The Junk Bond Era (1985-1989) was a time of great change in Las Vegas. It was an era of unbridled excess, where the city's skyline was forever altered by the arrival of mega-casinos financed through Michael Milken's revolutionary high-yield bond market.

The Capital Solution

Traditional banks still viewed casinos with suspicion. But Michael Milken's Drexel Burnham Lambert offered an alternative: high-yield bonds that could raise hundreds of millions for casino construction. The cost was higher interest rates, but the money was available.

The Building Boom

During this period, financiers like Milken provided the necessary capital for massive projects. Steve Wynn's Mirage was the crown jewel of this era, a $630 million bet that paid off spectacularly and proved the viability of junk-bond financed casino development.

The Risks

The high interest rates on junk bonds created enormous pressure to generate revenue. Properties had to perform or face default. This pressure drove innovation—casinos had to offer more than just gambling to attract the visitors needed to service their debt.

Legacy

Though Milken eventually went to prison for securities violations, his financial innovation had permanently changed Las Vegas. The Strip learned it could borrow big, build big, and succeed. The mega-resort was born.