If there were any doubts about the strength of the future of the gaming industry in Nevada, the deal by MGM Mirage to buy Mandalay Resort Group - the biggest casino deal ever - should lay them to rest.
The question now becomes whether control of so much of the Las Vegas market by one company is an asset or a threat to the industry as a whole.
The $4.8 billion purchase, if approved by regulators, would give MGM Mirage control of more than half the 72,000 rooms on the Las Vegas Strip. An important part of the deal is a 31-acre parcel ready for development south of the Mandalay Bay hotel and casino.
The implications for the industry seem to be positive. As casinos are increasingly consolidated into a handful of major corporate owners, the strength and consistency of their financial health improves. Investment in construction of new properties seems assured.
Smaller competitors, including several of the niche casinos in Las Vegas, also should benefit. The broader the reach of marketing campaigns by a giant like MGM, the more visitors are drawn to Las Vegas. There remains plenty of room for competition.
For customers, it's possible room rates may rise at resorts owned by the conglomerates. The giant corporations have tighter control over the market and could gradually ramp up the room rates by, say, $10 a night to improve their profitability.
However, that also opens opportunities for the smaller casinos to compete. Bargain hotel rooms have always been a lure for Las Vegas, and we expect they always will be. The strategy works.
Whether the sale produces any ripples in Northern Nevada is doubtful. Mandalay Resorts owns Circus Circus in Reno and a half interest in the Silver Legacy. They are not of the scale of the Las Vegas resorts, and it remains to be seen whether MGM Mirage wants to operate them or sell them.
As attractive as the gaming industry is in Las Vegas, though, it's not the future of Northern Nevada's economy. While gaming win continues to grow here, casinos are an attraction - not the destination. The destinations are Lake Tahoe in the summer and the ski areas around it in the winter.
Las Vegas is on a winning streak, which means Nevada's economy can simply go along for the ride.
