Casino chief suggests room restrictions, tax changes

LAS VEGAS - Growing concern about overbuilding has prompted a top hotel executive to suggest possible imposition of growth restrictions in this gambling capital.

J. Terrence Lanni, chairman of the MGM Grand hotel-casino, said some tough decisions may have to be made to control the area's future growth.

"There's going to be a capacity problem, no doubt," Lanni told Preview '99, an economic forum. He noted Las Vegas will have 126,000 hotel rooms by the end of 1999, the most of any city in the United States. The 5,005-room MGM Grand is the largest hotel in the U.S.

Tourism officials are concerned about the increase in the number of rooms at a time when visitor volume is flat. The 3,025-room Bellagio opened in October and four more hotels open this year.

Lanni suggested Clark County officials may want to consider a plan where new rooms could not be built until a like number are taken out of inventory.

He cited similar growth restrictions imposed by the Tahoe Regional Planning Agency in the Lake Tahoe area.

Lanni also suggested that Nevada consider expanding the state's 6.8 percent gambling tax to include gambling equipment manufacturers and suppliers. He said such companies benefit from the gambling industry but don't pay the 6.8 percent "privilege tax" paid by the hotel-casinos they service.

"They don't pay their fair share," Lanni said.

New revenue sources will be on the 1999 Legislature's agenda as it wrestles with a $137 million budget shortfall.

"There's going to be a hue and cry to increase the gaming tax," Lanni said. He suggested the Legislature and Gov. Kenny Guinn should "take a look at how they can expand the privilege tax" before considering raising taxes on hotel-casinos.

And he suggested slot route operators would be another tax target. Route operators provide machines to locations such as grocery and drug stores, and pay a standard fee, rather than a tax on revenues.

Lanni, one of nine members of the National Gambling Impact Study Commission, said it is too early to tell what the group will suggest when it presents a report to Congress in June. The federal commission was formed two years ago to study the economic and sociological impact of gambling on America.

He said the commission is likely to suggest that the rapidly-growing Indian gambling industry "should be regulated and should be taxed."

He said the commission will also focus on compulsive gambling.

"We have to recognize the fact there are people who don't handle gambling," Lanni said. "One person with problem gambling is one too many."

The session, sponsored by the Las Vegas Chamber of Commerce and Nevada Development Authority, also featured Michael Klausman, president of the CBS Studio Center in Los Angeles. Klausman said the Las Vegas Valley has many viable locations for film production facilities along with the skilled labor to suit the needs of the industry.

Carol Harter, UNLV president, traced the growth of the university to its current 21,312 students, noting a 5 percent increase in growth the past year.

Former USC and professional football coach John Robinson, who was named UNLV coach last month, urged business and civic leaders attending the forum to be patient with the Rebel program.

"We're on our way to something special," Robinson said. "How long it will be, I don't know. How high it will be, I don't know."

The Rebels are winless in 15 games, dating back to the 1997 season.

Pete Nordstrom, co-president of Seattle-based Nordstrom Inc., said there are no immediate plans to expand to Las Vegas, despite rumors the company would join the growing number of upscale retailers here.

Nordstrom said Nordstrom wants to be in Las Vegas, adding, "It's just a question of when and where."

The company has 99 stores in 22 states, with 27 new stores planned over the next five years.

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