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Gaming Guru

Jeff Simpson

Jeff Simpson on why bad news involving gambling is bad news for Las Vegas

29 July 2007

LAS VEGAS, Nevada -- Casino owners enjoy increasingly robust revenue streams from luxurious hotel suites, gourmet restaurants and exciting entertainment, not to mention nightclubs selling $25 bottles of vodka for $300.

Clearly casino gambling no longer sets Las Vegas and Nevada apart from the rest of the country, with state- and tribal-regulated casinos a reasonable driving distance away from most Americans.

Even so, gambling is vital to Las Vegas casinos. Casino owners have been telling me for a long time that no revenue falls more cleanly from the top to the bottom line than gambling winnings.

Although it may be the resorts, the celebrity chefs, the world-class pools and spas and what seems like 75 Cirque du Soleil shows that distinguish the city from competing venues, most folks immediately associate Las Vegas with gambling.

And gambling's taken some tough shots in the past couple of weeks, body blows that can't help but be bad for our city.

First, there was NFL quarterback Michael Vick's alleged involvement in dog fighting and gambling on dog fights.

There's no Las Vegas connection, but the vile practice of dog fighting exists as a vehicle for gambling.

Second, there was the shocking story of NBA referee Tim Donaghy, who allegedly bet on NBA games and may even have improperly influenced the outcome of games he officiated.

We Las Vegans always get sanctimonious when there is a betting scandal involving someone who bet with illegal non-Nevada bookies or Internet sportsbooks.

"We take just a small fraction of total bets," we say. "We're the canary in the coal mine, the regulated betting venue that can help to keep sports betting honest," we cry. "Why don't these ignorant outsiders worry about the illegal bookmakers and online sports books and leave us alone? " we wail.

Those sentiments are understandable - but naive.

To almost every American, sports betting is associated with Las Vegas. When sports betting takes a hit, so does Las Vegas.

Despite our protestations, and no matter how well we explain the reality of legal sports betting here in Nevada, betting scandals such as the flagrant fouls allegedly committed by Donaghy are bad for the city's chances to land an NBA, NFL or Major League Baseball team.

The third, and worst, gambling-related story involved a Chinese-Mexican businessman who was arrested outside of Washington, D.C., last week.

Allegedly part of an international methamphetamine conspiracy, Zhenli Ye Gon was charged with diverting huge shipments of chemicals needed to make methamphetamine to groups that manufactured the meth and shipped it to the United States.

Mexican authorities recently raided Ye Gon's Mexico City mansion and seized $207 million in cash.

According to the Associated Press, authorities said Ye Gon lost more than $125 million gambling in Las Vegas since 2004.

If Ye Gon is a meth kingpin, and if the money he allegedly lost in Las Vegas casinos was drug money, it would be far from the first time criminals have brought their ill-gotten gains to Las Vegas, whether to launder the cash or gamble it away.

It is unreasonable to expect casinos to screen customers to verify the source of their money, even whales who wager the millions Ye Gon is alleged to have bet. As long as federal money-laundering rules and other laws are followed, Las Vegas casinos shouldn't be blamed for criminals' losses.

But that won't be how folks suspicious of gambling and our city view the amount of money Ye Gon is alleged to have lost in Las Vegas.

They'll see it as one more example of gambling gone awry, and of a city immorally capitalizing on vice.

Jeff Simpson is business editor of the Las Vegas Sun and executive editor of its sister publication In Business Las Vegas.