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Gaming Guru

Rod Smith
 

Inside Gaming Column: Fuel, Transit Troubles Foreseen in Las Vegas's Future

24 July 2006

LAS VEGAS, Nevada -- Baby boomer corporate leaders seem singularly focused on what's in it for them, and that may be starting to concern investors, say Wall Streeters who have sat in on recent boardroom presentations. Analysts worry about McCarran International Airport and the highway from Los Angeles maxing out in three or four years. They're also trying to see how visitors will get around once they're here. And then there's the question of where the fuel will come from to get the added visitors here, move them around and send them home. Wall Streeters say in private presentations that the attitude from corporate leaders is: "We'll make out fine, and damn the competitors." Some local leaders and analysts say privately that Strip developments should command as much public scrutiny as Red Rock Resort got a few years back.

With Wynn Macau ready to open in six weeks, Asian analysts are touting Macau as the next challenger for the gaming market Las Vegas has dominated for 75 years. But hold on a minute. Las Vegas operators say the former Portuguese colony is generating a one-way visitor stream -- and it'll probably stay that way. Few Americans are likely to go to Macau to gamble, but Asians will want to come to the world's gaming and entertainment mecca, the Strip. The Venetian and Wynn Las Vegas already are proving the point with the high rollers they have been luring.

The Imperial Palace has devised a new concept of exports for the gaming industry, and maybe a new marketing ploy at the same time. Early this month, it shipped six antique cars on loan to Shanghai, the first of 38 making the trip from Las Vegas, for the first automobile museum in China. The Imperial Palace will be the only non-native participant in this joint venture with the Chinese government. The Imperial Palace cars, along with 37 cars from the Blackhawk Collection in Danville, Calif., will be the centerpiece of the Shanghai Automobile Museum when it opens in September and will put a face on Las Vegas for millions of Chinese they have never before imagined.

If it doesn't look, quack or act like a duck, it's not. Despite all the back-slapping, casino executives complain it's hard to see the tax changes in Illinois as a tax rollback as billed. The state Legislature cut the top tax rate to 50 percent from 70 percent. But each casino operator except Rock Island had to agree to make up the difference between actual taxes paid under the new tax and the minimum paid in fiscal 2004. That guarantees Illinois loses no revenue from gambling for the next two years and it looks more like spin than tax cutting to casino operators, who nevertheless are chicken to be quoted.

Gaming Wire Editor Rod Smith can be reached by phone at 477-3893 or by e-mail at rsmith@reviewjournal.com.