Columnist Jon Ralston: Nevada will remember Black Tuesday

Sunday, March 5, 2000 | 9:19 a.m.

Jon Ralston, who publishes the Ralston Report, writes a column for the Sun on Sundays and Wednesdays. Ralston can be reached at 870-7997 or through e-mail at ralston@vegas.com.

Most voters and political observers will focus their attention this week on the balloting for the White House. But while Super Tuesday could determine the presidential nominees, someday it will be remembered as Black Tuesday in Nevada because of the long-term impact a very different election will have on the state's economy.

After years of legal and political conflict, Californians this week will approve a dramatic expansion of Indian gaming in their state when Prop 1A passes by an expected landslide. No one knows exactly where the impact on Nevada ultimately will fall within the spectrum stretching from nonexistent to apocalyptic. But while it may take four or five years, the political and economic ramifications here could be as far-reaching as when gambling was legalized in Nevada nearly 70 years ago.

Last month a Bear Stearns analysis pinpointed the loss of revenue in Las Vegas at 3.6 percent by 2004, including 23 percent reductions in downtown revenues. Reno/Sparks (21.6 percent), Laughlin (15.8 percent) and Lake Tahoe (15.4 percent) would be hit much harder, according to the report.

But those are just numbers -- and frankly, numbers based on a speculative house of cards. Bear Stearns has no better information than anyone else about what will happen -- how many Indian casinos will sprout, how many slots will be imported, how far the Indians will go.

But something is going to happen. And no matter how much we have to hear the tired line, "more gamblers elsewhere means more gamblers for Nevada," erecting casinos in a market responsible for generating more than a third of the state's gaming revenue cannot be good.

All of this would be deliciously ironic were it not so seriously distasteful: A small group of multimillionaires who exert substantial political clout has manipulated the California political system and the ballot process to augment their bottom lines. Let's face it: The Indians learned from the best oligarchy I know, the one headquartered on Las Vegas Boulevard South.

And the problem here for the gamers is their credibility is shot. As one executive put it, "Maybe we've cried wolf too long." No matter how many figures are published about how much the casinos contribute to the state economy or how much they donate to charitable causes, the gamers can't get away from their record of hypocrisy and shifting loyalties. Whether it's gaming in other states (it'll destroy Las Vegas) or on tribal reservations (it's the beginning of the end) and, eventually, the Internet (we must nip it in the bud), the Chicken Little-like plaints ring hollow.

Threats have become opportunities. Companies wail about other jurisdictions and then invest there to meet shareholder demands -- a pattern seen in various cities and now next door, where the second California Gold Rush is about to take place. But how much gold will be rushing out of Nevada, too?

Though state Sen. Joe Neal's gaming tax increase initiative may be misguided in both the amount (5 percent) and the execution (too much earmarking of receipts and not enough money to mount a real campaign), the potential is limitless for him to exploit the industry's in-state poor mouthing vs. its California extravagance.

That's politics. The economics of this are harder to gauge, especially for Gov. Kenny Guinn as he embarks on an unprecedented plan to predict and fund state needs far into the future. State economic forecasters will be handicapped by a continued climate of uncertainty, too. Slot machine limits in California could be lifted by a capricious California elected elite or a governor and legislative contingent swimming in Indian gaming campaign money.

An expected lawsuit by card clubs and race tracks alleging that the state is giving special privileges to Indians may slow the impact a little. But the end result -- if the Bicycle Club and Hollywood Park get slots, too -- may be even more deleterious.

Whether the next president is John McCain or George Bush or Al Gore will have marginal impact on Nevada. And that outcome will be ephemeral compared to the long-term effects wrought by the inevitable passage on Black Tuesday of Prop 1A.