Casino Connection Nevada

Paying the price, waiting for the reward

by Roger Gros

Economic issues are always important in the gaming industry. Some say casinos are “recession proof” because their revenues don’t dip nearly as dramatically as other entertainment choices during bad economic times. The theory goes that people need diversions when times get tough and other things get cut before the devoted gambler cuts his gambling budget. And when you add the attraction of Las Vegas, the conventions and the other reasons people visit Nevada (business, vacations, family events), the impact of an economic downturn isn’t nearly as bad as it might be in other states.

But the truth is, bad economic times affect everyone. Even if it doesn’t impact the Nevada gaming industry substantially, it certainly affects the executives and employees of the industry. Take the recent slump (some would say “crash”) of housing prices in Las Vegas. Values at some levels of the housing market are down as much as 25 percent below where they peaked two years ago. Those of us who own homes in the Las Vegas Valley and have been hoping for a nice profit over what we’ve paid for our houses have seen the potential revenue gain decline. (Unless you’re a financial genius like me who bought at the top of the market!) But you have to have someplace to live, so even with that decline, your economic situation hasn’t changed all that much.

We’re all paying through the nose for gasoline. Getting stuck in one of our memorable Nevada traffic jams now has the added frustration of wasting that precious gas as we stop-and-go on the 215, I-15 or 95.
 
Food prices, always high in Nevada because of the distance the food must travel to get to us, have been climbing higher and higher. Check out the price on that gallon of milk the next time you go to Smith’s. It won’t be long before it will be more economical to buy a fifth of vodka instead. (And a heck of a lot more fun!)

Yes, times are tough.

But how long can we expect it to last? In many ways, Nevada is as dependent upon the national economy as any other state, maybe even more so. After all, if other states (and countries) are hit hard economically, it’s likely that their residents will curtail their vacations and business travel (despite some analysts’ claims to the contrary).

It’s Nevada’s gaming industry that is the key to the recovery of the state. With more reasons to come to Las Vegas (and Reno/Tahoe, to some extent), Nevada will rebound faster than many states. And the new construction now underway on the Strip may be perfect timing.

Last month, we saw the first of the new generation of gaming resorts open when the Palazzo debuted. Early next year, Encore, the partner of Wynn Las Vegas, will come online. Later next year, CityCenter will open. Not to mention the Fontainebleau, Aliante Station, the Eastside Cannery and several other smaller properties.

The addition of these resorts will bring tens of thousands of more jobs to the state. These people will demand housing, which should reverse the housing-price decline.

These resorts are going to be “must-see” attractions, encouraging new and repeat visitation to Las Vegas.

And this new business will create more tax revenue from companies, employees and ancillary businesses, easing the burden on those already here.

So while the sky may be falling right now in somewhat messy economic conditions, it won’t be long until the sky becomes the limit. And isn’t that why we all come to Nevada? Don’t we all enjoy the opportunities that are available to us in the gaming industry and beyond? Let’s protect this resource and allow it to lead us out of the wilderness, so to speak.