California Indian gaming revenue could surpass Nevada’s this decade and deal a devastating blow to the Silver State’s casino industry.
Tribes in California are on a pace to rake in $6 billion this year. That beats New Jersey and ranks second only to Nevada’s $9.3 billion.
The forecasts come as Northern Nevada’s closest gaming threat, Station Casinos’ Thunder Valley, prepares to open in June near Auburn. Roughly the size of Reno’s Silver Legacy, the property recently purchased 98 additional acres that could be used for a Las Vegas-style hotel.
Frank Fahrenkopf, president and CEO of the American Gaming Association, said Nevada will be hit hard by the growing competition from tribal casinos.
“This is the seventh year in a row I will talk about the impact of Indian gaming,” Fahrenkopf said. “It is very real. It is devastating, but it is not the end of the world.”
“People in Northern Nevada say ”˜We don’t want to be Las Vegas,’” the former Reno lawyer said. “Well, No. 1, you’re not. No. 2. The town has to be more creative.”
At the 19th annual Governor’s Conference on Tourism in Reno this month, gamers discussed partnering with tribes to bolster business for both isolated Indian casinos and large gaming meccas.
“Fighting growth of Indian gaming . . . is a futile battle,” said James Baum, director of development for Harrah’s Entertainment Inc.
Baum has negotiated agreements with tribes for Harrah’s, including the Rincon San Luiseno Band of Mission Indians and the $125 million Harrah’s Rincon Casino and Resort in San Diego County.
“We bring customers to Nevada from our other properties,” he said, adding the proliferation of Indian casinos also makes gambling more socially acceptable to people outside of Nevada, which helps the industry.
University of Nevada professor Bill Eadington said the relationship between American Indian casinos and Nevada operators might not be so beneficial.
“They are creating consumers, but they are also taking consumers that otherwise would have come across the border,” he said. “It really comes down to the challenge of what town officials can do to replace and replenish tourists.”
While Las Vegas has struggled to bring business back to pre-9/11 levels, Reno has been in a virtual tailspin. Washoe County gaming revenues have declined in 21 of the past 24 months compared with the previous year.
But despite its strong presence in both Northern and Southern Nevada, Harrah’s is moving full-speed ahead with its Indian ventures in the Golden State.
“The company looks for strategic opportunities, and we think California is a great market,’’ said Jan Jones, a senior vice president and former Las Vegas mayor. “The risk to stockholders of gaming companies entering the California market is minimal, she noted, compared with decisions to build $1 billion casinos in Las Vegas.’’