Las Vegas Sun

March 28, 2024

Gaming turnaround key local story

The year 2002 will be remembered in Las Vegas business circles as the year of the rebound -- the rebound from the 2001 terrorism.

Business slowed down markedly in Las Vegas after Sept. 11, 2001, when the terrorism prompted the grounding of the nation's airline fleet and temporarily brought the tourism industry to its knees -- leading to thousands of layoffs in Las Vegas.

The big Las Vegas casino gambling industry -- which employs some 189,000 people -- has since turned around but is still not performing at pre-Sept. 11 levels. Its continued rebound is likely to be a major business story again locally in 2003.

Here are the top local business stories of 2002, as selected by Las Vegas Sun editors and reporters. Three other major economic stories -- turmoil at Nevada Power Co., the malpractice insurance crisis and the business tax debate -- appear in the Metro section of today's Sun as major local news stories of 2002.

1. Casino rebound: As the industry recovered in 2002, billions of dollars were committed to or spent on new local gaming projects and expansions including Steve Wynn's $2.4 billion Le Reve, new towers at the Venetian, Bellagio and Mandalay Bay, Mandalay Bay's Convention Center, the Hilton time share project, new Turnberry condominium towers at the MGM Grand, the Colosseum at Caesars, the Cannery, the Tuscany, the Ritz-Carlton at Lake Las Vegas and a Station Casinos property in Summerlin.

2. Wynn IPO/Macau expansion: Steve Wynn managed to take his new casino company public, raising $489 million -- less money than expected because of a tough national IPO market, criticism of Wynn's past management of Mirage Resorts and skepticism about the structure of his Le Reve IPO. Despite these challenges, the IPO amounted to a vote of confidence for Las Vegas and the ability of Wynn to once again redefine the Las Vegas experience. Also, Wynn and fellow casino entrepreneur Sheldon Adelson won a competition to expand their gambling empires to the city of Macau -- bringing Western casinos and convention centers to the huge and potentially lucrative Chinese gambling market.

3. Airline industry failures and successes: Denied a federal loan guarantee and abandoned by an investor, bankrupt National Airlines abruptly closed in November after growing to become the third-largest airline carrying tourists to Las Vegas. The news was better for market leader Southwest Airlines, which didn't lay anyone off after the 2001 terrorism. America West Airlines, the No. 2 carrier in Las Vegas, restructured its fares to attract business travelers. Low-fare competitor JetBlue entered the Las Vegas market, Singapore Airlines launched flights between Las Vegas and Hong Kong and Japan Airlines reinstated service between Tokyo and Las Vegas that was cut after 9-11.

4. U.S. gambling expansion: -- State budget shortfalls caused legislators in numerous states to embrace gambling as a source of tax revenue. A major expansion of casino gambling was approved in New York, while voters in Arizona, Idaho and Tennessee approved gambling measures. Indian gambling in California and Arizona emerged as a bigger threat to Nevada's casino industry. Las Vegas casino operators including Park Place Entertainment Corp., Harrah's Entertainment Inc., Boyd Gaming, MGM MIRAGE, Adelson and Wynn worked on proposals for new and expanded casinos all over the country.

5. Internet gambling: Congress again failed to approve legislation explicitly banning Internet gambling. Nevada regulators gave up on a plan to legalize online gambling within the state and said the Legislature needs to again review the issue after the U.S. Justice Department told the state it considers Internet gambling to be illegal. Casino giant MGM MIRAGE launched an offshore Internet gambling business, while Adelson, Park Place Entertainment and Binion's Horseshoe announced plans to enter the Internet gambling business. Station Casinos, in the meantime, shelved its Internet gambling program.

6. Union contract: A threatened major strike was averted with deals between casinos and the 50,000-member Culinary Union. Big Strip employers agreed to hike benefits and wages $3.24 per hour over five years.

7. Grocery industry shakeup: Raley's pulled out of the Las Vegas supermarket industry, selling 18 stores to the owner of Smith's Food and Drug Stores and Food 4 Less. The Federal Trade Commission approved the deal, arguing the market will remain competitive in part because of the emergence of non-union Wal-Mart as a big player in the local grocery market.

8. Technology failure: PurchasePro, at one time the city's largest technology company, filed for bankruptcy and disclosed it had been investigated by the Securities and Exchange Commission.

9. Health care industry expansion: Valley, HCA and St. Rose Dominican planned for or broke ground on new hospitals in the fast-growing southwest portion of the Las Vegas Valley.

10. Aladdin bankruptcy: The $1.2 billion Aladdin operated under bankruptcy protection as would-be buyers came and went, while its attached Desert Passage mall regrouped with new retailers after several of the original tenants left or closed.

Also in 2002: Park Place CEO Thomas Gallagher resigned under pressure and was replaced by Wallace Barr. .. Harrah's CEO Phil Satre said he would step down and turn the company over to Gary Loveman... MGM MIRAGE put an Atlantic City casino resort on hold to devote capital elsewhere... casino properties sold included the Lady Luck, Jackie Gaughan's downtown properties and the closed Maxim... Vacation Village abruptly closed after it was sold... Coast Casinos Inc. registered for an IPO, then put it on indefinite hold due to market turbulence... MGM MIRAGE, Park Place Entertainment Corp. and Mandalay Resort Group filed plans with regulators to launch private gambling salons for high-rollers... gaming executives William Bennett and Ralph Engelstad died... the St ratosphere battled with neighbors and the city over a new thrill ride... historic Binion's Horseshoe faced lawsu! its over allegedly unpaid bills... former Station Casinos executive Blake Sartini bought the PT's Pubs chain... Congress again failed to ban betting on NCAA games, but the measure is sure to come up again... Fashion Show Mall opened a huge addition featuring the city's first Nordstrom and Bloomingdale's home stores... Chelsea Property Group and Simon Properties started construction of a downtown outlet mall... Wal-Mart fended off a major union organizing drive in Las Vegas... Citibank purchased California Federal Bank, creating the third-largest bank in Nevada... the failure of accounting giant Arthur Andersen sent its key Las Vegas clients to competitor Deloitte... the owner of the Comdex trade show ran into financial difficulties... the homegro wn El Portal chain of leather goods and luggage stores were closing at year's end... Sprint and intervenors compromised on a rate hike, agreeing to boost local rates $43.5 million per year.

archive