Gamers seek backing for industry ‘must-do’ list

David Strow

Wednesday, Dec. 12, 2001 | 10:50 a.m.

The Nevada gaming industry already had an agenda of issues it wanted addressed before Sept. 11.

A possible ban on college sports betting. Internet gambling. Congestion on Interstate 15. A new tax structure in the state.

Those issues have not changed. In fact, they have become more important as Nevada slips into recession, Harrah's Entertainment Inc. Chairman and Chief Executive Phil Satre told attendees Tuesday at the opening session of the Governor's Conference on Travel & Tourism.

"We no longer have a to-do list," Satre said. "We have a must-do list. We must work together (as an industry) to complete this checklist, not only for ourselves but for all of Nevada."

One priority that has become even more urgent, Satre said, is the situation on I-15. Congestion on the freeway link between Los Angeles and Las Vegas had been legendary before Sept. 11. These days, even more traffic is traveling along this 300-mile route, as Las Vegas picks up some of its lost visitation in the form of more drive-in traffic.

"I-15 is congested, clogged, and in need of an angioplasty," Satre said.

What Nevada and the gaming industry must do, Satre said, is redouble their efforts to widen the freeway.

Nevada's need to broaden its tax structure is also becoming critical following Sept. 11, Satre said. As Nevada charges no income tax to businesses and individuals, the state's budget is extremely reliant on gaming revenue taxes. The state was already facing a budget deficit before Sept. 11, and that situation is worsening because of plunging revenues at the state's casinos.

Relying so heavily on one industry for a state's tax revenue is "irresponsible," Satre said.

"The gaming industry cannot do this alone," Satre said. "The tax burden must be broadened to ensure all businesses pay their fair share."

Satre was followed by Frank Fahrenkopf, chief executive of the American Gaming Association.

Government bailouts have been the talk of Washington since the attacks, most notably with the airline industry. The AGA is backing a bailout package of its own for the nation's struggling hospitality and tourism industry.

Provisions of this package, which would be attached to a broader economic stimulus bill, include increases in the deductibility of business meals from 50 percent to 100 percent and an acceleration in the allowed depreciation of capital equipment, which would include slot machines. Accelerating depreciation would allow greater tax benefits for casino companies, since depreciation is used to offset income. The AGA is also backing efforts to help laid-off workers with COBRA health care payments, a move spearheaded by the Culinary Union.

"If we can get this through, it's something that could lift the entire hospitality industry," Fahrenkopf said.

No effort was undertaken, and none is planned, to pursue a specific stimulus package aimed at the gaming industry, Fahrenkopf said. The strategy to focus on a broader hospitality package was undertaken at the urging of several members of Nevada's congressional delegation, including Sen. Harry Reid, Fahrenkopf said.

"There's a feeling by the delegation that there were too many industries running around with their hands out, saying, 'Help me, help me,' " Fahrenkopf said.

A bill that received much pre-Sept. 11 attention was the campaign to ban betting on collegiate sporting events in Nevada's sports books. Many in Nevada believe this issue is now all but dead; Fahrenkopf warned that this is not the case. He said it is quite possible the ban could be attached to a larger appropriations bill in 2002 by its proponents.

"The NCAA has a new team of lobbyists (in Washington) ... they're experienced, savvy lobbyists," Fahrenkopf said. "We are going to see it (the betting ban) again. We have to be prepared for it."

Fahrenkopf also repeated the AGA's long-standing opposition to legalized Internet gambling, saying the AGA's board didn't believe the necessary technology is available to regulate the industry. This has gone against the tide in Nevada, where a bill was passed earlier this year that gave state gaming regulators the power to legalize Internet gambling at their discretion.

Rep. Bob Goodlatte, R-Va., has introduced a bill that would make Internet gambling illegal under federal law. And Rep. Jim Leach, R-Iowa, introduced a separate bill that would deem any credit card debt incurred on an Internet casino to be uncollectible.

But despite the AGA's continuing opposition on Internet gambling, there are no guarantees the AGA will support these bills, Fahrenkopf said.

The Goodlatte bill, Fahrenkopf said, appears to give an unfair advantage to the horse racing industry. "It appears to give the horse racing industry a blank check to have Internet wagering in the home across the United States," he said.

And it could create problems for casinos with common pool wagering, which involves the laying off of bets between sports books and horse racing tracks across the country.

"We have serious concerns with the Goodlatte bill," Fahrenkopf said. "We may be in a position where we might have to oppose that bill."

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