Sunday, Feb. 19, 2006 | 12:33 p.m.
If you had looked around in 1988, when the Indian Gaming Regulatory Act became law, you might have guessed that Las Vegas' future was dicey. Until then the Silver State enjoyed a near-monopoly on legalized betting in the United States. Only New Jersey permitted anything more than a lottery.
But in 1988, Atlantic City posed a genuine threat to Las Vegas. Closer to seemingly infinite numbers of people - Atlantic City is an easy bus ride from New York, Boston, Philadelphia, Washington and Baltimore - the once-queen of American leisure seemed likely to snatch the crown back from Las Vegas.
Indian gaming potentially posed an even greater threat. Instead of a few casinos on the other coast, Indian gaming promised an infinite number of places, scattered across the country. The presumption at the time was that all these little grind joints would draw people away from Las Vegas.
Of course, that's not what happened. Indian gaming and even Atlantic City turned into feeders for Las Vegas. Beginning with the Mirage, we embarked on the most remarkable bit of urban construction ever undertaken. In the decade between the opening of the Mirage in 1989 and the completion of the Aladdin in 2000, Las Vegas built more than 60,000 hotel rooms, as many as are in Los Angeles. The new Las Vegas was born, and we are much the better for it.
In the end, the piece of legislation that was supposed to bury Las Vegas, the Indian Gaming Regulatory Act, coincides with the greatest building boom in Las Vegas' history. Indian gaming really did turn out to be spring training for Las Vegas. No one ever came to Las Vegas and then said: "Now that I've seen Las Vegas, I've really got to go to Foxwoods!"
In the process, we made ourselves into something new, with 1989 serving as a breakpoint, a sea change between past and present. Before that time, Las Vegas was primarily about gaming. After the opening of the Mirage, we became the city of entertainment, the place where people went to see what was hot. Gaming ceased to be the menu; it remained a prominent entree among many other choices.
This offered economic rewards few anticipated. Between 1989 and 2004, Las Vegas roughly doubled its annual visitation, from a little more than 18 million to more than 37 million. At the same time, the "visitor dollar contribution," a measure of what visitors spend here, roughly tripled. We got more visitors, sure; what's more important is that we got more out of them.
But this kind of success posed a larger problem: how to maintain the "hotness" that was so crucial in the new Las Vegas' success. At first, that seemed easy. As visitation increased, we threw money at the problem, built like crazy, and people came essentially to see what we were up to.
That has worked of late, but it is not a long-term strategy. Our competitors, cities such as Orlando, Fla., marvel at our success, but see it as some kind of magic. They cannot figure out how we stay on top.
It's not magic at all. What appears to be random on the surface is actually forcefully calculated decision-making aimed not only at the present, but also at the future.
That's what makes the Las Vegas Convention and Visitors Authority decision to invest $737 million in upgrading the Las Vegas Convention Center so important. We have killed the competition in this market. When Orlando planned to expand its convention center last year, critics there rightly pointed out that this rapidly growing city, replete with Disney World, could not compete with Las Vegas for convention business.
Staying ahead of the game is neither easy nor cheap, but it is essential. It takes money to make money, something LVCVA's managing board understands. The $7.6 billion that conventioneers spent in Las Vegas last year is sure to grow.
This kind of investment keeps Las Vegas unique. It is another one of the many decisions that helps Las Vegas defy conventional economic logic. Our success is not magic at all. It is planning, forethought and recognition that change will happen, and we need to anticipate it. Instead of resting on our laurels, we're planning what comes next. As long as that continues, Las Vegas is likely to stay on top.
Hal Rothman is a history professor at UNLV. His column appears Sunday.
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