The coming year will be a real test for
northern Nevada's gaming and tourism
industries.
Growth in northern California Indian
gaming, the trench ReTRAC project, a
slowdown in air travel - those and other
challenges face the area's leisure industries
in 2003.
Some issues are not new. Air passenger
travel through the Reno-Tahoe
International Airport has been declining
since at least 1999. In that year, 6.1 million
air travelers passed through the airport.
That total dropped 8 percent to 5.6 million
in 2000, and dropped again in 2001,
by 12 percent to 4.9 million. The total for
2002 is not yet available, but passenger
traffic through October was down 10 percent
from the same 10 months in 2001.
The airlines are struggling more than
ever and next year will likely get worse
before it gets better for the area's airports.
The problem of Indian gaming isn't
new either, but several important milestones
are expected in 2003. First, in
March, the tribes are renegotiating their
compacts with the state of California.
Currently the tribes are allowed up to
2,000 slots per casino, but they will be
looking to increase that number significantly.
They'll likely get what they want if the
tribes agree to share more gaming revenue
with the state, according to Bill
Eadington, University of Nevada, Reno,
economics professor and director of the
Institute for the Study of Gambling and
Commercial Gaming.
"California will be desperate enough for
the revenues and will allow more slots if
the tribes agree to allocate a portion of slot
revenues to the state in the same way
Connecticut does," said Eadington. "That
would give the state $250 million. Now it
only gets $70 million. And the state is facing
a $20 billion deficit."
That's good news for California. "But
the point is if they take that position then
it's not good news for Nevada," said
Eadington.
The casinos will
also likely be successful
with additional slots,
said Eadington, since
the market there is
now underserved.
"The rule of thumb is
one gaming device per
100 population. That shows up everywhere,"
there is gaming, he said. "There's
50,000 devices there now for 35 million.
Using that rule of thumb there could be
350,000 devices for that population capacity."
More bad news is coming next summer
when the Thunder Valley Station casino is
scheduled to open in Roseville, Calif., near
Interstate 80. The Indian casino is expected
to have close to 2,000 slots, 100 games
tables, a 500-seat buffet and three restaurants.
The casino could immediately begin to
attract travelers that would otherwise venture
to northern Nevada. "But the real
question will occur next fall and winter
when they're challenged with driving over
the mountain," to reach Reno and Sparks,
said Eadington.
Another casino is going up near
Placerville, 45 minutes from Sacramento,
and it recently received approval to build an
off ramp from Highway 50, said
Eadington.
"There are increasing choices in
California. It will grow the market but it
will also grab those that drive here now," he
said. "The question is how many will be
siphoned off."
Add that to the fact that Washoe
County gaming, in particular, is already suffering.
While statewide gaming rebounded
somewhat late in the year,Washoe County
gaming continued to decline. The latest figures,
for October, show 5 percent gain in
gaming wins statewide
and a 5 percent drop
in Washoe County.
Total visitor volume
is down also. In
the third quarter, the
number of visitors to
Washoe County
dropped 11 percent to
1.2 million.
Convention attendance fell 37 percent to
29,390. Meanwhile, hotel room nights were
up 2.5 percent to 1.4 million.
The three-year trench project could add
insult to injury by deterring people from
going to casinos south of downtown, said
Eadington.
All this adds up to trouble for the
Washoe County economy. Numbers for
2002 aren't yet tallied, but in 2001, the
Washoe County economy took a 4 percent
hit when the number of visitors dropped 4
percent and gaming wins fell 5 percent.
That's why the state's tourism officials
are working to remake Nevada's image as an
adventure destination. The biggest news at
the Governor's Conference on Tourism earlier
this month was the announcement that
the ESPN Great Outdoor Games are going
to be held in Reno next July.With it comes
about 50 hours of television coverage and
tens of thousands of visitors.
"We're working to diversify our economy
so it's not totally dependent on tourism,"
said Lt. Gov. Lorraine Hunt at the conference.
Northern Nevada's economy may
depend on it.
