Nevadans pledge cooperation in face of California gambling expansion

Thursday, Feb. 17, 2000 | 1:49 a.m.

They also agreed during a daylong meeting in Reno on Wednesday that continued cooperation among the often rival factions is crucial to the future of Nevada's tourism industry.

"We are looking at the gorilla on the doorstep," University of Nevada, Reno economics professor Bill Eadington said.

Eadington, who heads UNR's Institute for the Study of Gambling and Commercial Gaming, said northern Nevada's gambling- and tourism-based economy, which gets half its visitors from California, faces a firestorm of competition after the expected passage March 7 of Proposition 1A in California.

The measure would legalize Nevada-style slot machines and would more than double the roughly 20,000 slots already operating without state or federal approval. It also would expand Indian gambling.

Wall Street analysts and others estimate a 13-to-20-plus-percent cut in northern Nevada gambling revenues, which help finance many public programs and services.

"There's clearly greater awareness of this problem and there is greater willingness to work together to overcome the challenges" the region faces as a destination, and that is key to the area's survival, Eadington said.

The forum followed a similar meeting a year ago after the passage of Proposition 5 in California in 1998 that would have expanded Indian gambling. Courts struck that down as a violation of the state constitution.

Proposition 1A amends the constitution and is supported by Gov. Gray Davis and most tribes. It also allows renegotiation in 2003 of the compacts the tribes sign with the state for gambling, which could open the door to even more slot machines.

Eadington said he also is concerned that other businesses, from race tracks to bars and card clubs, will lobby for similar gambling later, which could expand gambling even wider.

Sara Beth Brown, vice president and general counsel for Reno-based slot maker International Game Technology, painted a less threatening picture than Eadington.

IGT stands to benefit from legalized gambling in California, but is equally concerned about Reno's health, she said.

She predicted a 13 percent reduction in northern Nevada gambling revenues in about 18 to 24 months, but felt the area would recover the losses in about two years.

"If I were in Laughlin, I'd be singing a different tune," she said.

The southern Nevada community already has been stung by Arizona Indian gambling and faces a big hit from Southern California.

Michael Rumbolz, president and CEO of slot maker Anchor Gaming Corp., cited one Wall Street analyst's prediction that California Indian gambling could divert at least 1.2 million customers from Reno-Sparks, which had about 5.1 million visitors in 1998.

Because gambling has reduced tribes' unemployment and welfare rolls and because Proposition 1A will send tax revenues to the state, "this will give the state an interest in protecting these operations," he said.