Northern Nevada would be hit hardest by expansion of gambling in California

Tuesday, Oct. 13, 1998 | 11:30 a.m.

But many of the people here who make a living from the quarters those Californians pump into slot machines are afraid that all could be changed by an election they can't vote in.

They say a California ballot measure that would open the way for widespread gambling on Indian reservations would batter the economy of northern Nevada.

"This is without a doubt one of the most significant issues that has ever faced the state of Nevada. Period," says Nevada Resort Association lobbyist Harvey Whittemore.

California already has a number of Indian casinos, but they operate in a legal limbo as many tribes resist signing a model agreement that Republican Gov. Pete Wilson has negotiated with several tribes. Proposition 5 would allow casinos on the state's 112 reservations under terms more generous than the Wilson deal.

While Nevadans may not be able to vote against Proposition 5, the state's casino and hotel interests are fighting it with cash. They've already given $15.5 million to the anti-5 campaign, according to state records that show the biggest donors are Hilton Hotels Corp., which owns three Las Vegas hotel-casinos and is building a fourth; Mirage Resorts Inc., owner of four Las Vegas resorts; and Circus Circus Enterprises Inc., owner of three Strip hotel-casinos plus one under construction.

The tribes have put up $42.7 million of their casino winnings since the beginning of the year. They spent heavily to get the measure on the ballot, while the opposition campaign didn't form and start collecting money until the measure had already qualified.

Casino moguls looking at a map of Indian reservations forsee the Golden State dotted with casinos, including strategic spots in Placerville beside U.S. 50 and Auburn on Interstate 80 -- the two main routes from California into the Reno and Lake Tahoe area.

Las Vegas, with its nightclub shows, family attractions and nationwide clientele, is considered less vulnerable. Northern Nevada gets 50 to 70 percent of its business from northern California, according to industry executives, and the bulk of that business comes in by car and bus over mountain roads that are often treacherous during the Sierra winter.

"Nobody who has been caught in a snowstorm in the Sierras will ever go up there to gamble if they can go somewhere closer to home," says Sharkey Begovich, owner of Sharkey's casino in Gardnerville, 25 miles east of here.

Lodi, Calif., resident Dorothy Kraft, 77, playing the slots at Harrah's here one recent day, said the drive to Nevada is fun when weather's good but "not in the winter."

An industry financed study found that widespread gambling in California could cut business in northern Nevada by 10 to 15 percent in the first couple of years, Whittemore said.

Bus driver Ron Abrams, who has hauled people to Nevada resorts for more than 30 years, said business already is off for tour buses and expanded Indian casinos will only hurt more. "Oh, yeah, I know it will," he said.

Indian leaders say they have a right to build casinos on their sovereign land.

Mark Nichols, chief executive officer of the Cabazon Band of Mission Indians in Indio, Calif., acknowledged that Proposition 5 could hurt Nevada. But he said California Indians aren't to blame because northern Nevada resorts diversify their attractions beyond gambling.

Moraino Patencio of the Pechanga Gaming Commission in Temecula, Calif., says Nevada casinos should look at the measure as a spur for new investment rather than a threat.

In fact, operators of some of the big northern Nevada resorts are confident that their non-gambling attractions -- and the breathtaking scenery around Lake Tahoe -- would continue to draw Californians even if there were casinos closer to home.

Gambler John Brumett of Ukiah, Calif., agreed. As he dropped quarters into a Harrah's slot, Brumett, 76, said, "There are Indian casinos all around us back home and we don't even go there. We like to come to Tahoe. It's more than just going into the closest casino."

Times have changed since the late Harvey Gross put six slot machines and a couple of blackjack tables into his roadside cafe-gas station at Stateline in 1944. Now Harvey's Resort Hotel towers over Lake Tahoe, with about 2,000 slots and 98 table games. Neighboring Harrah's, Caesars Tahoe and the Horizon are on a similar scale.

"They come for the entertainment, the atmosphere," says Chris Seran, taking a break from a job running a craps table at Harvey's. "They're gambling only a small part of the time."

Phil Bryan, a veteran casino executive who runs Boomtown on I-80 near the California line, said the challenge will be for resorts to offer a better package -- entertainment, recreation, food and other services in addition to gambling.

"We just have to continue to perfect our presentation, and not expect pure gaming to carry the day," Bryan says. "We don't know how the vote is going to come out, but either way we will continue to have increased competition from everywhere."

Chuck Bluth, owner of the Cal-Neva Resort on Tahoe's north shore, said the "grind joints" that depend heavily on slot machines are in for trouble if Indian gambling expands in California.

Bluth began 10 years ago to market his club as a place to get married or have a honeymoon, and says that put him "way ahead of the curve."

That's the sort of insulation that other resorts will have to adopt but "they waited too long," he adds. "Now they're going to all be running around trying to figure out what to do."