Gambling, tourism failing to keep pace in northern Nevada

Tuesday, Oct. 6, 1998 | 10:44 a.m.

Gambling and tourism contribute $1 billion annually to the local economy but those sectors stopped growing in northern Nevada about 14 years ago when adjusted for inflation, the study by Comstock Bank said.

The report projects continued expansion of southern Nevada's economy.

The current expansion of northern Nevada has been dominated by three sectors - construction, total trade and government - all considered "support industries," the report said.

"These support industries are ultimately dependent on employment creation in more basic industries, such as gaming, tourism and manufacturing, where growth has been significantly slower or even negative," said Robert Barone, chairman and chief executive officer of the Reno-based Comstock Bancorp.

The study warns that the "tax squeeze on local governments is real.

"Their revenues are insufficient to provide basic services and it will only get worse," the report said.

Taxes on gaming win and retail sales account for about two-thirds of all revenues in the state's general fund. They also contribute to local governments.

"The sector which has historically produced the largest positive impact on the local economy - gaming stopped growing in terms of real, inflation-adjusted gaming win 14 years ago," the report said.

"'We have been living off the largesse ever since."

Ken Adams, a local gaming industry consultant, said he agrees with the bank's report.

"I would characterize the Reno market as being flat with little growth," he told the Reno Gazette-Journal. "If we don't strengthen our product ... we're going to be struggling."

That concern is shared by Richard Wells, president of Wells Gaming Research in Reno, which tracks player traffic in local casinos.

"The gaming industry is important and I wouldn't characterize it as sick and dying, but it's certainly not growing," he said.

Southern Nevada, in contrast, continues to experience growth. With the opening of Bellagio, Mandalay Bay, Paris-Las Vegas and the Venetian, Las Vegas will add more than 12,000 rooms over the next five quarters.

"These new resorts and the intensified marketing and business developments underway in Southern Nevada will offset the negative impacts of spreading worldwide economic turmoil," Barone said.