Lawmakers banking on casinos as a way to boost the economy should take a look at Reno. Nevada’s other city is refurbishing its bowling stadium in an effort to reinvent itself and attract new visitors. (Insert joke here.)
Reno was hit hard by the housing bubble. High unemployment, bankruptcies and foreclosure have forced the city to layoff workers and cut programs for the last five years. Its largest casino filed for bankruptcy protection in May. The downtown lacks residents and is dotted with empty buildings alongside faded casinos. A new marketing campaign doesn’t even mention gambling – the main industry in Reno.
“Reno has had it easy until recently because it had a monopoly on things that were illegal in the other states,” Alicia Barber, a historian at the University of Nevada, Reno, and the author of “Reno’s Big Gamble,” told The New York Times. “But now it’s facing tough questions for the first time. It’s like a child star that still wants the world’s attention.”
Reno is a harbinger for other states and cities banking on casinos to lure visitors. The market is quickly becoming saturated. Instead of attracting tourists, the casinos rely on locals. But those gamblers only have so much to spend and little in the way of growth. The result is a casino bubble that is starting to run out of air.
Tags: bankruptcy, bowling, casino, foreclosure, Reno
The steady growth in casinos across the country is beginning to weigh on some operators who are struggling with increased debt loads.
USA Today reports that several major casino companies are wrestling with debt burdens taken on before the recession. The increased competition will only exacerbate the financial pressure on the bottom line for many casinos.
Some of the casino companies cited included Ceasars Entertainment and MGM Resorts International in Las Vegas and the Foxwoods casino in Connecticut. The paper also said casinos in the Atlantic City and Reno markets will also continue to face financial pressure from increased competition. One takeaway: the financial troubles facing many casinos is creating lucrative work for bankruptcy attorneys.
More broadly, the financial struggles of the casinos underscores how the growth in gambling in many states is unsustainable. States that rely on gambling revenue to fund operations will likely find a shrinking pot. The problem is there is only so much money states can take from gamblers. As more and more states legalize casinos and expand other gambling operations, look for the casinos to continue to cannabilize one another.
Tags: Atlantic City, bankruptcy, Caesars Entertainment, casinos, debt, Foxwoods, MGM Resorts, Reno