Small casinos feel pinch of recession

Associated Press

Sunday, Jan. 11, 2009 | 12:45 p.m.

For 10 years, Nonie Galloway helped pay the bills as a hostess-cashier at the Silver Club in Sparks.

Now, the 34-year-old single mother of five is wondering what she'll do next after the resort on Saturday became the latest small casino to close in Nevada _ a long-term trend experts say is being exacerbated by the recession.

"It's been rough, really rough," said Galloway, whose kids range in age from 2 to 14.

"It's upsetting my kids, too, because they're worried about me and what I'm going to do next. I don't know what I'm going to do now," she added.

Galloway is among thousands of employees who have lost jobs statewide as the recession and spread of Indian gambling have combined to take a toll on small casinos.

The faltering economy is the driving force in the Holder Hospitality Group's decision to close its Silver Club in Sparks and its Red Garter Casino in West Wendover on March 3, company spokesman Tom Clark said.

The Silver Club had 219 employees and the Red Garter has 155.

Holder has been trying to sell its 13 Nevada casinos for 18 months, Clark said, but potential buyers have faced difficulty securing credit.

"We're seeing the perfect storm," Clark said. "The traveling public and locals don't have the disposable dollars like they have in the past. The smaller properties are having more trouble weathering the storm than the larger properties."

Elsewhere, the December closure of the Oasis' casino, restaurants and night clubs in Mesquite affected 500 workers, while the November closure of Fitzgeralds Casino-Hotel in Reno affected 475 employees.

Tom Cargill, a University of Nevada, Reno economics professor, said smaller Nevada casinos have struggled since the advent of Indian casinos in California and the recession may have accelerated a long-term trend of such resorts going out of business.

"There's a long-term trend here where these places don't reopen, so what you could see here is a further deterioration of the gaming base," he told the Reno Gazette-Journal.

"The days when you could just build a cement building and put mirrors and slot machines inside and make money, well, those days are long over," he added.

The Silver Club is the latest in a long string of Reno-area casinos to close since 1995 that includes Harolds Club, the Nevada Club, the Riverboat, the Comstock, the Sundowner and the Golden Phoenix.

The recession continues to hurt Nevada casinos both big and small, according to a report Friday from the state Gaming Control Board.

The casinos reported an almost 15 percent drop in winnings from gamblers in November _ the 11th straight month of declines _ compared with the same month a year earlier.

The report shows declines during November in every major market in the state, including the Las Vegas Strip which was down 16 percent.

In northern Nevada, clubs in Washoe County, which takes in Reno, were down 15.2 percent. That's the 17th consecutive month of declines for the area.

"It's the economy, the big decline in the stock market and people tightening up on their spending," said Control Board analyst Frank Streshley.

The decline also is taking an emotional toll on casino workers, said Galloway, the former Silver Club employee.

"I've had some sleepless nights," she said. "It's had the same effect on my co-workers. We've all watched our kids grow up together. It's just like you're losing your second family and home."