California accounts for 35 percent of Nevada gaming revenues
LAS VEGAS (AP) – Concerns over expansion of Indian casino gambling is a legitimate issue for Nevada companies, with a recent report indicating Californians provide 35 percent of Nevada’s gambling revenues.
The Bear, Stearns & Co. report suggests the expansion of Indian gambling in California will result in a 21.6 percent decrease in revenue growth in the Reno/Sparks area by 2004, representing an economic impact of $232 million in lost gambling revenues.
The same report forecasts a 23.4 percent decrease, or $155 million, in downtown Las Vegas. The Las Vegas Strip would fare the best, experiencing a 0.6 percent decrease, or $34 million loss, by 2004.
Casino executives disagree on how the growth of Indian gambling in California will impact Nevada.
”I think Indian gambling will expand the number of people who come here,” Scott LaPorta, executive vice president and chief financial officer for Park Place Entertainment, told a recent investors conference.
Colin Reed, chief financial officer of Harrah’s Entertainment Inc., disagreed. He projects some 47 percent of California households now participate in gambling and ”you won’t see that many more customers (developed in Calfornia) because the penetration is so high.”
Bill Eadington, like Bear Stearns, believes the biggest impact will be felt in Reno and northern Nevada.
While Las Vegas has continually reinvented itself, spending billions of dollars on a dozen megaresorts and expanding its menu to including shopping and entertainment extravaganzas, Reno has failed to entice new projects.
”Indian casinos can more easily duplicate what is found in Reno,” said Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.
Forecasts for the impact on Reno ”run the gamut from ‘Should we close the doors’ to ‘We’re not going to feel this at all,”’ Eadington said. ”It’s somewhere in between.”