California initiative may ignite spending by Nevada casinos
Wednesday, July 1, 1998 | 9:18 a.m.
"This initiative campaign will be the most expensive in American history outside of a presidential campaign," said I. Nelson Rose, a professor specializing in gambling law at Whittier Law School in Costa Mesa, Calif. "(The Nevada gaming industry) will be willing to put up tens of millions of dollars to oppose it."
Rose delivered his comments during a Monday conference call for investors that was sponsored by the Wall Street investment banking firm of Bear, Stearns & Co. Inc.
California's 37 Indian casinos now offer poker and a variation of Las Vegas slots, but blackjack, craps, roulette and most other Vegas-style games are illegal.
That would change if California voters adopt the ballot measure, forcing the state's governor to approve scores of tribal casinos.
Bear, Stearns gaming analyst Jason Ader estimates that could mean the loss of as much as $300 million in yearly gaming revenues in southern Nevada. In 1997, the state of Nevada generated a gambling win of $7.8 billion, including $6.15 billion in the Las Vegas area.
Ader said in a recent report that casino operators catering to low- and mid-market gamblers are likely to be more affected than those catering to high-end players.
Among the potential Nevada casino-industry victims identified by Ader: Circus Circus Enterprises Inc., Primadonna Resorts Inc. and Boyd Gaming Corp.
BancAmerica Robertson Stephens analyst Harry Curtis believes the lost revenue in southern Nevada would be closer to $600 million annually.
"We estimated 8.5 million visitors from California travel to Las Vegas annually, representing estimated casino revenue of approximately $1.5 billion," Curtis wrote in a recent report. "More conveniently located casinos in California with comparable casino games and noncasino amenities is likely to reduce trip frequency, particularly midweek, by 30 percent to 50 percent."
Much of Monday's conference call linking Rose and Ader focused on the likelihood of the ballot measure's passage.
"In November, the voters will not approve the initiative," Rose predicted. "The voters' minds will not let them accept the idea of widespread, wide-open casinos in the state of California."
In recent months, the Las Vegas gambling industry, led by Circus Circus executive Mike Sloan, has begun to oppose the measure. Casino executives also are banking upon a coalition of California tourism executives, restaurant owners and union members to defeat the plan.
One powerful opponent could be the California Teachers Union, whose statewide membership could fear the loss of lottery revenue to expanded Indian casinos. Like many states, Californians rely on their state lottery to generate revenue for schools.
"Unions are in a funny position," Rose said. "I don't know how the teachers' union would come out on this (or) what this would do to the California state lottery."
Rose also said the November ballot measure has "provisions that are probably illegal. There would be lawsuits over this initiative for years."
BancAmerica Robertson Stephens' Curtis echoed that sentiment in his recent report.
Curtis said the California Constitution has a prohibition against Las Vegas- or Atlantic City, N.J.-style casinos. As a result, an Indian gambling initiative would have to be linked to a change in the state's constitution, and the November measure is not.
"As a practical matter," Curtis wrote, "if the initiative passes, then the issue is likely to be litigated for an extended period, possibly three years."
archive
- Most Read
- Discussed
- Most E-mailed
- Fight snapshot: Pacquiao is a hit with Jimmy Kimmel, and vice versa
- Google Maps glitch renames Henderson
- Rebels’ win raises a few what-ifs
- Wood: Not the renewable energy some had in mind
- Vegas is inspiring, but not buying, ideas for tourism ads
- Quagga mussels a toxic threat to Lake Mead
- Pinnacle CEO resigns after meeting confrontation
- As earnings fall, Riviera unsure if bankruptcy can be avoided
- Trial set for parents of boy, 4, who died in hot vehicle
- Not all doctors agree with AMA support of bill
Blogs
Top Chef: Las Vegas
Top Chef Odds Week 11: And then there were six
Politics: The Early Line
Rep. Berkley livens health care debate with story of her own
Now and Then
Wranglers to face familiar foe and that's putting it mildly
Sports: Upon Further Review
Fight snapshot: Arum takes a pot shot during Pacquiao training (2 Comments)
Robin Leach's Las Vegas Celebrity Watch
Final Five have two routines each on Dancing With the Stars
The Coin Bucket
Blue Man Group at half price for locals
Elsewhere
Findlay Prep's Bradley fitting in at Texas (2 Comments)
Calendar »
- 10 Tue
- 11 Wed
- 12 Thu
- 13 Fri
- 14 Sat
-
Las Vegas Wranglers vs. Utah Grizzlies
Orleans Hotel-Casino
-
Leaving Springfield at Beauty Bar
Beauty Bar | 10 p.m. to 11:59 p.m.
-
Justin Sayne and Dignity at Moon
Moon Nightclub | 10:30 p.m. to 11:59 p.m.
-
Lily Tomlin at the Hollywood Theatre
Hollywood Theatre at MGM Grand
-
2nd Annual Go-Go Cup at Blush
Blush Boutique Nightclub | 10 p.m. to 11:59 p.m.
The Sun
Locally owned and independent for more than 50 years.
Technorati









