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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Gaming leaders pleased with Reid re-election

5 November 2010

LAS VEGAS, Nevada -- Consensus is that Nevada slot machine manufacturers and the Silver State's casino industry were the big winners in the 2010 midterm elections.

The approval of ballot referendums in two communities in Maryland and Missouri could pave the way for some 6,000 slot machines at casinos in those markets.

Meanwhile, gaming leaders said Tuesday night's re-election of Senate Majority Leader Harry Reid will benefit the casino industry in Washington, D.C.

Lobbyists who represent the gaming industry said Reid, who won a fifth Senate term, clearly understands the casino business, having served a stint as the chairman of the Nevada Gaming Commission.

"Gaming is an industry that views federal regulation and oversight as both an opportunity and a threat," said R&R Partners CEO Billy Vassiliadis, a gaming industry lobbyist. "Having Harry Reid back there in what may be a seminal next few years is important because he is someone who knows and understands the industry."

MGM Resorts International Chairman Jim Murren said Wednesday he was "very happy" that Reid won re-election. Murren personally backed Reid, appearing in several television advertisements claiming that Reid "saved CityCenter."

The company gave $250,000 to a political action committee that supported Reid. Murren said Reid's victory was important to the gaming industry.

"He's helped our company and he's a powerful force," Murren said in response to a question from an analyst during MGM Resorts' third-quarter earnings conference call. "He understands the gaming industry. His opponent did not."

Murren said the results of Tuesday's elections in Nevada bode well for the gaming industry. He doesn't believe casinos will be targeted by Nevada lawmakers in the 2011 legislative session.

Republican Gov.-elect Brian Sandoval, a former chairman of the Nevada Gaming Commission, has a good knowledge of the casino industry and the challenges it has faced in the past two years, Murren said.

"He has a tough job and some difficult decisions facing him in cutting expenses and broadening revenues," Murren said. "We're going to be right there, helping him out."

Murren said the gaming industry "represents more than 40 percent of the state budget" with MGM Resorts "responsible for about 11 percent." He told analysts in response to a question that he didn't think there was "an appetite to raise gaming taxes in the state."

"The gaming industry has been devastated by the great recession," Murren said. "It would be reckless to raise gaming taxes on the industry at this time."

Vassiliadis said Sandoval was open to discussions about the economic challenges facing Nevada and that gaming would want to participate in the talks.

"I think that gaming leaders will want to participate in the process with other business leaders," he said.

Outside of Nevada there were just a handful of ballot referendums on gaming issues.

The most significant votes took place in Missouri and Maryland.

Residents of Cape Girardeau, Mo., overwhelmingly approved the establishment of a casino, which could allow Missouri gaming regulators to move a casino license once held in St. Louis by Pinnacle Entertainment to the southeastern part of the state.

Isle of Capri Casinos has proposed building the resort in Cape Girardeau.

In Anne Arundel County, Md., voters approved zoning for a slot machine casino that would be built by the Cordish Companies.

Together, the two casinos could combine for 6,000 slot machines.

"The elections were positive for the outlook for new developments and markets for the casino industry and the equipment manufacturers," Janney Montgomery Scott gaming analyst Brian McGill said.