not gotten such a large offer [for New Frontier in 2007]—I only paid $165 million…and got $1.24 billion—well, you do that deal.”
2019 - Ruffin buys Circus Circus Casino.
1. Ruffin purchases Circus Circus for $825 million from MGM. Circus Circus is one of the older properties on the Las Vegas strip and located in its less-populated but growing northern section.
2. The purchase includes the 3900-room casino hotel, the Adventuredome theme park, a 10-acre RV park, the adjacent Slots-A-Fun Casino and the festival grounds, all sitting on a total of 102 acres on the Las Vegas strip.
3. On how he views the purchase:
  1. Ruffin calls it “a land play with cash flow … and oh by the way, we’re the last piece available on the strip.”
  2. “That’s the hook. I really wanted the dirt. . . . So the land with positive cash flow is the optimal thing you can have. Now you get to hold the land and let it appreciate, and it always does. . . . Especially in Las Vegas.”
4. 65 acres of the 102 acres are empty
  1. Four years prior to the Circus Circus purchase, MGM bought 25 of the 102 acres, paying $444mm (or $17.5mm/acre)
  2. Ruffin’s $825mm deal for 102 acres equates to $8.1mm per acre + cash-flowing casino at reasonable cash-on-cash return
5. On purchase price:
  1. “Roughly 10 times cash flow [Note: he likely means EBITDA] … It’s got an $80 million-a-year cash flow. . . . So not bad. So roughly I have a 10 percent return on the money already, not counting what else we can do [with the land].”
  2. “Circus Circus, opened in 1968, looks a little tired. But to Ruffin, it’s a bargain. ‘To build a new casino hotel these days, you can’t do it for less than a million dollars a room.’ That would make replacing Circus Circus a $4 billion proposition.”
6. In 2025, Ruffin announced there is an interest in selling Circus Circus and he believes its worth $5bn:
  1. “Let’s just say there is interest … It’s worth $5 billion. Why do you think I bought Circus Circus? For the 102 acres … That’s the land play. Remember what I did at the Frontier, how the value of the land went crazy [in 2007] —here it’s going crazier.”

Conclusions

Strict Focus on a Few Industries
Ruffin lived his investment life with a pretty strict adherence to a few industries, especially with his larger investments. Ruffin’s early business life focused solely on building new convenience stores. Naturally, real estate location was an important part of this process, so his later focus on real estate properties was not entirely disconnected from his beginnings. The furthest leap he made was opening the Marriott in Wichita, with the transition to hospitality (still with a real estate component). But, after the lease deal of his convenience stores, he stayed almost entirely, with his largest deals, within the real estate / hospitality sectors. In his later life he owned a large group of commercial real estate properties as investor, and as operator of the large casinos in Las Vegas.

Maximized all the investment variables
Ruffin (1) bought cheap, oftentimes due to distress of the owner or economy or both, (2) was seemingly a shrewd operator able to fix properties in distress or cure tough labor negotiations, and (3) showed an ability to sell at peak valuations. Doing all three consistently well over a life time is enough to create a remarkable investment record. When combined with the fourth component, the intelligent use of borrowed money - sometimes purchasing properties with no money of his own at closing - it’s no wonder the result is a man who is now shopping his $5bn 100%-owned casino in Vegas.

Ambition / Desire to “keep pushing” (and the different life paths he could have chosen to take)
Interesting to think about the many different ways Ruffin’s could have played out if he did not decide to keep pushing forward. For example, he could have stayed satisfied with his “Sunday monopoly” store. Or, even after that, he could have stayed satisfied with owning a few stores containing self-service gas stations, surely ending up a fairly wealthy Wichita resident. But, because it turned out that he (1) was an outstanding investor and (2) had the desire to keep pursuing further, compounding changed his life outcome tremendously. He was also aided by making no errors in his large investments, probably helped by his extreme focus on a few industries.

He basically chose a life of continually compounding wealth and through a long series of shrewd deals ended up a billionaire. I’m sure this is likely the story for most with extreme wealth (i.e., an intense “never satisfied” mindset), but it’s still interesting to think about his different potential life paths.

Sources:

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