SAN DIEGO — A former Nevada governor turned casino company executive believes the Las Vegas casino industry is in a good place as the region enters a new decade and more projects near completion over the next two years.
“Things are going well. Las Vegas is doing better than ever,” former Republican Gov. Brian Sandoval said Sunday during a panel discussion at the National Council of Legislators from Gaming States (NCLGS) winter meeting in San Diego.
Sandoval, now president of global gaming development with MGM Resorts International, also credited Nevada with being at the forefront of some significant changes to the gaming industry. Sandoval noted that as chair of the Nevada Gaming Commission from 1998 to 2001 they were instrumental in getting enabling legislation through the legislature that allowed them to investigate internet gaming, especially geo-fencing and age verification technology.
“As governor, we passed the first internet gaming bill,” said Sandoval.
On Feb. 21, 2013, Nevada expanded its existing laws to permit and regulate online gambling becoming the first state to legalize online gambling on an inter-state basis.
Sandoval signed into law Assembly Bill 114, a law that allowed the state to enter compacts with other states that authorized online gambling. The law opened the door for the state’s online poker business which eventually signed liquidity agreements with New Jersey and Delaware.
“We also allowed for betting on esports,” Sandoval added.
Currently, Nevada also allows for online and mobile sports betting within its state borders, while regulators have yet to approve real money online slots and table games.
Sandoval told attendees of the 45-minute discussion on attracting capital investment Sunday that Las Vegas was in a good place with several projects that are under construction. Genting Group’s $4.3 billion Resorts World Las Vegas is scheduled to be completed next year on the site of the former Echelon project that Boyd Gaming walked away from during the recession. Allegiant Stadium is expected to be done later this year, and the $1.5 billion Las Vegas Convention Center expansion will be completed in December before workers begin a renovation of the existing facilities which is expected to be done in 2024.
Sandoval also highlighted the MSG Sphere at The Venetian, a massive project just east of the Sands Expo Center that is scheduled to be completed in 2021. In addition, the Nevada Gaming Control Board unanimously recommended approval of licensing for New York businessman Steven Witkoff for the Drew, which is expected to open by November 2022. The state gaming commission is expected to consider final approval on Jan. 23.
Sandoval reiterated his belief that this is one of the best times for Las Vegas, admitting “I’m biased.”
State Sen. William Coley, R-Ohio, who moderated the panel discussion, noted that his state has 11 casinos but said what gaming companies are “really after is a return on their investment.” Both Coley and Sandoval noted that tax rates play a crucial role in the amount of investment. In Nevada, the tax rate on gross gaming win is 6.75 percent.
“The more you tax the less opportunity you have for reinvestment,” Sandoval said. “The gaming properties need to make money. The trick is to find that right balance … not over tax.”
Tax rates on gross gaming revenues vary widely in the U.S. with Delaware having a 58 percent effective rate on slot machine revenue; 33.9 percent effective rate on gross table game revenue. Mississippi has an 11.2 percent effective tax rate on gross gaming revenue, while New Jersey taxes gaming between 9.25 percent and 10.25 percent.
“No two states are obviously the same,” Sandoval said. “There are some places that just don’t want (casino gambling). It’s a process. You have to listen to your constituents.”
Sandoval said Nevada is just a different state that you can’t compare with other gaming states.
“There is a tax regime that has a lower rate that allows for more investment,” the former governor said. “Part of the challenge is people saw what Las Vegas has … (is) what we want. It’s just not an apples to apples comparison.”
The NCLGS, which met Jan. 9-12 in San Diego, included more than 40 legislators from 20 states with commercial and tribal casinos, racetrack casinos, lotteries and emerging forms of gaming including sports betting.
The NCLGS summer meeting is scheduled for July in Chicago. At that meeting, Coley, who is currently president of NCLGS, will step down from his position and be replaced by Sen. Keith Pickard, R-Nev. Pickard, an attorney who practices family law in Henderson, was first elected to the Nevada Assembly in 2016 before winning his Senate seat in 2018.