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Saturday, March 6, 2010 | 2:01 a.m.
Sun coverage
Last-minute lobbying led to the Legislature’s surprise reinstatement of a portion of slot machine taxes earmarked for problem gambling treatment, education and research.
Gov. Jim Gibbons had proposed eliminating all money for gambling addiction services to help plug the budget deficit, as money from the $2 slot tax was needed for other programs. Instead, the Legislature restored about half of the money intended for problem gambling assistance in fiscal year 2011, along with a host of other social services, in exchange for increases in business fees such as those charged by the Gaming Control Board to license casino owners.
Still, lower slot tax collections will likely yield less than $500,000 for problem gambling grants in the coming year, much less than initial projections of around $850,000, Nevada Health & Human Services spokesman Ben Kieckhefer said.
“Nevada depends on gambling, which includes gambling by people who are out of control,” said Assemblyman James Ohrenschall, D-Las Vegas, who helped circulate a list of programs, including problem gambling services and assistance for needy seniors, slated for cutting. Supporters called it the “ugly list” and said it represented programs certain legislators refused to cut.
“I think it shocked the conscience of legislators to cut this funding,” said Ohrenschall, a recent graduate of Boyd Law School who skipped the state bar exam to attend last month’s special session in Carson City.
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No executive may be more aware of how perceptions of wealth have changed than the head of Nevada’s largest casino company.
MGM Mirage Chairman and CEO Jim Murren speaks at the grand opening of the Mandarin Oriental Las Vegas at CityCenter on Dec. 4, 2009.
In an interview with Fox Business Network last month, MGM Mirage CEO Jim Murren struck a populist note when he said he has cut back on things such as fancy cars, dining out and luxury vacations.
“All of us feel differently about money and about value today than we did even a year ago or two years ago,” he said. “I feel like I’m a better person today than I did three years ago. I don’t do much shopping … but I spent money that I didn’t need to spend.”
After buying a BMW and Mercedes, Murren said he’s “down to a Jeep Cherokee” — an SUV also preferred by Murren’s mentor, billionaire Kirk Kerkorian, a man known for his lack of pretension.
Other executives have recently professed their liberation from the kind of ostentatious spending that fueled the American economy and, ultimately, the recession.
And yet, not all companies stand to lose from the country’s shifting values like MGM Mirage. It, after all, developed a high-end business model in Las Vegas dependent upon a certain level of conspicuous consumption.
Murren’s professed relief in “saving and making do with what I have and not being anxious to have more” seems to fit the personality of the informal yet outspoken executive, who frequently praises his sensible, New England upbringing.
“You’re not defined by the car you drive or the clothes you wear or the jewelry you have,” he added.
Sensible spending will be good for consumer budgets. Whether it’s good for Las Vegas has yet to be seen.
***
In an investor presentation posted on its Web site last week, Harrah’s Entertainment reiterated its long-term plans to build an open-air retail and entertainment district between its Flamingo and O’Sheas casinos and to finish off its 665-room Octavius Tower at Caesars Palace.
Harrah’s revealed a preliminary budget of $550 million for the corridor and the goal of achieving a return of at least 25 percent by capitalizing on foot traffic and demand for nongambling amenities rather than casinos.
Caesars Palace is seen on Jan. 14, 2010.
Harrah’s also said $325 million of the $410 million cost of Octavius Tower has been spent so far. It stopped construction last year after determining that the recession had killed demand for additional hotel rooms in Las Vegas. Similarly, competitors have shelved plans for resorts, while lenders pulled the plug on the under-construction Fontainebleau Las Vegas, which may sit idle for years. Octavius Tower is a self-contained expansion that can sit empty without disrupting business at Caesars, officials have said.
Plans for both projects remain on hold, Harrah’s spokesman Gary Thompson said last week.
Spending hundreds of millions of dollars is not a prospect some investors want to entertain in the midst of Las Vegas’ worst economy.
These are cost-effective, high-return projects “designed to capitalize on existing visitation,” the presentation reminded them.
Jim Murren is a fake, and spinning a hypocritical tale of down to earth lifestyle after nearly bankrupting MGM with the biggest example of wasteful spending in City Center. I just wish he would pack up and go back to New York City, and leave us here in Las Vegas to sort out the mess he and his likes have created here.
the budgets and spending of these big corporations is based on future expected income. therefore, in 2005, when city centre was started I am sure it did not look like a stupid and wasteful idea. BTW those like Murren have the executives positions in Vegas because of their capabilities, and billionaires like Kirk would not risk their wealth by giving executive positions to people that would simply create a mess out of their assets!!!
Well gamblinfin, sure looks like old Kirk was wrong on this one now doesn't it? Now If you were to use Mr. Wynn as your example, then that would be more feasible as Steve did not leverage himself into oblivion to get his properties built..Murren took old Kirk for a Missouri boat ride without a paddle or a rope..
I wonder how effective addictive gambling teatment is? Less than 5%?
Why would you live in Las Vegas the gambling capital of the world if you are addictive to gambling.
good question. that would be like living in the neighborhood of the Jack Daniels distillery for an alcoholic. daily craziness.
just have the state break up the illegal cartel between harrah's, the gaming control board and the DA's office and that would provide for much needed relief to thousands of patrons.
harrah's drugs and overextends credit knowing that DA Zadrowski will use his gun and badge to collect often arresting and imprisoning otherwise law abiding citizens...
FEDS please save us from harrah's wrath...
environprotector u shoul read Winer Takes All by Christina Binkley to see how Steve Wynn lost it all (Mirage corporation) and all his properties were taken by kirk. it was because of many things, including too much leverage and poor management! today, his corporation (Wynn) has a lot of debt, considering it owns only two properties on the strip. Considering the bubble in the economy that burst 2 years and 3 months ago, Murren did not get into a lot of debt.
Gambling is everywhere today - well, maybe everywhere except Hawaii and Utah, and Hawaii is considering it now. Here in Oregon, we have video lottery - within two miles from my house, there are dozens of places I can go to play keno, video poker, slot machines, and lottery tickets. Poker has gotten bigger here too. Gambling is everywhere.
Environprotector comes across as a bitter former MGM Mirage employee. His opinions are based in fact however they require one to twist the ugliest possible bent on each and every comment. Again according to him the Downtown business model is going to be the savior of Las Vegas. Bring back the free rooms, bring back cheap buffets, and start giving money to the tourists through loser slots and let the renaissance begin. Bob Stupak where are you when we need the crazy mad marketing skillz you utilized in the early 80's.
I agree that Las Vegas has too many luxurious properties and the supply of for the high end customers exceeds. But I disagree with the looser slots and cheep (or free) rooms will save it. If the high end resorts on the strip go with that business model, than we will be seeing more layoffs and deteriorating properties.
Eljeffe and gamblingfin :
The main point I make by advocating the return of the value to Las Vegas gambling formula, is that the relatively small percentage of high rolling wealthy tourists are not enough to sustain the overhead of today's Las Vegas. We NEED the mid and low rollers en masse to bring those dollars back. The only way you are going to entice them, is to offer them value.