Richard N. Velotta
Tuesday, July 27, 2010 | 2:01 a.m.
Beyond the Sun
When gambling went from being a pastime largely offered by organized crime to a leading entertainment industry, academia took notice. Thus began UNR’s Institute for the Study of Gambling and Commercial Gaming in 1989.
Its leader is William Eadington, an economics professor internationally recognized as an authority on the legalization and regulation of the industry.
Las Vegas has long been considered the world’s top gaming destination. Is that still true?
Gaming revenue in Macau this year probably will exceed $20 billion, which is a little over three times the size of Las Vegas ... Las Vegas still has more diversity in its various offerings, but it’s hard to say that it’s king of the hill in gambling.
What’s the biggest threat to Las Vegas’ dominance in the industry: Macau? Tribal casinos? Another venue?
Macau really doesn’t compete against Las Vegas except for, perhaps, at the very high end. I think they’re more complementary than competition so far. There is an argument to be made that what we’re seeing now is the maturing of the American gaming market and the gaming market in many other countries, as the long period of fairly dramatic growth that we had seen in gaming seems to be coming to an end.
How has the casino industry changed as a result of the down economy?
Virtually every major gaming company found itself caught in overleveraged situations and this was all built around the unbridled optimism that prevailed until 2006 and 2007. The gaming industry in particular viewed itself as nearly invulnerable, and Las Vegas, in particular, viewed itself as a place that could continually transform and develop a new destination that would be successful. This time around, it just didn’t work.
We’ve seen a number of projects shut down, canceled or delayed in Las Vegas. When do you think we’ll see a see a new resort?
It’ll take awhile. You’ve obviously got Fontainebleau and Echelon that are partway along. For the Echelon, there’s obviously a question of whether it will physically deteriorate before anything comes about. But the Fontainebleau … it’s still a big number to finish it. And the Cosmopolitan is going to, interestingly, open before the world improves very much, so that’s going to add to some of the challenges.
Besides the economy, what do you consider the biggest issue facing the casino industry today?
The next big questions may be intergenerational. For example, we have gaming that is built around table games that have been of diminishing importance for everybody but Asia, and gaming devices that are really just increasingly souped-up video games with gambling overtones. Whether those products transform to the next generation or not is going to be an interesting question.
Steve Wynn has announced that he is considering moving his corporate headquarters from Nevada to Macau. What’s your view of that strategy?
Steve Wynn is a visionary and his real interest is in the creation of new properties and the creation of new iconic structures. He is not as interested in the operational side. If you look at Las Vegas, versus Macau and Asia, there’s no question where the action is going to be and I thought that part of his statement made sense. The part that didn’t make sense, of course, was the Obama bashing.
A longer version of this story appears in this week’s In Business Las Vegas, a sister publication of the Sun, and on the Sun’s website, lasvegassun.com.