Gaming expert doubts slot study conclusions

Slot machines in Clark County convenience stores and supermarkets contribute far less to the local economy than a recent study concluded, a UNLV gaming expert says.

A Coopers & Lybrand study commissioned by four major slot-route operators asserted "the total income of Clark County increased by about $119 million" in 1997 because of the neighborhood slot industry.

"That's simply not true," said William Thompson, chairman of UNLV's public administration department. "There are economic gains only if players bring money into the community.

"If the money is already here and is simply being put into slot machines in neighborhood locations, where are the gains?"

The study estimated Clark County route operators took in a total of $188.9 million in gaming revenues last year, but didn't indicate that virtually all of it came from local residents.

Thompson estimated tourists accounted for less than 1 percent of the money wagered in neighborhood slots. As a result, there was no net "gain" to the local economy.

That's different from the Strip, he said, where "at least 90 percent of the money is wagered by tourists," resulting in a true gain to the economy.

The study also said that if store slots were limited, "even though grocery store expansion will continue based upon population growth, the impact will be felt by the consumer in higher prices of consumable goods. This price increase is due to the revenue loss from gaming."

"I think that's baloney," Thompson said. "I don't believe it."

Price comparisons at a Vons outlet in Boulder City, where no slots are allowed, and a Vons with slots in Las Vegas show Thompson is right. Prices are the same at both stores for 25 random items compared.

"That doesn't surprise me," Thompson said. "Shoppers in Laughlin are paying just as much as people in Bullhead City, and those in Las Vegas are paying as much as those in Barstow."

While the study didn't disclose how much grocery store slots contributed to the owners' profits, it did reveal that, on average, a City of Las Vegas convenience store operator can bring in an extra $17,233 a month by leasing 550 square feet of space to a slot-route operator.

That jumps to an average $21,493 a month in the rest of Clark County, and goes even higher if the store owner negotiates a revenue-sharing deal with the route operator.

The study also said "some fraction" of any economic gains "will leak to neighboring economies." Thompson explained how.

"All our grocery stores are owned by out-of-state companies, so whatever profit they get from leasing the space or sharing in the win leaves the state," he said.

According to Sean Higgins, executive director of the Nevada Retail Gaming Association, the study was commissioned in response to Mayor Jan Laverty Jones' concerns about the social impacts of neighborhood gaming.

"We as an industry wanted to know what the economic impact was," Higgins said. "We spoke to her about doing the study and she thought it was a good idea."

Jones has asked Nevada gaming regulators to study the proliferation of slot machines and video poker games in convenience stores, groceries and other locales to determine, among other things, their impact on problem gambling.

The association's route operators include Anchor Gaming Corp., Jackpot Enterprises Inc., an Alliance Gaming Corp. subsidiary and ETT Inc., a privately held company. They paid for the $200,000 study.

The operators "truly didn't know the economic impact of their industry," said Lisa Mayo of Coopers & Lybrand. "And we had no preconceived notions or special instructions.

"We weren't asked to consider the social costs, which have a lot of variables to them, but merely the economic (numbers)," she said.

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