Yesterday, I had to book a room at the Silver Legacy in Downtown Reno for a meeting I have to attend early next month.
Strangely enough, after I booked I found this RGJ article noting Silver Legacy's troubles in paying off the mortgage. This seems so awkward for such a big, flashy casino... And it must be painful for those in Reno who had high hopes for Silver Legacy and what it would do for Downtown Reno.
When it opened in July 1995, the Silver Legacy Resort Casino was going to be Reno’s chance to revamp a gaming market that had not seen a major new property open in 17 years.
The Silver Legacy was the result of a partnership between the family-owned Eldorado Hotel & Casino and Circus Circus Enterprises run by Don Carano and CEO Clyde Turner respectively. [...]
And for awhile, the plan worked. For example, the Reno-Sparks gaming market pulled in $834 million in 1995 and by 2000 that revenue grew to nearly $1 billion, according to UNLV gaming statistics.
The idea behind the Silver Legacy was to create a “downtown synergy,” said Guy Rocha, Nevada’s former state archivist. It featured sky-walks connecting the Eldorado and the Circus Circus as well as dome that would house a 127-foot mining rig as the Silver Legacy’s center piece.
“And it really moved a lot of the casino focus to the north side of the railroad tracks and the north side of Commercial Row,” Rocha said. “It really changed the downtown focus a lot. And I think they did for a period of time, and perhaps still do, but the landscape has changed with gambling.”
And then, everything changed. And yes, we again have California to thank (or blame) for it.
California voters approved Proposition 5 in 1998 and gave the green light to tribal casinos. But after the California Supreme Court overturned Prop 5 as unconstitutional, then Governor Gray Davis (D) and several Native American tribes went back to the ballot in 2000 with a constitutional amendment, Prop 1A. But once Prop 1A passed with 65% of the vote in March 2000, tribal casinos were finally approved for good. And ever since then, California gaming has increasingly become a serious threat to Nevada gaming interests. Northern Nevada especially felt the brunt of competition from Sacramento and San Francisco area tribal casinos as fewer Northern California gamblers were making the drive through the Sierras to Reno.
And it's not just California that's posed a threat to Nevada casinos. Right now, it looks like Las Vegas is faring better. Air traffic at McCarran continues to improve, and key Strip player MGM Resorts has narrowed its losses and found firmer financial footing. However, look at the details and see where MGM is faring best. And look at what's landed both Wynn Resorts and Las Vegas Sands into a giant tub of legal hot water. Macau is now the largest gaming market in the world, and Las Vegas will have to get used to growing competition from abroad... And perhaps from the internet as well.
So why am I bringing up everything from a Downtown Reno casino near foreclosure to Macau to online poker? Simple. These stories should all be a wake-up call to Nevada. We can no longer rely only on casino revenue to survive.
This really shouldn't be news. Two years ago, we were being warned. And late last month, UNLV's Robert Lang was trying to remind us again of what needs to be done to fix Nevada's (and especially Southern Nevada's) failing infrastructure, diversify our economy, and allow for a healthier and more balanced economy to grow.
However, this doesn't come cheap. Our colleges badly need investment. So do K-12 public schools. So do our roads and mass transit operations. And so does our health care system. And we simply can't do this without new revenue.
As it is now, Nevada is dangerously over-reliant upon casinos and the gaming industry. During "the boom years", it may have been easy to dismiss this as silly "negative nelly" talk. But now that we're facing chronic budget woes and inadequate public infrastructure that hasn't kept up with population growth for some time, we can no longer ignore the obvious.
So this is why we're embarking on "Tax Week" here at Nevada Progressive. I'd like to do my part to help foster discussion of what we must do to secure a better future for Nevada, so expect multiple ideas and perspectives on how best to fix Nevada's broken tax system and fill those pesky budget holes for good.