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Gaming Guru

Rod Smith
 

Inside Gaming Column: California Gamin' All About Suckers

14 February 2005

In Southern California, there seems to be a consensus in the hospitality industry and the media about tribal casinos: They're for suckers. And they're no competition for Las Vegas, as hospitality executives see it.

Prove it? Easy. Just ask yourself, when was the last time you planned a long weekend or an extended vacation at a tribal casino? Californians aren't that different from us. They'll stop by, just like Las Vegans stop at Station Casinos properties. But they'll spend big time in the mecca of gaming itself.

Hospitality brass say even the glitzy gambling joints are locals casinos for gambling Californians who live near tribal lands. Compared with the Strip, they attract less-affluent players who are more likely to be problem gamblers who can't afford to lose. Tribal casinos, blessed by the state, are taking aim.

Voters who bought the promise of tax relief are the second set of suckers. Tribal casinos were sold as solutions to the state budget crisis, but they produce a pittance in revenues because the tribes are untaxable, sovereign states.

Gov. Arnold Schwarzenegger alone makes up the third class of suckers. He negotiated new compacts for tribes to increase their slots, but the agreements put tribal leaders in a position to demand concessions on revenues, card rooms and slots at tracks. That's why there are hardly any new slots at tribal casinos.

Hospitality honchos say operators chasing management agreements can get sucked in by their own propaganda. The agreements are short-lived. The tribes can squeeze casino industry profits in the negotiations, milk operators in planning and running casinos, and ultimately go out on their own.

Finally, the tribes themselves are often suckers, falling for their own propaganda that any development solves social woes. It only works if the money they earn is seriously reinvested in economic development and treating fundamental social problems.

Players, government, operators and tribes who think gaming is a long-term solution to short-term problems have it backward. It's a short-term fix for long-term problems.

The suckers have one characteristic in common. They all self-victimize. Las Vegas is not among them, and industry insiders here say it won't be as long as operators continuously reinvent themselves, the Strip and the destination.

This is the task at which the gaming industry has always excelled. With new towers at The Venetian, Mandalay Bay, Bellagio and Caesars Palace; Wynn Las Vegas planning the grandest grand opening ever; and developers jumping at opportunities around the north end of the Strip, we'll see how well they do this time. Hospitality executives in the Southland say there isn't likely to be a better show on earth, anywhere.

The Inside Gaming column is compiled by Gaming Wire Editor Rod Smith. You can contact him by phone at 338-9653.