On Tuesday, billionaire Carl Icahn announced he had sold the unfinished Fontainebleau resort in Las Vegas for $600 million, quadrupling his money in seven years. Just up the Las Vegas strip a few weeks earlier, in June, Golden Entertainment said it had agreed to buy the Stratosphere resort for $850 million from Goldman Sachs.

These summer deals for the Fontainebleau and Stratosphere show Icahn at his best and are a reminder that while many people go to Las Vegas to gamble, Icahn has been enormously successful playing his own game, betting on the booms and busts of Las Vegas that have humbled other big players.

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One of the greatest deals Icahn ever made was for the Stratosphere resort, a hotel-casino that includes the nation’s tallest freestanding observation tower. The vision of Bob Stupak and located north of the Las Vegas Strip, the Stratosphere opened in 1996 and by the winter of 1997 it was in bankruptcy court.

Icahn took control of the situation by buying big chunks of the Stratosphere’s debt for pennies on the dollar, becoming its biggest creditor. He purchased the Stratosphere out of bankruptcy court in 1998 and eventually bought out the minority shareholders, too.

But he didn’t stop there. Icahn bought 17 acres of vacant land surrounding the hotel, tracking down the owners of individual homes and properties, many of them abandoned in what was then an economically depressed part of town. Some observers thought Icahn had lost his mind. After picking up some other casino assets like Las Vegas’ Arizona Charlie’s, Icahn’s Vegas bet all-in totaled about $300 million.

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As Bob Stupak had envisioned, Las Vegas boomed and tourists found their way up the Las Vegas Strip to the Stratosphere. With the credit markets flowing, Icahn sold the Stratosphere assets for $1.3 billion to Goldman Sachs’ Whitehall Street Real Estate Fund in 2007 at the top of the market cycle. Goldman Sachs’ lending arm funded the deal with lots of debt and the land Icahn had purchased around the Stratosphere was the key to the deal that closed on the eve of the financial crisis. Icahn made $1 billion in profits. – Written by