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November 17, 2017

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Reno’s economic surge could last 10-20 years, gaming analyst says

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Scott Sonner / AP

A gaming analyst said this week that Reno is in “the early stages of what is a very exciting expansionary cycle.”

The city of Reno is poised for a long-term economic upswing, according to an analyst from Union Gaming Research of Las Vegas.

“We’ve seen housing prices really firm up,” said Union Gaming analyst John DeCree on “Nevada Newsmakers” Monday. “That is always a great economic indicator for the casino and entertainment industry.”

Construction jobs and residential development spur more sustainable economic activity. “As large companies come and create construction jobs, they bring population and migration to the city, which then requires housing development, then expansion of schools and other social services,” DeCree said.

“We are in the early stages of what is a very exciting expansionary cycle for Reno,” DeCree said. “Each step we take, the more economic development there is. And certainly, a casino is an entertainment option, and as the city gets larger, more tourism comes. As more people live in the city, the airport can then expand and add more direct service.”

DeCree said the investment community rarely seems to look past a year or two, but Reno’s long-term prospects are sound. “In three to five years (if we are) still in a high-growth cycle and if things keep going as they are, 10 to 20 years is something that could be feasible. Let’s hope the global and U.S. economy kind of steer the course, and I think Reno will keep leading away.”

Factors in his assessment of Reno’s growth potential — especially for gaming companies — include:

• The “Tesla effect,” growth in jobs and incremental business travelers created by large companies such as Tesla, Switch, Apple and Google.

• Home-grown and well-schooled sets of family executives from the Farahi and Carano families, operators of Monarch and the Reno-based Eldorado Resorts.

• Progress made by gaming executives and the Reno Sparks Convention and Visitors Authority in seeking more meetings and convention business.

Union Gaming recently upgraded shares of Monarch Casino & Resort Inc. — the parent company of Reno’s Atlantis Resort & Spa — from a hold rating to a buy rating.

A sky bridge connects the Atlantis resort with the Reno-Sparks Convention Center. The Eldorado is also strategically based to take advantage of meetings and convention business, DeCree said.

The Reno gaming community’s midweek tourism slump is being aggressively addressed by the authority’s marketing for meetings and conventions, DeCree said.

“Reno, overall, is starting to work on (midweek issues),” DeCree said. “The convention authority is under new leadership, very well-directed, and we are pretty excited about the opportunities ahead.”

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