Reno prepares to compete with Indian gambling

Saturday, Dec. 16, 2000 | 9:57 a.m.

Most agree that existing California casinos already are syphoning off some business from northern Nevada's economy, skimming off convenience gamblers, bus junkets and other business.

But everyone knows that its only a matter of time before the big California locomotives - major casinos like an Interstate 80 project outside Sacramento - threaten to level a crossing arm over Reno's traffic flow.

While Indian gambling in Northern California is developing more slowly than in Southern California, it's only a matter of time before some gambling powers rise nearby.

Most noteworthy are the planned Station Casinos project off Interstate 80 just east of Sacramento and the Lakes Gaming project off U.S. Highway 50 outside Placerville.

"You've got to be concerned," said Don Carano, who has significant personal investments in Reno as owner and chief executive officer at the Eldorado Hotel-Casino and as partner in the Silver Legacy Resort Casino.

Fears are warranted.

Californians comprised 51 percent of Reno-Sparks visitors last year, according to the 1999 Visitor Profile Study compiled for the Reno-Sparks Convention & Visitors Authority. Many of the new California Indian casinos will, or already do, offer these same visitors a Nevada-style experience much closer to home.

Some optimistic leaders hope that beyond just protecting the existing revenue base, the Reno-Sparks area can do more than just defeat the California Indian casino threat. They believe Reno can win the battle decisively.

"We are not a tumbleweed city that's just going to dry up and go away," said Dean Richard, sales and marketing director at Circus Circus Hotel Casino.

With new business from conventions, golfers and skiers, some leaders say visitor count could actually go up. That count has dipped slightly each of the last three years and hovered around 5 million total visits.

But Reno is asking for trouble, say local leaders, if it fails to expand its customer base with conventioneers as well as offer visitors new attractions in a more physically appealing environment.

These leaders also focus on the need to improve transportation to and from the area and to promote local outdoor and recreational attractions.

"We've got no God-given right" to the golf, ski and convention niche, said Dennis Conrad, president of Raving Consulting in Reno, who consults for numerous tribes and is a former Nevada gaming executive.

"What's interesting about Reno is it may be the only gaming town in the country that isn't truly supportive of gaming," Conrad said, adding that many take the industry for granted, ignore it or wish it wasn't here. That's why it's incumbent upon the industry to do something to restore pride about having gaming here, he said.

Conrad also says its a misperception to assume that Indian casinos aren't adequately regulated. "They've gone the other way," he added. "After being in Nevada it's like, wow, they've gone too far."

Mark Macarro, chairman of the Pechanga Indian Reservation in Temecula, Calif., and key spokesman for California tribes before Proposition 1A passed to allow Nevada-style gambling, said that California tribes are leading the regulatory way.

John Hensley, chairman of the California Gambling Control Commission, adds that the goal for all is a clean and respected gambling industry.

His biggest concern: "We do not want organized crime in California gambling," the former U.S. Customs Service special agent said.

Hensley wants to ensure California learns from states like Nevada. While Nevada now is highly regarded for its "exceptionally squeaky clean" industry, he says it took decades for the state to dig out of the hole of a past dotted with mob ties.

About 60 California tribes have signed compacts with the state to run gambling operations and about 39 already are operating. Of those, about 25 are expanding. Another eight are under construction and at least 11 more are reportedly planned.

Besides the Indian gambling activity in California, Oregon and Washington also are dotted with Nevada-style Indian casinos competing for the same dollars that once made their way to Reno.

Gambling at Oregon's eight Indian casinos increased an estimated 16.7 percent last year to $312.8 million, said Robert Whelan, a Portland economist with ECONorthwest. He predicts that figure could increase to about $335 million by the time this year ends.

In Washington, 13 tribes have gambling compacts with the state, and another will soon be added, said Susan Arland, spokeswoman with the Washington State Gambling Commission in Olympia. The tribes had about $170 million in 1998 revenue, the last year for which estimates are available, she said.

Another estimate, which includes between 10 and 20 additional casinos that do not have agreements or "compacts" with the state of Washington, puts the statewide total in the $400 million range.

Washington also has 91 commercial card rooms, 64 of which are licensed for house-banked card games, Arland said. Total card room receipts, after payouts, in the fiscal year ended June 30, 1999, were $109 million, she said.